Hendrik Van Der Sandt v Shannon Group Services Pty. Limited, Shahram Mehin
[2024] FWC 2188
•19 AUGUST 2024
| [2024] FWC 2188 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Hendrik Van Der Sandt
v
Shannon Group Services Pty. Limited, Shahram Mehin
(C2024/3609)
| COMMISSIONER CRAWFORD | SYDNEY, 19 AUGUST 2024 |
General protections dismissal dispute – jurisdictional objection – independent contractor and not employee – no dismissal – assessment complicated by applicant operating a corporation – finding of employment – employee resigned – resignation not forced – application dismissed.
BACKGROUND
Hendrik van der Sandt has made an application to the Fair Work Commission (Commission) under s.365 of the Fair Work Act 2009 (Cth) (FW Act) for the Commission to deal with a dispute arising out of Mr van der Sandt’s allegations that he was dismissed from employment with Shannon Group Services Pty. Limited (Shannon Group) in contravention of Part 3-1 of the FW Act. Mr van der Sandt has identified Shahram Mehin (Director) as a second respondent in the application.
Shannon Group provides engineering, construction, and maintenance capabilities for commercial and industrial partners in the oil and gas, petrochemical, mining, and manufacturing sectors. This can include providing project management services, pipeline installation and maintenance, and engineering solutions.[1]
On around 3 March 2024, Shannon Group entered into a Service Level Agreement (SLA). The parties identified in the SLA are Shannon Group and Calspec Australia Pty Ltd (Calspec). Calspec was registered with the Australian Securities and Investment Commission (ASIC) on 13 December 2023. Mr van der Sandt is the sole director and shareholder of Calspec.[2] A signed version of the SLA has not been filed by either party.[3]
Mr van der Sandt’s Form F8 general protections application identifies an employment commencement date of 5 March 2024 and a dismissal date of 30 May 2024. The application was filed on 30 May 2024.
On 12 June 2024, Shannon Group filed a Form F8A response. The Form F8 identified a jurisdictional objection to Mr van der Sandt’s application. Shannon Group relied on the SLA to argue Mr van der Sandt was not an employee of Shannon Group and hence was not “dismissed” within the meaning of s.386 of the FW Act. Shannon Group subsequently raised an alternative jurisdictional objection. Shannon Group submitted that even if Mr van der Sandt was an employee of Shannon Group, the employment ended at Mr van der Sandt’s initiative when he resigned from his role. Shannon Group argued Mr van der Sandt cannot establish he was forced to resign within the meaning of s.386(1)(b) of the FW Act.
Shannon Group’s jurisdictional objections must be resolved before the Commission’s conciliation powers under s.368 of the FW Act are exercised.[4]
I issued directions for the filing of material and listed a hearing regarding Shannon Group’s jurisdictional objections for 2 August 2024.
Mr van der Sandt represented himself at the hearing on 2 August 2024. Shannon Group was represented by Zack Eshraghi (Director and General Manager of Projects) and Mr Mehin.
MATERIAL FILED
Shannon Group
Shannon Group relied on the following evidence in support of its jurisdictional objections:
· An unsigned copy of the SLA. I marked the agreement Exhibit R1.
· A screenshot of a text message from Mr van der Sandt to Mr Eshraghi sent at 4:15pm on 28 May 2024. Mr van der Sandt’s message states:
“Hi Zack. I have spoken to my wife about our discussion today. Unfortunately we feel to work these extended hours on an ongoing basis and the 3 hours travelling on top of it will not be beneficial to our family. Leaving home at 5h30am and coming home after 7pm has taken its toll on our family, and with this going to continue with me being a supervisor and having to work these hours and then after hours to do safety documentation and quality documents and your expectation that I need to do Frontiers welding quality is unfortunately to much and we do not see chance to do this. I have an opportunity to go back to the guy I worked with on weekends as a fitter. Thanks for the opportunity however the effort is tough for the compensation too. I will finish the pigging project for wharf etc before I finish up. Trust you will understand.”
I marked the screenshot Exhibit R2.
