Lukies v S2V Consulting Pty Ltd and Anor (No.2)

[2019] FCCA 380

FEDERAL CIRCUIT COURT OF AUSTRALIA

LUKIES v S2V CONSULTING PTY LTD & ANOR (No.2) [2019] FCCA 380

Catchwords:
INDUSTRIAL LAW – Application alleging contravention of s.119 and s.44 of the Fair Work Act 2009 – whether the first respondent failed to make a redundancy payment to the applicant – whether the offer of employment made by the second respondent to the applicant was less favourable – no breach of s.119 or s.44 of the Act is made out.

Legislation:

Fair Work Act 2009 (Cth), ss.22, 55, 119, 122, 562

Cases cited:

Sensis Pty Ltd v Gundi [2017] FCA 1519

Applicant: GRANT LUKIES

First Respondent: S2V CONSULTING PTY LTD

Second Respondent: AMEC FOSTER WHEELER AUSTRALIA PTY LTD

File Number: PEG 364 of 2016

Judgment of: Judge Street

Hearing date: 19 February 2019

Date of Last Submission: 19 February 2019

Delivered at: Perth

Delivered on: 19 February 2019

REPRESENTATION

Counsel for the Applicant: Ms K Stewart

Solicitors for the Applicant: Culshaw Miller Lawyers

Counsel for the Respondents: Ms R Lee

Solicitors for the Respondents: DLA Piper

ORDERS

1. The application against both respondents is dismissed.

2. There is to be no order as to costs between the parties including the reserved costs.

DATE OF ORDER: 19 February 2019

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PERTH

PEG 364 of 2016

GRANT LUKIES

Applicant

And

S2V CONSULTING PTY LTD

First Respondent

AMEC FOSTER WHEELER AUSTRALIA PTY LTD

Second Respondent

REASONS FOR JUDGMENT

1. This is an application brought within the Court’s jurisdiction under s 562 of the Fair Work Act 2009 (Cth) (“the Act”) in respect of an alleged contravention of s 119 of the Act and consequently a contravention of s 44 of the Act in respect of the alleged failure of the first respondent to make a redundancy payment required under s 119 of the Act.

2. The second respondent is not an entity in respect of which there was an offer of employment made to the applicant, which the applicant contends failed to comply with requirements of s 122(3) of the Act, on the basis that the applicant did not receive an offer of employment made by another employment that met the requirements of s 122(3)(a)(i) of the Act. The second respondent was subsequently joined to the proceedings on the basis of an allegation of their involvement in the alleged contravention.

3. The proceedings were commenced on 11 August 2016. The amended statement of claim filed on 15 June 2018 pleaded that the applicant did not sign or accept the terms and conditions of the proposed contract, which was identified as being contained in the letter dated 24 May 2016, because it:

   a)failed to include the Return to Full Time Work Clause and the Redundancy Clause;

   b)changed the applicant’s job description from “Global Director - Technical Safety” to “Senior Consultant”, back at schedule 1 of the proposed contract), which effectively removed, inter alia, his responsibilities in dealing and implementing strategic growth initiatives globally, coordinating technical safety work between other regional locations, development of the TSR team personnel and his lines of reporting;

   c)changed the applicant’s line of reporting from the General Manager to the Technical Safety & Risk Manager;

   d)included a new restraint provision (clause 21 of the proposed contract);

   e)was incomplete in that the company policy documents and formal job description were missing, which was of particular importance to the applicant because he had not been formally advised what role he would actually be performing for the second respondent; and

   f)stated at paragraph 28.2 that the proposed contract superseded any prior discussion, agreement or understanding or anything connected with the subject matter of the proposed contract and therefore the applicant could not rely on the Return to Full Time Work Clause and the Redundancy Clause.

4. The applicant’s employment was terminated on 14 June 2016 by the first respondent and no redundancy payment was made in circumstances where the first respondent contended that there had been in fact an offer of employment rejected by the employee that met the requirements of s 122(3)(a)(i) and (ii) of the Act, as well as the requirements of s 122(3)(b) of the Act. There is no issue in the present case in respect of the requirements of s 122(3)(a)(ii) and (b) of the Act in fact being met.

