The Australian Workers' Union v Shell Refining (Australia) Pty Ltd
[2011] FWA 4408
•11 JULY 2011
[2011] FWA 4408 |
|
DECISION |
Workplace Relations Act 1996
s.170LW - pre-reform Act - Application for settlement of dispute (certified agreement)
The Australian Workers’ Union
v
Shell Refining (Australia) Pty Ltd.
(C2011/3915)
COMMISSIONER RYAN | MELBOURNE, 11 JULY 2011 |
Alleged dispute concerning the offer of a Staff position and subsequent withdrawal of offer.
[1] The dispute in this matter concerns a claim by Mr David Towart that he is entitled to be treated as a Salary Group 5 Staff Position for the last 12 months of his employment with Shell Refining Australia P/L (Shell) and that this means that he will, on termination, be entitled to superannuation benefits attached to a Salary Group 5 Staff Position. Shell for its part contend that Mr Towart is only entitled to the wages and conditions attached to his original classification as a Refinery Operator employed under the Geelong Refinery Enterprise Agreement 2008 - Operations Employees.
[2] Mr Towart has been employed by Shell for 37 years. Until 2006 his position was unequivocally that of a Refinery Operator. It is the events since early 2006 that have given rise to the issue in dispute.
[3] Mr Ellison, the Refinery Manager in 2005 at the Shell Refinery in Geelong, gave evidence, by way of a Statutory Declaration, that Mr Towart was at management request placed in a day work position with the Business Improvement Review Group. In August 2005 Mr Ellison had a conversation with Mr Towart in which Mr Towart was verbally offered a staff position at Salary Group 5 salary rating. The offer was not put in writing. Mr Towart did not accept the offer nor does it appear did Mr Towart reject the offer. Mr Ellison ceased being the Refinery Manager in October 2005.
[4] In March 2006 Mr Towart was approached by his then line supervisor with a request from Senior Shell management that Mr Towart become the Shell 2006 member of the Loaned Executive Program with United Way and a new member of the Business Improvement Group (Margin and Energy Team). If Mr Towart accepted then he would receive a firm offer of a Salary Group 5 staff position.
[5] Whilst Mr Towart started the work of being the Shell 2006 member of the Loaned Executive Program with United Way he did not start working on the Business Improvement Group (Margin and Energy Team) until a few months later.
[6] On 25 May 2006 Mr Towart was presented with a formal offer of appointment to the Salary Group 5 staff position by Ms Lynne Beaumont the HR Manager.
[7] Mr Towart considered the offer and put an alternative offer back to Ms Beaumont. Mr Towart’s alternative offer was that he stay on the pay and conditions as a Refinery Operator until 1 year before his retirement at which time he become a Salary Group 5 staff position in accordance with the offer from Shell.
[8] Approximately 1 or 2 weeks after making his counter offer to Shell Mr Towart was asked to, and did, commence the work on the Business Improvement Group (Margin and Energy Team). Mr Towart asserted that he commenced the work on the presumption that his counter offer was accepted by Shell.
[9] Mr Towart performed the role of being the Shell 2006 member of the Loaned Executive Program with United Way for 12 months. Mr Towart performed the role of being a member of the Business Improvement Group (Margin and Energy Team) for 18 months.
[10] It would appear that from the end of 2007 that Mr Towart was no longer working in either of the 2 roles. What work Mr Towart did after that time was not disclosed to the Tribunal.
[11] In March 2009 Mr Towart was called to a meeting with the then HR Manager, Mr Lammers who said words to the effect, “Now that your BIR work has been concluded I would like to talk about finishing at the refinery.” 1 In response Mr Towart informed Mr Lammers that there was an offer of a Salary Group 5 staff position available for Mr Towart to take up 12 months before his retirement. Mr Lammers initially agreed to honour this commitment.
[12] At a later meeting Mr Lammers informed Mr Towart that both the staff offer and the redundancy would be paid to Mr Towart but only if Mr Towart left immediately. Mr Towart then pointed out to Mr Lammers that Mr Towart would require to be on the new staff arrangement for a minimum of 12 months for any gain in superannuation to take effect, and that Mr Towart had plenty of annual leave and long service leave that could cover this period. Mr Lammers refused to change his mind.