· A screenshot of a text message from Mr van der Sandt to Mr Eshraghi sent at 6:49pm on 28 May 2024. Mr van der Sandt refers to being misclassified as a contractor and that he should have been an employee of Shannon Group. Mr van der Sandt indicates he intends to make an application to the Commission to dispute his classification. I marked the screenshot Exhibit R3.
· An email from Mr Mehin to Mr van der Sandt dated 29 May 2024. Mr Mehin’s email refers to Mr van der Sandt terminating the SLA and a meeting held that morning. The email details handover arrangements. The email ends with reference to Mr van der Sandt providing Shannon Group with a proposal for a new contractual arrangement. I marked the email Exhibit R4.
· A copy of an email from Mr van der Sandt to Mr Eshraghi and Mr Mehin dated 31 May 2024. The email contains a proposal for Mr van der Sandt to “assist with closing the MDR” at Kurnell. The email refers to hourly rates and travel conditions and indicates Shannon Group can proceed by issuing a Purchase Order. I marked the email Exhibit R5.
· ABN and ASIC extracts for Calspec. I marked these documents Exhibit R6 and R7.
· A screenshot of Mr van der Sandt’s LinkedIn page which refers to him working for Calspec. I marked the screenshot Exhibit R8.
· A witness statement from Mr Mehin dated 26 July 2024. I marked the statement Exhibit R9. Mr Mehin was cross-examined on his statement.
· A witness statement from Mr Eshraghi dated 26 July 2024. I marked the statement Exhibit R10. Mr Eshraghi was cross-examined on his statement.
Although the documents comprising Exhibits R1 to R8 were not attached to a witness statement, Mr van der Sandt did not object to the documents being admitted.
Shannon Group relied on an “initial statement of facts” which contained an outline of submissions in support of its jurisdictional objections. Mr Eshraghi made oral closing submissions at the end of the hearing.
Mr Eshraghi indicated during closing submissions that the SLA was based on an old template that had been used previously by Shannon Group. Mr Eshraghi also accepted some of the terms of the SLA are inconsistent with an independent contracting relationship.
Mr van der Sandt
Mr van der Sandt relied on the following evidence in opposition to the jurisdictional objections:
· A copy of Mr Mehin’s email to Mr van der Sandt dated 29 May 2024. This is the same email that is marked Exhibit R4. I marked this copy of the email Exhibit A1.
· An email from Mr van der Sandt to the Commission dated 12 July 2024. The email contains evidence from Mr van der Sandt. I marked the email Exhibit A2.
· A copy of an email from Mr van der Sandt to Mr Mehin and Mr Eshraghi dated 23 February 2024. Mr van der Sandt’s email refers to his skills and the services he can provide to Shannon Group. A copy of Mr van der Sandt’s resume, qualifications, and tickets is attached to the email. The email refers to his services being offered through an ABN at $100 per hour. Other proposed travel and transport conditions are identified. I marked the email Exhibit A3.
· A copy of an email from Mr Mehin to the “Team” dated 1 March 2024. The email welcomes Mr van der Sandt to “the Shannon Family” and states he will “start with SGS from Monday, 4th March.” I marked the email Exhibit A4.
· A copy of an email from Carolina Barrios (Digital Project Manager) to Mr van der Sandt and others dated 17 April 2024. The email is sent to Mr van der Sandt’s email address with Shannon Group. I marked the email Exhibit A5.
· A copy of a Shannon Group and Ampol document titled “Project No: S535L Storm Water Project.” The document records it being prepared by Mr van der Sandt. I marked the document Exhibit A6.
· A copy of an email from an Ampol representative to Mr van der Sandt dated 11 May 2024 which thanks Mr van der Sandt for his support on the previous day. The email is sent to Mr van der Sandt’s Shannon Group email account. I marked the email Exhibit A7.
· A copy of a Safe Work Method Statement on Shannon Group letterhead which identifies Mr van der Sandt as the person that prepared the document. I marked this document Exhibit A8.
· A copy of an email from Mr van der Sandt to Chel Hargreaves dated 21 May 2024. Mr van der Sandt signs off on the email as Operations Manager for Shannon Group. I marked the email Exhibit A9.
