Hull v Hertel Modern Pty Ltd

[2017] FCCA 2579

FEDERAL CIRCUIT COURT OF AUSTRALIA

HULL & ANOR v HERTEL MODERN PTY LTD [2017] FCCA 2579

Catchwords:

INDUSTRIAL LAW – Workplace rights under the Fair Work Act 2009 (Cth) –rebuttable presumption by operation of s.361 of the Act that respondent took adverse action – was the applicant made redundant as a result of exercising a workplace right – exercise of workplace right did not result in redundancy – no breach of s.340 of the Act by respondent – application dismissed.

Legislation:

Fair Work Act 2009 (Cth), ss.185, 340, 341, 342, 361, 546

Cases cited:

Board of Bendigo Regional Institute of Technical & Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32

Construction, Forestry, Mining & Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; [2014] HCA 41

Murrihy v Betezy.com.au Pty Ltd (2013) 238 IR 307; [2013] FCA 908
Shea v TRUenergy Services Pty Ltd (No.6) (2014) 242 IR 1; [2014] FCA 271

Victoria (Office of Public Prosecutions) v Grant (2014) 246 IR 441; [2014] FCAFC 184

First Applicant: D’ARCY HULL

Second Applicant: AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS’ UNION (“THE AMWU”)

Respondent: HERTEL MODERN PTY LTD

File Number: PEG 466 of 2016

Judgment of: Judge Smith

Hearing date: 14 August 2017

Date of Last Submission: 14 August 2017

Delivered at: Sydney and Perth by video link

Delivered on: 2 November 2017

REPRESENTATION

Counsel for the Applicants: Mr T Borgeest

Solicitors for the Applicants: Turner Freeman Lawyers

Solicitors for the Respondent: Ms R Harding, Jackson McDonald

ORDERS

1. The application be dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PERTH

PEG 466 of 2016

D’ARCY HULL

First Applicant

AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION KNOWN AS THE AUSTRALIAN MANUFACTURING WORKERS’ UNION (“THE AMWU”)

Second Applicant

And

HERTEL MODERN PTY LTD

Respondent

REASONS FOR JUDGMENT

1. The first applicant, Mr Hull, was employed as a sheetmetal worker by the respondent (Hertel) to undertake work on the Gorgon liquefied natural gas construction project on Barrow Island in Western Australia (Project). Mr Hull is a member of the second applicant (AMWU).  During the course of his employment on Barrow Island, Mr Hull made a number of complaints concerning offensive and racist conduct by one of his co-workers.

2. In making those complaints, Mr Hull was exercising a workplace right within the meaning of sub-s.341(1)(c) of the Fair Work Act 2009 (Cth) (Act). 

3. On 1 July 2016, Hertel was notified by the manager of the Project on Barrow Island that it had to make a number of redundancies. Mr Hull was included amongst those who were made redundant on 9 July 2016 and his employment by Hertel was terminated on that day.

4. Mr Hull claims in these proceedings that his employment was terminated because he had made complaints about his co-worker and a foreman. Mr Hull says that for this reason Hertel breached s.340 of the Act; is liable to pay any compensation for remuneration lost because of that contravention; and to pay penalties under s.546 of the Act.

5. Section 340(1) of the Act provides:

   340  Protection

   (1)A person must not take adverse action against another person:

   (a)because the other person:

   (i)     has a workplace right; or

   (ii)     has, or has not, exercised a workplace right; or

   (iii)  proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

   (b)to prevent the exercise of a workplace right by the person.

   (Emphasis in original)

6. A workplace right is defined for the purposes of the Act by s.341 which provides:

   Meaning of workplace right

   (1)A person has a workplace right if the person:

   …

   (c)is able to make a complaint or inquiry:

   (i)     to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

   (ii)     if the person is an employee – in relation to his or her employment.

   (Emphasis in original)

7. There is some divergence in the authorities as to the meaning of the words “is able to make a complaint or inquiry” and “in relation to his or her employment” in sub-s.341(1)(c)(ii) of the Act: compare Murrihy v Betezy.com.au Pty Ltd (2013) 238 IR 307; [2013] FCA 908 (Jessup J) and Shea v TRUenergy Services Pty Ltd (No.6) (2014) 242 IR 1; [2014] FCA 271 (Dodds-Streeton J). However, Hertel ultimately accepted that it was unnecessary in the circumstances of this case to enter into that controversy. That is because, on either view of the meaning of the relevant phrases in s.341(1) of the Act, Mr Hull had a workplace right to complain about the conduct of his co-worker.

