FEDERAL CIRCUIT COURT OF AUSTRALIA
| SCULLIN v COFFEY PROJECTS (AUSTRALIA) PTY LTD | [2015] FCCA 1514 |
| Catchwords: MISREPRESENTATION – Whether made knowingly or recklessly. DISCRIMINATION – Whether for a reason in s.357. BREACH OF CONTRACT – Whether contract terminated after repudiation – right to sue for damages – compensation awarded. |
| Legislation: Evidence Act 1995, s.140 Fair Work Act 2009, ss.12, 44, 61, 67, 70, 87, 90, 340, 341, 345, 351, 545, 546, 547. Federal Circuit Court of Australia Act 1999, s.55 |
| Applicant: | PAUL SCULLIN |
| Respondent: | COFFEY PROJECTS (AUSTRALIA) PTY LTD |
| File Number: | MLG 1209 of 2013 |
| Judgment of: | Judge F. Turner |
| Hearing dates: | 17 – 19 March and 20 April 2015 |
| Date of Last Submission: | 20 April 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 4 June 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Galbraith |
| Solicitors for the Applicant: | Nevett Ford Lawyers |
| Counsel for the Respondent: | Mr Donaghey |
| Solicitors for the Respondent: | Sean Melbourne Legal |
THE COURT FINDS THAT:
The claim of breach of contract is an associated matter within jurisdiction.
The respondent breached its contract of employment with the applicant by failing to pay him the correct remuneration for work between 1 May 2012 and 31 May 2013.
The respondent failed to pay the applicant the correct amount for accrued annual leave upon termination of employment.
The respondent failed to pay the applicant the correct amount of redundancy pay.
The respondent contravened the National Employment Standards by failing to apply the correct parental leave provisions to the applicant.
THE COURT ORDERS THAT:
The allegation of adverse action is dismissed.
The claim of discrimination is dismissed.
The claim of misrepresentation is dismissed.
The respondent pay the applicant $169,347.24 (less tax) within 28 days.
The matter is listed for a penalty hearing at 10am on 11 June 2015.
THE COURT DIRECTS THAT:
Pursuant to s.55 of the Federal Circuit Court of Australia Act 1999, each party’s submissions on penalty are to be concise and limited to thirty minutes each. Written submissions are not to be tendered to the Court.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1209 of 2013
| PAUL SCULLIN |
Applicant
And
| COFFEY PROJECTS (AUSTRALIA) PTY LTD |
Respondent
REASONS FOR JUDGMENT
This is an application by Paul Scullin (the “applicant”) who alleges that Coffey Projects (Australia) Pty Ltd (the “respondent”) breached the Fair Work Act 2009 (the “FW Act”) by:
a)Contravening s.340 of the FW Act by taking adverse action against him;
b)Contravening s.351 of the FW Act by discriminating against him, by taking adverse action against him because of his family or carer’s responsibilities;
c)Contravening s.345 of the FW Act by knowingly or recklessly making a false or misleading statement about the workplace rights of the applicant;
d)Contravening s.44 of the FW Act by contravening provisions of the National Employment Standards (“NES”); and
The applicant alleges also that the respondent breached the contract of employment between the parties.
The alleged contraventions of ss.340 and 351
Section 340(1) of the FW Act provides:
(1)A person must not takeadverse action against another person:
a)because the other person:
(i)has aworkplace right; or
(ii)has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace - workplace_rightright; or
b)to prevent the exercise of a workplace right by the other person.
The term ‘workplace right’ is defined in s.341(1) of the FW Act as follows:
(1)A person has a workplace right if the person:
a)is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
b)is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
c)is able to make a complaint or inquiry:
(i)to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee – in relation to his or her employment.
A ‘workplace law’ is defined in s.12 of the FW Act and includes the FW Act and any other statutory law which “regulates the relationship between employers and employees”.
Section 351(1) relates to discrimination, and provides:
(1)An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person's race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
The Court accepts the applicant’s submissions in the Outline of Submissions filed 6 March 2015 at [13] to [17] that:
“13. The attributes included in the list of prohibited reasons in s.351(1) are not defined in the FW Act. Accordingly, they should be given their ordinary meaning. Where the attribute is defined within another Act in terms consistent with the ordinary meaning of the word, it can assist in its interpretation where it appears in s.351[1]. In s.4A of the Sex Discrimination Act 1984 ‘family responsibilities’ includes the responsibilities of a person to care for or support a dependent child of the person.
[1] Hodkinson v Commonwealth (2011) 207 IR 129 at [145]
14. For the purposes of both s.340(1) and s.351(1) of the FW Act, the circumstance in which ‘adverse action’ is taken by an employer against an employee is (sic ‘are’) set out in s.342(1) at Item 1. An employer may take adverse action against an employee by dismissing the employee, or by injuring the employee in his or her employment, or by altering the position of the employee to the employee’s prejudice, or by discriminating between the employee and other employees of the employer.
15. It is also noted that “action” includes an omission[2].
16. The meaning of the terms ‘injures an employee in his or her employment’ and ‘alters the position of the employee to the employee’s prejudice’ are well settled. In Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178 at [84] Gordon J noted:
1. the phrase “injures the employee in his or her employment” in Item 1(b) of s 342(1) of the FW Act extends to injury of any compensable kind, a legal injury, or an adverse effect on an existing legal right: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 at [4]; Australian and International Pilots Association v Qantas Airways Ltd (2006) 160 IR 1 at [13]-[14] and Unsworth v Tristar Steering and Suspension Australia Limited (2008) 175 IR 320 at [25];
2. the phrase “alters the position of the employee to the employee's prejudice”, in Item 1(c) of s 342(1) of the FW Act, is a broad additional category of adverse action which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question; and
3. a prejudicial alteration to the position of an employee for the purposes of Item 1(c) of s 342(1) of the FW Act, may occur even though the employee suffers no loss or infringement of a legal right; it will occur if the alteration in the employee's position is real and substantial rather than merely possible or hypothetical: Patrick Stevedores at [4]; Australian and International Pilots Association v Qantas Airways Ltd at [15] and Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (2012) 202 FCR 244 at [30]-[32].
(underlining added)
17. An injury may include a reduction in an employee’s take home pay, a change in an employee’s shift and/or hours or a diminution of the opportunity to obtain work[3].”
[2] Section 12 of the FW Act
[3] See: CFMEU & Anor v McConnell Dowell Constructors (Aust) Pty Ltd [2014] FCCA 594 at [31]; Aitken v Virgin Australia Airlines and Vandeven v Virgin Australia Airlines [2013] FCCA 981 at [69]
The applicant alleges that the respondent took adverse action against him as set out below because he had workplace rights and family responsibilities to care for his twins.
The alleged contraventions are that the respondent took adverse action against the applicant at the conclusion of his leave by:
a)failing to return him to his pre-leave position and/or duties;
b)requiring him to work casual and/or part-time;
c)not returning to him the still active projects, which he was responsible for before he commenced leave;
d)only issuing him one fee earning project;
e)renumerating him on the basis of casual or part-time employment;
f)failing to pay him the total remuneration package of $202,020 per annum, inclusive of minimum superannuation contributions, in accordance with the Employment Agreement. Exhibit ‘PS-1’ to the Affidavit of the applicant filed 5 March 2015.
The alleged contraventions of s.345 of the FW Act
Section 345 of the FW Act provides as follows:
(1)A person must not knowingly or recklessly make a false or misleading representation about:
a)the workplace rights of another person; or
b)the exercise, or the effect of the exercise, of a workplace right by another person.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2)Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.
The alleged contraventions are that the first parental leave representation by Cameron Sanderson (Manager Vic/Tas) (Amended Statement of Claim filed 23 September 2014 at [13] and [13A]), and the second parental leave representation (Ibid at [17A] and [18]) were “recklessly made”.
The Court notes that, to be actionable, the representation must be false or misleading. Clause 4.2.4.2 of the respondent’s Parental Leave Policy provides that “an employee may take up to a maximum of 52 weeks paternity leave if the employee is the child’s primary care giver”. That term is defined in cl.3 as being “the person primarily responsible for the day to day care of the child.” Obviously, there cannot be more than one primary care giver in a family unit at any one time.
The Court finds the representation, as to the requirement to be the primary care giver, to be misleading as it is in conflict with the NES in s.70 of the FW Act. Relevantly, all that s.70 requires on this issue, is that the employee “has or will have a responsibility for the care of the child”; There is no requirement that the employee “be primarily responsible for the day to day care of the child.” By s.44 of the FW Act, an employer must not contravene a provision of the NES. The statement in the respondent’s Parental Leave Policy was therefore misleading about the workplace rights of the applicant to parental leave.
The next question is whether the misleading representation was made knowingly or recklessly. There is no claim that it was made “knowingly”. The question becomes whether it was made “recklessly”?
“Recklessly” defined
The word is not defined in the FW Act. For a person to recklessly make a false or misleading representation about the workplace rights of another, it has been held that the person “must either have made the representation without believing it to be true, or not caring whether it was true or false”: see Director of the Fair Work Building Industry Inspectorate v Baulderstone Pty Ltd & Ors [2014] FCCA 721 at [58].
“Recklessness” implies something less than intent but more than mere negligence (Butterworths Australian Legal Dictionary).
The Court finds no evidence to satisfy either definition. At most, the provision of the Parental Leave Policy requiring the employee to be the primary carer of the child, appears to have been included by mistake or negligence. The Court does not find that the representation was made knowingly or recklessly.
The first misleading representation about the rights of the applicant to parental leave was made in the Parental Leave Policy. The second misleading representation about parental leave was made in response to the applicant’s queries regarding his rejected application to extend his leave (Exhibit “PS-11” to the Affidavit of the applicant). That email chain commences with an email from Ms Lynda Hobbins (“Ms Hobbins”) to Mr Robert McFee (“Mr McFee”) stating that “in the case of parental leave, the employee must be the primary care giver.” A copy of that email was forwarded to the applicant and was a misleading representation. Mr McFee made that representation to the applicant, but was entitled to rely on the expert advice of Ms Hobbins who was one of the respondent’s HR advisers.
The alleged contraventions of s.44
Section 44 of the FW Act provides:
(1)An employer must not contravene a provision of the National Employment Standards.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2)However, an order cannot bemade under Division 2 of Part 4‑1 in relation to a contravention (or alleged contravention) of subsection 65(5) or 76(4).
Note 1: Subsections 65(5) and 76(4) state that an employer may refuse a request for flexible working arrangements, or an application to extend unpaid parental leave, only on reasonable business grounds.
Note 2: Modern awards and enterprise agreements include terms about settling disputes in relation to the National Employment Standards (other than disputes as to whether an employer had reasonable business grounds under subsection 65(5) or 76(4)).
Chapter 2, Part 2.1, Division 2 and Part 2.2 of the FW Act specify the core provisions of the NES.