· A copy of an invoice issued by Frontier Engineering to Mr Eshraghi dated 24 May 2024. I marked the invoice Exhibit A10.
· A copy of an email from Lucy Warner (Administrator) to Frontier Engineering dated 28 May 2024 regarding payment for work on two jobs. Frontier Engineering replies later on 28 May 2024 providing Ms Warner and Mr van der Sandt with an invoice for approval of payment. I marked the emails Exhibit A11.
· A copy of an email from Mr van der Sandt to an Ampol representative dated 22 April 2024 which attaches a Capability Statement. Mr van der Sandt signs the email as Operations Manager for Shannon Group. Mr Mehin and Mr Eshraghi are copied into the email. The Ampol representative replies all to the email on 28 May 2024 and refers to a meeting regarding work at a refinery in Brisbane. I marked the emails Exhibit A12.
· A copy of Mr Mehin’s email to Mr van der Sandt dated 29 May 2024. The same email is marked Exhibit R4. I marked this copy of the email Exhibit A13.
· A copy of an email from Mr van der Sandt to Mr Eshraghi and Mr Mehin dated 31 May 2024 which provides a proposal for completion of work for Ampol. Mr Eshraghi replies on 31 May 2024 accepting the proposed hourly rate. I marked the emails Exhibit A14.
· A copy of an email from Mr van der Sandt to Mr Eshraghi and others dated 3 June 2024. Mr van der Sandt sent the email from a Calspec account and requests payment for work performed to the week ending 30 May 2024. Mr Eshraghi responded later in the day on 3 June 2024 and stated: “Time sheet approved.” I marked the emails Exhibit A15.
· A copy of an email from Mr van der Sandt to Mr Eshraghi and Mr Mehin dated 3 June 2024. The email is sent from Mr van der Sandt’s Calspec account and concerns operational matters with the pigging project. Mr van der Sandt later follows up with an email from a Gmail account because his other email could not be delivered to Mr Eshraghi. I marked the emails Exhibit A16.
Mr van der Sandt confirmed the accuracy of the documents under an oath and was cross-examined on his evidence. Mr van der Sandt admitted during cross-examination that three sub-contractors were engaged by Calspec to assist with the project Mr van der Sandt was working on.
Mr van der Sandt made oral submissions at the end of the hearing.
On 3 August 2024, after the hearing had concluded and I had reserved my decision, Mr van der Sandt sent an email to the Commission which had five screenshots of text messages between Mr van der Sandt and Mr Mehin attached. The dates identified in the messages are 30 April and 1 May 2024.
Correspondence was subsequently sent to Shannon Group seeking confirmation of whether it opposed the admission of the additional documents filed by Mr van der Sandt. Shannon Group responded that it did object to the documents being admitted on the basis Shannon Group has “not been given a reasonable opportunity to consider, examine and reply to the additional evidence.” I then indicated the admission of the documents would be dealt with in the written decision.
I have decided to admit the five screenshots of text messages between Mr van der Sandt and Mr Mehin into evidence. The messages will collectively be marked Exhibit A17. Mr van der Sandt should clearly have filed any evidence he wanted to rely upon in accordance with the Commission’s directions. I also accept there is some degree of prejudice to Shannon Group that arises from the late filing of the evidence. However, I am conscious that if Shannon Group’s jurisdictional objections are upheld, Mr van der Sandt’s application will be dismissed. I am reluctant to prevent Mr van der Sandt from relying on any potentially relevant evidence in those circumstances. I also note the messages were within Mr Mehin’s possession at all relevant times even though they had not been filed by Mr van der Sandt. I consider this reduces the extent of prejudice that arises from the late filing.
STATUTORY PROVISIONS
Section 365(1) of the FW Act states:
If:
(a) a person has been dismissed; and
(b)the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;
the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.
The dictionary in s.12 of the FW Act defines “dismissal” by calling up the definition in s.386 of the FW Act. The definition in s.386 states:
Meaning of dismissed
(1) A person has been dismissed if:
(a) the person's employment with his or her employer has been terminated on the employer's initiative; or
(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person's employment, to avoid the employer's obligations under this Part.