[13] Mt Towart then sought to have a meeting with the Refinery Manager, Mr Huck Poh. Mr Towart describes this event in his witness statement as follows.
“This prompted me to request a meeting to discuss the dispute with the then Refinery Manager Huck Poh prior to him leaving for a new role in Shell Singapore.
But before I had the meeting with him his Secretary who had informed him of my dispute and the details, told me that all was fixed now and that Huck had instructed Aaron Lamers to not only put the Shell offer as agreed in place, but to move me to 120% of that job group 5 position.
In recognition of my efforts with the B.I.R. team, so no meeting with the Refinery Manager Huck would now be required.
She also told me to arrange a meeting with Aaron Lamers which I did to confirm and finalize what Huck had instructed him to put in place for me. At that meeting he assured me that all would be done as Huck had instructed. This left me a great sense of relief and ease regarding this on going situation.
Only days after Huck Poh had left for Singapore in December 2009, Aaron again informed me that things had changed again, and the deal that was put in place with the Staff offer was once again off.” 2
[14] Following this Mr Towart had a meeting with Mr Mark Schubert who replaced Mr Huck Poh as Refinery Manager. The position adopted by Mr Schubert is the current position of Shell as presented in this matter.
The Competing Submissions
[15] The AWU’s submission was that Shell accepted the counter offer made by Mr Towart in May 2006 when it accepted Mr Towart performing the work in the Business Improvement Group (Margin and Energy Team). On that basis Shell are obliged to move Mr Towart to the Salary Group 5 staff position so that he has a period of 12 months in that staff position before his employment is terminated.
[16] The submission of Shell was in the following terms.
“PN315. There doesn’t appear to be any contest over the fact that offers of employment were made, be they verbal or be they written, and it’s in the applicant’s evidence that he did not agree to a variation of his terms and conditions of employment because he would be financially disadvantaged, and this is a critical point - - -
PN323. He was not fit to continue in the role in which he was employed, so on that basis the company following its normal procedures found alternative work. Now, it happened to coincide because it was a fit with day work which had been discussed previously under the umbrella of a staff contract. Now, again the offer was made and the employee, quite properly, said those terms and conditions do not suit me because I will be financially disadvantaged and the practice at the refinery is when you move an operator on to day shift they carry all of their terms and conditions of employment. So that was a matter of fact. There would be a financial disadvantage there.
PN324. My contention is that even though the employee worked in a changing role we should not infer that that was under the 2006 offer of employment because the company accepted that the employee could not accept the contract in its existing form and the company, in turn, was not prepared to accept the modifications. However, we still had an obligation to the employee to absorb him back into the workplace, which we did for two years and it was only at the end of that assignment that the issue over the status of the offer some years before became a matter of contention, because it is our intention that at that point to reinstate the staff contract was obviously going to bestow on the employee a higher termination benefit.
PN325. So in summary, sir, there is no evidence of acceptance of the contract. There is certainly no evidence of the company accepting a modified version of the contract. Where it gets a little bit cloudy is the specific performance but that was an obligation we had to discharge anyway because, to be very frank, the alternative would have been unemployment.”
[17] What was not put by Shell but appears to be the logical conclusion of its submission is that in the absence of Mr Towart accepting the offer in May 2006 and in the absence of Shell accepting the modifications proposed by Mr Towart then at all times to the present Mr Towart remains employed under the terms of his original contract as a Refinery Operator.
[18] Neither the AWU nor Shell took me to any authorities to support their respective contentions.
[19] During the hearing the Tribunal drew both parties’ attention to a number of decisions which the Tribunal became aware of as a result of a very brief search during a break in proceedings. The Tribunal specifically offered each of the parties an opportunity of filing additional written submissions on the case law. The AWU declined the offer and Shell accepted the offer. However Shell subsequently made no submissions on the case law.
Consideration of the Issue
[20] The only witness evidence in this matter was that given by Mr Towart. Mr Towart presented as an honest witness and I accept the truth of his evidence.
[21] The material before the Tribunal comprised the witness statement of Mr Towart and one document introduced by Mr Skinner for Shell whilst cross examining Mr Towart. This document was a statement prepared by Shell for Mr Towart in October 2008 which stated his period of service, his position as an Operator and the salary entitlement of Mr Towart.