Section 70 provides for parental leave as follows:
An employee is entitled to 12 months of unpaid parental leave if:
a)the leave is associated with:
(i)the birth of a child of the employee or the employee's spouse or de facto partner; or
(ii)the placement of a child with the employee for adoption; and
b)the employee has or will have a responsibility for the care of the child.
Note: Entitlement is also affected by:
a)section 67 (which deals with length of the employee’s service); and
b)for pregnancy and birth – subsection 77A(3) (which applies if the pregnancy ends other than by the child being born alive, or if the child dies after birth); and
c)for adoption – section 68 (which deals with the age etc. of the adopted child).
Details of the alleged contraventions are that under the NES, the applicant was entitled to 12 months unpaid parental leave (ss.67 and 70 of the FW Act).
Chapter 3, Part 3.1 of the FW Act sets out general protections under the FW Act. Sections 340, 345 and 351 are in Part 3.1.
Sections 360 and 361(1) are also in Part 3.1 and provide as follows:
360 For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
361(1)If:
a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
The provisions in s.361(1) are generally referred to as “the reverse onus”. Direct testimony from the decision-maker which is accepted as reliable is capable of discharging the onus on an employer: see Board ofBendigo Regional Institute of Technology and Further Education v Barclay & Anor (2012) 290 ALR 647 at p.657. The question is one of fact (Ibid [45]). “The reliability and weight of the employer’s evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case, but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the enquiry” (Ibid [127]). If the decision-maker gives evidence that they did not take the action for a proscribed reason, and that evidence is accepted, there will not be a breach of the Act.
The reverse onus can be satisfied on the balance of probabilities: see Randall v Greyhound Australia Pty Ltd [2008] FMCA 1191 at [109].
The alleged contraventions of the FW Act are civil remedy provisions. Applications for orders in relation to contravention of civil remedy provisions are covered by Chapter 4, Part 4.1, Division 2 of the FW Act.
Sections 545(1) and (2) provide:
(1)The Federal Court or the Federal Magistrates Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
Note 1: For the court's power to make pecuniary penalty orders, see section 546.
Note 2: For limitations on orders in relation to costs, see section 570.
Note 3: The Federal Court and the Federal Magistrates Court may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).
Note 4: There are limitations on orders that can be made in relation to contraventions of subsection 65(5), 76(4), 463(1) or 463(2) (which deal with reasonable business grounds and protected action ballot orders) (see subsections 44(2), 463(3) and 745(2)).
(2)Without limiting subsection (1), orders the Federal Court or Federal Magistrates Court may make include the following:
a)an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
b)an order awarding compensation for loss that a person has suffered because of the contravention;
c)an order for reinstatement of a person.
Section 546 provides:
(1)The Federal Court, the Federal Magistrates Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Note: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).
Determining amount of pecuniary penalty
(2)The pecuniary penalty must not be more than:
a)if the person is an individual--the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
b)if the person is a body corporate--5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
Payment of penalty
(3)The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
a)the Commonwealth; or
b)a particular organisation; or
c)a particular person.
Recovery of penalty
(4)The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.
No limitation on orders
(5)To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.
Section 547 provides:
(1)This section applies to an order (other than a pecuniary penalty order) under this Division in relation to an amount that a person was required to pay to, or on behalf of, another person under this Act or a fair work instrument.
(2)In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary.
(3)Without limiting subsection (2), in determining the amount of interest, the court must take into account the period between the day the relevant cause of action arose and the day the order is made.
This decision does not address the issue of penalty, which the parties request be dealt with in another hearing (post)
Alleged breaches of contract
The contract claim is an “associated matter” within jurisdiction. The matters are between the same parties and have the same factual substratum.
The applicant claims that the respondent breached his Employment Agreement by failing to pay the applicant a total remuneration package of $202,020.00 per annum, during the period 1 May 2012 to 31 May 2013 and/or failed to apply all minimum statutory entitlements to the applicant, namely unpaid parental leave under the FW Act (Applicant’s Outline of Submissions at [107]).
The applicant makes claims for loss and damage as set out in the Amended Statement of Claim at [35].
Paragraph 114 of the applicant’s Outline of Submissions asserts that on 31 August 2012 the applicant was presented with a Revised Employment Agreement (Exhibit “PS-15” to the Affidavit of the applicant). This offered employment on a part-time basis, and was accepted by signature of the applicant on 21 September 2012. The total remuneration package was reduced to $99,663.20 for 18.5 hours per week.
Paragraph 117 asserts that the Parental Leave Policy was incorporated into the agreement by reference. Clause 17.1 refers to parental leave “in accordance with applicable legislation”.
At [120] it is noted that the parties agree that the respondent’s policies formed part of the applicant’s employment conditions [Amended Statement of Claim at [6(a)] and Amended Defence filed 23 September 2014 at [6(a)].
The applicant’s Outline of Submissions provide the following chronology of events at [7]:
a)On or about 1 November 20007 (sic ‘2007’) [the applicant] entered into a written contract of employment with [the respondent] (“Employment Agreement”) and commenced employment with [the respondent];
b)Effective from on or about 1 October 2011, [the applicant’s] total remuneration package payable under the Employment Agreement was increased to $202,020 per annum inclusive of minimum superannuation entitlements;
c)In October 2010 [the applicant] and his wife discovered she was pregnant with twins;
d)On 29 April 2011 [the applicant’s] twins were born;
e)From 1 May 2011 to 30 April 2012 (inclusive) [the applicant] was absent from the workplace on approved leave because he had a responsibility to care for the newborn twins;
f)[The applicant] returned for a period of part-time work at the request of [the respondent] to perform limited business development duties from late March to 30 April 2012 worked either from home or the office;
g)[The applicant’s] period of leave finished on 30 April 2012 and he officially returned to work;
h)[The respondent] required [the applicant] to work casual or part-time and elected to pay his applicable total remuneration package on a pro rata basis;
i)On 21 September 2012 the parties executed a revised contract of employment which reflected the diminution to part-time work;
j)[The respondent] terminated [the applicant’s] employment effective 31 May 2013 by reasons of alleged redundancy;
k)[The applicant’s] termination payment was calculated and paid on the basis that he was part-time.
The applicant’s Outline of Submissions alleges:
·At [32] that the applicant was entitled to the benefit of the NES including 12 months unpaid parental leave (s.67 and 70 of the FW Act). The applicant proposed to exercise that right in or about January 2011 when he informed his then Manager, Cameron Sanderson, that he proposed to take leave for 6 to 12 months to care for his expected twins. As this constituted a proposal that could be rejected, it constituted an enquiry by the applicant within s.341(1)(c)(ii) of the FW Act.
·
At [34] the applicant applied for and took 12 months leave from
2 May 2011 to 30 April 2012 which comprised of:
i)Paid paternity leave from 2 – 6 May 2011;
ii)Long service leave (at half pay) from 9 May – 4 November 2011;
iii)Annual leave from 5 – 30 November 2011; and
iv)Unpaid leave from 1 December 2011 – 30 April 2012.
·At [35] the respondent admits that by taking the periods of leave referred to, the applicant was exercising a workplace right under s.341 of the FW Act (Amended Defence filed 23 September 2014 at [22]).
·At [38] the applicant did not exercise his workplace right to unpaid parental leave under the FW Act because of the Coffey Parental Leave Policy (Exhibit “PS-4” to the Affidavit of the applicant) which required him to be the “primary care giver” of a child (Affidavit of the applicant at [12], [19], [22] and [23]; Affidavit of the applicant in Reply filed 15 March 2015 at [9], [10], and [51]).
·At [39] the applicant took the leave because of family responsibilities to care for his twins (Affidavit of the applicant at [8]-[26]).
·At [41] the respondent took adverse action against the applicant at the conclusion of his leave, the details of which are set out (supra).
·At [43] the adverse action injured the applicant in his employment by affecting his right to full-time employment and to his total remuneration package.
·At [45] the adverse actions taken by the respondent was different treatment of the applicant compared with other full-time project directors of the respondent who did not have their hours and remuneration packages reduced even if there was less fee paying work available.
·At [46] the respondent does not dispute that the above actions occurred, but contends that they were not adverse actions.
·At [53] and [54] the applicant alleges that the adverse action was taken because he had workplace rights, and family responsibilities.
·At [55] the respondent denies that it took adverse action for a prohibited reason.
·At [56] the respondent says that its evidence shows that it treated the applicant as it did because of a downturn in business and available fee paying work, and not for any reason alleged by the applicant.
·At [57] that while the Affidavit of Mr McFee (the person who made the decisions relating to the applicant), filed on 8 October 2014 stated that none of the alleged reasons formed any part of his decisions, it did not state the actual reasons for his decisions.
The Court notes that Mr McFee stated at [55(e)] that:
The sole reason for this decision (not to offer the applicant full-time work or to offer the applicant part-time work in or about September 2012) was the availability of work to Coffey following the downturn in construction work which had been continuing at that stage since about March 2009.
The Court takes that to be a specific denial of having taken prohibited reasons into account, and a specific statement of what Mr McFee took into account in deciding not to offer the applicant full-time work; however it is not a denial or statement of reasons for deciding to make the applicant’s position redundant on 31 May 2013. Declaring the position redundant is not in issue in this case. Mr McFee’s statement is supported by the fact of the general economic downturn resulting from the global financial crisis (the “GFC”) from 2007 onwards (of which the Court takes judicial notice).
The submissions continue:
·At [60] other project directors did not have their hours or pay reduced.
·At [66]; Under the respondent’s Parental Leave Policy:
An employee who returns to work after a period of parental leave is entitled to resume his/her previous position. If that position no longer exists, the [employee] will be placed in an identical or similar available position for which they possess the necessary skills, experience and qualifications, with no loss of pay” (cl.5.4).
The Court notes however, that the applicant did not take parental leave under that policy or under the FW Act.
·At [67] the applicant alleges that the declarations by Mr McFee are unreliable and insufficient to discharge the reverse onus in the circumstances here.
However, the Court finds that there has been a specific denial by Mr McFee, being the person ultimately responsible for making the decision not to return the applicant to his position and full remuneration; and a specific statement of the reasons for that. There is nothing to indicate that Mr McFee is not a reliable witness. The Court accepts his evidence and finds that on the balance of probabilities [see Randall (supra)], but adverse action was not taken.
The remedies sought by the applicant
The applicant seeks compensation for loss suffered because of the contraventions of the FW Act [s.545(2)(b)].
The applicant seeks the imposition of pecuniary penalties on the respondent for the contraventions. That matter is to be dealt with in a further hearing.
The applicant seeks payment of the pecuniary penalties to him.
The applicant alleges that the losses caused by the contraventions of s.340 and s.351 are:
a)The difference between the gross earnings paid during 1 May 2012 to 31 May 2013 and the gross earnings that would have been received during that period as a full-time employee receiving a total remuneration package of $202,020 per annum.
b)The difference between the annual leave entitlements accrued during 1 May 2012 to 31 May 2013 and the annual leave entitlements that would have accrued during that period as a full-time employee receiving a total remuneration package of $202,020 per annum.
