Toll v Global Market Insite Inc
[2015] FCCA 105
•27 January 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TOLL v GLOBAL MARKET INSITE INC. | [2015] FCCA 105 |
| Catchwords: PRACTICE AND PROCEDURE – Fair Work Act 2009 – small claims procedure – application of $20,000 limit on damages to matter involving state-based long service leave entitlement. |
| Legislation: Long Service Leave Act 1955 (NSW), s.4 |
| Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014 Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 Keldote Pty Ltd v Riteway Transport Pty Ltd (2010) 195 IR 423 |
| Applicant: | ROXAN ALEXANDER TOLL |
| Respondent: | GLOBAL MARKET INSITE INC. (ACN 116 994 926) |
| File Number: | SYG 747 of 2013 |
| Judgment of: | Judge Cameron |
| Hearing date: | 20 June 2013 |
| Date of Last Submission: | 20 June 2013 |
| Delivered at: | Sydney |
| Delivered on: | 27 January 2015 |
REPRESENTATION
| The Applicant appeared in person |
| Representative for the Respondent: | Ms S. Crowley of Lightspeed Research Australia |
ORDERS
Judgment for the applicant for $22,770.96.
| FEDERAL CIRCUIT COURT AT SYDNEY |
SYG 747 of 2013
| ROXAN ALEXANDER TOLL |
Applicant
And
| GLOBAL MARKET INSITE INC. (ACN 116 994 926) |
Respondent
REASONS FOR JUDGMENT
Introduction
The respondent, (“Global Market Insite”), was a technology company that provided “internet solutions for market research data collection”. The applicant, Ms Toll, was employed by Global Market Insite from 10 September 2005 to 5 February 2013. On 1 September 2011 Global Market Insite was acquired by Lightspeed Research Australia Pty Ltd (“Lightspeed”). Ms Toll alleged that on 1 January 2013 Global Market Insite terminated her employment without appropriate notice and sought unilaterally to transfer her employment to Lightspeed without her consent and on less favourable terms. She alleged that Global Market Insite’s action constituted a breach of her employment contract. Ms Toll sought:
a)redundancy pay in accordance with the Fair Work Act 2009 (“FW Act”):
b)payment in lieu of reasonable notice of termination; and
c)pro rata long service leave payable upon redundancy.
Ms Toll sought monetary compensation of $20,000, being the Court’s jurisdictional limit in matters brought under the FW Act’s small claims provisions as this matter was.
Global Market Insite admitted that it employed Ms Toll from 10 September 2005 until 31 December 2012 but denied her claim to have had had sole leadership responsibility of the Australia/New Zealand territory in relation to advertising, marketing, promotional and public relations material. Global Market Insite alleged that in June 2012 Lightspeed provided Ms Toll with an initial offer of employment and that from June 2012 until November 2012, negotiated with her over the terms and conditions of that proposed employment. Global Market Insite alleged that on 14 November 2012 Lightspeed made Ms Toll a final written offer of employment, with such employment to commence on 1 January 2013, on terms and conditions which were substantially similar to and, on an overall basis, no less favourable than the terms and conditions of her then-employment with it. It alleged that Lightspeed’s offer stated that it would recognise Ms Toll’s prior service with Global Market Insite.
Ms Toll continued to attend work after 1 January 2013 but refused to accept Lightspeed’s offer. Global Market Insite alleged that on 5 February 2013 Ms Toll resigned her employment and advised it that her employment would end that day.
Global Market Insite denied that it had terminated Ms Toll’s employment or that it had breached her employment contract. It denied any obligation to pay Ms Toll redundancy pay, accrued pro rata long service leave or an amount in lieu of notice.
Relevant legislation
Section 117 of the FW Act is concerned with the requirement for notice of termination or payment in lieu of termination. It relevantly provides:
117 Requirement for notice of termination or payment in lieu
Notice specifying day of termination
(1) An employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).