[22] The effect of the original Shell offer and Mr Towart’s counter offer are as follows.
[23] The Shell offer would have seen Mr Towart immediately regraded to the Salary Group 5 staff position with a higher base rate of pay but without the shift penalties attached to a Refinery Operators position, a net reduction in the income level of Mr Towart. However as a Salary Group 5 staff position Mr Towart was then entitled to the higher superannuation payments both during his employment and on retirement that were attached to staff positions. Mr Towart’s counter offer was that he stay on the loaded rate paid to Refinery Operators and not be moved to the Salary Group 5 staff position until 1 year before his retirement. This would enable Mr Towart to maintain his income level until 1 year out from retirement and would permit him to gain the necessary 12 months service in a staff position before retirement which was the trigger for accessing the higher staff superannuation entitlements on retirement.
[24] Although a formal offer was put to Mr Towart by Shell and although he put a specific counter offer back to Shell nothing was done by either Shell or Mr Towart to confirm what was the position that would apply if Mr Towart took on the two roles that Shell requested him to undertake.
[25] The conduct of Shell was that it accepted Mr Towart performing his two roles as a member of the Business Improvement Group (Margin and Energy Team) and as the Shell 2006 member of the Loaned Executive Program with United Way whilst continuing to pay him as a Refinery Operator.
[26] However the conduct of Shell was consistent with either of 2 possible scenarios. The first scenario was that Shell accepted the counter offer of Mr Towart. The second scenario was that Shell treated Mr Towart as having refused the offer of a Salary Group 5 staff position but where Mr Towart was willing to do the work asked of him on the basis of remaining on Refinery Operator terms and conditions.
[27] It was quite unsatisfactory for Shell not to have confirmed with Mr Towart the basis upon which Shell accepted Mr Towart performing the two specific roles.
[28] The evidence is clear that in May 2006 no written contract was entered into between Mr Towart and Shell. A written contract was proposed by Shell and verbal modifications were proposed by Mr Towart but nothing was concluded in writing and nothing was signed by either side.
[29] Mr Towart performed the work which was the subject of the written contract proposed by Shell and the verbal modifications to that contract as proposed by Mr Towart.
[30] In return for performing the role described in the proposed written contract Mr Towart was continued to be paid the salary for an Operator which included a Shift Premium and a Flexible Hours Allowance and other allowances even though Mr Towart was not working shift work, or working flexible hours or otherwise entitled to additional allowances.
[31] The total salary payable to Mr Towart as an Operator was higher than the total salary payable to Mr Towart as a Salary Group 5 staff position at 104% (the position referred to in the written contract proposed by Shell). Mr Towart’s superannuation entitlements as an Operator were less than the superannuation entitlements he would receive as a Salary Group 5 staff position at 104%. This flowed from the fact that the base rate of pay for superannuation purposes was significantly higher for the Salary Group 5 staff position at 104% as against the Operator position.
[32] Although there was no written contract in existence in May 2006 there clearly was a contract in existence. The terms of that contract can be discerned from the conduct of the parties.
[33] The silence of Shell in relation to indicating whether or not it accepted the counter offer of Mr Towart cannot be used to create a contract between Shell and Mr Towart in the terms proposed by Mr Towart. (Empirnall Holdings v Machon Paull ) 3
[34] However a contract may exist in the terms proposed by Mr Towart. As McHugh JA noted in Empirnall at 534,
“The offeree may be under a duty to communicate his rejection of an offer. If he fails to do so, his silence will generally be regarded as an acceptance of the offer sufficient to form a contract.”
[35] In Empirnall at 535, McHugh JA, after considering a decision of the Court of Appeals for Maryland in Laurel Race Course Inc v Regal Construction Co Inc 333 A 2d 319 (1975) said:
‘This formulation states acceptance in terms of a rule of law. However, the question is one of fact. A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms.’”
[36] In the present matter Shell had every opportunity to reject the offer from Mr Towart (the offer being that Mr Towart would perform the work specified in the proposed contract but on the basis that the change to a Salary Group 5 staff position would not occur until 1 year out from his retirement) before taking the benefit of the work performed by Mr Towart. Not only did Shell not reject the offer from Mr Towart but in addition Shell requested Mr Towart to specifically perform the work mentioned in the contract.
