McNeill v Australian Glass Group Pty Ltd and McNeill v Australian Glass Group Pty Ltd
[2016] FCCA 767
•8 April 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MCNEILL v AUSTRALIAN GLASS GROUP PTY LTD and MCNEILL v AUSTRALIAN GLASS GROUP PTY LTD | [2016] FCCA 767 |
| Catchwords: INDUSTRIAL LAW – Small claims. |
| Legislation: Fair Work Act 2009 (Cth), ss.26, 90, 117, 311 |
| Applicant: | KIM MCNEILL |
| Respondent: | AUSTRALIAN GLASS GROUP (QLD) PTY LTD |
| File Number: | BRG 436 of 2014 |
| Applicant: | TRAVIS MCNEILL |
| Respondent: | AUSTRALIAN GLASS GROUP (QLD) PTY LTD |
| File Number: | BRG 437 of 2014 |
| Judgment of: | Judge Baumann |
| Hearing date: | 24 October 2014 |
| Date of Last Submission: | 24 October 2014 |
| Delivered at: | Brisbane |
| Delivered on: | 8 April 2016 |
REPRESENTATION
| The Applicants appeared in person |
| Solicitors for the Respondents: | M+ K Lawyers |
ORDERS
That the Application filed in BRG436 of 2014 on 15 May 2014, be dismissed.
That the Application filed in BRG437 of 2014 on 15 May 2014, be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 436 of 2014
| KIM MCNEILL |
Applicant
And
| AUSTRALIAN GLASS GROUP (QLD) PTY LTD |
Respondent
BRG 437 of 2014
| TRAVIS MCNEILL |
Applicant
And
| AUSTRALIAN GLASS GROUP (QLD) PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
Because the facts and determinative issues in the two separate claims under the Fair Work Act 2009 (Cth) (filed in the Small Claims Division of this Court), are essentially the same, it is efficient to deliver reasons in both matters contemporaneously.
For the purpose of these reasons, Kim McNeill shall be described as “Ms McNeill” and Travis Mc Neill shall be described as “Mr McNeill”. Both Ms and Mr McNeill say they were employed by Horizon Glass Pty Ltd (“Horizon Glass”) to 18 December 2009. Ms McNeill was employed full time as a Customer Service Assistant from about May 2006. Mr McNeill was employed full time as a Productions/ General Manager since about July 2000.
Ms McNeill claims the Respondent was her employer from 21 December 2009 to 19 February 2010 and breached s.90 of the Fair Work Act 2009 (Cth) and was covered by the Pay Scale and National Agreement Preserving a State Award derived from the Clerical Employees Award – State 2002. She claims $7,711.28 for annual leave ($6,562.79) and annual leave loading ($1,148.49).
Mr McNeill claims the Respondent was his employer from 21 November 2009 to 19 February 2010 breached s.90 and s.117 of the Fair Work Act 2009 (Cth) and was covered by the Pay Scale and National Agreement Preserving a State Award derived from the Building Products, Manufacture and Minor Maintenance Award – State 2003. He claims $15,947.02 for annual leave ($7,602.35); annual leave loading ($1,330.41) and payments in lieu of notice ($769.69).
The Respondent, filed a detailed Response on 2 July 2014 to the claims of each of Ms McNeill and Mr McNeill. The basis for opposing any claim or payment is similar in many respects, but I propose to deal with the uncontroversial background and statutory framework before dealing with each claim separately in these reasons.
Background
On 18 December 2008, the Respondent entered into a Sale of Assets agreement to purchase the assets of Horizon Glass. A copy of the said agreement (to which neither Ms McNeill or Mr McNeill were a party), was produced to the Court and marked Attachment A to the Response.
Clause 6 of the Agreement provided as follows:
“6. Employees and Officers
6.1 The Vendor must deliver to purchaser all relevant particulars of each Employee including the Employee’s date of commencement, applicable awards, total remuneration (including bonuses or profit sharing arrangements), rostered days off superannuation or pension contributions, Workcare contributions, accrued annual leave (including loading) and accrued long service leave entitlements due to the Employee as at 18 December 2009.
6.2 Prior to Completion the Purchaser will offer employment to not less than 17 of the Employees of which 7 are to remain employed at the Premises and 10 are to relocate employment at the Purchaser’s business in Brisbane.
6.3 If the Purchaser offers employment to more than 17 Employees and any of those additional Employees become redundant prior to 31 March 2010 then the Vendor is responsible for their redundancy cost (with an estimate of that cost to be calculated, deducted from the Purchase Price and retained in trust by the Vendor’s solicitor for this purpose).
6.4 At the Completion date each Employee of the Vendor selected by the Purchaser is to be transferred to the employ of the Purchaser on terms and conditions no less favourable than those on which each such Employee is respectively employed prior to the Completion date.
6.5 The Purchaser and all its associated companies agrees that if Employees of Vender not selected under clause 6.2 and terminated in December 2009 by the Vendor are employed by the Purchaser within a period of six months from the Completion date the Purchaser will pay to the Vendor for each and every such person an amount as set out in Annexure 5. Such sums (including GST if applicable ) are to be paid to the Vendor within 5 working days of the date of the employment of each such person.
6.6 The Purchaser will assume the employee entitlements (being annual leave and long service leave) of the Employees that it employs under clause 6.3 and such amount will be adjusted against the Purchase Price.”