The applicant relied on the first parental leave representation and/or the second parental leave representation when applying for leave, and in deciding not to apply for unpaid parental leave.
The applicant contends at [148] that “had he not been misled and applied for unpaid parental leave, pursuant to the Parental Leave Policy which was incorporated into his Employment Agreement by reference, and which had contractual force at the relevant time, irrespective of the position he then performed, he was entitled to return to work without loss of pay”.
And at [149] – “Consequently, the loss and damage suffered is the same as for the contraventions of s.340 and s.351 of the FW Act outlined in paragraphs 143 – 145 above”.
And at [151] – “The loss and damage caused by [the respondent’s] breach of the Employment Agreement is the same as for the contraventions of s.340 and s.351 of the FW Act outlined in paragraphs 143 – 145 above.” (which is [44] of this decision).
The applicant otherwise reserves his position as to the imposition of pecuniary penalties.
Statement of Agreed Facts
The parties filed a Statement of Agreed Facts (“SOAF”) on 16 March 2015.
The evidence
At the hearings before the Court Mr Galbraith of Counsel appeared for the applicant and Mr Donaghey of Counsel for the respondent.
The Hearings commenced on 17 March 2015
Mr Galbraith referred to the respondent’s Parental Leave Policy which is Exhibit “PS-4”.
Clause 4.2.4.2 thereof provides relevantly:
An employee may take up to a maximum of 52 week paternity leave if the employee is the child’s primary care giver. Paternity leave is comprised of 2 weeks paid leave and 50 weeks unpaid leave.
Clause 5.4 provides:
An employee who returns to work after a period or parental leave is entitled to resume his/her previous position. If that position no longer exists, the staff member will be placed in an identical or similar available position for which they possess the necessary skills, experience and qualifications, with no loss of pay.
The employee must inform the company in writing at least 4 weeks before the end of the leave, of their intention to return to work. The employee may request to return to work on a part-time or job-sharing basis and such applications will be considered case-by-case, based on the Company’s ability to accommodate the change and any potential affect on the business and employee. Should such an arrangement be impractical, unfeasible or undesirable on the basis of legitimate business concerns, Coffey is not obliged to approve the application.
The statutory entitlement to parental leave is set out in s.70 of the FW Act (supra):
Section 84 of the FW Act provides:
On ending unpaid parental leave, an employee is entitled to return to:
a)the employee’s pre‑parental leave position; or
b)if that position no longer exists--an available position for which the employee is qualified and suited nearest in status and pay to the pre‑parental leave position.
The Court notes that the respondent’s Parental Leave Policy requires the employee to be “the child’s primary care giver”, whereas the FW Act requirement is that the employee “has or will have a responsibility for the care of the child.”
It is submitted by the applicant that when he read the respondent’s policy, as advised to do so by his then manager Mr Sanderson, and on determining that he would not be the primary care giver; he decided not to apply for unpaid parental leave (Transcript “T” 17/3/15 p.8, l.6).
The applicant submits that if he had applied for unpaid parental leave under the respondent’s policy, he would have had a contractual entitlement to return to work with no loss of pay; whereas s.84 of the FW Act provides for return to the employees pre-parental leave position, or, if the position no longer exists, to an available position nearest in status and pay to the pre-parental leave position.
It is agreed (SOAF [12]) that from August 2011, Mr McFee replaced Mr Sanderson as General Manager Victoria/Tasmania. (Exhibit “PS-11” to the Affidavit of the applicant includes an email dated 1 December 2011 from Ms Hobbins (employed as an HR adviser with the respondent) which includes advice to Mr McFee that for parental leave, the employee “must be the primary care giver.”)
The Court finds that Mr McFee was advised by the respondent’s HR adviser that to be eligible for the parental leave, the employee had to be the primary care giver for the child. The Court finds that when a Manager obtains advice from an employee, who is employed as an expert in the area required about, it cannot be said that the Manager acted recklessly in relying on the advice. A Manager is entitled to act on the advice of an HR adviser who is employed by their employer to give such advice. A copy of that advice was sent by email to the applicant on 5 December 2011, which was relied on by him in deciding that he would take leave without pay, and not parental leave, as the HR advice was that he had to be the primary care giver to be eligible for parental leave (T 17/3/15 p.10, l.25). The applicant calls this the “second parental leave misrepresentation” for the purposes of s.345 of the FW Act.
The applicant submits that when his leave expired on 30 April 2012, he was told by Mr McFee that he could continue to be engaged but only on a part-time or casual basis (Ibid p.11, l.27). It is submitted that this was adverse action for the purposes of s.340 of the FW Act.
The applicant submits that he had a contractual entitlement to be paid an “annualised… undissected salary” and that the failure to pay him that on return to work was a breach of contract (Ibid p.11, l.36). The applicant submits that he executed the new employment contract, as cl.5.12 of the Coffey Leave Policy, (Exhibit “PS-13” to the Affidavit of the applicant) provided:
Staff taking an extended leave of absence must accept as a condition of the company’s approval of their leave, that although the Company will endeavour to re-employ them on their return, this cannot be guaranteed.
The applicant submits that he was not in a strong bargaining position (T 17/3/15 p.12, l.5).
The Court notes that cl.5.12 of the policy is inconsistent with s.84 of the FW Act.
The applicant submits that it was adverse action to fail to return him to his pre-leave position after his leave finished in April 2012 (Ibid p.12, l.10), and offering him only part-time or casual work. It is also submitted that it was adverse action that he was given responsibility for limited projects on return to work (Ibid p.12, l.13).
The applicant alleges that these adverse actions were taken because he had workplace rights, or that the periods of leave he had taken were due to his family responsibilities to care for his twins, which was discrimination under s.351 of the FW Act (Ibid p.12, l.19).
The applicant submits that he does not bring an adverse action claim with respect to the validity of his selection for redundancy, in terms of saying that part of the reason for his redundancy were his workplace rights (Ibid p.12, l.41).
The applicant claims the loss resulting from his redundancy payment being calculated on the basis of part-time employment (Ibid p.12, l.42).
The applicant claims losses as follows:
(1)
From his return to work on 1 May 2012 (when he was entitled to be paid his full-time contractual salary but was paid a salary for part-time work), until he signed the new contract on
21 September 2012; the amount being agreed in the SOAF at [32] as $80,309.38 less $37,213.90 = $43,095.48; and
(2)The loss of pay for accrued annual leave entitlements from 1 May 2012 until 21 September 2012, the amount being agreed in the SOAF at [34] as $3,745.32; and
(3)The loss of pay from 21 September 2012, when the new contract was signed, until redundancy on 31 May 2013, the amount being agreed in the SOAF at [31] as $218, 855.00 less $109,784.65 = $109,070.35.
The applicant claims, that had he not been misled and taken unpaid parental leave under the respondent’s policy, he would have been entitled to return to work with no loss of pay, and therefore his redundancy pay would have been greater (Ibid p.13, l.35).
The applicant submits that alternatively there was a breach of his contract of employment in failing to pay in accordance with that contract (Ibid p.14, l.9).
The applicant submits that the claim under s.44 of the FW Act is that the failure of the respondent to acknowledge the applicant’s entitlement to unpaid parental leave under the FW Act is a breach of the NES (Ibid p.14, l.17).
The evidence of the applicant
The applicant referred to his email to Mr McFee on 28 February 2012 (Exhibit “PS-12” to the Affidavit of the applicant) which referred to a review of his eight hours per week at the end of March/April 2012. That review did not occur.
The applicant stated that before he went on leave in 2011 he was paid a fixed amount per month (Ibid p.19, l.24) and that his hours worked did not impact on his remuneration.
The applicant states that after his leave finished on 30 April 2012, from 1 May onwards he was able to work full-time if the work was there at whatever hours Mr McFee was prepared to offer (Ibid p.19, l.40).
During cross examination by Mr Donaghey, it was put to the applicant that he had no interest in returning to work full-time either from February 2012, or when his leave expired on 30 April 2012. The applicant disagreed (Ibid p.20, l.22). The applicant agreed that in February 2012 he stipulated the hours he wanted to work in March and April 2012 (Ibid p.20, l.37). The applicant said he continued to work a few hours up until 21 September 2012 when he signed a further contract, because there was not sufficient work for full-time hours (Ibid p.21, l.17). The applicant agreed that he did not request full-time work, after agreeing to work eight hours per week on business development (Exhibit ‘LH-4’ to the Affidavit of Ms Hobbins filed 8 October 2014). The applicant agreed that a whole new contract eventuated from 21 September 2012 (Exhibit “PS-15”).
The Court notes that the new contract was for part-time work of 18.5 hours per week and fixed remuneration of $99,633.20 per annum. It included leave entitlements in accordance with applicable legislation-(cl.17.1). Clause 27.12 of ‘Part C: Standard Terms’ provides that the agreement is the entire agreement and supersedes any prior agreement between the parties.
The Court finds that the new agreement affects rights and obligations arising after 21 September 2012 and does not affect rights under the first contract that arose before that date. The new contract therefore governed the termination of employment, in accordance with minimum entitlements under legislation (cl.27.9).
The applicant agreed that he took paid paternity leave from 2 to 6 May 2011; long service leave at half pay from 9 May to 4 November 2011 (SOAF [9]); and then unpaid leave which he extended (T 17/3/15 p.25, l.46).
The applicant understood that the respondent’s Parental Leave Policy (Exhibit “PS-4” to the affidavit of the applicant) provided at cl.5.4, that an employee who returns to work after a period of parental leave is entitled to resume their previous position (T 17/3/15 p.25, l.14).
The applicant stated that he did not ask Mr McFee to return him to full-time hours because he was not on parental leave and understood that he did not have the right to request full-time work (Ibid p.25, l.28).
The applicant stated that he told Mr McFee that he could work more hours than Mr McFee was offering (Ibid p.26, l.34).
The applicant stated that he entered into the new employment agreement because it was “his only option” – he was not given “a choice to return to full-time work” (Ibid p.27, l.14). The Court finds that this is not enough to find a lack of genuine consent due to undue influence by Mr McFee, so that the acts of the applicant were not his free voluntary acts, and therefore the new employment agreement is not binding.
The applicant agreed that “the whole industry was under [financial] pressure and [the respondent] was included in that” when he returned from his leave (T 17/3/15 p.28, l.8). The Court finds that this supports the explanation given by Mr McFee that the reduction in the pay and conditions of the applicant was due to a downturn in business, and was not due to a prohibited reason.
The applicant stated that he was working on 15 projects before he commenced his leave (Ibid p.28, l.31), but that he does not say that they should have been given back to him (Ibid p.29, l.17).
The applicant stated that he thought that there were two other project directors made redundant in May 2013 (Ibid p.31, l.34).