5. The obligation to satisfy the Court that the applicant did not receive an offer of employment made by another employer that met the requirements of s 122(3)(a)(i) of the Act lies on the applicant: see Sensis Pty Ltd v Gundi [2017] FCA 1519 at [33] to [37].

6. The applicant identified that at the time of his termination he had been employed by the first respondent for at least seven years and that he was entitled to redundancy pay under s 119(2) of the Act in the sum of $66,274.05. The applicant was also seeking a penalty hearing if the alleged contravention was made out in respect of s 119 of the Act. The applicant submitted that the offer of employment received by the applicant did not satisfy the requirements of s 122(3)(a)(i) of the Act so that his entitlement to redundancy pay was not affected.

7. The applicant did not dispute that the requirements of s 122(3) of the Act were satisfied insofar as:

   a)there was an offer made to him by the second respondent, being a second employer for the purposes of s 122(3) of the Act;

   b)the offer of employment from the second respondent recognised the applicant’s service for the first respondent, being the first employer for the purposes of s 122(3) of the Act;

   c)he did not dispute that if there had been an acceptance of the offer, which was rejected, the applicant would have been the subject of a ‘transfer of employment’ within the meaning of s 22(7)(a) of the Act.

8. The applicant referred to the written employment contract that was entered into on 17 February 2009 (“2009 Agreement”), at a time that the applicant’s position was “Technical Safety and risk director”. There was a written job description which the applicant received prior to accepting the offer of employment. In or about January 2014, the applicant alleges his position changed to “Global Portfolio Director - Technical Safety and Risk” and that his duties were the subject of a written job description.

9. The applicant submitted that on 21 April 2016, the applicant entered into an amended agreement with the first respondent which reflected changes to his remuneration package and other financial benefits and entitlements following the acquisition of the respondent business by Amec Australia Finance Company Pty Ltd. The applicant alleged that on 21 April 2016, the applicant entered into a further amended written employment agreement whereby he agreed to temporarily reduce his working days from five to four days per week, representing a 20 per cent reduction to his salary and a reduction in working hours from 40 to 32 hours per week.

10. The applicant identified the express terms in the Amended Hours Agreement in respect of:

    a)the original salary being reduced to the sum of $231,384.76 per annum in light of the reduced working hours from 40 to 32;

    b)the agreement would be subject to a term that the working hours and remuneration would be reviewed in March 2017 and on 1 April 2017 and that by mutual agreement either his reduced hours and remuneration would continue or it would revert to full-time status but with a total remuneration package valued to 10 per cent less his original salary;

    c)that in the event the applicant’s position was made redundant before 1 April 2017, the contract was the subject of a term that his redundancy would be based on his original salary and his entitlements.

11. The applicant also referred to the agreement referring to the applicant’s terms otherwise remaining the same as set out in his current employment contract and the subsequent letter dated 21 March 2016.

12. The applicant submitted that the offer of employment was less favourable in the following respects: first, it was not a permanent part-time position; second, it did not contain a Return to Full Time Work Clause; thirdly, it did not contain a Redundancy Clause; fourthly, the position was Senior Consultant reporting to the Manager of Technical Safety and Risk - grade XO nominal position, and alleged the position was a demoted one of reduced grade and of diluted roles, responsibilities and deliverables; and, lastly, that the agreement contained a restraint of trade provision which the applicant had not previously been subject to. 

13. The Court heard evidence from the applicant in support of his case and the applicant was cross-examined. There was a conflict between the applicant and Mr Goodwin, the general manager of the first respondent, in relation to the timing of particular discussions and the topics that were raised in the course of those discussions, including, in particular, the applicant’s role, being described as a senior consultant. The Court prefers the evidence of Mr Goodwin to that of the applicant that were in conflict in respect of the meetings and conversations, the applicant’s role, reporting and employment terms.