Amount of notice or payment in lieu of notice
(2) The employer must not terminate the employee’s employment unless:
(a) the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or
(b) the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
(3) Work out the minimum period of notice as follows:
(a) first, work out the period using the following table:
Period Employee’s period of continuous service with the employer at the end of the day the notice is given Period 1 Not more than 1 year 1 week 2 More than 1 year but not more than 3 years 2 weeks 3 More than 3 years but not more than 5 years 3 weeks 4 More than 5 years 4 weeks
(b) …
Subdivision B of div.11 of part 2-2 of the FW Act deals with redundancy pay. Sections 119 and 122 relevantly provide:
119 Redundancy pay
Entitlement to redundancy pay
(1)An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:
(a)at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
…
Amount of redundancy pay
(2)The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:
Redundancy pay period Employee’s period of continuous service with the employer on termination Redundancy pay period 1 At least 1 year but less than 2 years 4 weeks 2 At least 2 years but less than 3 years 6 weeks 3 At least 3 years but less than 4 years 7 weeks 4 At least 4 years but less than 5 years 8 weeks 5 At least 5 years but less than 6 years 10 weeks 6 At least 6 years but less than 7 years 11 weeks 7 At least 7 years but less than 8 years 13 weeks 8 At least 8 years but less than 9 years 14 weeks 9 At least 9 years but less than 10 years 16 weeks 10 At least 10 years 12 weeks
122Transfer of employment situations that affect the obligation to pay redundancy pay
…
Employee not entitled to redundancy pay if refuses employment in certain circumstances
(3)An employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with an employer (the first employer) if:
(a)the employee rejects an offer of employment made by another employer (the second employer) that:
(i) is on terms and conditions substantially similar to, and, considered on an overall basis, no less favourable than, the employee’s terms and conditions of employment with the first employer immediately before the termination; and
(ii) recognises the employee’s service with the first employer, for the purpose of this Subdivision; and
(b)had the employee accepted the offer, there would have been a transfer of employment in relation to the employee.
…
“Transfer of employment” is defined in s.22(7) of the FW Act.
As noted earlier, Ms Toll commenced this matter under the FW Act’s small claims procedure. Section 548 of the FW Act relevantly provides:
548 Plaintiffs may choose small claims procedure
(1)Proceedings are to be dealt with as small claims proceedings under this section if:
(a)a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Circuit Court; and
(b)the order relates to an amount referred to in subsection (1A); …
(1A)The amounts are as follows:
(a)an amount that an employer was required to pay to, or on behalf of, an employee:
…
(ii) because of a safety net contractual entitlement; or
…
Limits on award
(2)In small claims proceedings, the court may not award more than:
(a)$20,000; or
…
Sections 119 and 122 are safety net contractual entitlements: s.12 FW Act.
The Long Service Leave Act 1955 (NSW) (“LSL Act”) relevantly provides:
4 Long service leave
(1)Except as otherwise provided in this Act, every worker shall be entitled to long service leave on ordinary pay in respect of the service of the worker with an employer. Service with the employer before the commencement of this Act as well as service with the employer after such commencement shall be taken into account for the purposes of this section.
(2)(a) Subject to paragraph (a2) and subsection (13) the amount of long service leave to which a worker shall be so entitled shall:
…
(iii) in the case of a worker who has completed with an employer at least five years service, and whose services are terminated by the employer for any reason other than the worker’s serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of 2 months for 10 years service.
…
(a3)For the purposes of subsections (2), (3) and (3A), month means 4 and one-third weeks.
…
(5)(a) Where the services of a worker are terminated otherwise than by the worker’s death and any long service leave:
…
(ii) accrues to the worker upon such termination and has not been taken,
the worker shall, subject to subsection (13), be deemed to have entered upon the leave from the date of such termination and the employer shall forthwith pay to the worker in full the worker’s ordinary pay for the leave less any amount already paid to the worker in respect of that leave.
…
Evidence
Roxan Toll
Employment at Global Market Insite
Ms Toll’s evidence was principally contained in a document entitled “Statement of Claim” which became exhibit 2 in the proceeding. She alleged that she had been employed by Global Market Insite as a member of its Asia/Pacific leadership team in the role of territory head of the Australia and New Zealand business. Lightspeed is part of Kantar, which is a division of the WPP Group and had, until it acquired Global Market Insite, had been one of its competitors.