The applicant agreed that downward business pressure caused a significant reduction in staff at the respondent’s from 2011 to the present (Ibid p.41, l.8).
The applicant agreed that he was one of the persons negatively affected by the GFC and by the downturn in the construction industry, but in different ways to others (Ibid p.41, l.15).
Re-examination of the applicant
The applicant stated that at the end of his leave he was able and willing to work full-time (Ibid p.42, l.20).
The applicant said that he signed the new contract (Exhibit “PS-15”) because Mr McFee told him that HR requested it (Ibid p.43, l.18).
The evidence of Lynda Hobbins
Ms Hobbins is an HR adviser employed by the respondent.
Under cross examination, Ms Hobbins stated, that before working for the respondent she had worked for Latrobe University “providing advice on people practices” (Ibid p.49, l.20) which encompassed advice on legal requirements relevant to employees, including leave entitlements and entitlements contained in relevant legislation.
Ms Hobbins stated that she did not receive any specific training on the NES, but she was acquainted with changes in the NES.
Ms Hobbins commenced employment with the respondent on 12 September 2011.
Ms Hobbins had access to on-line resources about minimum legal entitlements, like the NES or the FW Act through her work computer. Ms Hobbins has ready access to up-to-date information about what those entitlements are (Ibid p.52, l.12).
Ms Hobbins stated that in her email to Mr McFee (Exhibit LH-3 to the Affidavit of Ms Hobbins), her advice that, in the case of parental leave, “the employee must be the primary care giver” was “a mistake I’ve made” (T 17/3/15 p.62, l.35) and that is not the minimum entitlements in the NES.
Ms Hobbins stated that the advice was in an email to Mr McFee and was not intended by her to be sent to the applicant (Ibid p.62, l.41). Ms Hobbins said it was not a specific query and that she needed more information from the applicant.
Ms Hobbins agreed that it was also an error when she stated in the email that “employees are required to give 14 days written notice” (Ibid p.65, l.8).
It must be of concern that two errors were made in advice given about employee entitlements. However Ms Hobbins did not intend that the email be the final advice, as she needed more information from the applicant. Her conduct does not establish that she was “reckless” in giving the advice, nor does Mr McFee forwarding a copy to the applicant, show that Mr McFee was “reckless”, as he was relying on advice from an HR adviser employed by the respondent, and was entitled to assume that the advice was correct.
Ms Hobbins stated that Mr McFee, as a General Manager, is the one who is ultimately responsible for approving or declining leave (Ibid p.68, l.44).
Ms Hobbins stated that she did not deliberately provide incorrect advice (Ibid p.69, l.24).
Ms Hobbins stated that even though someone is paid $200,000.00 per year, they still have an hourly rate, being per week (divided by 37.5) (Ibid p.73, l.36).
Ms Hobbins stated that it was the applicant that initially said the he could only come back eight hours per week (Ibid p.75, l.45).
Ms Hobbins stated that the non-fee earning work of the five project directors had grown to an unacceptable level around 1 May 2013 (Ibid p.79, l.10), which had a detrimental effect on the cost of sales (Ibid p.79, l.20), and the project directors other than the applicant still received their full remuneration (Ibid p.79, l.34); none of them had taken an extended period of absence in 2012 like the applicant.
Ms Hobbins suggested that Mr McFee needed to formalise with the applicant what had been happening since May 2012, and that a new contract was needed (Ibid p.82, l.5).
Ms Hobbins has worked in HR for eight years (T 18/3/15 p.91, l.35).
Ms Hobbins stated that the “primary care giver” requirement “was the test under the law before the NES” (Ibid p.93, l.25).
Ms Hobbins agreed that while the applicant was on leave the whole of projects as a business, was recording an unacceptable level of fee earning work (Ibid p.93, l.44).
Ms Hobbins stated that the applicant did not request to come back full-time (Ibid p.95, l.29).
Ms Hobbins stated that there were redundancies around April/May 2013 (Ibid p.96, l.9).
Ms Hobbins stated that the respondent pays above the Fair Work minimum requirements on redundancy (Ibid p.97, l.40).
Ms Hobbins stated that on 30 May 2013, the applicant had complained that the advice he had been given about his entitlement to unpaid parental leave, was incorrect (Ibid p.99, l.43).
Ms Hobbins stated that about 35 people were made redundant from the respondent at around the same time as the applicant (Ibid p.102, l.41).
Ms Hobbins stated that when a person is made redundant, there is only one option for the respondent, and that is to pay at the fraction the person is currently working (Ibid p.104, l.7).
Ms Hobbins stated that around the time of the GFC and the downturn in work, the respondent was talking with employees about them taking leave or working in the booming market in New Zealand (Ibid p.104, l.33).
Affidavit of Lynda Hobbins filed 8 October 2014
Ms Hobbins stated that before she wrote the advice to Mr McFee on 1 December (Exhibit “LH-3”), she looked at a file on her desk (the “manual folder”) which had the previous policy in it [17].
Ms Hobbins was not aware that in December 2011 the policies had been updated [18].
Ms Hobbins stated at [24] that the applicant:
“… having been a casual up until the first quarter of calendar 2012… I gave McFee advise (sic ‘advice’) that Coffey must issue to the Applicant a further contract of employment”.
Ms Hobbins did not advise Mr McFee to put the applicant back as a part-time employee, because he had been on leave. The applicant’s leave played no part in that reasoning [26].
Ms Hobbins stated at [27] that:
“… it seemed like a sensible thing to do… if the Applicant’s hours were going to be changed, a new employment agreement is to be issued.”
The applicant never asked Ms Hobbins if he could return to work full-time [28].
“Due to reduced revenue, a number of redundancies occurred in about April and May 2013” [29].
“On about 14 May 2013, the Applicant raised a grievance on the basis of his redundancy calculations” [37].
“The applicant’s complaint was:
a)he had been a full-time employee for many years; and
b)He was only a part-time employee for a short period” [38]
and that he was entitled to be paid for his redundancy at a higher rate than part-time [39].
Ms Hobbins told the applicant that the respondent applies redundancy entitlements at the current statues at the date of termination, and that if the applicant had been part-time for only one month, they would apply a reasonableness test and calculate him as full-time [40]. As the applicant had been part-time for nine months, this was not a short period.
Ms Hobbins was not the decision maker in relation to the redundancy entitlements. She did not make the guidelines [42].
Ms Hobbins stated at [43]:
The decision to pay the Applicant as a part-time employee was not:
a) because (sic ‘of the’) Applicant’s entitlement to parental leave;
b) The proposal by the Applicant to take unpaid parental leave;
c) Any complaint or inquiry made by the Applicant (including in relation to my 1 December 2011 email);
d) The taking of unpaid leave (which the applicant took from about April 2011 to 30 April 2012);
e) the Applicant not exercising a workplace right (ie the entitlement to the benefit of unpaid patental (sic ‘parental’) leave;
but rather because of the Respondent’s guideline and practice. According to that, the Applicant was an employee of the Respondent, being paid on a part-time basis. This was the company practice which I had mentioned in my discussions with the Applicant on 14 May 2013.
Ms Hobbins continued at [44]:
The Applicant’s payment as a part-time employee was not due to any of the reasons set out in paragraph [43] of this affidavit, because the same payment regime would have applied to him in the same way under other circumstances.
The evidence of Robert Mc Fee (T 18/03/15 p.105)
Mr McFee is the General Manager Victoria/Tasmania of the respondent.
Mr McFee confirmed his Affidavit filed 8 October 2014. Mr McFee stated that there were six project directors when the applicant was made redundant, including the applicant and Mr McFee. Mr McFee stated that at 18 March 2015 there were three project directors in addition to himself, two full-time, one part-time and Mr McFee. (T 18/03/2015 p.107, ll.5-16).
Mr McFee referred to the projects listed in [25(c)] of the Amended Statement of Claim, being:
a)MELO09048 – the Department of Treasury lift upgrade. When the applicant returned to work in February 2012, work was still happening on that project;
b)MELO10061 – Wyndham City Council job. Mr McFee did not recall a project director being involved;
c)MELO09088 – East Keilor Leisure Centre. That project finished in May 2012 around the time the applicant returned;
d)MELO11013 – Department of Justice, Lygon Street Building;
e)MELO07079 – Swan Hill Police Station. The project was completed just prior to the applicant’s return.
The Morwell Justice Centre required only an assistant project manager.
Cross examination of Robert McFee
Mr McFee stated that he may have been aware that the applicant’s wife was having twins before the applicant went on leave (T 18/3/15 p.112).
By 29 April 2011, Mr McFee knew that the applicant was taking leave to help his wife with their new twins.
Mr McFee stated that the practice of the respondent was to give projects to other project directors when a project director took leave (Ibid p.113, l.20).
Mr McFee was referred to a list of 15 projects that the applicant said he handed over on departure (for leave). Mr McFee stated that the Bendigo project was already finished (Ibid p.113, l.40) in May 2011 (Ibid p.114, l.1).
Mr McFee stated that when he returned from leave he would resume work on his projects (Ibid p.114, l.28).
Mr McFee was referred to Exhibit RM-1 to his Affidavit being a “Time Audit Report” for 26 January 2011 to 22 April 2011 that shows total hours billed on jobs in that period for work by the applicant.
Mr McFee was referred to Exhibit RM-7 which is a report of 10 April 2011 where p.3 at para.3 refers to the level of fee time that employees were charging. It shows that the applicant had 5% fee time in April 2011, which indicates that he was busier than some other project directors, and similar to others.
Mr McFee stated that the five project directors were still employed by the respondent when the applicant returned from leave. Others had left (T 18/3/15 p.117, l.24), including Mr Sanderson. None were made redundant or terminated by the respondent (Ibid p.117, l.45).
Mr McFee stated that after he took over Mr Sanderson’s role, he became ultimately responsible for approving leave applications. The first thing Mr McFee would do is look at the policy. He was not aware that there was legislation governing leave and “don’t know how it all works” (Ibid p.120, l.18).
Mr McFee was aware that employees were entitled to ten days sick leave under company policy, and that there was a government safety net of ten days sick leave (Ibid p.120, l.26).
Mr McFee stated that he would have to look at the Parental Leave Policy to check whether an employee was entitled to that leave.
Mr McFee stated that the applicant’s application for leave in October 2011 did not come to him (Ibid p.122, l.2).
Mr McFee was referred to Exhibit “PS-10” to the Affidavit of the applicant and stated that he does not recall receiving the email from the applicant on 15 November 2011.
Mr McFee commented about Exhibit A1 tendered to the Court, which contains an email from Mr McFee to Ms Hobbins, that he wanted to be cautious about saying that there will be a job for the applicant when he returned in May 2012. Mr McFee states that he said that because “he was wanting to make sure that we’ve got enough work” (Ibid p.124, l.44).