Given these definitions, a person can only be “dismissed” for the purposes of s.386(1) of the FW Act if there was an employment relationship in existence.
I will first consider the issue of whether Mr van der Sandt was an employee of Shannon Group.
If I find that Mr van der Sandt was an employee, it will be necessary to determine whether Mr van der Sandt was “dismissed” from employment within the meaning of s.386(1) of the FW Act.
CONSIDERATION – EMPLOYEE OR CONTRACTOR
This is an area of law that will be significantly changed by amendments to the FW Act that are due to commence on 26 August 2024.[5] The amendments are specifically directed at the issue of whether subsequent conduct of the parties can be considered when characterising the nature of their relationship. However, the new legislative provisions are not relevant for this case given the relationship between the parties ended prior to the commencement of the amendments. As a result, I am required to apply the precedent established by the majority of the High Court in Personnel Contracting[6] and Jamsek.[7]
Justice Wigney provided a summary of the principles established by the Personnel Contracting and Jamsek judgments in JMC,[8] the accuracy of this summary was not contested on appeal.[9] His Honour identified the following six principles:
i.Where the rights and duties of the parties are comprehensively recorded in a written contract, the legal rights and obligations established by the contract are decisive of the character of the relationship as long as there are no arguments that the contract was a sham, the contract has been varied or waived, or are subject to an estoppel.
ii.A contract of employment must be construed in accordance with the established principles of contractual interpretation.
iii.The characterisation of the relationship between the parties is not affected by circumstances, facts or occurrences arising between the parties that have no bearing on their legal rights. As a result, the parties’ subsequent conduct will generally be irrelevant when it comes to characterising the relationship.
iv.Relevant contractual provisions for determining the nature of the relationship include mode of remuneration, provision and maintenance of equipment, obligation to work, hours of work, provision of holidays, the deduction of income tax, the delegation of work, and the right to exercise direction and control.
v.There are often two key considerations for the characterisation. The extent of control the putative employer has regarding how, when, and where the work is performed. The other is the extent to which the putative employee can be said to be working in their own business, as distinct from the business of the putative employer.
vi.A label given by the parties to their relationship is not determinative and will rarely assist in characterising the relationship.
In this case, the rights and duties of the parties are recorded comprehensively in the SLA. Neither party submitted that the contract was a sham, had been varied or waived, or is subject to an estoppel. As a result, it is necessary to analyse the various rights and duties in the contract to characterise the relationship between the parties.
A substantial amount of the evidence relied upon by both parties was directed at how the parties subsequently conducted themselves under the contract. Mr van der Sandt referred to an email where Mr Mehin welcomed him to the Shannon Group “team”. Mr van der Sandt also referred to having a Shannon Group email address and that his email signature identified him as an Operations Manager for Shannon Group, including on emails sent to external parties. Shannon Group relied upon the subsequent engagement of three subcontractors by Calspec as being indicative of an independent contracting relationship. I do not consider I can place any weight on any of these matters given the High Court’s judgments in Personnel Contracting and Jamsek. The relationship needs to be determined based on the rights and obligations in the SLA. The operation of email accounts, a position title for Mr van der Sandt, and the engagement of subcontractors, are not matters that are addressed in the SLA. These matters are evidence of subsequent conduct that cannot currently be considered when characterising the relationship.
The terms of the SLA
I consider the following provisions of the SLA weigh in favour of finding that there was an employment relationship between Shannon Group and Mr van der Sandt:
i.The Principal Deliverables clause of the SLA states “Your company will be engaged to provide the following services on full time basis as required by Shannon Group Services…” This wording is more consistent with a full-time employment contract than a contract between two parties conducting their own businesses.
ii.The SLA requires compliance with Shannon Group’s policies and procedures as amended from time to time. This is a provision that is commonly found in employment contracts.
iii.The SLA identifies hours of work as: “Nominally 07:00 to 17:00 and as directed by your nominated manager.” The right of Shannon Group to issue directions in relation to hours of work is significant as is the reference to a nominated “manager”.
iv.The Time Recording clause in the SLA states:
“You are required to complete regular time recordings as directed by your nominated manager.