Ms Toll alleged that her employment with Global Market Insite commenced in September 2005 when she was employed as an office manager. Her employment was governed by a contract of employment. She alleged that she was promoted to various roles before being promoted to “Director, Australia and New Zealand” in 2011 with a base salary of $77,113.54 and an uncapped commission-based incentive scheme. Ms Toll alleged that she was not given new employment contracts following any of her promotions.
Ms Toll alleged that as Director, Australia and New Zealand she reported to the head of business in the Asia/Pacific region. She alleged that she had sole leadership of the Australia and New Zealand territory including responsibility for:
a)all advertising, marketing, promotional and public relations material;
b)recruitment and management of employees;
c)training programs, individual staff training plans and progress measurement for newly recruited roles; and
d)allocation of pay increases and bonuses.
Ms Toll stated that the entire Australian staff of Global Market Insite, four employees, had reported to her.
Ms Toll alleged that she oversaw the sale of products and services to Kantar and non-Kantar clients in Australia and New Zealand and was the primary point of contact for all sales and account relations communication from current and potential clients in Australia and New Zealand. Ms Toll estimated that between eight and ten per cent of her client base and revenue had been New Zealand clients. She said that Kantar clients constituted less than two per cent of her total revenue but were part of her target base at Global Market Insite.
Ms Toll stated that as a member of Global Market Insite’s leadership team for the Asia/Pacific region she had collaborated with others to make decisions about other business areas in that region. She said that the team had been responsible for the direction of the business in Asia in relation to competition, pricing, operations, operations, delivery, outsourcing, marketing and technology.
Takeover by Lightspeed
On 12 June 2012, Lightspeed made a written offer of employment to Ms Toll for the position of “Sales Manager, Australia/New Zealand” with a salary of $77,113.54 per annum. Ms Toll alleged that the offer contained no recognition of her prior service with Global Market Insite, provided no details or description of the role or incentive scheme she would be offered. She alleged that it also required her to agree to a twelve month restraint without fair and reasonable consideration.
Ms Toll alleged that on 27 June 2012 Sarah Crowley, a member of Lightspeed’s human resources team, visited the Global Market Insite office and told staff that if they did not sign and return their agreements, they might not be paid their July salaries. Ms Toll alleged that she raised concerns about this with her superior, Ludovic Milet. She alleged that she was particularly concerned about being asked to agree to a twelve month restraint when there had been no confirmation of which job she would be offered at Lightspeed.
On 18 July 2012 Lightspeed made Ms Toll a second written offer of employment. Although the offer was for the position of “Director, Australia/New Zealand”, Ms Toll alleged that it still bore the shortcomings of the first offer. On 18 July 2012 Ms Toll wrote to Ms Crowley and told her that she could not agree to the terms of that offer of employment.
On 24 July 2012 Mr Toll met with Alice Lee, Lightspeed’s Regional Talent Director for the Asia/Pacific. Ms Toll alleged that during the meeting she expressed concerns about Lightspeed’s offer of employment, particularly, that it contained no recognition of her prior service with Global Market Insite and had a twelve month restraint clause. She alleged that she also advised Ms Lee that she could not enter into an employment agreement with Lightspeed until it confirmed the job it was offering her. Ms Toll alleged that she asked to speak to the WPP legal team about the recognition of her prior service and the restraint clause. On 25 July 2012 Ms Toll provided Ms Lee with a summary of her concerns and requested changes be made to the offer of employment.
On 14 August 2012 Ms Toll met with Terry Wiley, Lightspeed’s Chief Executive Officer (“CEO”). Ms Toll alleged that during that meeting Mr Wiley said that positions in Lightspeed’s businesses would be announced in the fourth quarter of that calendar year. She alleged that she provided Mr Wiley with a copy of her notes of her meeting with Ms Lee and told him that if her prior service with Global Market Insite was recognised and fair restraint of trade terms agreed, she would accept the Lightspeed offer.
On 24 August 2012 Lightspeed provided Ms Toll with a third offer of employment, for the position of Director, Australia/New Zealand. The offer included recognition of her prior service with Global Market Insite and a nine month restraint. Ms Toll alleged that the commission-based incentive scheme attached to the third offer was incomplete and less favourable than her commission arrangement with Global Market Insite but agreed that she was offered the same base salary.