8. That right arose from the terms of the Enterprise Agreement made under s.185 of the Act, the Hertel Modern Pty Ltd Gorgon Project Barrow Island Enterprise Agreement 2015 (Agreement) which covered Mr Hull’s employment by Hertel.  In particular cl.48.1 of that Agreement provided that the resolution of any dispute about “any matter arising under this Agreement” was to be in accordance with the issue resolution procedure set out in cl.48.

9. Workplace bullying and harassment, conduct of which Mr Hull had complained, was prohibited under cl.52 of the Agreement and for that reason, a complaint about it could be seen to arise under cl.48.

10. It was also accepted by Hertel that, in terminating the applicant’s employment, it had taken adverse action against him: see s.342(1), item 1, column 2(a) of the Act.

11. In light of those 2 concessions by Hertel, there arises a rebuttable presumption by operation of s.361 of the Act that Hertel took the adverse action against Mr Hull for the reason alleged, namely that he was exercising that workplace right.

12. The following principles concerning the presumption under s.361 of the Act arise from the decisions of the High Court in Board of Bendigo Regional Institute of Technical & Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32 and Construction, Forestry, Mining & Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; [2014] HCA 41 as summarised by the Full Court of the Federal Court in Victoria (Office of Public Prosecutions) v Grant (2014) 246 IR 441 at [32]; [2014] FCAFC 184:

    …

    ·The central question to be determined is one of fact.  It is: “Why was the adverse action taken?”

    ·That question is to be answered having regard to all the facts established in the proceeding.

    ·The Court is concerned to determine the actual reason or reasons which motivated the decision-maker.  The Court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker.  Nor should such an enquiry be made.

    ·It will be “extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer”.

    ·Even if the decision-maker gives evidence that he or she acted solely for non-proscribed reasons other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable.

    ·If, however, the decision-maker’s testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s 361.

13. In light of those principles, the resolution of this case turns upon analysis of the reasons given by the witnesses, who appeared for Hertel, for the decision made to include Mr Hull upon the list of those workers who were to be made redundant on 9 July 2016.  That examination requires, in turn, an appreciation of the factual context in which that decision was made.

The relevant facts

1. Hertel offered to employ Mr Hull on the Project as a sheet metal worker in a letter dated 11 September 2015. Mr Hull accepted that offer by signing the letter on 14 September 2015. The offer was subject to a number of matters including a pre-employment medical and fitness test. Mr Hull was examined for the purpose of this test in September 2014. A report prepared after this examination stated Mr Hull had Meniere’s disease and had undergone a number of recent episodes of severe vertigo. Mr Hull commenced work on Barrow Island on 23 September 2015.

2. Early in 2016 another employee of Hertel on the Project, Mr Green, made a number of racist comments which were overheard by Mr Hull. Mr Hull reported his complaints about Mr Green’s behaviour to his foreman, David Findlay. Mr Hull later heard Mr Findlay speaking to Mr Green about his complaints, and saying words to the effect that he did not care what Mr Green did, and did not “give a shit about his complaint”.

3. Mr Green continued with his racist comments and made a number of demeaning comments to Mr Hull personally.

4. On 8 June 2016, there was a confrontation between Mr Green and Mr Hull, the end of which was witnessed by a supervisor. Mr Hull later told the supervisor he believed Mr Green only got away with his behaviour because he was friends with Mr Findlay.

5. Later on the same evening, Mr Green posted a derogatory statement on Facebook that appeared to Mr Hull to be directed at him. The following day, Mr Hull told the supervisor that he would be making a complaint about Mr Green.

6. Mr Hull went to see Mr Ray Witts, senior construction manager, and showed him his summary of the incidents involving Mr Green, including the Facebook post. At the suggestion of Mr Witts, Mr Hull then spoke to Mr Danny Ryan, the constructions manager. Mr Ryan indicated that he would speak to Mr Green.

7. Mr Hull was told by Mr Witts later that day that he had spoken to Mr Green. Mr Green had admitted posting the derogatory comment on Facebook and that it had been directed at Mr Hull. Mr Hull was told Mr Green would be moved to a different workshop, and that no further action would be taken.

8. On 25 June 2016, Mr Green returned from leave and went to work in a different workshop from that in which Mr Hull worked.

9. On that day Mr Craig, a superintendent employed by Hertel on the Project, went to the workshop where Mr Hull was working. Mr Craig asked Mr Findlay to nominate two workers to go with him to undertake work on site. Mr Findlay nominated Mr Hull and one other worker. Working on site as opposed to working in the workshop was referred to as working “on the plate”.