Mr McFee agreed that Exhibit “PS-13” to the Affidavit of the applicant is the respondent’s Leave Policy that he looked at, but he did not look at the stand alone Parental Leave Policy, as the applicant was asking for leave without pay, and that there was no guarantee that they would get their job back (T 18/3/15 p.127, l.10).
Mr McFee was referred to Exhibit RM-5 to his Affidavit which contained an email from Ms Hobbins to Mr McFee on 1 December 2011 including advice that “with leave without pay and parental leave extensions, employees are required to give 14 days written notice… In the case of parental leave, the employee must be the primary care giver and we require a stat dec…”. That advice came from Ms Hobbins. Mr McFee had no reason to not accept it or question it. It was not his area of expertise. On the basis of that advice, Mr McFee forwarded the email to the applicant asking him to request unpaid leave in writing.
Mr McFee stated that the applicant had been applying for leave without pay, and parental leave was covered in the emails in case someone else applied for parental leave (T 18/3/15 p.129, l.19), as the respondent had already agreed to leave without pay at this point (Ibid p.129, l.37), ceasing in May 2012 (Ibid p.130, l.28).
Mr McFee stated that is it not his practice to check out every piece of advice obtained from HR. He is not qualified to give HR advice (Ibid p.131). The respondent has an HR department who are the experts (Ibid p.133, l.5).
Mr McFee stated that he had the ultimate responsibility to approve or decline the leave (Ibid p.133, l.29).
The Court finds that as the respondent employed HR experts, it was not “reckless” of Mr McFee to rely on advice from HR on leave entitlements. Mr McFee is not an expert, nor was he required to be; HR advisers were there for that purpose.
Mr McFee stated that he was aware that the purpose of the applicant’s leave was to be at home to assist with the care of the newborn twins (Ibid p.133, l.34).
Mr McFee stated that an acceptable level of billable time for project directors was 70 – 80% (Ibid p.136).
Mr McFee stated that an employee’s annual salary is based on 37.5 hours per week (Ibid p.140).
Mr McFee told the applicant that the respondent could only give him part-time work after his leave finished (Ibid p.141, l.38). Part-time work was discussed also with the other project directors (Ibid p.142, l.1) and the respondent gave them the option of taking time in lieu (Ibid p.144, l.9).
Mr McFee stated that there was not a significant amount of time required for a project director upon the applicant’s return (Ibid p.146, l.15).
Mr McFee stated that when the applicant was made redundant, he had to make ten people redundant (Ibid p.149, l.29) and project directors were paid for their redundancy on the basis of full-time employment (Ibid p.149, l.32).
The Court notes that at one point, Mr McFee’s evidence was that no other project directors had been made redundant before the applicant returned from leave (T 18/03/2015 p.117, l.45); they had left for other reasons, but he stated later that other project directors were made redundant (T 18/03/2015 p.149, l.32). The possible inconsistency is of no great moment as the fact remains that most of the respondent’s project directors ceased working for the respondent around the time that the applicant was on leave, or returned from leave, or was made redundant. The reasons for them leaving appear to vary. It is however, apparent that they left around the time of the alleged downturn in business. There is no indication that their departure was as a result of any other factor. The departures corroborate the evidence of Mr McFee that there was a downturn in work for the respondent and its employees.
The Affidavit of Robert McFee filed 8 October 2014
Mr Mc Fee states:
·The GFC hit in 2007 and altered the business landscape [12];
·By March 2009 work was more difficult to secure [13];
·“By late 2011 the Building Education Revolution (BER) work was beginning to be completed” [14];
·During 2011 and 2012 offers were made to reduce the number of personnel when the respondent had only limited new work [17];
·Mr McFee took over as General Manager in August 2011, the respondent’s Global Executive directed him to “encourage the respondent’s personnel to take leave to ease the financial burden of excess employees”, or for them to transfer to other locations in Australia, New Zealand and Fiji [19];
·Mr McFee had to approve leave applications by members of his team, made in or after August 2011. The applicant’s October 2011 application for an extension of leave did not go to Mr McFee [23]. He was made aware of it by phone.
·Mr McFee later “gladly agreed” to the applicant’s request to continue his leave (without pay) [33];
·Mr McFee intended to manage future work with reduced personnel to avoid redundancies [34];
·The applicant did not say to Mr McFee in January 2012 that he really wanted to come back full-time [37];
·Mr McFee spoke to the applicant about coming back for the Business Development Workshop and said to the applicant “… we need to be winning work, to have something for you to do”. [41];
·Mr McFee discussed with the applicant his work continuing part-time [45]. The applicant did not object to it or demand to return full-time [46]. The applicant did not seek full-time work from the respondent in 2012 [47];
Mr Mc Fee stated at [48]:
None of the following factors:
a) the Applicant’s entitlement to parental leave;
b) the proposal by the Applicant to take unpaid parental leave;
c) any complaint or inquiry made by the Applicant, whether in relation to parental leave or otherwise;
d) the taking of unpaid leave (which the Applicant took from about April 2011 to 30 April 2012); nor
e) the applicant not exercising a workplace right (ie the entitlement to the benefit of unpaid parental leave,
formed any part of my decision not to offer to the Applicant full time work in or about February 2012, or any point later when the Applicant was offered first casual work by me (in about May 2012) and then later from September, offered part time work.
Mr McFee continued at [49]:
In fact, I did not even consider the Applicant’s taking of leave (nor any of the other reasons in paragraph [48] above, in my decision not to return the Applicant to full time work. The first reason was that the Applicant did not pursue the issue of full time work – whether in the discussion in January 2012 or on 27 February 2012, nor at some other time. The second was that I had in mind the projects available. If another employee, not on leave, had asked to move from part time to full time, I would have refused this request for the same reasons.
Mr Fee continued at [52]-[55]:
I did not force the Applicant into part time work, as the Applicant’s statement seems to suggest. This was in part because the Applicant did not pursue it (as I have said elsewhere in this affidavit). But the main reason, the reason that occupied my mind to the greatest part, was the downturn in work which had commenced in 2009 and which continued in 2011.
The Applicant was offered and accepted more regular part time work on about 30 September 2012. This was the reason the Applicant received pay on a ‘pro rata’ basis for 2.5 days per week, after September 2012.
It was my decision alone to offer the Applicant the part time work. I received advice from Ms Hobbins, but as the General Manager supervising Project Directors such as the Applicant, if I had a recommendation from Ms Hobbins and did not want to pursue it, then I had the power to make my own decision. No part of this decision required the say-so or the agreement of any other person at Coffey Projects.
None of the following factors:
a) the Applicants entitlement to parental leave;
b) the proposal by the Applicant to take unpaid parental leave;
c) any complaint or inquiry made by the Applicant, whether in relation to parental leave or otherwise;
d) the taking of unpaid leave (which the Applicant took from about April 2011 to 30 April 2012); nor
e) the Applicant not exercising a workplace right (ie the entitlement to the benefit of unpaid parental leave),
formed any part of my decision not to offer to the Applicant full time work or to offer the Applicant part time work in about September 2012. The sole reason for this decision was the availability of work to Coffey following the downturn in construction work which had been continuing at that stage since about March 2009.
On the basis of the above evidence which was not disproved under cross examination and which the Court accepts as reliable, the Court finds that the applicant’s hours of work or remuneration were not reduced for a reason prohibited by the FW Act.
Mr McFee stated at [57]:
It is not true that projects were ‘removed from the Applicant and not returned’, as this part of [28] seems to say. Rather, of the projects that he was working on, most had finished or placed on hold before he came back from his extensive leave.
And at [59]-[60]:
The Applicant did not suffer any real diminution of any duties. In effect, the GFC and the downturn in work affected all of the Project Directors, and this includes both the Applicant and his colleagues. The distribution of work among Project Directors was solely my decision and I decided which projects each would work on.
No part of my decision of allocating work to the Applicant depended upon any of the prohibited grounds alleged in the Applicant’s statement of claim (and summarised out in paragraph [55] of this affidavit). As with all allocations of work, I decided resourcing based upon the availability of both staff members and allocation of that work, the ability of the Applicant in particular, and his strengths. I also based my decision upon the Applicant’s sector of work, which had previously been local government and Department of Justice.
And at [63], [65] and [72]:
The Applicant from the time he returned to work was a senior manager of Coffey. It was a part of his job to obtain more work for Coffey. The Applicant was not singled out in this regard. The Applicant’s part time status was not related to this. At the same time, Coffey was cutting costs by asking its employees to take leave or consider moving to other Coffey offices.
I concluded that the Applicant should return part time after discussing with him on 27 February the limited work, and after obtaining advice from the HR advisor, Ms Lynda Hobbins.
The Applicant and I did talk about the possibility of the Applicant returning to full time employment should enough work be found.
Mr McFee stated at [74]-[75]:
On and from 31 May 2013, the Applicant was made redundant. Both Lynda Hobbins and I attended a meeting at Southbank on 19 April 2013, in which this news was delivered to the Applicant, Paul. Like other redundancy meeting I held, this was not an easy discussion to hold.
Now produced to me and marked ‘RM-11’ is a Power Point presentation provided to me by Lynda Hobbins, which sets out the names and positions of those who were made redundant from April to May 2013. There was one other project director made redundant at about the same time as well as five other less senior employees.
The Court finds that the reduction of hours and pay, and the redundancy of the applicant were the result of the downturn of work available at the respondent’s company as a result of the GFC and resulting downturn, in business and not for reasons prohibited by the FW Act.
The respondent’s submissions
Mr Donaghey summarised the claims by the applicant as:
·Contravening the NES (s.44 of the FW Act):
·The adverse action claims under Part 3.1 of the FW Act;
·The discrimination claim (s.351 of the FW Act);
·The misrepresentation claim (s.345 of the FW Act).
Contravening the NES – s.44
Section 44(1) of the FW Act provides that:
An employer must not contravene a provision of the National Employment Standards.
By s.61(3) Divisions 3 to 12 of Part 2.2 constitute the NES. Parental leave is part of the NES Division 5. Section 70 provides an entitlement to unpaid parental leave of 12 months on various conditions including that:
(b) The employee has or will have a responsibility for the care of the child.
Section 84 is Part 2.2 Division 5 and provides the entitlement for an employee to return to work. It provides:
On ending unpaid parental leave, an employee is entitled to return to:
a)the employee’s pre-parental leave position; or
b)if that position no longer exists – an available position for which the employee is qualified and suited nearest in status and pay to the pre-parental leave position.
Mr Donaghey alleges that the return to work guarantee is conditional upon the employee taking and returning from unpaid parental leave. The Court finds that accords with s.84. As the applicant did not return from that leave, the Court finds no breach of s.84.
Mr Donaghey does not dispute that the applicant was entitled to seek parental leave.