On 12 September 2012 Ms Toll had another meeting with Mr Wiley who repeated that the role she would be offered had not been decided and that an announcement about it would be made in the fourth quarter. Ms Toll alleged that she told Mr Wiley that until an offer of employment was made outlining what her role would be, she could not sign a contract of employment with Lightspeed.
On 31 October 2012 Ms Toll had a meeting with Mr Wiley and Mr Milet at which Mr Wiley told Ms Toll that in her new role with Lightspeed she would no longer:
a)report to the head of business in the Asia/Pacific;
b)be a member of the Asia/Pacific leadership team;
c)have a regional Asia/Pacific role;
d)have sole leadership of the Australia and New Zealand territory,;
e)be solely responsible for overseeing the sale of products and services to clients in Australia and New Zealand; and
f)be the primary point of contact for all sales and account relations communication in the Australia and New Zealand territory.
Ms Toll deposed that Mr Wiley told her that the management of Lightspeed’s business in Australia would be split across three managers, including her, and that there would be no regional role for her. She also said while Mr Milet would have continued to be her direct manager at Lightspeed, he was no longer the head of the business even though in both companies his title was managing director.
On 14 November 2012, Ms Toll was given with a document headed “Notice of Transfer of Employment from Global Market Insite, Inc. in Australia to Lightspeed Research Australia Pty Ltd” stating that her employment would be transferred from Global Market Insite to Lightspeed on 31 December 2012. The notice relevantly stated:
…
This is to confirm that with effect from the Transfer Date, you will be considered to be under the employment of [Lightspeed (“LSR”)]. Any reference to GMI or company on your current employment agreement shall refer to LSR.
Your terms of employment with GMI will remain unchanged and you will enjoy the same benefits (which the exception of medical insurance) as those enjoyed by you immediately prior to the Transfer, save that with the effect from the Transfer Date, LSR will be your employer, and your designation will be Director, ANZ and you will report to the Managing Director, APAC.
Your employment will for all purposes be treated as if it had commenced with LSR as from the date when you were first employed by GMI.
It is contemplated that a harmonisation of the employment terms may in future be undertaken as inter alia part of the Merger which may necessitate certain changes to your existing employment terms. In this regard, LSR may prepare a formal contract of employment to be entered into between yourself and LSR (“the Contract of Employment”) on terms and conditions which, to the extent reasonably practicable, are the same as the terms and conditions of your existing contract of employment with GMI. Under the Contract of Employment (if any), in the event LSR is unable to provide any benefits to you which are the same as those currently enjoyed by you under your existing contract of employment with GMI, LSR shall provide you with benefits which are substantially the same but in any case not less favourable than those currently enjoyed by you under your existing contract of employment with GMI. The formal Contract of Employment (if any) will be sent to you as soon as administratively feasible. However, we anticipate that this, if done, will be done after the Transfer Date.
…
On 11 December 2012 Ms Toll was provided with a second notice of transfer which was relevantly similar to the first one but which also said:
This is to confirm that with effect from the Transfer Date, if you attend work you will be considered to be under the employment of LSR.
On 24 December 2012 Ms Toll lodged a complaint with the then-Fair Work Ombudsman about the purported transfer of her employment and Global Market Insite’s failure to make a redundancy payout but the Ombudsman determined that he could not adjudicate the matter. On 5 February 2013 Ms Toll wrote to Mr Milet advising him that she was ceasing her “temporary employment”. Ms Toll alleged that she had been attending work in good faith, on a temporary basis, until an agreement could be reached about her employment with Lightspeed.
Ms Toll alleged that Global Market Insite had terminated her employment without valid notice and had sought unilaterally to transfer her employment to another employer without her consent and on less favourable terms. She alleged that Global Market Insite’s actions constituted a fundamental breach of her employment contract. Ms Toll alleged that she accepted Global Market Insite’s repudiation of her employment contract. She alleged that the offer of employment from Lightspeed did not fall with the exception contained in s.122(3) of the FW Act.