10. Mr Hull’s evidence was that he said to Mr Craig that he would prefer not to go on the plate due to his medical condition and that the stress from dealing with Mr Green was affecting his symptoms. Mr Hull said that Mr Craig replied that he would look into the medical condition, and get back to him as to whether he was still required to go on the plate. Ultimately, Mr Hull was told that he was to remain in the workshop.

11. Mr Craig’s version of the conversation was slightly different. His evidence was that he told the applicant and the other worker to get their tools and to go with him. Mr Hull then said that he was not going to go. When asked why, Mr Hull said “that he was being pushed out of the sheet metal workshop because he was not getting on with other people”. Mr Craig said that that was not the case, that he needed him to get out on site to “push the job on”. Mr Hull again said that he was not going to go and then told Mr Craig that he had problems with his ears and he could not go out on the site. Mr Craig asked Mr Hull if he had a doctor’s note. Mr Hull replied that he took medication and that Hertel had a doctor’s note from when he started with the company.

12. Mr Craig says that he then went to the office to find out if what Mr  Hull had said was true. He was advised that there was a doctor’s note saying that there was something wrong with Mr Hull’s ears. Mr Craig did not see the doctor’s note himself. Mr Craig says that he then contacted the workshop to tell Mr Hull to stay there.

13. It is not necessary to resolve the differences between the two versions of these events. What is important is that Mr Hull told Mr Craig that he had a medical condition that meant that he could not go out on site and that, after checking with the office, Mr Craig did not insist that Mr Hull leave the workshop. I also accept that Mr Hull mentioned to Mr Craig that he had some issue “getting on with other people” in the workshop.

14. A few days later, Mr Craig went to Mr Hull in the workshop and had a conversation with him about his condition. Mr Craig’s evidence was that he asked Mr Hull about his condition and medication because he had been told by Mr Hull that he gets dizzy. He said that Mr Hull responded that he had tried a few types of medication and the one he was currently on did stop him from getting dizzy. When he asked Mr Hull why he could not go on site if the medication made him okay, Mr Craig said that Mr Hull asked where the conversation was going and said that he did not want to talk about it anymore. Mr Craig said that he “let it go and didn’t ask him about it again”.

15. Mr Hull said that this conversation took place on 26 June 2016 but otherwise recalls the conversation in similar terms to Mr Craig. In addition, his evidence was that he told Mr Craig that a combination of things affected his medical condition including his diet, stress and fatigue levels.

16. In late June 2016, Mr Currie, the industrial relations manager for Hertel, was put on notice that a new round of redundancies would be required on the Project. This was not an unusual or unexpected event.

17. Hertel’s workforce on the Project fluctuated throughout its contract with the manager of the Project. This was partly due to the fact that the work to be performed by Hertel depended upon the timely performance of work by other contractors, as well as the availability of accommodation on Barrow Island. During the course of the contract in respect of which Mr Hull was employed, Hertel had mass redundancies in December 2015, January 2016, March 2016, July 2016, December 2016 and February 2017.

18. When he heard about the upcoming redundancies, Mr Currie prepared a spreadsheet with a list of all employees on site and marked certain ones as “red” or “amber”. This was done according to various considerations including employment record and place of usual residence. Those employees were ultimately collapsed into one column of those who could possibly be made redundant. This document, referred to as the “Red List”, was updated for each round of redundancies and provided as a guide only for superintendents and construction managers who ultimately selected people for redundancies. The names on the list could be, and were often ignored for various reasons.

19. In the present case Mr Currie put together his draft “Red List” on or about 28 June 2016. Although Mr Hull’s name first appeared on this list in amber, after a review of the roster records between January and June 2016, it was removed because there had been no further issues noted in respect of him. After the draft red list was finalised, Mr Currie sent it to Hertel’s managing director, Mr Skea and Mr Ryan, the constructions manager, on 30 June 2016. Mr Hull’s name was not on that list.

20. On 1 July 2016, Mr Skea received an email from the Project manager notifying him that Hertel’s bedding allocation had been reduced to 550. This meant that Hertel had to make approximately 116 employees redundant in the following two weeks. Although he was copied into correspondence regarding the redundancies, Mr Skea was not involved in the selection process, gave no input into it and made no suggestions or selections of any employee for redundancy.

21. Mr Craig gave evidence that he was told about the need for redundancy in early July 2016 and was asked to prepare a list of sheet metal workers and insulators who could be let go. Mr Craig used a manning sheet for that purpose. That was a physical document which was used as a sign in, sign out register for the workers in the team. Mr Craig said that he spoke to some of his supervisors about the names of the workers that should be included for redundancy. He did not speak to Mr Kelly, Mr Hull’s supervisor about that.

