Ibrahim Chidiac v Manpower

[2016] FWC 1395

[2016] FWC 1395

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ibrahim Chidiac
v
Manpower
(U2016/4333)
Ibrahim Chidiac
v
Queensland Property Investments Pty Ltd T/A Woolworths Ltd
(U2015/17225)

COMMISSIONER BISSETT MELBOURNE, 3 MARCH 2016

Application for relief from unfair dismissal – Not an employee of Woolworths Ltd – Jurisdictional objection upheld – Application against Woolworths Ltd dismissed – Extension of time objection to be determined.

[1] Mr Ibrahim Chidiac has made two applications for unfair dismissal. The first is against Queensland Property Investments Pty Ltd T/A Woolworths Ltd (Woolworths) and the second is against Manpower.

[2] Mr Chidiac said he was employed at Woolworths for about three years and on 22 December 2015 his employment was terminated by Woolworths.

[3] In response to the application, Woolworths indicated that Mr Chidiac was not an employee of Woolworths but was on assignment through Manpower, a labour hire company.

[4] Mr Chidiac subsequently made a further application for unfair dismissal against Manpower.

[5] Manpower says that Mr Chidiac is an employee of Manpower, his employment has not been terminated and he has not been placed in further employment as he has a medical certificate indicating he is not fit for work. This medical certificate operates until late March 2016.

[6] Mr Chidiac’s lawyer, Mr Ibrahim, sought to have both matters listed for Mention for the purpose of determining firstly, who Mr Chidiac’s employer was when he was dismissed and second, if it is Manpower, whether or not an extension of time should be granted within which he may make his application for unfair dismissal.

[7] Mr Ibrahim requested the Commission hear and decide both matters concurrently as they were both ‘jurisdictionally objected to’. Whilst Mr Ibrahim may have requested this, no directions were issued to indicate that both matters would be dealt with concurrently. Ultimately Mr Ibrahim made submissions (without calling any formal evidence) on both matters he says are at issue.

[8] The matters were referred to me for ‘mention’ which was heard by phone. No directions had been issued for the mention. Given the lack of directions I decided, after hearing from all parties on the first question and Mr Ibrahim with respect to the second question (the extension of time if the employer is Manpower), that I would first determine who the employer was. If the employer is found to be Woolworths the extension of time matter would not need to be dealt with. If the employer was found to be Manpower then Manpower would be given an opportunity to respond to the material put by Mr Chidiac and Mr Chidiac be given an opportunity to reply.

[9] For this reason this decision deals only with the question as to Mr Chidiac’s employer.

[10] Following the receipt of oral submissions from all parties I confirmed with each party if it was satisfied for the Commission to make a decision in relation to Mr Chidiac’s employer on the basis of the material that had been put in submissions. Each party said it was happy for the Commission to make a decision on that basis.

[11] Mr Chidiac did not give evidence in the proceedings although was invited to through his representative.

Submissions

[12] In its Form F3 employer response form, Woolworths says of Mr Chidiac:

On 22 November 2012, the Applicant [Mr Chidiac] performed services at the request of Manpower at Woolworths’ Regional Distribution Centre in Hume, Melbourne. The Applicant regularly performed services at the Distribution Centre for a little over 3 years.

On 22 December 2015, Manpower was advised that the Applicant was not to return to the Distribution Centre due to substantiated inappropriate conduct.

The Applicant was a labour hire worker as defined in the Fair Work Commission’s Unfair Dismissal Benchbook. This definition states:

“A labour hire worker is someone who enters into a work contract with a labour hire agency. The labour hire agency has a commercial contract to supply labour with a host firm. The worker performs work for the host firm. The host firm pays the labour hire agency, and the labour hire agency then pays the worker. The worker has no contract with the host firm and as a result cannot make an unfair dismissal claim against the host firm. An example of this is a nurse working for a nursing agency.”

The Applicant was a labour hire employee who entered into a work contract with Manpower and Manpower had a commercial contract to supply labour to the Distribution Centre. The Distribution Centre pays Manpower for labour and Manpower provides wages to the Applicant.

