Mr Daniel Bunt v ITW Proline

[2014] FWC 750

[2014] FWC 750 [Note: An appeal pursuant to s.604 (C2014/3145) was lodged against this decision - refer to Full Bench decision dated 11 April 2014 [[2014] FWCFB 2328] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Daniel Bunt
v
ITW Proline
(U2013/12164)

COMMISSIONER SIMPSON BRISBANE, 31 JANUARY 2014

Jurisdictional objection - Respondent not the Employer - Application dismissed

[1] On 2 August 2013 Mr Bunt (“the Applicant”) made an application under Section 394 of the Fair Work Act 2009 for an unfair dismissal remedy. He alleged in his application that his employer was ITW Proline. (“the Respondent”).

[2] An unsuccessful conciliation was conducted on 12 September 2013. The matter was then allocated to me and listed for directions 15 November 2013. At the Directions hearing the Respondent pressed their jurisdictional objection stating that the Applicant was not an employee of the Respondent but rather a labour hire organisation Programmed Integrated Workforce (“PIW”).

[3] The parties were sent out directions giving them both to close of business 29 November 2013 to lodge their submissions. Upon receipt of this material both parties were to notify chambers if they were requiring this matter listed for hearing or for the matter to be dealt with on the papers. On the 4 December the Applicant notified chambers requesting the matter be dealt with on the papers, however, the Respondent requested the opportunity to file a submission in response. This was granted and the 12 December 2013 was the date required.

[4] Applicant’s Submissions

1. On or about 15 October 2009 the Applicant entered into a Casual Employee Agreement with Programmed Integrated Group Limited (the “Labour Hire Agency”).

2. From on or about 14 April 2011 to 16 July 2013 the Applicant performed duties for the Respondent under a Labour Hire arrangement through the Labour Hire Agency.

3. On or about 2 July 2013 the Applicant was informed by the Respondent that all casual employees that were part of a Labour Hire Arrangement would be terminated due to a lack of work.

4. On 16 July 2013 the Applicant was informed that this day was to be his last day of work at ITW Proline.

5. On or about 2 August 2013 the Applicant filed an Application for Unfair Dismissal against the Respondent (the “Application”).

6. The Respondent has made a jurisdictional objection to the Application on the basis that the Applicant was not an employee of the Applicant.

7. The Respondent is party to the ITW Proline (Qld) / NUW Enterprise Agreement 2012 (the “Enterprise Agreement”).

[5] The Applicant submits that he was a party to the Enterprise Agreement.

Section 53(1) of the Fair Work Act 2009 (Cth) (“the Act”) clearly states that:

“an enterprise agreement covers an employee or employer if the agreement is

expressed to cover (however described) the employee or the employer”

[6] Clause 1.6(3) of the Enterprise Agreement states that the Enterprise Agreement shall be binding on:

“All employees whether members of the National Union of Workers or not whose employment is, at any time when the agreement is in operation, subject to the agreement”

[7] Clause 4.2.4 of the Enterprise Agreement states:

“Casuals employed either by the company or a through a labour hire agency on a continuous service period of longer than 12 months will be deemed to be

permanent employees [sic]”.

[8] The Applicant was employed through a labour hire agency, namely Programmed Integrated Group Limited, and performed continual service at the Respondent’s workplace from 14 April 2011 to 16 July 2013 being two (2) years, two (2) months and two (2) days.

[9] The Applicant submits that in accordance with clause 4.2.4 of the Enterprise Agreement, by the Applicant completing one year of service, the Respondent became the Applicant’s employer and the Labour Hire Agency merely performed an administrative function analogous to the Labour Hire Agency in the Federal Court matter of Damesvki v Guidice and Others [2003] 133 FCR 438.

[10] The Applicant submitted that the “purpose” of clause 4 of the Agreement was to ensure that casual employment was minimised to accommodate for peaks in demands. The Applicant submitted that clause 4.2.4 was included in the Agreement to ensure that a worker’s statutory rights (both generally and under the Agreement) were not removed. The Applicant’s submission does not address however that clause 4.2.4 makes no reference to rights or any specific reference to legislation.

[11] The Applicant refers to s.380 of the Act which defines an employee to mean:

“an employee means a national system employee”

[12] A ‘national system employee’ is defined by s.13 of the Act as:

“an individual so far as he or she is employed or usually employed, as described in the definition of national system employer in section 14, by a national system employer” (emphasis added)

[13] The Applicant submitted that the phrase in s.13 of the Act “employed or usually employed” is not defined by the Act and is therefore ambiguous. What the Applicant has failed to address however, is that s.13 of the Act is clear that a national system employee is not who is “employed or usually employed...by a national system employer”. That is, at its simplest, an employee is one who is employed by a national system employer.

[14] However, the Applicant submits that clause 4.2.4 of the Agreement “creates” an employment contract between the Respondent and Applicant and that the Agreement reflects a clear intention by the parties to do so.

Does clause 4.2.4 give rise to an employment contract between the Applicant and Respondent?

[15] It is well settled in Australian law that a contract, of any description, exists where the legal elements of that relationship occur. The general elements to a finding that a contract exists, are clear; offer, acceptance, consideration and intention to be legally bound.