You are responsible for the completion of your own time record. Completing time records on behalf of another person or permitting another person to do so on your behalf, may result in disciplinary action, up to and including dismissal.
Any timesheets must be approved by your nominated manager.”
The right for a Shannon Group “manager” to issue directions about time recordings and the reference to “dismissal” are more consistent with an employment relationship.
v.Shannon Group is required under the SLA to provide a company laptop, a company utility vehicle, and a fuel card. The requirement for Shannon Group to provide this equipment to Mr van der Sandt is more consistent with an employment relationship.
vi.The SLA states all rights and obligations in respect of intellectual property made or discovered during your agreement is and will remain the property of Shannon Group. This provision limits the ability for goodwill to be generated by Calspec or Mr van der Sandt and is a term often contained in employment contracts.
The SLA permits Shannon Group to require attendance at training courses and for attendance to be funded by Shannon Group. This is more consistent with an employment relationship.
vii.The SLA allows Shannon Group to terminate the SLA without notice in a range of circumstances including refusing “to comply with any reasonable instruction or direction including any failure to comply with your obligations under any of SGS rules, policies and/or procedures and any directions given my management of SGS.” This type of provision is commonly contained in employment contracts.
viii.The SLA contains a restraint clause in favour of Shannon Group which operates for a period of six months. This is another provision that is commonly contained in employment contracts.
ix.The SLA contains a probationary period of three months. It is unlikely that an independent contractor would be subject to a probationary period. This is another term commonly contained in employment contracts.
x.After prescribing a rate of pay to apply under the SLA, the SLA states:
“Your rate is inclusive of the following:
All insurances including Public Liability & Workers Compensation (Copies of insurances to be provided).
All the tools necessary to perform the work.
Superannuation.
All statutory requirements.”
The effect of this provision is that Shannon Group is paying for insurances, tools, and superannuation via the rate of pay. Shannon Group making these payments is more consistent with an employment relationship.
In contrast, leaving aside the labels that the parties have given to their relationship in the SLA, there are few provisions that are consistent with an independent contracting arrangement. There is a requirement for invoices to be issued to Shannon Group to receive payments, although this is arguably just a consequence of the labels used by the parties in the SLA.
However, there is one factor that potentially weighs strongly in favour of characterising the relationship between the parties as one of principal and agent. The parties to the SLA are identified as two corporations, Shannon Group and Calspec. This complicates the characterisation exercise far more than would be the case if Mr van der Sandt was identified as a party to the SLA operating with an ABN. The legal issue that necessarily arises is whether the identification of a corporate entity in the SLA precludes a finding that there was an employment relationship, despite the various other factors. Alternatively, the reference to a corporate entity may be a factor that needs to be considered in the overall assessment, but not a determinative factor. For the following reasons, I consider the reference to a corporate entity is a highly significant, but not determining factor.
In ACE Insurance,[10] the Full Court of the Federal Court was considering the characterisation of a significant number of putative employees. While most of the putative employees were personally identified in the relevant contracts, there were two cases where a corporate entity was identified, rather than the putative employee. In the leading judgment, Buchanan J found that the reference to the corporate entities did not preclude a finding of employment.[11] Justices Robertson and Lander did not depart from that view.
Justice Buchanan also concluded that one of the contracts was not in fact made with the named corporate entity and that the contract was entered into by the putative employee. One of the reasons for this conclusion was that the putative employee signed the contract personally.[12] The same issue potentially arises in this case because the signatory page of the SLA relevantly states:
“Signed by an authorised officer of the Shannon Group Services…
Signed by You:
…………………………
Service Provider”
The signatory page is consistent with Mr van der Sandt being the other party as opposed to Calspec. Given I have not been provided with a signed copy of the SLA, I do not consider it is possible to make a final decision on this issue. I will make my assessment on the assumption that Calspec is the other party to the SLA. However, I consider there is considerable doubt in relation to that issue.
Returning then to the issue of whether the naming of a corporate entity is determinative, consideration needs to be given to whether the precedent from ACE Insurance has been overridden by the High Court judgments in Personnel Contracting and Jamsek.