At no time did the Distribution Centre provide payment directly to the Applicant as a contract of service.

[13] On this basis, and relying on the decision in Re Advanced Australian Workplace Solutions Pty Ltd 1, Woolworths submitted that Mr Chidiac was not an employee of Woolworths. It is therefore not the employer and Mr Chidiac’s application for unfair dismissal against it must fail for this reason.

[14] In its submissions Woolworths also said that it had no contract of employment with Mr Chidiac and none of the essential elements to form a contract exist. Further, it said there was no intent to form a contract with Mr Chidiac with respect to employment at Woolworths.

[15] Manpower said that it is the employer of Mr Chidiac. It said that when Mr Chidiac registered with Manpower he completed a registration form in which states that Manpower will allocate jobs to him that he has the skills to perform. Further, it said it had full responsibility for all of his inductions.

[16] Manpower said that, while it has a contract with Woolworths to supply labour when Woolworths seek it, Woolworths control who is on its site at any one time and it can decide when an assignment comes to an end. When this occurs Manpower seeks to place its employee in another assignment. It said that Mr Chidiac is currently unavailable for assignment due to illness and it will attempt to place him on a further assignment when he returns from personal leave.

[17] Mr Chidiac submitted that the statutory enterprise agreement that applies at Woolworths (the National Union of Workers – Queensland Property Investments Pty Ltd Melbourne Regional Distribution Centre Enterprise Agreement 2013 (the Agreement)) overrides the ‘policy statement’ (which I take to mean the extract from the Benchbook set out in Woolworths’ Form F3 above) and that the Agreement is legally binding and covers both Mr Chidiac and Woolworths.

[18] Mr Chidiac submitted that the Agreement applies to all employees located at the Melbourne Regional Distribution Centre. He worked at that Centre and hence was covered by the Agreement.

[19] Mr Chidiac said that the Agreement covers all terms and conditions of his employment and therefore Woolworths has control of his employment and is therefore his employer. It relies on clause 2.1 of the Agreement to support this. Clause 2.2 of the Agreement states that ‘Woolworths Limited agrees to guarantee all employee entitlements for which the company is liable, and the company and Woolworths Limited will enter into a separate agreement with the union to effect this’. Mr Chidiac said that a guarantee of the type at clause 2.2 is ‘a contract to answer for the payment of some debt, or the performance of some duty by a third person’. Mr Chidiac stated that clause 2.2 provided a guarantee to him from Woolworths and his must, therefore, be an employee of Woolworths.

[20] Mr Chidiac further said that the Agreement, at clause 6.3.3, demonstrates that a casual employee who is not directly engaged by Woolworths is referred to as being an employee on the same terms and conditions as any of its other employees. In this respect he submitted that the engagement process is irrelevant to the employment relationship. This is so even though the Agreement refers to ‘labour hire casual’ but this should be taken as a reference to ‘the mode or vehicle’ of his engagement and not to his employment relationship with Woolworths.

[21] For these reasons Mr Chidiac submits that the Agreement overrides the ‘policy statement’ and/or that the statement does not apply to his particular circumstance.

[22] In the alternative Mr Chidiac submits that Woolworths and Manpower are associated entities within the meaning of the Corporations Act 2010 (Cth) because, he says, Woolworths exercised control over Manpower by dictating who it could or could not send to site. In essence Mr Chidiac says that Woolworths controls who Manpower can supply to it in the form of labour in that Woolworths determines who can work on its site and that this means the Woolworths does control the operations of Manpower.

[23] Mr Chidiac also argues that there is an agency relationship between Woolworths and Manpower such that Manpower is no more than an agency of Woolworths such that Mr Chidiac’s employment in with Woolworths.

Consideration

Does the Agreement cover Mr Chidiac?

[24] The Agreement is expressed to apply to Queensland Property Investments P/L (the Company), the National Union of Workers (NUW) and employees of the Company who are employed in classifications in the Agreement (clause 2.1).