Attachment B to the Response identified the 17 employees who were to be offered employment by the Respondent and who, pursuant to Clause 6.4, were to be transferred to the employ of the Respondent at the completion date “on terms and conditions no less favourable” then those which applied prior to the Completion date.
The completion date was 18 December 2008.
The employees identified received an offer of employment from the Respondent which recognised their continuity of service. Ms McNeill did not receive any such offer and the Respondent says that it did not contemplate employing her.
Similarly, Mr McNeill did not receive such a letter of offer of employment and the Respondent says that it did not contemplate employing him.
The Respondent concedes that Mr McNeill was engaged for a brief transition period of nine weeks but the Respondent says it did not accept continuity of service in respect of Mr McNeill. Whilst denying that Ms McNeill was ever employed by the Respondent, the Respondent does concede that for a period of nine weeks Ms McNeill “received a payment from the Respondent as part of an income splitting arrangement”.
Statutory Framework
On 1 July 2009, the Fair Work Act 2009 (Cth) commenced, when the previous of the Workplace Relations Act1996 (Cth) was repealed, from that date.
However there was a six month period where parts of the Workplace Relations Act (Cth) were still in effect, as a result of the Fair Work (Transitional Provisions and Consequential Amendment) Act 2009 (Cth). Relevantly, sch.11 pt.3 s.7(3) to the Transitional Act provides that:
“(3) Part 2 – 8 of the Fair Work Act (as modified by Item 8 of this schedule applies in relation to the transfer of business”, which occurred on or after the Workplace Relations Act repeal day.”
As a result, and the parties agree, s.311 of the Fair Work Act 2009 (Cth) applies. It provides as follows:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
The parties also agree, in respect of entitlements (if the issue arises) that ss.600 and 601 of the Workplace Relations Act 1996 (Cth) applied.
Was Ms McNeill Employed by the Respondent
I am not satisfied on all the evidence, that Ms McNeill was offered employment pursuant to Clause 6.2 of the Sale of Assets Agreement. Accordingly, if she has a claim for annual leave and leave loading, the only liable employer could be Horizon Glass.
I cannot be satisfied on the evidence whether Ms McNeill was a bona fide employee of Horizon Glass or whether the allegations that her partner Mr Travis McNeill, as General Manager of Horizon Glass, “split” in some way his employee remuneration with his wife, with the approval of the Directors of Horizon Glass, are correct.
Accordingly, I am compelled to dismiss the claim made by Ms McNeill.
What where the Terms of Mr McNeill’s Employment
Mr McNeill was in a Senior Position with Horizon Glass. It is alleged his father was a director of Horizon Glass, however no company details were probatively placed before the Court. In this regard, whilst I accept the Rules of Evidence do not apply in Small Clams Division applications, it is a matter for the Court to decide what weight should be applied to all evidence before the Court.
The Applicant Mr McNeill has not established on the balance of probabilities, that when his employment with Horizon Glass came to an end on 18 December 2009, he “became an employee of Australian Glass” as he alleges. He was not offered a continuing position in writing pursuant to Clause 6.4 as he was not “selected by the Purchaser” to be transferred to the employ of the Purchaser.
In the Affidavit sworn by Brendan Middleton, the Chief Financial Officer of the Respondent, he deposes to a conversation said to have occurred on or about December 2009 between Mr McNeill and John Moreno, the former Chief Financial Officer of the Respondent. It is alleged that the Respondent:
“would offer an eight (8) week temporary engagement for Mr McNeill to assist with post sale transition period and arrangements after the Sale Agreement.”
The Applicant Mr McNeill did not dispute this evidence, preferring to rely upon a suggestion that the Respondent retained funds to pay redundancies in respect of continuing employees after 20 December 2009.
However, the fact remains, that on the clear interpretation of the Sales Agreement, Mr McNeill was not offered a position.
That he regarded the former employer Horizon Glass as being liable for his entitlements is, in my view, confirmed his decision to seek repayment under the General Employee Entitlements and Redundancy Scheme (GEERS). The claim by Mr McNeill was apparently refused (and a review unsuccessful) because the Department took the view that the Respondent was liable to recognise his “accrued entitlements”.
This position seems to be based on a view accepted that the Applicant :
“commenced work with the second employer immediately after termination from Pipimol Pty Ltd (Horizon Glass) on terms substantially the same and no less favourable than previously employed.”
I do not, on the evidence before this Court, agree that was the position. It must be noted, that the Applicant must discharge the evidentiary onus of establishing his claim. He has failed to do so.
For completeness, I agree with the submissions of Mr Mossman for the Respondent, that the claim for long entitlements arise under Part 6 of the Industrial Relations Act 1999 (Qld), which is a Sates based continuity of service provision. By virtue of s.26, the continuity of service provisions are excluded by the Fair Work Act 2009 (Cth). This Court therefore has no jurisdiction.
However, it is probably of little comfort to Mr McNeill that even if he had continuous service (which I find he did not), his termination of employment in February 2010, is less that ten years from the date of commencement with Horizon Glass in July 2000.
Finally, as I have found that the nature of the engagement of Mr McNeill by the Respondent was for a fixed term, no payment in lieu of notice arises.
As a result of the findings made, the Application by Mr McNeill must be dismissed.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Baumann
Date: 8 April 2016
Key Legal Topics
Areas of Law
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Employment Law
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Civil Procedure
Legal Concepts
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Appeal
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Costs
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Procedural Fairness
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Natural Justice
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