14. The applicant did not impress the Court as a witness of truth. The applicant asserted that he had an entitlement to return to full-time paid employment in 2017. That assertion is not consistent with the terms of the communications and it was an exaggeration by the applicant and, the Court finds, a deliberate exaggeration. The Court does not accept the applicant as a reliable witness in respect of the events and communications which took place. The Court prefers the evidence of Mr Goodwin to the extent of the conflict between the parties.

15. The first respondent was an entity providing consulting services in the oil industry and was affected by a downturn in the industry that gave rise to employees entering into reduced employment entitlements for the survival of the first respondent. Whilst being a Technical Safety and Risk Director from 25 February 2009 to sometime in mid/late December 2010, initially reporting to Gordon Cowper, Operations Director, the applicant then performed roles as a Special Services Director from mid/late 2010 to September 2014, reporting to Harry Lassila, Operations Director, and from July 2013 onwards, reporting to Mr Goodwin as the Regional Operations Manager Australia and New Zealand and then as General Manager. The applicant held the position of Global Portfolio Director - Technical Safety and Risk from September 2014 until March 2016, reporting to Mr Goodwin as the General Manager. From March 2016 until June 2016, the applicant held the role of Senior Consultant, reporting to Fred Blackmore, the Technical Safety and Risk Manager.

16. The applicant disputes that he held the role of Senior Consultant from March 2016.

17. The Court prefers the evidence of Mr Goodwin in that regard and the Court finds that there were discussions in respect of the intended changed role as identified by Mr Goodwin in 2016, which relevantly included informing the applicant words to the effect of:

    We need to review your job title and your job description in light of the changes to the market and the business - Global Portfolio Director isn’t really appropriate any more. I see your role continuing largely as is, in terms of the project work you do in Australia and the wider region…

    It makes sense for you to report into Fred now as a link back into the Perth business.

    I don’t see you as subordinate to Fred - this is more about communication.

18. The Court accepts that on 29 March 2016, Mr Goodwin in a meeting with the applicant informed the applicant words to the effect of:

    …we need to review the Job/Position Description to reflect the modified organisational structure.

19. The Court does not accept that the applicant took issue with the description of “Senior Consultant” raised at that meeting. The Court accepts that Mr Goodwin said words to the effect:

    I feel that your job title might be changed to something like "Senior Consultant" as there isn't a global aspiration any more, but that in my view your day to day role would not change that much given that most of your work is HAZOP project work and BD in and around Australia, SE Asia and Middle East as it has always been.

20. The applicant received an email from Mr Goodwin on 29 March 2016 in which his job description by the first respondent was changed to “Senior Consultant - Divisional Director - Divisional Manager (XO Job Description)”. The job description, marked Exhibit A, included the responsibilities and duties, as well as a reference to qualifications and competencies. It described the location as being in Perth and referred to a billing grade description of X0, which referred to a custom procedure for fees to clients, and referred to “Senior Consultant” and the applicant reporting the Divisional Director/Discipline Lead.

21. The Court accepts that this gave rise to a description agreed by the parties within the first respondent of the applicant’s position and that he was thereafter a Senior Consultant with the first respondent, as asserted by Mr Goodwin, up until the time of the making of the offer by the second respondent.  In this regard, the Court accepts that the email of the applicant in response to the email from Mr Goodwin of 30 March 2016, in which the applicant said, “Looks about right to me,” on a fair reading, included the job description being “right” in respect of him becoming a Senior Consultant.

22. The Court does not accept that the applicant’s role with the first respondent after March remained as described as “Technical Safety and Risk (TSR) Portfolio Manager (global)”. The Court finds that the applicant’s role thereafter was as identified in exhibit A, being a Senior Consultant. On 20 April 2016, the applicant signed a contract of employment varying his contract from full-time to part-time salary effective from 1 April 2016 and with his status being changed from full-time to part-time. That contract identified the new part-time remuneration details, being 32 hours a week and a total remuneration package of $231,384.76.