[37] As McHugh JA noted in Empirnall at 535:
“The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including its silence, as signalling to the offeror that his offer had been accepted.”
[38] In the circumstances as they were in May 2006 I am of the view that a reasonable bystander, aware of the circumstances at that time, would regard the conduct of Shell, in asking Mr Towart to commence the work specified in the contract a week or two weeks after Mr Towart had specifically put modifications to the contract to the Shell HR Manager, as signalling to Mr Towart that his offer had been accepted.
[39] In Empirnall Kirby P at 531 also used the objective bystander test to come to the same position as McHugh JA. Importantly Kirby P went on to say: “It is possible that the same result would have been reached by the route of estoppel, had that been pleaded and proved.”
[40] Equitable estoppel would only be available to Mr Towart if he could satisfy the test laid down by Brennan J in Waltons Stores (Interstate) v Maher 4. Whilst there are strong suggestions that one or more of the elements of equitable estoppel are made out in the present matter the case before the Tribunal was not run on the basis of an argument that Shell was estopped from denying the existence of a contract in the terms proposed by Mr Towart.
[41] In my view there is a simpler approach to adopt. I note the discussion by Kirby J in Agricultural and Rural Finance P/L v Gardiner 5 of the concepts of waiver, estoppel and election. In relation to these three concepts Kirby J referred to the comments of Robert Walker LJ in Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12 at 27:
"(Waiver, estoppels and election) All share a common foundation in a simple instinct of fairness, and in particular the perception that as between two parties to a transaction or a legal relationship it is or may be unfair for one party, A, to adopt inconsistent positions in his dealings with the other, B."
[42] I adopt this approach as to fairness between the parties to resolve the difficulties posed in this matter.
[43] In late 2009 Mr Huck Poh, Refinery Manager, through both his Secretary and Mr Lamers, the HR Manager, confirmed to Mr Towart that the original staff position offer would be put in place but with an improvement, in that, instead of the position being a Salary Group 5 position at 104% level is was now to be Salary Group 5 position at 120% level.
[44] Once Mr Huck Poh left the Refinery to take up a new position for Shell in Singapore the incoming Refinery Manager, Mr Mark Schubert adopted a contrary position to that of Mr Huck Poh.
[45] Even if I had not been satisfied that the conduct of Shell in specifically not rejecting the offer from Mr Towart had led to a contract existing in the terms proposed by Mr Towart, I would have, in any event, come to the conclusion that once Mr Huck Poh confirmed that the arrangement proposed by Mr Towart was not only in place but was improved by Mr Huck Poh then from that time on Shell could not adopt an inconsistent position in relation to Mr Towart.
[46] Fairness dictates that Shell cannot now adopt an inconsistent position to that originally offered by Mr Towart in May 2006 and confirmed to be in place, with an improvement, by Mr Huck Poh in 2009.
[47] The matter in dispute before is to be resolved as follows:
Shell is to immediately place Mr Towart on a Salary Group 5 staff position in accordance with the terms of the contract offered to Mr Towart in March 2006 subject to the following variations:
1. The Salary Group 5 staff position is to be at 120% of the mid-point for Salary Group 5 to give effect to the variation made by Mr Huck Poh.
2. The salary is to based upon whatever is the current salary levels applicable at Shell Refinery rather than the specific monetary values expressed in the May 2006 document.
3. The Benefit Account amount and the Allowances specified in the May 2006 document are to be adjusted to maintain their relative value to the salary level at 104% of the mid range of Salary Group 5.
4. The 3 year cycle for the reduction in the value of the Allowances specified in the May 2006 document are to be adjusted with the three reductions occurring on 1 June 2012, 1 June 2013 and 1 June 2014.
5. Termination of the contract by notice may not be effected by Shell without giving 12 months and one days notice.
COMMISSIONER
Appearances:
Mr S. Wood for The Australian Workers’ Union
Mr D. Skinner for Shell Refining (Australia Pty Ltd
Hearing details:
2011.
Melbourne:
May 10
1 Transcript at PN147
2 Exhibit A1
3 (1988) 14 NSWLR 523, Kirby P at 527, McHugh JA at 534
4 [1988] HCA 7
5 [2008] HCA 57
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