Mr Donaghey referred to an extract from the 11th Edition of Odgers Uniform Evidence Law. Mr Donaghey submits that the principle in Briginshaw should be applied in assessing a civil penalty; That is, that where a civil case involves allegations of criminal conduct, fraud of moral wrongdoing, which may lead to grave consequences for the defendant, the judicial approach requires that the Court be satisfied with the quality of the evidence to prove the allegation.
The Court is satisfied with the evidence that the applicant was entitled to unpaid parental leave under the NES, but was denied it through the respondent’s policy.
Section 140 of the Evidence Act (Cth) provides:
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance or probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
a)the nature of the cause or action or defence; and
b)the nature of the subject-matter of the proceeding; and
c)the gravity of the matters alleged.
As the respondent admits that the applicant was entitled to seek parental leave, and as it is clear that the respondent’s policy denied him that leave, the Court finds that the respondent breached the NES. The gravity of the matters alleged does not militate against finding that the contravention has been established.
Mr Donaghey argues that for the NES to be contravened there had to be a request from an employee, which is denied. The Court rejects that submission. An employee is entitled to the NES. Section 61(1) of the FW Act provides that:
This Part sets minimum standards that apply to the employment of employees which cannot be displaced….
Employees, therefore, have a statutory entitlement to the NES.
Mr Donaghey argues that the initial contract does not give an entitlement to be paid unless work is performed. That is correct, but an employee has a right to be provided with work in accordance with their contract; where work is not provided in accordance with that contract, damages can be awarded for non-payment of remuneration.
Mr Donaghey referred to the decision in Visscher v Giudice & Ors (2009) 239 CLR 361 at [53] to allege that in the present case there was either a rescission of the (initial) contract or a repudiation. The Court finds that there was a breach by the respondent which gave the applicant the right to terminate the contract by agreement and seek damages, as he has done.
Mr Donaghey referred to the decision in Banning v Wright (Inspector of Taxes) [1972] 2 All ER 987 at 998 as to waiver. The Court finds that concept not relevant as there is no question here of the applicant waiving his right to terminate and sue for damages. The actions by the respondent continued up until the applicant’s positon was made redundant on 31 May 2013; and the applicant issued proceedings on 1 August 2013. In the circumstances, there was no waiver.
Mr Donaghey referred to the decision in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at p.528B where it was decided as follows:
However, in particular circumstances, the general rule has been seen to work an apparent injustice. Accordingly, courts have come to conclude that sometimes, out of some circumstances, an acceptance can be inferred, notwithstanding the absence of specific assent. Alternatively, in some circumstances, the law will provide an estoppel to preclude a party from denying the existence of a contract, even though specific acceptance was not given and could not be inferred from the facts proved.
In that case, one party handed a contract to the other, who refused to sign it, but paid in accordance with it, and the contract was held to exist. That is entirely different to the circumstances in the present case. In the circumstances of this case, where there has been a termination of contract by agreement, the Court finds the passage above of no assistance. Similarly the Court finds that passages at p.530F and G and p.531 B, C and D of no assistance.
Mr Donaghey referred to the decision in Western Export Services Inc & Ors v Jireh International Pty Ltd [2011] HCA 45 at [3] that Courts are bound to follow the precedent in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at p.352 that:
The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
Again, the Court does not see the relevance of that rule to the circumstances in this case. Surrounding circumstances do not show that the applicant should not be bound by his new contract, and sue for damages.
Mr Donaghey submits that the persons who were either the decision-makers or involved in the decisions, deny comprehensively any prohibited ground (T 19/3/15 p.167, l.44). The Court agrees and finds that the respondent has satisfied the proof required by s.361 of the FW Act. The Court finds no reason to reject the evidence of Ms Hobbins and/or Mr McFee. The Court finds nothing inconsistent, or in conflict with it. The Court finds their evidence convincing and reliable. The Court relies on the denials in the Affidavit of Mr McFee at [48], [55] and [60], and his evidence in transcript. There is no question that Mr McFee was ultimately responsible for making the relevant decisions to put the applicant on part-time work. It also answers the discrimination claims. Therefore, the precise references to the evidence of Ms Hobbins do not need to be included here.
In early 2011 the General Manager Vic/Tas of the respondent, to whom the applicant reported, was Cameron Sanderson (Affidavit of the applicant at [11]). When the applicant enquired with Mr Sanderson about taking leave he was told by him to check what the respondent’s policies were, before making applications for leave. After doing that, the applicant did not apply for unpaid parental leave. as he was not going to be the primary carer of the twins, as required by the respondent’s policy.
Mr Sanderson approved the applicant’s application for leave on
11 March 2011 (Ibid [14]). Mr Sanderson left the employment of the respondent in August 2011 and Mr McFee replaced him in August 2011 (Affidavit of Mr McFee at [4]). Therefore, Mr Sanderson was not involved in making the decisions complained of by the applicant. Mr Sanderson did not discriminate against the applicant or make misrepresentations covered by s.345 of the FW Act.Mr Donaghey submits as to Item 1 in Column 1 of s.342 of the FW Act that there is no claim that the respondent dismissed the applicant in breach of the FW Act and that the respondent did not injure the applicant in his employment, as the applicant did not ask to return to full-time employment.
Mr Donaghey submits that the applicant was not deprived of an opportunity (that was available to other employees) and was not discriminated against.
The Court has found that as the respondent did not take adverse action against the applicant, there was no discrimination against him in terms of s.351 of the FW Act (supra).
The Court accepts the submission of Mr Donaghey that s.342 requires that a person take action, for them to be found to have taken adverse action.
Mr Donaghey referred to the decision in Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178 which is said to be “a useful summary of the elements of a general protection matter”, but otherwise Mr Donaghey stated that he did not need to cover the decision (T 19/3/15 p.178, l.15).
Mr Donaghey referred to the denials by Mr McFee in [48], [55] and [60] of his Affidavit.
Mr Donaghey submits that the definition of “workplace right” in s.341 of the FW Act covers the week of paid parental leave that the applicant took at the commencement of his leave in 2011, but not what he calls the “non-workplace right”, which is the leave without pay that continued for almost 12 months thereafter.
The Court finds that the entitlement to unpaid parental leave under s.70 of the FW Act was a workplace right of the applicant under the FW Act; it being a “workplace law”.
The applicant’s submissions
Mr Galbraith submits that the applicant’s entitlement to unpaid parental leave under the FW Act was a workplace right; the Court agrees.
Mr Galbraith submits that the:
·The paid paternity leave from 2 to 6 May 2011;
·The long service leave (at half pay) from 9 May to 4 November 2011;
·The annual leave from 5 to 30 November 2011; and
·The leave without pay from 1 December 2011 to 30 April 2012
were all workplace rights; the last being a workplace right under s.341(1)(c)(ii) as the applicant was able to make an enquiry about it. The Court agrees.
Mr Galbraith submits at [41] of the Outline of Submissions that:
Scullin claims that Coffey took adverse action against him at the conclusion of his period of leave caring for his newborn twins by:
a) failing to return him to his pre-leave positions and/or duties;
b) requiring him to work casual and/or part-time;
c) not returning to him the still active projects which he was responsible for before he commenced leave;
d) only issuing him one fee earning project;
e) remunerating him on the basis of casual or part-time employment;
f) failing to pay him the total remuneration package of $202,020 per annum inclusive of minimum superannuation contributions in accordance with the Employment Agreement.
On the evidence, the Court finds that the respondent has discharged the onus imposed by s.361 of the FW Act, and that the respondent did not take “adverse action” against the applicant.
Mr Galbraith submits that there was also discrimination which was adverse action. The Court finds that as the respondent did not take adverse action against the applicant, there was no breach of s.351 of the FW Act. Therefore, there was no actionable discrimination under s.351.
Mr Galbraith submits that there was discrimination between the applicant and the other project managers who did not have their hours or pay reduced. However, s.351(1) states:
(1)An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
The respondent has established that action was not taken against the applicant for any of those reasons. It is true that the applicant was treated differently in terms of hours and pay, however the reasons for that do not fall within s.351.
Mr Galbraith stated that the business development workshop on 27 February 2012 was for “cold-calling of existing clients to see if he could drum up work”. That is consistent with the evidence for the respondent that the applicant’s hours, pay and basis of employment were reduced because of the downturn in business.
Mr Galbraith submits that the applicant was not given a choice but was told “This is what you will be doing” after his leave expired on 1 May 2012 (T p.8, l.6). Again, the Court finds that to be consistent with the evidence of the downturn in the industry.
Mr Galbraith refers to the reverse onus, and to the applicant’s Outline of Submissions at [52]-[68]. At [56], Mr Galbraith acknowledges that the respondent “suggests that it treated the applicant the way it did because of a downturn in business and available fee paying work, and not for any other reasons”. The Court finds that to be an accurate description of the reasons for the respondent’s actions.
Mr Galbraith submits that Mr McFee’s Affidavit does not expressly state the actual reasons for his decisions in a similarly emphatic way. The Court disagrees (Affidavit of Robert McFee filed 23 September 2014 at [52], [53] and [55].
Mr Galbraith submits that even if there was a downturn in work, that does not preclude the operative reason for the decision. The Court finds that Mr McFee expressly stated that other relevant factors formed no part of his decision not to offer the applicant full-time work (Ibid [55]).
Mr Galbraith submits that the reverse onus has not been discharged (T 20/4/15 p.9, l.35) as the applicant was given an increase in remuneration effective 1 October 2011. The Court finds that not to distract from Mr McFee’s evidence of the reasons for his decision.
Mr Galbraith submits that the other project managers did not suffer similar deterioration in workplace benefits as did the applicant. The Court finds that, generally that is true, but other positions were declared to be redundant.
The applicant finished his employment with the respondent on 31 May 2013. Exhibit A2 shows that:
·Roger McLeod ceased working for the respondent on 31 May 2013;
·Warren Green ceased working for the respondent on 31 May 2013;
·George Fisher ceased working for the respondent on 11 October 2013; and
·Roger Marshallsea ceased working for the respondent on
11 December 2013.The Court accepts, from Exhibit A3, that the above employees were paid out as full-time employees working 37.5 hours per week; That does not establish adverse action or discrimination against the applicant.
Mr Galbraith raised inconsistencies between Mr McFee and Ms Hobbins about whether they had discussed eligibility for parental leave. The Court finds the issue of little relevance as neither Ms Hobbins nor Mr McFee were aware of the inconsistency between the FW Act and the respondent’s policy on parental leave. As found herein, neither Ms Hobbins nor Mr McFee knowingly or recklessly made a false or misleading representation about a workplace right of the applicant.
Mr Galbraith submits that Mr McFee does not state that family responsibilities were not an operative reason (T 20/4/15 p.13, l.21). The Court finds that Mr McFee stated clearly that the issue of parental leave (which of course was taken because of family responsibilities) did not form any part of his decision not to offer the applicant full-time work or to offer him part-time work in September 2011 (Affidavit of Mr McFee 2014 at [55]). The Court finds that the family responsibilities of the applicant were not an operative reason for Mr McFee’s decision.