[25] The ‘guarantee’ at clause 2.2 of the Agreement is a guarantee that Woolworths Limited gives (although it is not a party to the Agreement) for entitlements of employees of the company. Woolworths Limited and the Company will enter into an agreement to this effect.

[26] This guarantee is not a guarantee that the employer (Queensland Property Investments P/L 2) gives to employees but is one that Woolworths Limited gives. Clause 2.2 of the Agreement is not a guarantee by Queensland Property Investments P/L of employee entitlements but rather notation of an arrangement between Woolworths Limited, Queensland Property Investments P/L and the NUW. Even if it was a guarantee directed at employees it does not, of itself, show that Mr Chidiac is an employee. That must be established in the first instance before clauses in relation to rights and obligations of employees can be said to have effect. I do not accept that clause 2.2 supports Mr Chidiac’s claim that he was an employee covered by the Agreement.

[27] Mr Chidiac’s interpretation of clause 6.3.3 of the Agreement is flawed as he has made the mistake of reading a part of the Agreement out of context. The well-established principles of construction of an award (and agreements) are clear that the document must be read in context. 3

[28] The Agreement recognises that there will be casual employees directly engaged by Woolworths and there will be Agency casuals. That the generic terms ‘casual employees’ is used in clause 6.3.3 cannot override either the totality of the clause – which acknowledges that casual employees may be ‘directly engaged or not’ – or the remainder of the Agreement which recognises and establishes arrangements for the Agency casuals.

[29] Clause 6.3 of the Agreement allows for the engagement of casual employees then proceeds to set out the terms and conditions under which casual employees will be engaged. It provides, in addition, that Agency casuals will be employed on the same terms and conditions as directly hired casual employees.

[30] Clause 6.3.5(b) of the Agreement adds to this and places an obligation on Woolworths to only accept Agency casual staff if those staff receive the same pay and conditions as directly engaged casual staff.

[31] That Woolworths met this obligation in relation to its contract with Manpower does not make staff engaged through Manpower directly engaged employees of Woolworths. All Woolworths has done is meet its obligations under the Agreement.

[32] It is because of the operation of clause 6.3.3 of the Agreement that Manpower, through its arrangement with Woolworths, ensured that Mr Chidiac had the same terms and conditions as Woolworths directly engaged employees but it does not make Mr Chidiac an employee of Woolworths.

[33] That Woolworths agreed to only engage agency casual employees that receive the same wages and conditions as directly engaged casual employees does not make the agency engaged staff employees of Woolworths. The Agreement and its obligations have no binding effect on Manpower but rather is a commitment from the employer to the NUW and employees. There is nothing transformative in the clause such that any person working on the site – regardless of who they are employed by – is covered by the Agreement when they come on site.

[34] There is nothing in the submissions of Mr Chidiac that convinces me that the normal principles that apply to the interpretation of an agreement should be set aside in this case. There is nothing in the Agreement that indicates a person such as Mr Chidiac is covered by the Agreement. The majority of the clauses that Mr Chidiac relies on apply to ‘employees’. It is necessary that he first establish that he is an employee before he can make claim to coverage of the Agreement. To argue that he is an employee and therefore the Agreement covers him is a completely wrong approach to the question.

[35] To accept Mr Chidiac’s submission would be to accept that where a labour hire employee is placed on assignment and the terms and conditions of the labour hire employee are the same as the direct employees then the labour hire employee is, in fact, a direct employee. Nothing has been put that would enable a conclusion with such import to be reached.

[36] The law recognises the existence of labour hire arrangements whereby a principal enters into a contract with an agency for that agency to provide labour to the principal. The agency then provides its employees on ‘assignment’ to the principal. There is a contracting relationship between the principal and the labour hire firm and there is a legitimate employment relationship between the labour hire firm and the employee it places on assignment with the principal. That, in this case, Mr Chidiac was placed on assignment with Woolworths for over three years might suggest Woolworths is nor monitoring its use of agency staff particularly well but it does not change the fundamental relationships between Woolworths and Manpower on the one hand and Manpower and Mr Chidiac on the other.