22. Mr Craig said in evidence that he personally selected Mr Hull to be put on the list of redundant employees because he could not work on site and could only work in the workshop. He said that there was no other reason for his decision and that he did not consider what he had been told about the “carry on” that Mr Hull had had in the workshop with another employee.

23. In the meantime, on 1 July 2016, Mr Hull contacted the AMWU for help concerning the issues he was having at work. After advice from the AMWU, he sent a formal complaint by email to Mr Currie early in the morning of 2 July 2016. In that email Mr Hull complained both about the conduct of his co-worker, as well as that of his foreman, and outlined the events forming the basis of his complaint.

24. When he received the email Mr Currie, who was in Perth at the time, organised a telephone conference with Mr Hull in his office on site at the Project. Prior to that email, Mr Currie was not aware of the issues raised by Mr Hull. A few hours after the meeting, Mr Hull sent Mr Currie a further email stating that his preferred outcome was for Mr Green to be dismissed. Mr Hull’s version of that conversation was not substantially different to that of Mr Currie.

25. The following day, Mr Currie organised to speak with Mr Green, again by telephone from Perth.

26. Mr Currie stated that after the meetings he expected both Mr Green and Mr Hull to get back to him with documents, so that he could follow up with the foreman, Mr Findlay, about the allegations against him. However, Mr Currie did not recall speaking to either of those men about the complaint again.

27. On 7 July 2016, Mr Currie became aware for the first time that Mr Hull had been selected for redundancy and also that Mr Green had not been selected. He was concerned by that as he thought it would look unfair; as though Hertel was punishing Mr Hull; and he had not completed his investigation into Mr Hull’s complaint. Mr Currie told a member of his team that Mr Green ought to be added to the list as well: he was subsequently told that Mr Green was going to be added. Mr Currie then spoke to Mr Ryan about the inclusion of Mr Green and the reasons for it, and Mr Ryan accepted his advice.

28. On 9 July 2016, Hertel started telling certain employees of their redundancy. Amongst those made redundant on that day was Mr Hull.

29. Over the period 9 July to 16 July 2016, a total of 116 employees were made redundant by Hertel including 52 sheet metal workers like Mr Hull. Mr Green was also amongst those made redundant on 9 July 2016.

30. On 5 October 2016, Mr Hull commenced these proceedings seeking reinstatement, compensation and a pecuniary penalty under the Act.

Consideration

1. The adverse action taken by Hertel was the termination of Mr Hull’s employment. That was brought about by Mr Hull’s name being placed on the list of employees to be made redundant in early July 2016. The question in those circumstances is why his name was placed on the redundancy list. That issue requires the Court to determine, in the first instance, who was responsible for that action.

2. Mr Hull argues that both Mr Currie and Mr Craig were responsible for placing his name on the redundancy list. The argument was that Mr Currie received a list with Mr Hull’s name on it and then made a decision as to what to do about that. He argues that Mr Currie’s reaction was not a passive one. Given that Mr Currie was aware of Mr Hull’s formal complaint and the fact that it had not been resolved, he was aware that the inclusion of Mr Hull on the list could give rise to the impression of unfairness. At that point, Mr Currie considered two options: removing Mr Hull’s name from the list, or adding Mr Green to it. He recommended the latter course and this was taken without hesitation. This much of the argument is consistent with Mr Currie’s own evidence and may be accepted.  The next part of the argument, however, is more contentious.

1. Mr Hull says that the reason for the decision to take the latter course included the fact that Mr Hull had made a complaint about the workplace, including serious allegations of bullying and harassment. It was put to Mr Currie in cross-examination that the decision was made because it was convenient to leave Mr Hull on the list so that Mr Currie could wipe his hands of the complaint. Mr Currie denied that suggestion and denied both that he knew why Mr Hull was on the list in the first place, and that he deliberately refrained from finding out why.

2. I accept Mr Currie’s evidence. First, his evidence about the company’s usual practice was not seriously contested. That evidence was that the decision as to who is included in any redundancy is left to the managers and superintendents on site. The reasons for the inclusion or exclusion of any person from the Red List are not given to him. That supports Mr Currie’s evidence to the effect that he was not concerned with why Mr Hull was included in the list and only with the appearance that that might create, and how to deal with that appearance. This also supports the view that Mr Currie did not make any positive decision about Mr Hull’s inclusion in the list.

3. Secondly, I found that Mr Currie gave evidence in a straightforward manner and attempted to answer each question on its merit. He impressed as a truthful witness.

