Rodney Roberg, Terry Scriven, Vincent Tuckfield, Neill Thomas, Henryk Wozniak v FGP Company Pty Ltd and Steelworks Australia Pty Ltd

[2013] FWC 2429

[2013] FWC 2429

FAIR WORK COMMISSION

REASONS FOR DECISION

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

Rodney Roberg, Terry Scriven, Vincent Tuckfield, Neill Thomas,
Henryk Wozniak
v
FGP Company Pty Ltd and Steelworks Australia Pty Ltd
(U2012/13043, U2012/13044, U2012/13045, U2012/13046, U2012/13047)

Mark Szymanik
v
FGP Company Pty Ltd
(U2012/13080)

COMMISSIONER HAMPTON ADELAIDE, 3 MAY 2013

Unfair dismissal applications - two respondent parties in most matters - first respondent in liquidation - whether applications stayed by virtue of the Corporations Act 2001 - matters stayed involving the company in liquidation pending permission of Court or other developments impacting upon liquidation - matters may proceed against other respondent.

1. Background

[1] This decision concerns a number of related applications seeking a remedy for alleged unfair dismissal pursuant to s.394 of the Fair Work Act 2009 (the Act). In all but one of the applications, the applicants have named two legal entities; namely, FGP Company Pty Ltd (FGP) and Steelworks Australia Pty Ltd (Steelworks).

[2] In the other application, the applicant, Mr Szymanik, has foreshadowed seeking to add Steelworks as a further respondent however this has not been dealt with as yet.

[3] It is common ground that FGP went into voluntary liquidation on 30 August 2012. That is, it has passed a resolution for voluntary winding up within the meaning of the Corporations Act 2001 (the Corporations Act).

[4] The applicants in each matter claim that FGP and Steelworks are related companies and that the liquidation of FGP is part of a “phoenix” arrangement. It is alleged that the operations of FGP were in effect transferred to Steelworks and this involved the “new” company continuing operations, the engagement of all former employees (except the applicants who are represented by the union) and with the same management. It is also contended that the phoenix arrangements have been undertaken to avoid the payment of entitlements to the applicants and to effectively remove them from their employment.

[5] The Fair Work Commission has been provided with information about certain enquiries and investigations being conducted by the liquidator of FGP, Hall Chadwick, the Australian Taxation Office and the Australian Securities and Investments Commission. It has not yet been appropriate for the Commission to deal with these matters and no findings have been made in relation to the primary allegations of the applicants.

[6] Hall Chadwick has provided information to the Commission as part of the preliminary stages of these matters, however on 12 February 2013, it advised that in light of s.500(2) of the Corporations Act these matters could not proceed except by leave of the Court.

[7] The applicants did not consent to a stay being issued and the matter was heard by me on 19 April 2013. At the conclusion of the hearing I advised that a stay would be issued in each matter as they applied to FGP, and that I would subsequently issue reasons for that decision.

2. The operation of the Corporations Act 2001

[8] Hall Chadwick did not seek to make submissions on the matter but relied upon the approach taken by McKenna C in Lawler v ABC Development Learning Centres Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed)[2010] FWA 7679 (Lawler).

[9] Mr Hardie of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU), who appeared on behalf of the majority of applicants, accepted the approach in Lawler but contended that it could be distinguished on the basis that in this case the respondent was subject to an alleged “phoenix liquidation”. That is, there were investigations under way into the arrangements and this had the potential to expose a “sham liquidation”. This position was adopted by Ms Stam who appeared for Mr Szymanik.

[10] I note that Steelworks has been provided with all details of applications and hearings, and copies of transcript of earlier directions hearings in each of these matters, but has apparently chosen not to participate.

[11] Hall Chadwick rely upon s.500(2) of the Corporations Act which relevantly provides as follows:

“500 Execution and civil proceedings

(1)  ...

(2)  After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

(3)  ...”

[12] A “court” and “Court” is each defined for the purposes of the Corporations Act in s.9, which provides that, unless the contrary intention appears, the meanings are given by s.58AA. Section 9 relevantly reads:

“9 Dictionary

Unless the contrary intention appears:

...

"court" has the meaning given by section 58AA.

"Court" has the meaning given by section 58AA. ...”

[13] Section 58AA of the Corporations Act provides the following definition in relation to the meaning of “court” and “Court”:

“58AA Meaning of court and Court

(1)  Subject to subsection (2), in this Act:

"court" means any court.

"Court" means any of the following courts:

(a)  the Federal Court;

(b)  the Supreme Court of a State or Territory;

(c)  the Family Court of Australia;

(d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.

(2)  Except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under this Act may, subject to Part 9.7, be brought in any court.

Note: The matters dealt with in Part 9.7 include the applicability of limits on the jurisdictional competence of courts.”