[16] The purported operation of clause 4.2.4 of the Agreement is that a contract of employment be imposed upon the parties where a casual employee, employed by a labour hire agency, is employed for a continuous period of longer than 12 months. It is unclear where in this clause the Applicant submits that an offer of contract, acceptance of a contract or, perhaps more importantly, an intention to be legally bound, arises.

[17] Clause 4.2.4 of the Agreement does not specifically mention that a contractual relationship is offered by the Respondent (as the purported employer) to an employee of labour hire agencies (as purported employees). Even if the contract did do so the Applicant’s contention appears to be that a contract would be created even where neither party wished for such to be created. It is settled in law that a contract of employment cannot be forced upon an employee without that person’s consent. 1 The purported operation of clause 4.2.4 would appear to breach that concept and force employees that fall within clause 4.2.4, to work for the Respondent, despite their express wishes.

[18] Clause 4.2.4 cannot, on that basis, give rise to a contract of employment between the parties, absent the express elements of a contract of employment, in particular, offer and acceptance by the parties.

Is clause 4.2.4 about a ‘permitted matter’?

[19] If I am wrong in considering that clause 4.2.4 of the Agreement does not give rise to a contract of employment I am satisfied that even if it did, the clause of the Agreement is of no effect.

[20] An enterprise agreement may only be made about ‘permitted matters’. 2 Those matters which are ‘permitted matters’ are considered by s.172(1) of the Act as follows:

“172 Making an enterprise agreement

Enterprise agreements may be made about permitted matters

(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:

(a) matters pertaining to the relationshipbetween an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b) matters pertaining to the relationship between the employer or employers...that will be covered by the agreement;

(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d) how the agreement will operate.” (emphasis added)

[21] And further s.172(2) as follows:

(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement):

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and

(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

[22] The asserted operation on behalf of the Applicant has the effect of extending the coverage and operation of the Agreement to a person, whom the Applicant concedes was not an employee of the Respondent when the Agreement was made. The Applicant’s submission proceeds further to assert that because of the extended operation of the enterprise agreement, the unfair dismissal provisions within the Act are also extended.

[23] It is noted that a clause that is not a term about a permitted matter, has no effect to the extent that it is not a term about a permitted matter. 3 On this basis alone the clause has no effect and therefore cannot have the binding effect contended for on behalf of the Applicant.

[24] The Applicant submitted, in reply, that to find that the Applicant was not a permanent employee of the Respondent would be contrary to the Act and the Agreement. In this regard the Applicant relied upon s.739(5) of the Act.

[25] Apart from the finding that clause 4.2.4 is not a permitted matter and therefore is of no effect, it is noted that s.739(5) of the Act applies “if a term...requires or allows the FWC to deal with a dispute”. Section 739 of the Act clearly applies to arbitrated disputes pursuant to dispute settling procedures in Awards or Enterprise Agreements. It is of no application to a matter arising under s.394 of the Act.

Should the Commission look behind the relationships to identify the ‘true’ employer?

[26] The Applicant submitted that in cases where multiple employers may exist the Courts have adopted an approach by applying the principles applicable in determining whether a contract of services or contract for services exists. 4

[27] The Applicant submitted that the relationship of control existed between the Applicant and Respondent such that the Commission should consider that the Respondent was the true employer of the Applicant. Specifically, the Applicant submitted that the Respondent was responsible for performance or discipline issues, determined hours of work, required that the Applicant wear a uniform with the Respondent’s logo and that the Respondent set performance indicators and controlled workloads. The Applicant also submitted that the Applicant was not able to work for another employer and was not able to subcontract his obligations to the Respondent.

[28] I am satisfied these tests are not relevant in this matter and that the proper question is whether an employment contract exists between the Applicant and Respondent or not.

Joint employment?

[29] In the alternative the Applicant submitted that the Applicant was jointly employed by the Respondent and PIW, pursuant to the ‘Doctrine of Joint Employment’.

[30] The ‘Doctrine of Joint Employment’ has yet to receive firm recognition as forming a part of the law of Australia. The Applicant referred to a single authority of a first instance decision of the Federal Court of Australia. 5 That case however did not make a definitive finding on the existence of the doctrine within Australia but recognised “scope” for it in Australian law. It is noted that a recent Full Bench decision of FWC 6stated that the Commission had no role in developing matters of common law and that in any case such a relationship would require an express or implied contract between the parties. There is no evidence before me to support the existence of such a contract.

[31] Even if the Commission were to accept in this matter that the doctrine has application in Australian law, the same problems arise at the start of the Applicant’s argument. The argument proceeds on the basis that a contract of employment is imposed upon the parties by the operation of clause 4.2.4 of the Agreement. The same issues arise in this consideration as in previous discussions.

[32] As it is my view the Respondent was not the employer I have no jurisdiction to hear the application and it must be dismissed. I will issue an order accordingly.

COMMISSIONER

 1   Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014 at 1018.

 2   Fair Work Act 2009 (Cth) s.172(a).

 3   Fair Work Act 2009 (Cth) s.253(1)(a).

 4   In this regard the Applicant relied upon Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 at [75].

 5   Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803.

 6   FP Group Pty Ltd v Tooheys Pty Ltd [2013] FWCFB 9605

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