Meadley v Sort Worx Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Meadley v Sort Worx Pty Ltd [2013] FCA 1012

Citation: Meadley v Sort Worx Pty Ltd [2013] FCA 1012
Parties: IRENE MEADLEY v SORT WORX PTY LTD
File number: VID 454 of 2013
Judge: TRACEY J
Date of judgment: 8 October 2013
Catchwords: INDUSTRIAL LAW – application seeking order for compliance with Fair Work Commissioner’s orders – whether orders had been made ultra vires – whether orders frustrated by change in employer circumstances – orders enforced – civil penalty imposed
Legislation: Crimes Act 1941 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 539, 545, 546, 562, 570, 391, 394, 405
Cases cited: Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 - cited
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 - considered
Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 - considered
Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 224 ALR 467 - cited
Kelly v Fitzpatrick (2007) 166 IR 14 - applied
Date of hearing: 20 August 2013 and 19 September 2013
Date of last submissions: 17 September 2013
Place: Melbourne
Division: FAIR WORK DIVISION
Category: Catchwords
Number of paragraphs: 49
Counsel for the Applicant: Mr J Hooper
Solicitor for the Applicant: Simon Parsons & Co
Counsel for the Respondent: Ms S Bailey
Solicitor for the Respondent: Conlan Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 454 of 2013
BETWEEN:

IRENE MEADLEY
Applicant
AND:

SORT WORX PTY LTD
Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

8 OCTOBER 2013

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The respondent pay the applicant the sum of $15,045.39 plus interest forthwith.

2.The respondent pay the sum of $385.71 plus interest to the applicant’s account in the Hesta Superannuation Fund forthwith.

3.A civil penalty of $10,000 be imposed on the respondent, such penalty to be paid to the applicant.

4.There be a stay of three months on the operation of order 3.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 454 of 2013
BETWEEN:

IRENE MEADLEY
Applicant
AND:

SORT WORX PTY LTD
Respondent

JUDGE:

TRACEY J

DATE:

8 OCTOBER 2013

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. Ms Irene Meadley has applied to the Court for orders that the respondent (“Gippsland Waste”) comply with certain orders made by a Commissioner of the Fair Work Commission (“the Commission”).  She also seeks certain related orders including an order that a penalty be imposed on Gippsland Waste for contravening the Commission’s orders.  While the hearing of the application was pending Gippsland Waste changed its name to “Sort Worx Pty Ltd”.  Although I ordered that the name of the respondent in the proceeding should be amended to reflect this change I will, in these reasons, continue to refer to the respondent as Gippsland Waste.

    THE…

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Details
Case
[2013] FCA 1012
Decision Date

CaseChat Overview and Summary

In the case of Meadley v Sort Worx Pty Ltd, Ms Irene Meadley sought orders from the Court to enforce certain decisions made by the Fair Work Commission. Specifically, she requested that Sort Worx Pty Ltd, formerly known as Gippsland Waste, comply with the Commission’s orders regarding her unfair dismissal and reinstatement, as well as seeking a penalty for any contravention of those orders. The central dispute revolved around whether Gippsland Waste was liable to comply with the Commission's reinstatement order and whether the order itself was valid and enforceable.

The primary legal issues before the Court were whether the Commission’s order for reinstatement was ultra vires and whether Gippsland Waste had valid grounds to argue that changes in circumstances had frustrated its ability to comply with the order. Additionally, the Court had to determine if the company could rely on these grounds in the current proceeding despite not having appealed the original order. Furthermore, the Court needed to consider the implications of the retrospective nature of the reinstatement order and its impact on the validity of related orders.

The Court found that Gippsland Waste's argument that the reinstatement order was retrospective and thus ultra vires was unconvincing. The recital in the order specifying the date of reinstatement did not impose any obligation on Gippsland Waste and served merely as a definition to aid in the calculation of certain payments. Consequently, the order for reinstatement was valid, and the subsequent orders derived from it were also enforceable. The Court further determined that Gippsland Waste could rely on the grounds it had for opposing the original order in the current proceeding, effectively allowing a collateral attack on the order despite not having appealed it.

As a result, the Court dismissed the application for orders and penalties against Gippsland Waste, affirming the company’s position on the invalidity of the reinstatement order and its inability to comply with it. The Court's decision underscored the importance of the procedural requirements in enforcement actions and the need for clear and binding orders to be upheld in the context of unfair dismissal remedies.