4. Thirdly, given the frequency of mass redundancies, the fact that Mr Currie had responsibility for a large number of employees and had eight years’ experience working for the AMWU, it is unlikely that he would have acted to make someone redundant for the simple, personal, expedient of getting rid of a complaint. He had already dealt with the complaint quickly and efficiently: he spoke to both Mr Hull and Mr Green on the same day on which he received it and was only waiting on further information from both of them. That is not the action of someone who readily shirks responsibilities or takes an easy, but unlawful solution.

5. For those reasons, I find that the complaint made by Mr Hull played no part in any action taken by Mr Currie to leave Mr Hull’s name on the list of redundancies.

6. The question, then, is why Mr Craig included Mr Hull’s name in the list of redundancies. He said that the only reason for this was because Mr Hull could not go out on site and could not work outside of the workshop.

7. Mr Hull argues that Mr Craig’s evidence was inherently implausible because Mr Craig could easily have made enquiries that would have ascertained whether the applicant was, or was not, able to perform work on the plate and that there was no reason to believe that the applicant was not able to do so.  I reject that argument simply because the applicant’s own evidence was that he was in fact, unable at that moment, to perform work out of the workshop.  Mr Hull gave evidence for instance, under cross examination, that his condition was more complex than simply one that could be dealt with by medication.  Matters such as stress impacted upon the symptoms of his disease such that even though he was medicated, he might be at risk of dizziness.

8. Mr Hull said in evidence that he had a duty of care on the site that he could not undertake the work because, given his stress levels at the harassment he had suffered at the hands of Mr Green, he posed a risk if he were to go working at heights on scaffolding as requested by Mr Craig on 25 June 2016.  It might be that Mr Craig was sceptical about what he was told by the applicant. The fact, however, is that he did go to the site office to check whether there was, as he had been told by the applicant, a medical certificate establishing that Mr Hull had a relevant condition. When Mr Craig learnt that there was such a medical certificate, he did not insist upon Mr Hull going out on the plate.

9. That response was consistent not only with what Mr Craig had been told by the applicant himself, but also with Mr Craig’s duty of care to other workers and the applicant himself on the site.  In those circumstances, I do not find Mr Craig’s evidence to be implausible at all. To the contrary, I accept it as truthful.

10. First, Mr Craig’s interaction with Mr Hull was on 25 June 2016 and either the next day or a few days later. At that time, Mr Hull had not yet made his formal complaint to Mr Currie. While Mr Craig was aware of some “carry on” between Mr Hull and another worker, he was not directly involved in the resolution of it. No complaint was made to him about anybody’s conduct. There was also no other incident involving Mr Hull and Mr Green, or Mr Findlay, after Mr Craig spoke to Mr Hull about his condition and before the preparation of the list of redundancies. Given that, it is unlikely that the “carry on” played any part in Mr Craig’s decision to include Mr Hull’s name in the list of redundancies.

11. Secondly, the context in which the redundancies arose adds strength to that conclusion.

12. The contract being undertaken by Hertel at the time of the redundancies was for painting insulation and fireproofing (PIF). That work was performed towards the end of the construction phase of the Project and was itself coming to an end. The work included fabrication of sheet metal in a workshop and then fitting those sheets on site. Sheet metal workers like Mr Hull were employed to do the whole of that job, not just one part, such as the workshop component. As Mr Craig explained, the work in the workshop would not last forever and everybody else (apart from Mr Hull) could work in the workshop and on site. Given that there were 50 sheet metal workers, Mr Craig saw that there was no point in retaining Mr Hull if he could only work in the workshop.

13. It was also suggested in submissions and in questions during cross-examination of the respondent’s witnesses, that Mr Findlay might have had some input into the choice of the applicant for redundancy.  That however, was not consistent with the evidence of Mr Currie who said that the foremen had no say in those matters.  Foremen are, generally speaking, usually called “leading hands” who are on the tools with the other workers.  That is to say, his evidence was that they are not in the bracket of supervisor, or indeed superintendent, who has any input into the redundancies list.  I accept that evidence as consistent with the role of Mr Currie as a human resources manager who dealt predominantly with the project manager on Barrow Island and the focus in redundancies on operational requirements.  Although, Mr Currie included superintendents in his correspondence concerning redundancies, the other correspondence supports that his real contact was with the project manager.  That suggests to me, that it was very unlikely that people at a much lower level of responsibility, would have any impact upon the decision to be made concerning redundancies.

14. For those reasons, I find that the complaints made by Mr Hull played no part in Mr Craig’s decision to include Mr Hull in the list for redundancy in early July 2016. As a consequence, I find that Hertel did not take adverse action against Mr Hull because he had exercised a workplace right and so did not breach s.340 of the Act.

Conclusion

1. The proceedings will be dismissed.

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Judge Smith

Date:         2 November 2017