23. The contract referred to the applicant earning leave accruals, as well as public holidays, and relevantly provided aside the heading ‘Period of review’:

    Your working hours and remuneration will be reviewed in March 2017 and by mutual agreement as of April 1^st 2017, either the reduced hours/remuneration detailed in this letter will continue, or, you will revert to full-time status with a TPR less 10% of your previous full-time TRP.

24. The Court finds on no view it was that term one that entitled the applicant to return to full-time employment, as he asserted from the witness box. Further, on a fair reading of the review clause, the applicant was provided with a certain date for the purpose of a review but no certainty in respect of whether he would continue to remain part-time or full-time. The provision as such was really one giving the applicant certainty only as to timing in respect of discussions. The agreement also included:

    As communicated to all employees recently, should you be made redundant between now and April 1^st 2017, your redundancy payment will be based on your previous full time salary and entitlements (as they were prior to April 1^st, 2016). Should you be made redundant after April 1^st 2017 your redundancy payment will be based on the existing contract conditions at the time of redundancy.

25. This term, on its face, identified a 12-month period in which if the applicant were made redundant the calculation of the redundancy payment would not be based on his part-time salary but would be calculated on his former full-time salary. The provision effectively ceased after 1 April 2017. The contract identified that all other terms and conditions in the applicant’s employment contract and the subsequent letter dated 21 March 2016, remain unchanged. The letter was accepted and signed by the applicant on 21 April 2016.

26. By email dated 24 May 2016, Josephine Robertson, the Human Resources Advisor on behalf of the second respondent, wrote to the applicant attaching the applicant’s Amec Foster Wheeler contract of employment. The email provided that the applicant let the author know when he is free and will “drop by and give you the original with the additional payroll documents” that are required for the applicant to complete. The email noted:

    There is mention of a position description there, this is standard to our contract template, as you already have a PD we’ve not included this, however if you do require one we can address this in the near future.

27. On a fair reading, the email clearly identified that the applicant’s existing position description would continue. That was a description of a Senior Consultant. The letter dated 24 May 2016 identified that this was the making of an offer of part-time employment on the terms and conditions set out below, commencing on the date specified in Item 2 of Schedule 1. The Schedule 1 in that regard identified the commencement on 1 June 2016. There is also a service recognition date being 25 February 2009.

28. The Schedule identified the applicant holding the position with the title Senior Consultant, and identified in relation to the applicant having to report to the person who holds the management position identified in Item 4 of Schedule 1, that the applicant would be reporting to Mr Max Goodwin, General Manager. The letter also identified that reporting lines may change from time to time.

29. The letter identified a location in respect of the work, being the Perth office. The letter identified a total remuneration package identical to that which the applicant had signed with the first respondent on 21 April 2016. The letter identified the superannuation fund, hours worked being 32 hours per week, and identified the days in the Schedule. Under the heading “Job Description” there is reference to:

    the purpose of your role, your reporting lines, responsibilities and levels of authority are detailed in your Position Description, which is attached and may be varied from time to time by the Company.

30. It is common ground that no position description was actually attached to the covering letter, and that is because it had been the subject of the explanation in the covering email of 24 May 2016 that made clear on plain reading that the applicant would continue to be the person who held the same position description with the second respondent as that he had in exhibit A through the first respondent.

31. The contract had provisions relating to remuneration, remuneration payment, superannuation, salary packaging, incentive scheme, expenses, taxation, annual leave, personal/carer’s leave, compassionate leave, parental leave, long service leave, and working hours. There was a provision that referred to a probationary period, however, item 10 identified no such provision was applicable. There are provisions dealing with car parking, telephone and laptop, and confidential information. There is a restraint clause that:

    For a period of 6 months following termination of employment, regardless of the circumstances in which the employment was terminated, you must not solicit, encourage or otherwise entice any staff of the Company or affiliated companies in the Amec Foster Wheeler Group to work for or be otherwise engaged in any new business, undertaking or activity in which you may be involved.