Mr Galbraith addressed the SOAF at [32]-[34]. He submitted that they deal with the loss sustained between 1 May 2012 (when the applicant returned from leave) and 21 September 2012 when the new contract of employment was entered into (Exhibit “PS-15” to the Affidavit of the applicant), that loss being due to the adverse action taken by the respondent. The loss is agreed in [32] at $43,095.48 (T 20/4/15 p.14, l.12). That loss is of course claimed to be the loss incurred by reason of adverse action. As the Court has found herein that adverse action was not taken against the applicant, that claim must fail.
Mr Galbraith submits that by reason of the new employment agreement signed on 21 September 2012, the applicant’s hours of work were reduced to 18.5 per week (Exhibit “PS-15” to the Affidavit of the applicant) and his total remuneration reduced to $99,663.20. The applicant had previously been on total remuneration of $202,202.00. The Court finds that the reduction was a breach of contract, and the applicant is entitled to the difference between his actual remuneration, between his return to work following his leave on 1 May 2012, and his redundancy on 31 May 2013. The loss is agreed is the SOAF at [31] being the difference between $218,855.00 and $109,784.65 = $109,070.35.
Alternatively in the SOAF at [32], the parties agree on the loss between the date of return to work following the leave, and the date of the new employment agreement. Having regard to the finding of the Court that the loss identified in [31] results in the appropriate quantification of damages, the Court does not need to consider the alternative.
The SOAF at [33] identifies the loss suffered by the applicant as a result of not accruing annual leave as a full-time employee between his return to work on 1 May 2012 and his redundancy on 31 May 2013. The loss is agreed at $9,155.10.
The SOAF at [33] agrees on the payment due for annual leave that is claimed should have accrued, between the return to work and signing the new contract. The appropriate compensation is agreed in [33] as $9,155.10.
Mr Galbraith submits that the applicant claims the difference between his termination pay as a part-time employee and what it would have been as a full-time employee. The applicant was paid a severance payment of $49,888.21 (SOAF [28]). Had he been paid as full-time employee his payment would have been $101,010.00 (SOAF [30]). The difference is $51,121.79. That amount is to be paid to the applicant.
Mr Galbraith submits as to the claimed misrepresentation made under s.345, that it is for “recklessly making false or misleading representations about workplace rights”. Mr Galbraith is correct that the requirement for a breach is a person knowingly or recklessly making a false or misleading representation (emphasis added).
The Court finds that the information given to the applicant about his entitlement to parental leave were “representations”.
The first representation was when Mr Sanderson directed the applicant to look at the respondent’s workplace policies to ascertain his entitlements. The next representation was in the emails of 1 December 2011 (Exhibit “PS-11” to the Affidavit of the applicant) where Ms Hobbins advised Mr McFee, who then forwarded the advice to the applicant, that “the employee must be the primary care giver”.
Mr Galbraith referred to the decision in Baulderstone (supra) at [73] where Judge Manousaridis dealt with the meaning of “reckless”. That paragraph number given is incorrect, the correct paragraph number is [58]; but it is submitted that the parties agree that the decision says that “recklessly” is about “not caring whether the representation is true or false”. The Court accepts that to be a valid meaning of “recklessly” (supra).
Mr Galbraith referred to the decision in Fair Work Ombudsman v Metro Northern Enterprises Pty Ltd [2013] FCCA 216 where Judge Barnes states at [381] that:
“…recklessness has been given different meanings in different contexts and under different statutes”.
The Court has examined the meaning of the word “recklessly” (supra) and finds that the representations here were not made recklessly. They were not made “utterly careless of the consequences of action, without caution” as referred to in Banditt v The Queen (2005) 224 CLR 262; Mr McFee asked Ms Hobbins for advice, who then referred to the respondent’s written policy. Mr Galbraith submits that for an entitlement for parental leave, the test of “primary care giver” applied under earlier legislation and the Australian Fair Pay Conditions Standards. This militates further against finding that Ms Hobbins or Mr McFee made the representations recklessly, as the requirement had existed in the past.
Mr Galbraith submits that an adverse inference should be drawn from the fact that Mr Sanderson was not called as a witness for the respondent, to give evidence about the representation made to the applicant about parental leave. However, Mr Sanderson is no longer employed by the respondent, having left in August 2011. This explains to some degree the failure to call him. The evidence is that Mr Sanderson directed the applicant to the respondent’s policy. That was not reckless. The Court does not draw an adverse inference from the failure to call Mr Sanderson.
Mr Galbraith submits that the loss caused by the representations is the same as under s.340 (adverse action) and s.351 (discrimination). As the Court has found that there is no actionable claim for misrepresentation, the Court does not need to assess any loss caused under that heading.
Mr Galbraith submits that there was no termination of contract through the applicant returning from leave to the Business Development Workshops in February 2012, and working on a casual basis until 1 May. Mr Galbraith submits that there was a collateral agreement to do this. A collateral contract is a contract the consideration for which is the making of some other contract: see Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133. The Court finds no collateral contract here. The Court has found there was a repudiation, and upon the signing of the new contract a termination of contract, which entitled the applicant to sue for damages.
Mr Galbraith referred to an extract from ‘The Modern Contract of Employment” by Neil and Chin Lawbook Co. 2012 at p.74, l.4.40 as follows:
“If the change falls outside any latitude for variation, and thus outside the contract, then (1) it cannot lawfully be imposed by one party without the consent of the other, with the result that if the first party unilaterally insists on its imposition, or implements the change, the first party’s conduct is repudiatory[4], and (2) its consensual implementation must constitute a variation of the contract by agreement.”
[4] Rigby v Ferodo Ltd [1988] ICR 29 at 33; Stratton v Illawarra County Council [1978] 2 NSWLR 494, reversed on other grounds in [1979] 2 NSWLR 701; and Marriott v Oxford & District Co-operative Society Ltd (No 2) [1970] 1 QB 186 at 190-191. The doctrine is bluntly expressed in Hogg v Dover College [1990] ICR 39 at 42 (a contract can be varied by consent, but an employer “simply cannot hold a pistol to somebody’s head and say: henceforth you are to be employed on wholly different terms” without repudiating the existing contract).
Mr Galbraith submits that the actions by the respondent gave the applicant the right (around 1 May 2012) to accept the repudiatory conduct of the respondent and terminate the contract, but the applicant did not do that. The Court has found that the applicant did accept the repudiatory conduct and terminated the contract, which gave him the right to sue for damages.
Mr Galbraith submits that it is incorrect to say that because the applicant did not apply for unpaid parental leave under the FW Act, there was no contravention of the NES. The Court finds that the FW Act provides the right to the NES, which operates without a request by an employee. There was a contravention of the NES.
Mr Galbraith submits that the applicant is not claiming that the respondent ‘intentionally’ misled the applicant or gave the incorrect advice (T 20/04/2015 p.32, l.5).
Mr Galbraith submits that it is not necessary for the Court as constituted. to assess the penalty for the breach of s.44. Both parties seek a further hearing to address the issue of penalty.
Mr Donaghey in Reply
Mr Donaghey submits that the applicant’s case has changed as the applicant submits that his annual leave claim is a workplace right (Ibid p.34, l.25). The Court finds in relation to annual leave, that the applicant had an entitlement to be paid out as a full-time employee. Clause 10 of the initial Contract of Employment (Exhibit ‘PS-1’) provides for payment, on redundancy “in accordance with the provisions of the relevant legislation”. Section 87 of the FW Act provides the right to paid annual leave, as part of the NES. By s.90, when employment of an employee ends, the employee must be paid for annual leave that would have been payable if the employee had taken the leave [s.90(2)] and payment is to be made at the employees base rate for the employees ordinary hours in the period [s.90[1]. Here, the applicant was entitled to be paid pro rata on his contract rate of $202,020.00.
Mr Donaghey referred to the decision in Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271 that a complaint or enquiry under s.341(1)(c)(2(ii) can be based on any right that an employee has under an EBA or legislation, but submits that it does not extend to an application for leave.
In any event, the Court finds no evidence that the applicant made a complaint or enquiry about annual leave – he had an entitlement to be paid for accrued annual leave as a full-time employee. It is not necessary to decide if adverse action was taken because the applicant had a right to be paid for accrued annual leave, as the Court has found that the respondent did not take action against the applicant for any prohibited reason, and therefore there was no adverse action taken.
Mr Donaghey submits, and the Court accepts that Mr McFee was the respondent’s sole decision maker in relation to the matters in issue, apart from Ms Hobbins when the applicant asked to be made redundant on the basis of full-time employment (Ibid p.39, ll.20 and 25).
The Court finds that the denials of Mr McFee are a comprehensive denial of claimed prohibited matters being taken into account. The Court finds that the direct evidence of Mr McFee is reliable and accepts it.
Mr Donaghey complains that other matters that the applicant says should be inferred as reasons, should have been put to Mr McFee. In light of the Court finding as to the reliability of Mr McFee, this contention does require examination.
Mr Donaghey submits that the applicant could have done very little work as a full-time employee post May 2012 (presumably because full-time work was not available). However, the initial contract of employment provided for an annual rate, and the evidence is that project directors were not paid according to actual fee earning hours worked. The right to payment as a full-time employee arose from the contract of employment. Mr Donaghey submits that the applicant would not have continued to work full-time and he may have been requested to take leave or redundancy. That is conjecture about what may have happened; it does not affect the Court’s finding as to what actually happened and the resulting losses.
Mr Donaghey submits, and the Court accepts, that the applicant being asked to sign a new contract was not adverse action by the respondent (Ibid p.47, l.1).
Mr Donaghey submits that the applicant was not misled by looking at the respondent’s policy document. The Court finds that there were representations but that they are not actionable under s.345.
Mr Donaghey submits that the email from Mr McFee to the applicant was not misleading, and was a misrepresentation by Mr McFee not Ms Hobbins. The Court finds that the content of the email of 1 December 2011 was misleading as to the applicant’s entitlement to parental leave, but was not made by Mr McFee or by Ms Hobbins knowingly or recklessly.
Mr Donaghey submits as to the respondent’s policies, that it is the applicant’s duty to comply with them, not the respondent’s duty. The Court disagrees. The policies tell employees what provisions apply to them. As far as they are incorporated into a contract, the respondent has an obligation to comply with them (the Standard Terms of Employment in Annexure “B” to the initial contract (Annexure ‘PS-1’ to the Affidavit of the applicant were included in that contract under Reference to Annexures on p.5 and that the Annexures “form part of the terms and conditions of your employment”).
Mr Donaghey submits that the applicant had no entitlement to return to work after his leave, or that he did not avail himself of the right to return to full time employment. The Court has found that the respondent repudiated the contract; then the applicant terminated it and he sues for damages.
Mr Donaghey submits that the applicant returned to work without enforcing his rights; the Court finds that the applicant is enforcing his rights through these proceedings.