[14] In Lawler, McKenna C concluded as follows:

“[19] Having regard to the meanings given by s.9 and s.58AA of the Act to “court” (with a lower case “c”) and “Court” (with an upper case “C”), it appears the “Court” to which reference is made in s.500(2) includes only those identified at s.58AA(1)(a)-(d). Hence, no action or other civil proceeding is to be proceeded with or commenced against the respondent except by leave of the Court and subject to such terms as the Court imposes.

[20] Fair Work Australia does not come within the meaning of a “Court” in s.58AA(1) of the Act and s.58AA(2) provides that, except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under the Act may, subject to Part 9.7 , be brought in any court. Further, as to s.9, its introductory words provide that unless “the contrary intention” appears, “court” and “Court” have the meanings given by s.58AA. So far as s.500(2) of the Act is concerned, the use of the upper case “C”/“Court” is plain and unambiguous, and does not allow for the broader construction advocated by the applicant to encompass Fair Work Australia. Moreover, it does not appear, either from s.500(2) of the Act, or taken in its broader legislative context, that in s.500(2) the meaning of “Court” otherwise can be taken to include Fair Work Australia. The discretionary/public interest considerations to which the applicant referred do not relevantly arise, and therefore need not be considered, given that the meaning of “Court” in s.500(2) of the Act does not include Fair Work Australia.

[21] In Smith, the Full Bench noted that the principal issue there under consideration was whether s.471B of the Act applied to the commencement or the continuation of proceedings before the Commission - which involved construing the meaning of “a court” in s.471B of the Act. The Full Bench concluded that if the Legislature had intended to make proceedings in the Commission subject to the leave requirement in s.471B of the Act, it could have done so by express provision - finding that “court” in s.471B should be given its defined meaning. In contrast with the provisions of s.471B of the Act concerning “a proceeding in a court”, s.500(2) of the Act, which the parties agreed is the operative section, refers, in relevantly different terms, to an “action or other civil proceeding” requiring the leave of the Court.

[22] This application comprises, pursuant to s.500(2) of the Act, an action or other civil proceeding which may not be proceeded with or commenced against the respondent except by leave of the Court and subject to such terms as the Court imposes. Thus, leave of the relevant Court needs to be obtained if the applicant wishes to proceed with this application before Fair Work Australia. Such leave may not, despite the applicant’s submissions, be granted by Fair Work Australia as the Tribunal is not a “Court”, as defined.”

[15] The reference to “Smith” in the above decision is to a Full Bench decision 1 of the AIRC that considered the import of s.471B of the Corporations Act as it stood at that time.

[16] The parties in this matter have accepted the approach taken by the Commission in Lawler and I would respectfully agree and adopt the Commissioner’s findings. I would add s.500(2) of the Corporations Act was not considered in Smith. I also note that that provision appears to apply specifically to circumstances where the business has passed a resolution for voluntary winding up and different arrangements are contemplated by the Corporations Act in other circumstances where a company is subject to different forms of administration and winding up.

[17] FGP has been subject to a voluntary liquidation and the operation of s.500(2) of the Corporations Act is such that civil proceedings of the nature of the present applications cannot continue against FGP unless leave has been given by a Court of competent jurisdiction. If leave is granted, these matters may be heard by the Commission subject to any terms the Court imposes.

[18] I note that the applicants contend that the status of the liquidation might be affected by the phoenix related investigations. It is not clear to me how this would work however I have at least taken that possibility into account.

[19] I also observe that Steelworks is a different legal entity and proceedings against it are not impacted for present purposes by s.500(2) of the Corporations Act.

3. Conclusions

[20] As a result of the above, each of these applications is stayed as they apply to FGP pending an application for leave of a Court to proceed. I have granted liberty to apply should the circumstances of the liquidation change so as to relevantly impact the operation of the Corporations Act.

[21] In terms of the applications as standing against Steelworks, the present investigations appear to bear upon certain issues as they might impact upon these applications. There are significant issues about the extent that the applications can properly be addressed to Steelworks in this jurisdiction however these matters have not yet been substantively heard. In the absence of a relevant discontinuance by the applicants, those matters will need to proceed before the Commission in due course.

[22] A further directions conference will be convened to confirm the intentions of the parties and to make the necessary directions arising from this decision.

[23] I have also granted general liberty to apply.

COMMISSIONER

Appearances:

T Hardie of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) for applicants Roberg, Scriven, Tuckfield, Thomas and Wozniak.

R Stam of Mahony’s Lawyers, with permission, for applicant Szymanik.

Hearing details:

2013

Adelaide

19 April.

 1   Smith and others v Trollope Silverwood and Beck Pty Ltd (In liquidation) PR940508, 17 November 2003.

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<Price code C, PR535869>