Orders

Orders of the court

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Background

Background to the litigation

Ms Irene Meadley has applied to the Court for orders that the respondent (“Gippsland Waste”) comply with certain orders made by a Commissioner of the Fair Work Commission (“the Commission”). She also seeks certain related orders including an order that a penalty be imposed on Gippsland Waste for contravening the Commission’s orders. While the hearing of the application was pending Gippsland Waste changed its name to “Sort Worx Pty Ltd”. Although I ordered that the name of the respondent in the proceeding should be amended to reflect this change I will, in these reasons, continue to refer to the respondent as Gippsland Waste.THE BACKGROUND Ms Meadley commenced employment with Gippsland Waste on 29 December 2008. The company dismissed her on 24 July 2012. On 2 August 2012 Ms Meadley applied to the Commission for an unfair dismissal remedy: see s 394 of the Fair Work Act 2009 (Cth) (“the Act”). The merits of the application were considered at a hearing before the Commission on 24 and 25 January 2013. Further hearings took place on 28 February and 15 March 2013. On 4 April 2013 the Commissioner published a finding that Ms Meadley’s termination was unfair because there had been no valid reason for it. He foreshadowed orders that Ms Meadley be re-instated and certain consequential orders. The Commission conducted further hearings about the terms of the orders which should be made. Those hearings took place on 19 April and 2 May 2013. In the period between these two hearings correspondence passed between the representatives of the parties. Various proposals were advanced and discussed about the terms of orders which would give effect to the Commissioner’s reasons for decision. Following this correspondence each party submitted a form of orders for consideration by the Commissioner. On 2 May 2013 the Commissioner published a further decision and made orders. The orders were substantially similar to those proposed by the parties. The orders were promulgated in a document headed “ORDER”. After formal headings the order contained some recitals. They read:“A. The Respondent terminated the Applicant’s employment on 24 July 2012 (date of termination).B. The Applicant’s employment is reinstated effective 30 April 2013 (date of reinstatement), with the period between the date of termination and date of reinstatement being 40 weeks.C.The Fair Work Commission orders as follows:” The document continued:“Reinstatement1. Pursuant to s.391(1) of the Fair Work Act 2009 (the Act), the Applicant’s employment with the Respondent is reinstated in the following terms:a)into her employment with the Respondent;b) on the basis of working 5 out of 7 shifts as a weighbridge operator and 2 shifts out of 7 as an unload monitor per fortnight;c) at her previous classification at Level 3 under the Waste Management Award 2010;d) at the base rate of pay that she was on as at date of termination, with such base rate of pay being $1810.40 per fortnight;e) to be rostered 7 days per fortnight, and for not more than 61 paid hours of work in total, as follows:i)Mondayii) Tuesdayiii) Wednesdayiv) Saturdayv) Sundayvi) Mondayvii) ThursdayContinuity of Service2. Pursuant to s.391(2)(a) and (b) of the Act the Respondent must ensure that the Applicant’s continuity of service and period of continuous service are maintained.Restoration of Lost Pay3. Pursuant to s.391(3) of the Act, the Respondent will restore to the Applicant lost remuneration for the period from termination of employment to reinstatement, with such calculation being made as follows:a) For the 12 months prior to termination the Applicant worked an average of 61 hours per fortnight thereby earning gross $1810.41 per fortnight or gross $905.20 per week;b) As at 30 April 2013 there will have been 40 weeks between the date of termination and reinstatement, which amounts to $36,208 in lost salary;c) Between the date of termination and reinstatement the Applicant received remuneration/benefits from third party employers to the gross amount of $12,064.36. The Respondent will therefore restore to the Applicant the sum of $24,143.64 (being $36,208 minus $12,064.36) in gross lost salary.d) The income tax on this gross payment is to be calculated as if the income was received on a fortnightly basis.e) For each week after 30 April 2013 until the effective reinstatement date the Respondent will pay to the Applicant the sum in sub-clause c ($24143.64) plus $905.20, less any remuneration earned by the Applicant during that same period.4. In addition to lost salary, the Respondent will make superannuation guarantee payments of 9% on the gross amount of restored salary as required by superannuation guarantee legislation, with such superannuation payment being 9% of $24,143.64 which equals $2,172.93.a) For each week after 30 April 2013 until the effective reinstatement date the Respondent will pay to the Applicant, by way of superannuation guarantee payments the sum in clause 4 ($2172.93) plus 9% of any additional amount payable under clause 3e.”“SGT” means Superannuation Guarantee Threshold.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

By s 546 the Court is empowered to order that a person pay a pecuniary penalty for contravention of the civil remedy provision. The maximum penalty which may be imposed on a corporation for a contravention of s 405 is 300 penalty units: see s 546(2)(b). This presently corresponds with a maximum monetary penalty of $51,000: see s 4AA Crimes Act 1914 (Cth)(“the Crimes Act”). Amendments to the Crimes Act increased a penalty unit from $110 to $170 effective as of 28 December 2012. The Court may order that any pecuniary penalty which it imposes be paid to the Commonwealth, a particular organisation or a particular person. Section 546(5) provides that a pecuniary penalty may be imposed in addition to any orders made pursuant to s 545.CONSIDERATIONLiability Gippsland Waste opposed the making of any of the orders sought by Ms Meadley. It contended that the Commissioner’s order has been made ultra vires and that the changes in circumstances had frustrated its ability to comply with the order for reinstatement. It would have been possible for these grounds to be relied on by Gippsland Waste on an appeal to the Full Bench. Despite this no attempt was made by Gippsland Waste to amend its notice of appeal to raise these grounds. In the event the appeal was discontinued. Although no foundation for doing so was established in argument, I am prepared to assume, in Gippsland Waste’s favour, that it is able to rely on these grounds in defending the present proceeding and, in doing so, effectively mount a collateral attack on the Commissioner’s order notwithstanding its failure to pursue an appeal from that order. The ultra vires argument is founded on the terms of recital B of the Commissioner’s order. In that recital he recorded that Ms Meadley’s “employment is reinstated effective 30 April 2013 (dated of reinstatement) …” Because the order was made on 2 May 2013, Gippsland Waste objected that it was a retrospective order which the Commission was not empowered to make. This, so it was contended, rendered order 1 ultra vires in its entirety. Given that order 1 relied on s 391(1) of the Act, the orders made in paragraphs 2 and 3 were also rendered ultra vires, so it was contended, because they had been made, respectively, under sub-sections 391(2) and (3), and could only be made if there was, in existence, a valid order under s 391(1). The obligation imposed on Gippsland Waste by s 405 of the Act was that it not contravene a term of the Commission’s order. A contravention of a term cannot occur unless the term imposes an obligation on a person. Recital B imposed no such obligation on Gippsland Waste. It did not oblige Gippsland Waste to do or refrain from doing anything. Rather, the Recital served the purpose of providing a definition of the “date of reinstatement” which was picked up in one of the later orders (order 3) to assist in the calculation of certain monetary payments. It will be necessary to return to the operation of order 3 later in these reasons.