32. There is a clause relating to use of business names, and clause 23.1 provided:

    If any problems or issues arise during your employment, the matter should be discussed with your immediate manager. If the problem remains unresolved, you should refer it to more senior levels of management for further discussion.

33. Clause 23.1, whilst not locking in a particular time for review of the applicant’s terms and conditions, was a provision that facilitated, in substance, the same type of step that the review clause did, albeit without a specific date.

1. There was a provision concerning occupational health and safety, a provision concerning termination, employment policies, privacy and a provision concerning acceptance, which relevantly included in clause 28.2:

   This Contract supersedes any prior discussion, agreement or understanding on anything connected with the subject matter of the contract.

2. The letter also included:

   Should you have any queries, please do not hesitate to contact your HR representative specified in Item 14 of Schedule 1.

3. In that regard, there was a reference to Josephine Robertson. The last sentence again provided a mechanism for consultation or review, if the applicant sought to do so in respect of the terms of the contract in due course.

4. Following the communication of that offer the applicant raised a concern in the cover of an email dated 26 May 2016, in relation to the remuneration and the review, as well as expressing concern in respect of there being no new ‘AFW’ job description attached. The applicant stated that he had expressed concern in relation to the remuneration provision, superannuation, taxation, working hours and restraint.

5. After sending that communication, the applicant received an email from Ms Robertson dated 27 May 2019, the person identified in the proposed contract of offer, to identify that:

   … that the period of Review clause in your letter titled “Fulltime to Part-time Salary and Hours Change” dated 20 April 2016 will be honoured by Amec Foster Wheeler.

6. It was then set out how that would be honoured, as set out below:

   Period of review: Your working hours and remuneration will be reviewed in March 2017 and by mutual agreement as or April 1st 2017, either the reduced hours/ remuneration detailed in this letter will continue, or, you will revert to fulltime status with a TRP less 10% of your previous full time TRP.

   As communicated to all employees recently, should you be made redundant between now and April 1st 2017, your redundancy payment will be based on your previous full time salary and entitlements (as they were prior to April 1^st 2016). Should you be made redundant after April 1st 2017 your redundancy payment will be based on the existing contract conditions at the time of redundancy.

   Should you have any questions please feel free to contact me.

7. There is an issue in the proceedings as to whether or not the email dated 27 May 2016 is properly described as being part of the offer of employment made by the second respondent. The letter was written by a person identified in the offer of employment as having the authority to make communications in respect of a contract. The email dated 27 May 2016 was plainly intended to have binding effect by the second respondent if the contract was accepted by the applicant. There is no significance as to whether the email was annexed to the offer document or not.

8. Nor does the Court accept the submission that clause 28.2 of the contract of employment detracted from or prevented the offer as identified as including the content of the email of 27 May 2016, being one that would bind the second respondent. Given the communications between the parties the Court would have given effect to clause 28.2 to the extent that the agreement had been accepted, and where there was any attempt to depart from it, the effect of the communication identified in the email dated 27 May 2016, was contractual, binding and enforceable had the applicant accepted the offer.

9. The Court finds the offer did not suffer from any deficiency of the kind pleaded by the applicant or alleged by the applicant in the applicant’s case that there was no review clause and no redundancy clause of the kind identified in the letter of 20 April 2016. The other complaints by the applicant that it was for a part-time position, are of no substance because the applicant was already in a part-time position and had no contractual entitlement to return to a fulltime position. In that regard it could not be said that the offer in relation to employment with the second respondent in the part-time position for 32 hours a week, on the same salary as the applicant then had with the first respondent, was on a basis less favourable than the employee’s terms and conditions of employment with the first respondent immediately before the termination.

10. Secondly, for the reasons the Court has just given, it is not correct to say that the offer did not include the effect of the undertaking identified in the email dated 27 May 2016.

11. Further, for the reasons the Court has already given, I do not accept that the applicant’s position was other than that of Senior Consultant at the time the offer was made. The communications made it clear that the applicant’s full description in respect of his current position continued to apply.