[37] There is no suggestion that Mr Chidiac is a contractor such that matters associated with who controls or directs his work is relevant.

Is there a contract of employment between Mr Chidiac and Woolworths?

[38] For Mr Chidiac to be covered by the Agreement he must be an employee of Woolworths. For him to be an employee of Woolworths there must be a contract of employment between him and Woolworths – either written or oral.

[39] Whether or not Mr Chidiac is an employee of Woolworths is a matter of law and fact. I am satisfied that Mr Chidiac has not entered into a contract of employment with Woolworths. None of the elements necessary for the formation of a contract are present in this case. There has been no intention on behalf of Woolworths, and Mr Chidiac presents no evidence of any intention on his part, to create a contract. There has been no offer of employment to Mr Chidiac or acceptance by him of such an offer; and there has been no payment direct to Mr Chidiac by Woolworths in return for his labour.

[40] I am therefore satisfied that there is no employment contract between Mr Chidiac and Woolworths.

[41] Mr Chidiac submits that the Agreement is a contract between Woolworths and its employees. In making such a submission, Mr Chidiac misunderstands the standing of an enterprise agreement and its relationship to the contract of employment. It is well established that a contract of employment and an award (or agreement made in accordance with the relevant legislation) are separate instruments. An employment contract must be entered into before an enterprise agreement can apply. The enterprise agreement does not replace the contract of employment. Further, the terms of the enterprise agreement are not automatically part of the contract of employment unless expressly incorporated into the contract. Even if Mr Chidiac is correct that does not overcome the fact that there is nothing in the Agreement that makes him an employee of Woolworths.

[42] I am satisfied that Mr Chidiac does have an employment relationship with Manpower. Mr Chidiac agreed that his employment contract is most likely with Manpower (although not under oath), that he is paid by Manpower and that Woolworths does not pay him. To the extent that Mr Chidiac suggests that Manpower is no more than an agent that processes his pay I do not accept that this has any credence. Further, following the end of his placement at Woolworths Mr Chidiac wrote to Manpower about his future employment. There is no evidence that he approached Woolworths about the end of his employment but rather his contact was with Manpower.

[43] During the mention of this matter I requested that Manpower provide a copy of the registration papers signed by Mr Chidiac when he commenced with Manpower. On a search for the documents Manpower indicated that it had lost the document in some office relocation but it was aware, from its electronic records, that Mr Chidiac had signed the registration papers on 20 November 2012. Further, electronic records of Manpower indicate activity on Mr Chidiac’s record through until at least 2013. Mr Chidiac agreed that, prior to commencing work at Woolworths he had to go through Manpower. Regardless of any documentation between Manpower and Mr Chidiac I find that there is not contract of employment between Mr Chidiac and Woolworths.

Are Woolworths and Manpower associated entities?

[44] Mr Chidiac suggested that Woolworths and Manpower are associated entities within the meaning of the Corporations Act 2010 because Woolworths exercised control over Manpower in that it could dictate to Manpower who it sent to the Woolworths site.

[45] I think that Mr Chidiac misunderstands or misrepresents the provisions of the Corporations Act 2010. Section 50AA of the Corporations Act 2010 states:

Control

(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(2) In determining whether the first entity has this capacity:

(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and

(b) any practice or pattern of behaviour affecting the second entity’s financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).

(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity’s financial and operating policies.

(4) If the first entity:

(a) has the capacity to influence decisions about the second entity’s financial and operating policies; and

(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity’s members;

the first entity is taken not to control the second entity.

[46] There is nothing that has been put by Mr Chidiac that suggests Woolworths has the capacity to determine the outcome of decisions about Manpower’s financial and operating policies. That Woolworths may have a say as to who Manpower can send on assignment to its site does not allow Woolworths to determine the outcome of operating and financial policies of Manpower. Manpower is a multinational company. It is unlikely that Woolworths indicating that Mr Chidiac (or some other person) cannot enter the Woolworths site on assignment from Manpower determines financial or operating policies of Manpower. Even if the consideration of Manpower was restricted to its operations in Australia it is not possible to see how Woolworths’ actions could possibly be seen to determine financial or operating policies of Manpower in any real or practical sense.