In Personnel Contracting, Gordon J was part of the majority and wrote separate reasons. In relation to the identity of the contracting parties, Her Honour stated:
“The nature of the contracting parties, such as where a contracting party is a separate entity or partnership, rather than an individual, may suggest that the relationship between the parties is not that of employer and employee.”[13]
The language used by Gordon J suggests that a party being an entity or partnership is a suggestive rather than determinative factor.
Justice Gordon cited two authorities in support of the statement in Her Honour’s judgment: Chaplin[14] and Hollis v Vabu.[15] The same authorities were cited in the joint judgment of Gordon and Steward JJ in Jamsek.[16]
In Chaplin, the Privy Council stated:
“A further important indication against this being a contract of service is the right of the respondent to incorporate himself … It may not be impossible for a body corporate to be a servant but the concept is entirely unfamiliar.”
The use of the term “indication” is consistent with the right to incorporation not being a determinative factor.
In Hollis v Vabu, McHugh J stated:
“But while the couriers were subject to extensive direction and control by Vabu, were Vabu’s representatives and worked for Vabu’s business interests, there were features of the relationship which are not typical of a traditional employment relationship. They include the provision by employees of their own equipment – and in some cases, motor vehicles – the capacity to incorporate or form their own business structure, the tax and superannuation arrangements, and the lack of actual provision for annual leave and sick pay benefits.”
The use of the term “features” is again consistent with a capacity to incorporate not being a determinative factor.
Although the majority of the High Court in Jamsek clearly found the fact that the contracting parties were partnerships for most of the relevant periods to be highly relevant to the outcome in that case, the partnerships in those cases had also purchased the expensive trucks used to provide services to the putative employer. I do not read the majority judgments as establishing that the existence of the partnerships was itself determinative of how the relationship should be characterised.
Based on the authorities identified above, I consider the naming of a corporate entity and not Mr van der Sandt as a party to the SLA is a factor that weighs significantly in favour of a finding that Mr van der Sandt was an independent contractor. However, I do not consider it is a determinative factor.
Conclusion – nature of the relationship
Despite the SLA being expressed to cover a corporate entity and not Mr van der Sandt personally, I consider this factor is significantly outweighed by the various other rights and obligations in the SLA that suggest the relationship should be characterised as an employment relationship. It is clear the SLA provided Shannon Group with an extensive degree of control over the working hours and arrangements. The terms of the contract are consistent with Mr van der Sandt being required to provide personal service and there are numerous references in the contract to consequences if that personal service is not adequately provided.
I find Mr van der Sandt was an employee of Shannon Group.
Given this finding, I need to consider whether Mr van der Sandt’s employment was terminated at the initiative of Shannon Group or alternatively, whether Mr van der Sandt was forced to resign as a result of Shannon Group’s conduct.
CONSIDERATION – WHICH PARTY TERMINATED THE EMPLOYMENT
Mr van der Sandt raised two separate lines of argument in support of his position that his employment was terminated at the initiative of Shannon Group.
Firstly, Mr van der Sandt argued that although he gave notice of his resignation via the text message he sent to Mr Eshraghi on 28 May 2024, Mr van der Sandt had intended to work for a further period to “finish the pigging project for wharf etc.” Mr van der Sandt argued that his employment was terminated at Shannon Group’s initiative when they ceased contact with him before the project work was completed, and therefore ending the employment on their initiative. This is essentially an argument that Shannon Group dismissed Mr van der Sandt prior to the expiration of the notice period for his resignation.
Secondly, Mr van der Sandt argued that if the employment ended by way of resignation, he was forced to resign because of the conduct of Shannon Group.