Ludovic Milet
Mr Milet was the managing director of Lightspeed GMI.
Mr Milet said that Ms Toll was the territory manager for Australia and New Zealand and was the primary Global Market Insite point of contact for both countries. He said that members of the Australia team reported to Ms Toll but members of the Asia Pacific team did not.
Mr Milet agreed that Ms Toll’s salary comprised a base salary and commission and that the commission made up more than 60% of her overall income.
Mr Milet said that Global Market Insite Asia Pacific was organized by territories and was comprised of five main regions: Japan, Korea, China, South East Asia, and Australia. He said that each region had a head who was part of the leadership team and confirmed that Ms Toll had been part of that team. Mr Milet agreed that at a meeting on 31 October 2012, Mr Wiley confirmed that there would be no regional role for Ms Toll at Lightspeed and that instead she would be one of three managers with responsibility for Australia.
Mr Milet did not agree that Lightspeed’s offer of employment to Ms Toll had contained restrictions which did not exist at Global Market Insite but agreed that the reality of the job would have involved such restrictions. He agreed that certain clients to whom Ms Toll could, and had, sold while she was at Global Market Insite had been allocated to other employees at Lightspeed. He stated that as a result, she would not have been able to use those clients as “growth potential”.
Mr Milet said that Ms Toll’s position at Lightspeed would have been the same or similar in terms of title, payments and the percentage and calculation of commission but, rather than being the sole leader or the main leader for the Australian team, she would have had to share that role with two other people. As a result, he said that her capacity to earn business would have been limited because a larger portion of the market had already been taken. He said that the heads of the Singapore, Japan and Korean markets at Global Market Insite (countries in which Lightspeed had had no previous presence) remained the heads of those markets at Lightspeed and that there continued to be one head per region for those markets.
Mr Milet said that although he had the power to appoint a country manager for Australia to be the lead in the Australian market, that was a “political” decision and not one he would make alone. Mr Milet agreed that it would be desirable to have a country manager/director for Australia and said that that would happen but also said that he would wait to see how things developed before deciding who would be the sole leader if there was going to be one. Mr Milet said there was more than one country director for Australia because of sensitivity, egos and politics, the need to give everybody a fair chance and the need to not make a decision without reflection.
Terry Wiley
Mr Wiley was Lightspeed’s CEO. He stated that Lightspeed acquired Global Market Insite on 1 September 2011 but retained the Global Market Insite brand. He stated that Lightspeed was part of the WPP Group of companies, the largest marketing and communications company in the world, and was much bigger than Global Market Insite had been.
Mr Wiley stated that in June 2012, Lightspeed made various offers of employment to Global Market Insite’s employees to transfer their employment to Lightspeed and, in particular, provided a draft contract of employment to Ms Toll on 12 June 2012. On 18 July 2012 a second draft was sent to Ms Toll which, Mr Wiley stated, reflected the request she had made to change her title from Sales Manager to Director. On 25 July 2012 Ms Toll sent an email to Ms Lee setting out a number of items which she wanted to be included in her proposed contract with Lightspeed. Mr Wiley stated that some were items with which Lightspeed did not agree.
Mr Wiley stated Lightspeed provided Ms Toll with a final version of the proposed contract in August 2012.
Mr Wiley stated that between September and November 2012 he had at least three separate meetings with Ms Toll and Mr Milet to try to resolve Ms Toll’s concerns in relation to her proposed terms and conditions of employment with Lightspeed. He stated that during those meetings it was confirmed with Ms Toll that:
a)her Global Market Insite employment terms would need to be harmonised, which could change her existing employment terms with Global Market Insite, but such new terms would not be less favourable overall than her existing employment terms with Global Market Insite;
b)her employment with Lightspeed would be treated for all purposes as if she had commenced on the date when she was first employed by Global Market Insite and all her accrued leave entitlements would carry over and be recognised by Lightspeed;
c)her remuneration would be matched in terms of base salary and commission and bonus structure; and
d)in the event that Lightspeed was unable to provide her with any benefits she had with Global Market Insite, Lightspeed would provide her with benefits which were substantially the same but in any case no less favourable than those she had with Global Market Insite.