[47] The determination of Woolworths as to who comes on to its site cannot be equated to the determination of financial or operating policies of Manpower.

[48] I do not accept that Woolworths and Manpower are associated entities.

Is there an agency arrangement between Woolworths and Manpower?

[49] Mr Chidiac further claims that Manpower is an agent of Woolworths because ‘they have a contract with Woolworths to represent them in the provision of labour.’ Further, Mr Chidiac says that the essential elements for an agency relationship exist – that is that there is a contract between Woolworths and Manpower that entails Manpower (in this case) acting according to the dictates of Woolworths.

[50] Mr Chidiac confuses the contract between Woolworths and Manpower and the employment contract between Manpower and Mr Chidiac with the existence of an agency arrangement between Woolworths and Manpower.

[51] It is true that Manpower provide labour to Woolworths as Woolworths require and in accordance with a contract between Woolworths and Manpower. Whilst that contract is not in evidence one can reasonably assume, based on known matters, that it requires that any labour assigned to Woolworths at the site Mr Chidiac worked at be provided the equivalent terms and conditions as those that apply to directly engaged employees as set out in the Agreement. It is reasonable to assume that the contract also leaves to Woolworths the acceptance or otherwise of a person Manpower propose to place on assignment – that is Woolworths can reject a person put forward by Manpower.

[52] Following the end of the mention Mr Chidiac’s representative sought to provide more authorities to the Commission on the matter of ‘agency’. I decided to allow this further information to be provided.

[53] I have considered the authorities provided by Mr Chidiac and I am not convinced they help his cause.

[54] In Homecare Direct Shopping Judy Gray 4 an agency agreement existed (and was not disputed to exist) between Homecare Direct and its area manager. The area manager then engaged Ms Gray on a distributor agreement. The question before the Court (on appeal) was whether it was reasonably open, in the decision at first instance, for it to be found that a contract existed between Homecare and Ms Gray. In considering the matter the Court of Appeal considered aspects of the agency arrangement including the principals relevant to determining the existence of a principal/agency relationship. One of those principles is stated to be that:

(c) The parties cannot by ‘labelling’, no matter how genuinely intentioned, either confer a particular legal character on a relationship that it does not possess or deny it a character that it does possess. ‘Labels’ are not a substitute for legal analysis of the evidence. 5

[55] That principal must hold true regardless of the approach to the question. Mr Chidiac cannot make the relationship between Woolworths and Manpower one of principal/agency just by calling it that.

[56] Whilst I accept that the actual arrangements need to be considered in its totality and the labelling of the arrangement as labour hire alone does not make it as such, I do not consider the decision in Homecare Direct has any bearing on the matter before me. In this case there is no agency relationship between Woolworths and Manpower and there is no dispute that Mr Chidiac is an employee. The matter goes to who the employer is. Further, the role of Woolworths is not ‘pivotal’ in terms of where, when or how Mr Chidiac works. Woolworths could no longer exist tomorrow but that would not change the nature of the relationship between Mr Chidiac and Manpower or its capacity to place him on assignment.

[57] In Scott v Davis 6 Gummow J said:

The term ‘agency’ is best used, in the words of the joint judgment of this Court in International Harvester Co of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Co, ‘to connote an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties’.

Usually the legal relations so created will be contractual in nature. In all these cases, the principal’s liability will not be vicarious. The resultant contract is formed directly between the principal and the third party and there is no contract between the agent and the third party which is attributed to the principal.

[58] In this case there is no capacity for Manpower to create any legal relationship between Mr Chidiac and Woolworths.

[59] Mr Chidiac also referred me to the decision in ACE Insurance Limited v Trifunovski 7. I have considered that matter and again do not consider it relevant to the matter before me. The central question in that case was whether insurance agents were contractors or employees. It is not clear to me how matters of ‘control’, canvassed in that decision, are relevant in this case. If this matter went to the question of contractor/employee it would be more evident.