The end of the relationship between Shannon Group and Mr van der Sandt is largely recorded in the following documentary evidence:
i.Mr van der Sandt sent a text message to Mr Eshraghi at 4:15pm on 28 May 2024 which confirmed he was finishing up with Shannon Group and would “go back to the guy I worked with on weekends as a fitter.” Mr van der Sandt explained in the message that he was leaving due to what he considered to be unsustainable work and travel commitments with Shannon Group and to prioritise his family life.[17]
ii.Mr van der Sandt sent a further text message to Mr Eshraghi at 6:29pm on 28 May 2024. In that message, Mr van der Sandt alleged he was misclassified as a contractor by Shannon Group and indicated he was considering legal action.[18]
iii.Mr Mehin sent an email to Mr van der Sandt on 29 May 2024. The email indicates a meeting was held that morning to discuss Mr van der Sandt’s termination of the SLA. The email refers to transitional arrangements for project work at Kurnell and ends by indicating Shannon Group will await a proposal from Mr van der Sandt for a “potential new pathway.”[19]
iv.Mr van der Sandt filed a Form F8 application on 30 May 2024 which identified that he was told about being “dismissed” on 28 May 2024.
v.On 31 May 2024, Mr van der Sandt sent an email to Mr Eshraghi and Mr Mehin which contained a proposal “with regards to the Ampol completion documents for the kicker project.” The email contains a proposed rate of pay and travel conditions. The email refers to Shannon Group issuing a purchase order in relation to the work. Mr van der Sandt states: “On receival of a PO, I will come to Kurnell immediately to assist with closing the MDR.”[20]
vi.Later in the day on 31 May 2024, Mr Eshraghi sent an email to Mr van der Sandt which stated: “I accept Calspec proposal for the hourly rate of $125 PH for the quality works going forward. Your PO is; S549T. Let me know of an estimate for the total hours you will spend on this item, so that I have it on my file. See you at Kurnell at 10:30am.”[21]
vii.Further emails were exchanged on 3 June 2024 regarding the work at Kurnell. Mr Eshraghi approved a timesheet submitted by Mr van der Sandt at 12:17pm on 3 June 2024. Mr van der Sandt sent emails at 5:11pm and 6:55pm regarding the project work and did not receive any response.[22]
I consider the documentary evidence above sufficiently establishes how the relationship between Mr van der Sandt and Shannon Group ended.
I find that Mr van der Sandt resigned from his employment with Shannon Group via the text message sent to Mr Eshraghi at 4:15pm on 28 May 2024. The further message sent by Mr van der Sandt at 6:29pm on 28 May 2024 reinforces that the employment had ended and Mr van der Sandt was considering legal action. Mr van der Sandt then commenced legal action against Shannon Group on 30 May 2024. Mr van der Sandt’s application states he was told about being dismissed on 28 May 2024. That appears to be a reference to the date Mr van der Sandt sent the resignation text message.
I reject Mr van der Sandt’s argument that Shannon Group terminated the employment during the notice period provided by Mr van der Sandt for his resignation. I consider the documentary evidence clearly establishes that the parties were negotiating about a new contracting relationship after Mr van der Sandt resigned on 28 May 2024. Mr van der Sandt accepted during the hearing that these were genuine commercial negotiations between Calspar and Shannon Group. I agree with that characterisation.
I find that Mr van der Sandt’s employment ended on 28 May 2024 when he resigned and that the interactions which occurred after that date arose from a new and separate relationship. I do not consider the ultimate breakdown in the new commercial relationship had any impact on the effectiveness of Mr van der Sandt’s resignation from employment with Shannon Group on 28 May 2024.
I find that Mr van der Sandt’s employment was not terminated at the initiative of Shannon Group and hence does not satisfy the meaning of a “dismissal” for the purposes of s.386(1)(a) of the FW Act.
Given I have found Mr van der Sandt resigned from his employment with Shannon Group, it is necessary to determine whether Mr van der Sandt was forced to resign because of conduct engaged in by Shannon Group within the meaning of s.386(1)(b) of the FW Act.