12. The communications from Mr Goodwin had made clear to the applicant that in substance he would continue to perform his similar role albeit with curtailment so far as concerns overseas opportunities. There was not, in substance, on the material before the Court to be a change in the nature, status or role of the applicant as a Senior Consultant, and, indeed, his line of reporting to upper management remained one in which the applicant was then having the benefit of reporting to the General Manager, Mr Goodwin, in relation to the proposed new contract of employment.

13. There is no substance to the proposition that the position was one reflecting any demotion or a diluted role in responsibility. There was reduced business of activities of the second respondent. The Court finds that the position was not one of demotion or reduced grade.

14. Further, the inclusion of the restraint clause, which on its terms identified the limited period as referred to above, of six months, is not something which on an overall basis could give rise to the terms and conditions being regarded as being less favourable than the applicant’s terms and conditions of employment with the first respondent.

15. In the course of the applicant’s evidence the applicant asserted that the communications he received were ones in which he was asking for exactly the same terms as he already had. Section 122(3) of the Act does not entitle the applicant to exactly the same terms. The applicant complained that he had endeavoured in the communications to seek amendments to the offer from the second respondent. That complaint rings hollow when the applicant advances an assertion that the email in response to his own request for acknowledgment in respect of a review on redundancy was said to somehow not form part of the agreement simply because it would not be formally included in the contract the applicant was to execute and it was clearly of contractual force.

16. Whether formally included or not, it is apparent that a Court would give effect as contractually binding to the communication on 27 May 2016, regardless of whether the applicant subsequently signed the agreement containing the clause 28.2. It is not appropriate to treat the offer that the Court is required to consider under s 122(3) of the Act as if that email dated 27 May 2016 was not part of the proposed offer of employment.

17. Further, even if the Court were to regard the email dated 27 May 2016 as not being part of the offer of employment, it needs to be looked at only through the lens of the substance of the email of 24 May 2016 in the terms of the attached offer and schedule. The ability of the applicant pursuant to clause 23 to seek to raise problems and/or pursuant to the last sentence, in substance gave the applicant an ability to raise concerns in respect of seeking a review, albeit it not a fixed date.

18. On an overall basis, accordingly, the offer of employment was no less favourable than the applicant suggests in terms and conditions, even if the email dated 27 May 2016 was disregarded and did not have the binging effect. Further, if the email dated 27 May 2016 was not included so far as redundancy is concerned, the applicant was then employed on a part-time basis and had the benefit of the commencement date from 1 June 2016. If the applicant had been terminated prior to 1 April 2017, which was a hypothetical issue, the Court does not accept that on an overall basis the omission of the provision in the email dated 20 April 2016 should be considered no less favourable than the applicant’s terms and conditions of employment with the first respondent. Whether looked at collectively in terms of the matters raised by the applicant, or on an individual basis, none of the matters identified by the applicant give rise to the offer of employment from the second respondent being one that was not substantially similar to in its terms and conditions. When considered on an overall basis, the offer was no less favourable than the employee’s terms and conditions of employment with the first employer immediately before the termination.

19. The applicant has failed to persuade the Court that the terms and conditions of the offer of employment of the second respondent was not substantially similar to, and when considered on an overall basis no less favourable than, the employee’s terms and conditions of employment with the first respondent immediately before termination. Accordingly, the offer complied with the requirements of s 122(3)(a)(i) of the Act.

20. Accordingly, there has been no breach of s 119 or s 44 of the Act.

21. Accordingly, the applicant’s case against both respondents fails.

22. The Court notes that there was not, in any event, any proper basis upon which it could have been said that the second respondent knowingly participated in any alleged contravention by the first respondent, even if a contravention had been made out.

23. Further, the Court notes that this is a matter where there was a genuine dispute in respect of the provisions of s 122 of the Act, and it is not one where the Court would have entertained any issue of penalty even if a contravention had been made out. There was otherwise agreement in respect of the relief to which the applicant would have been entitled if the applicant had succeeded against the first respondent in terms of the quantum.

I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate:  

Date:  26 June 2019