[60] There is no evidence that the role of Manpower is to recruit potential employees for Woolworths who are then directly employed by Woolworths following some assessment of their suitability much on the way a recruitment agency might work. These are quite different tasks and are to different ends. The labour hire function and assignment of employees provides Woolworths with some flexibility in its staff numbers as demand dictates. That Manpower provides such labour as requested by Woolworths does not change the status of Mr Chidiac.

[61] Further, I am not convinced that Manpower has ever represented itself as an agent of Woolworths or that Woolworths have indicated Manpower is its agent such that employment by Manpower could possibly be considered as employment by Woolworths.

Is Mr Chidiac an employee of Manpower?

[62] I am satisfied that Mr Chidiac is an employee of Manpower.

[63] Mr Chidiac agreed that he is paid by Manpower as a casual employee. To the extent it is necessary for this decision I do note that, when his assignment with Woolworths came to an end, Mr Chidiac did contact Manpower as to why he was not getting any further hours with Woolworths and, on request form Manpower, he forwarded to it an updated resume for the purpose of Manpower quickly securing a further assignment for him.

[64] Whilst Manpower could not produce Mr Chidiac’s initial employment documentation I am satisfied on the basis of the material provided and Mr Chidiac’s own statements to the Commission and based on Mr Chidiac’s immediate approach to Manpower when his assignment at Woolworths came to an end that he is an employee of Manpower.

Conclusion

[65] For the reasons outlined above I am satisfied that Mr Chidiac is not an employee of Woolworths.

[66] Mr Chidiac’s application for unfair dismissal from Woolworths is therefore dismissed. An order to this effect will be issued in conjunction with this decision.

[67] Given this finding it is necessary to deal with Mr Chidiac’s application for an extension of time within which Mr Chidiac can make an application for unfair dismissal against Manpower.

[68] Despite suggestions from the Commission that this matter should be dealt with in total pending this decision as to who is employer is, Mr Chidiac insisted that he be able to present material as to an extension of time at the time of the mention of both matters. At Mr Chidiac’s insistence I agreed to take submissions from him. No evidence was given. At the conclusion of the hearing it was agreed that if I found in this decision that Manpower was Mr Chidiac’s employer Manpower would be given five (5) workings days from date of decision days in which to make its submissions in reply to those of Mr Chidiac and Mr Chidiac would have a further three (3) working days in which to make an submissions in reply.

[69] Should the parties consider this is not adequate or should Mr Chidiac wish to call evidence in relation to the extension of time or there are other matters which require attention my chambers must be advised of this by close of business on 4 March 2016.

[70] Manpower therefore is required to provide its submissions as to Mr Chidiac’s application for an extension to time within which to make his application by 5.00pm 10 March 2016.

[71] Mr Chidiac will have until 5.00pm 15 March 2016to provide any submissions in reply.

[72] Unless either party requests otherwise, the application for an extension of time will be dealt with on the papers.

COMMISSIONER

Appearances:

T Ibrahim for Mr Chidiac.

F Ahmadzai of Queensland Property Investments Pty Ltd T/A Woolworths Ltd.

HA Macalister of Manpower.

Final written submissions:

Applicant, 25 February 2016

 1   Re Advanced Australian Workplace Solutions Pty Ltd (unreported, AIRCFB, Giudice J, McIntyre VP and Redmond C, 25 October 1999) Print S0253.

 2   Whilst ‘Woolworths’ is used generically to describe the employer at the site where Mr Chidiac worked, the actual employer

is Queensland Property Investments P/L.

 3   Golden Cockerel v The Australasian Meat Industry Employees Union[2014] FWCFB 7447.

 4 [2008] VSCA 111.

 5 [2008] VSCA 111, [48].

 6 (2000) 204 CLR 333, cited in Homecare Direct [44].

 7 [2013] FCAFC 3.

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