In Fingal Glen,[23] a Full Bench of the Commission endorsed, with one point of clarification, an earlier summary of the principles applicable to assessing whether an employee was constructively dismissed. The Full Bench stated:
“The four authorities cited above were summarised by a Full Bench of the AIRC in O’Meara v Stanley Works Pty Ltd (O’Meara) as follows:
“In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there... be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”
Subject to the comments below, we accept and adopt this as a summary of the principles applicable in determining whether an employee has been forced to resign because of the conduct of the employer within the meaning of s.386(1)(b) of the Act…
First, an employer may be found to have constructively dismissed an employee notwithstanding that it did not engage in the relevant conduct with the subjective intention of forcing the employee to resign. Secondly, although it is an “important feature” of constructive dismissal, it is not sufficient that “the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee”. There must also be either an intention to force an employee to resign, or else the conduct must be of such a nature that resignation was the probable result. The “limb” of the O’Meara test relating to resignation as a probable result of an employer’s conduct should be read in this light.”[24]
Mr van der Sandt has provided evidence that establishes he exchanged text messages with Mr Mehin on 30 April 2024 and 1 May 2024 regarding some issues that had arisen with his work for Shannon Group. Mr van der Sandt complains about a lack of trust from Mr Eshraghi and others in Shannon Group. The next relevant evidence is Mr van der Sandt’s resignation message sent on 28 May 2024, where he refers to concerns with his workload and travel requirements and states he has decided to leave and perform work as a fitter and that this is better for his family. I do not see how this evidence can establish that the conduct of Shannon Group forced Mr van der Sandt to resign.
I find that Mr van der Sandt has not provided sufficient evidence to establish that Shannon Group intended to force him to resign, or that the conduct of Shannon Group was of a nature to make resignation a probable result. The evidence demonstrates Mr van der Sandt decided to resign because he considered the work with Shannon Group was too demanding and that other work as a fitter was a better option for him and his family. That was an understandable decision that was not forced upon Mr van der Sandt by Shannon Group.
I find Mr van der Sandt was not forced to resign within the meaning in s.386(1)(b) of the FW Act.
CONCLUSION
I have found that Mr van der Sandt was an employee of Shannon Group. As a result, Shannon Group’s first jurisdictional objection is dismissed.
I have determined Mr van der Sandt was not dismissed by Shannon Group within the meaning of s.386 of the FW Act. As a result, Shannon Group’s second jurisdictional objection is upheld. There is no jurisdiction for the Commission to exercise its powers under s.368 of the FW Act.
Mr van der Sandt’s application is dismissed.
COMMISSIONER
Appearances:
Mr van der Sandt representing himself.
Mr Eshragi and Mr Mehin representing Shannon Group and Mr Mehin.
Hearing details:
2024.
Sydney.
2 August.
[1] Shannon Group’s initial statement of facts at [4], page 69 of the Digital Hearing Book (DHB).
[2] I confirmed this via ASIC company records.
[3] Exhibit R1 is the only version filed.
[4] Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152 and Lipa Pharmaceuticals Ltd v Mariam Jarouche [2023] FWCFB 101 at [23].
[5] The Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 amends the definition of “employee” under the FW Act. The new definition in s.15AA will expressly require consideration of how the contract is performed in practice. That in broad terms overrules the current High Court precedent on the issue.
[6] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 96 ALJR 89; [2022] HCA 1.
[7] ZG Operations Australia Pty Ltd v Jamsek (2022) 96 ALJR 144; [2022] HCA 2.
[8] JMC Pty Ltd v Federal Commissioner of Taxation [2022] FCA 750 at [16] to [27].
[9] JMC Pty Ltd v Federal Commissioner of Taxation (2023) 297 FCR 600; [2023] FCAFC 76 at [8] and [9].
[10] ACE Insurance Ltd v Trifunovski [2013] FCAFC 3 at [134] to [153].
[11] Ibid at [153].
[12] See ibid.
[13] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 96 ALJR 89; [2022] HCA 1, Gordon J at [174].
[14] Australian Mutual Provident Society v Chaplin (1978) 52 ALJR 407 at 410.
[15] Hollis v Vabu (2001) 207 CLR 21 at 48-49 [68].
[16] ZG Operations Australia Pty Ltd v Jamsek (2022) 96 ALJR 144; [2022] HCA 2, Gordon and Steward JJ at [99].
[17] Exhibit R2.
[18] Exhibit R3.
[19] Exhibit A14/R4.
[20] Exhibit A14/R5.
[21] Exhibit A14.
[22] Exhibits A15 and A16.
[23] Bruce v Fingal Glen Pty Ltd (in liq)[2013] FWCFB 5279.
[24] See [18], [19] and [23].
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