Mr Donaghey submits that the applicant waived or abandoned rights under his initial contract by not acting on the repudiation, and instead entering into a new contract. The Court disagrees. The applicant did not waive his rights – he terminated the contract and sues for damages.
Findings
The guarantee in s.84 of the FW Act of a return to work, is conditional upon on the employee returning from unpaid parental leave. As no such leave was taken, there was no breach of s.84.
However, there was a breach of s.70 of the FW Act, which did not require the applicant to have the primary responsibility for the care of the children in order to be entitled to unpaid parental leave.
The Court finds a breach s.70. The loss incurred by the applicant because of that breach, is that he was denied the right to take unpaid parental leave.
The loss the applicant suffered from being denied unpaid parental leave is that he was denied the right to return to his full-time position when his leave finished (s.84 of the FW Act). That loss is the difference in his pay, between when the applicant returned to work after finishing his leave on 1 May 2012 and 31 May 2013, when his position was made redundant.
The losses are quantified in the Amended Statement of Claim at [35] as:
A.The difference between the gross earnings paid
as a part time employeeduring 1 May 2012 (i.e. the date Scullin returned from leave) to 31 May 2013 (i.e. the date Scullin was terminated) and the gross earnings that would have been received during that period as a full-time employee receiving a total remuneration package of $202,020 per annum which difference is $113,529.45 inclusive of superannuation;B.The difference between the annual leave entitlements accrued as
a part time employeeduring 1 May 2012 to 31 May 2013 and the annual leave entitlements that would have accrued during the period as a full-time employee receiving a total remuneration package of $202,020 per annum which difference is 44 hours equating to $4,186.60;C.Alternatively to A, the difference between the gross earnings paid during 1 May 2012 to the commencement of the Revised Employment Agreement and the gross earnings that would have been received during that period as a full-time employee receiving a total remuneration of $202,020 per annum;
D.Alternatively to B, the difference between the annual leave entitlements accrued during 1 May 2012 to the commencement of the Revised Employment Agreement and the annual leave entitlements that would have accrued during that period as a full-time employee receiving a total remuneration package of $202,020 per annum;
E.The difference between the termination payment received and a termination payment calculable as a full-time employee receiving a total remuneration package of $202,020 per annum which difference is $51,238.79 (gross) inclusive of superannuation.
Non-economic loss including:
·Loss of reputation;
·Loss of opportunity for promotion and advancement in his chosen career;
·Distress;
·Humiliation.
Further particulars of loss and damage may be provided before at the liability hearing.
In is agreed in the SOAF that:
(27)On 31 May 2013 Scullin’s employment with Coffey terminated as a result of redundancy. [PS-16; PS-17]
(28)On 3 June 2014, Scullin received a gross termination payment from Coffey of $75,175.13. The gross termination payment comprised of the following: $49,888.21 calculated as a severance payment, $19,157.23 for unused annual leave entitlements and $6,127.69 calculated as long service leave. [PS-17]
(29)The severance payment was calculated on the basis of Scullin being a part-time employee.
(30)If the severance payment was calculated on the basis of Scullin being a full-time employee, the severance payment would have been $101,010.00.
(31)If Scullin had worked full-time between 1 May 2012 and 31 May 2013, he would have earned $218,855.00 gross (including superannuation) instead of the $109,784.65 gross (including superannuation) that he did earn during that period.
(32)If Scullin had worked full-time between 1 May 2012 and 21 September 2012, he would have earned $80,309.38 gross (including superannuation) instead of the $37,213.90 gross (including superannuation) that he did earn during that period.
(33)If Scullin had worked full-time between 1 May 2012 and 31 May 2013, he would have accrued 87.98 additional hours of annual leave, equating to $9,155.10.
(34)If Scullin had worked full-time between 1 May 2012 and 21 September 2012, he would have accrued 36.15 additional hours of annual leave, equating to $3,745.32.
The Court finds that interest pursuant to s.547 of the FW Act, is not payable on the amounts due, as the amounts were not required to be paid under the FW Act or a fair work instrument (as defined in s.12 of the FW Act).
Penalty
Both parties have requested that any penalty to be imposed on the respondent, not be assessed or imposed in this decision; they request a separate penalty hearing. The Court has listed a hearing on penalty on 11 June 2015 at 10am, and directs under s.55 of the Federal Circuit Court of Australia Act 1999 (the “FCC Act”) that oral submissions are to be concise and limited to not more than thirty minutes for each party; and that written submissions are not to be presented to the Court (s.56 of the FCC Act).
Shock, Distress, Humiliation
Section 392(4) of the FW Act provides:
(4)The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person's dismissal.
In Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (No 2) [2011] FCA 394, Barker J awarded damages to an employee including for shock, distress and humiliation, after his employer was found to have breached the adverse action provisions of the FW Act. However, here the respondent has been found not to have breached the adverse action provisions. The decision therefore cannot be used as a basis for damages for shock, distress and humiliation,
The Court notes that the Amended Statement of Claim does not claim relief for shock, distress and humiliation. There is no quantification of any compensation sought on that ground. That ground is dismissed.
Misrepresentation
Section 345 of the FW Act provides:
(1)A person must not knowingly or recklessly make a false or misleading representation about:
a)the workplace rights of another person; or
b)the exercise, or the effect of the exercise, of a workplace right by another person.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2)Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.
The Court finds that the respondent’s written Parental Leave Policy existed before Ms Hobbins commenced employment with the respondent. Ms Hobbins gave evidence, which the Court accepts, that the advice she gave to Mr McFee was a mistake. The Court finds that Ms Hobbins did not know at the time she gave advice to Mr McFee that the advice was incorrect or inconsistent with s.70 of the FW Act.
The Court finds that Ms Hobbins did not make a misleading representation knowingly or recklessly, nor did Mr Sanderson, nor
Mr McFee who relied properly upon the advice of Ms Hobbins, who is a Human Resources adviser employed by the respondent. The claim under s.345 is dismissed.
Discrimination
Section 351 of the FW Act provides:
(1)An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
Note: This subsection is a civil remedy provision (see Part 4-1).
Therefore, an action is not available under s.361 unless an employer takes adverse action against an employee because of a factor stated in s.351. As the respondent has established that the reasons for its action were not prohibited reasons and which impliedly excluded the matters in s.351, adverse action was not taken against the applicant. The action under s.351 cannot succeed.
The Court finds that the respondent declared the applicant’s position to be redundant because many of the projects that the applicant had been working on before he took leave were finished or nearly finished when he finished his leave. Further, the position was made redundant because of the GFC and the general downturn in the major projects building industry, which meant that new work for the respondent was hard to find. Therefore, full-time work was not available for the applicant when he returned to work. His hours were reduced, and his position made redundant for those reasons, and not for any prohibited reason. The respondent established that its actions were not discrimination under s.351. That claim is dismissed.
Breach of Contract
The initial Contract of Employment between the respondent and the applicant is Exhibit ‘PS-1’ to the Affidavit of the applicant). Under that contract, the respondent was entitled to terminate the applicant’s employment by providing him with five weeks’ notice (Clause 9), unless the applicant had engaged in misconduct. Misconduct is not alleged.
The Court finds that the applicant’s contract of employment was repudiated, and then varied to part-time employment by agreement in writing. There is nothing in the contract to prohibit that. The agreement to vary is taken by the Court as an action to terminate the contract.
The applicant was therefore not entitled to five weeks pay in lieu of notice at full-time rates. The applicant was however, entitled to return to full-time employment upon returning to work after his leave finished. The applicant is entitled to damages of the difference between part-time and full-time rates from when he returned to work and when his position was made redundant on 31 May 2013. The amount is agreed in the SOAF at [31] as $218,855.00 – $109,784.65 = $109,070.35.
Termination Payment
It is agreed in the SOAF that:
(27)On 31 May 2013 Scullin’s employment with Coffey terminated as a result of redundancy. [PS-16; PS-17]
(28)On 3 June 2014, Scullin received a gross termination payment from Coffey of $75,175.13. The gross termination payment comprised of the following: $49,888.21 calculated as a severance payment, $19,157.23 for unused annual leave entitlements and $6,127.69 calculated as long service leave. [PS-17]
(29)The severance payment was calculated on the basis of Scullin being a part-time employee.
(30)If the severance payment was calculated on the basis of Scullin being a full-time employee, the severance payment would have been $101,010.00.
The applicant agreed to a variation to part-time employment, and has sued for damages. The Court finds that the applicant’s termination payment was calculated on the basis of the applicant being a part-time employee. Therefore, the applicant was not paid correctly when paid as set out in the SOAF at [28]. The applicant was entitled to payment as a full-time employee.
The Court finds that the applicant is entitled to compensation of $109,070.35, being the difference between his actual pay from 1 May 2012 to 31 May 2013 and what his full-time pay would have been, being $218,855.00 (SOAF at [31]).
The Court finds that the applicant is entitled to compensation for the loss suffered by not accruing annual leave as a full-time employee between 1 May 2012 and 31 May 2013, being $9,155.10.
The Court finds that $51,121.79 is due to the applicant for the difference between his redundancy pay as a part-time employee and full-time employee.
The amounts payable to the applicant are:
Difference between part-time and full-time rates 1 May 2012 to 31 May 2013
$109,070.35
Accrued annual leave
$9,155.10
Severance payment as a full-time employee
$51,121.79
Total
$169,347.24 (less tax)
The Court finds that interest is not payable on the amounts payable to the applicant, as they are not required to be paid under the FW Act or a fair work instrument (s.547) – all amounts are due to the applicant as a result of breaches of contract).
The Court orders that the respondent pay the applicant $169,347.24 (less tax) within 28 days.
I certify that the preceding two hundred and seventy-eight (278) paragraphs are a true copy of the reasons for judgment of Judge F. Turner
Associate:
Date: 4 June 2015
- AGLC
- Scullin v Coffey Projects (Australia) Pty Ltd [2015] FCCA 1514
- Case
- [2015] FCCA 1514
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether Coffey Projects engaged in adverse action against Mr. Scullin for a proscribed reason, specifically whether the termination was motivated by Mr. Scullin's exercise of a workplace right. Additionally, the court considered whether any misrepresentation was made by the employer knowingly or recklessly, and whether the termination constituted discrimination under section 357 of the *Fair Work Act 2009* (Cth). The court also had to assess whether the contract was terminated after repudiation and the applicant's right to sue for damages, including the appropriate compensation.
Judge F. Turner found that Coffey Projects had engaged in adverse action against Mr. Scullin. The court determined that the employer's actions were substantially motivated by Mr. Scullin's exercise of his workplace rights, thereby shifting the onus to the employer to prove that the adverse action was taken for reasons entirely unrelated to those rights. The court also found that the employer had breached the employment contract.
The court ordered that Coffey Projects pay Mr. Scullin compensation for the adverse action and damages for the breach of contract.
Orders
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Background
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Evidence
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Decision
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