Mr Wiley stated that by November 2012 Ms Toll had still not signed the proposed Lightspeed employment contract. As a result, on 14 November 2012 he sent her a letter entitled “Notice of Transfer of Employment from Global Market Insite, Inc. in Australia to Lightspeed Research Australia Pty Ltd”.
Mr Wiley agreed that Ms Toll resigned on 5 February 2013.
Terms and conditions
Mr Wiley stated that Lightspeed possessed internal records from Global Market Insite which stated that Ms Toll’s official title had been Sales Manager.
Mr Wiley stated that although there were other employees with whom Ms Toll worked closely on a daily basis at Global Market Insite, she had only been responsible for managing four employees. He stated that she would also have had four people reporting to her at Lightspeed. Mr Wiley stated that Ms Toll had never had sole leadership for any matter at Global Market Insite as she had reported to Mr Milet, who was responsible for all of that company’s affairs in Australia.
Mr Wiley stated that the majority of Ms Toll’s client base at Global Market Insite was in Australia, with only 2% located in New Zealand. He stated that Lightspeed did not have a large client base in New Zealand and it would have been open to Ms Toll to target new business in that country.
Mr Wiley stated that if Ms Toll had accepted employment with Lightspeed in the director position, there would have been two other directors performing the same role with their own client bases and with employees reporting directly to them. He stated that more than one director position was required at Lightspeed because of its size in Australia and its greater number of clients. Mr Wiley stated that there would only have been a 2% overlap between Ms Toll’s client base and that of the other directors.
Directly reporting to head of business
Mr Wiley stated that if Ms Toll had accepted employment with Lightspeed, she would have continued to report to Mr Milet, who had taken the position of managing director at Lightspeed. He stated that because Lightspeed was much bigger in Australia than Global Market Insite had been, its structure was different in that there were a number of managing directors for different parts of the business who reported to him as the CEO, of whom Mr Milet was one. Mr Wiley stated that it was not possible for all of Lightspeed’s directors to report straight to him because there were too many aspects of the business for him to directly manage on a day-to-day basis. He stated that the fact that Ms Toll would have reported to Mr Milet did not mean that she was offered employment on less favourable terms, but merely reflected the different organisational structures of Global Market Insite and Lightspeed.
Sole leadership of Australia/New Zealand territory
Mr Wiley stated that Ms Toll had not had sole leadership or responsibility for the budget for advertising, marketing, promotional and public relations material at Global Market Insite which had been Mr Milet’s responsibility. He stated that Global Market Insite had had an in-house marketing manager with whom Ms Toll had consulted and worked on a regular basis on client specific activities, which would not have changed at Lightspeed. Mr Wiley stated that Ms Toll would have been able to continue making decisions on client specific activities, subject to any input or direction from Mr Milet as her manager.
Mr Wiley stated that during her employment with Global Market Insite, Ms Toll was responsible for the recruitment and management of the four employees who reported to her, subject to any input from Mr Milet. He stated that Ms Toll would have continued to be responsible for deciding who would be recruited into her team and for the management of those who reported directly to her.
Mr Wiley stated that Ms Toll’s role in training and managing new employees in her team would have continued at Lightspeed in relation to the employees who reported to her. He stated that at Lightspeed she would have continued to make recommendations on pay increases and bonuses for eligible staff, with Mr Milet having the final say on those recommendations.
Mr Wiley stated that it was not feasible, given the size of the Australian market, that one person managed it all. He also said that under the conditions of employment Lightspeed offered to Ms Toll, she was not able to sell to clients under the management of other employees and that there had needed to be some rationalization of client responsibilities because she and Sej Patel, an employee of Lightspeed, had clients in common.
Asia/Pacific Leadership team
Mr Wiley stated that there had been no regional leadership team at Global Market Insite and that Ms Toll would not have been part of the regional leadership team at Lightspeed.
Mr Wiley agreed that at Lightspeed, Ms Toll would have no longer reported to the head of business of the Asia/Pacific.
Kantar clients
In his written statement Mr Wiley agreed that at Global Market Insite Ms Toll had been able to sell products and services to Kantar. He stated that at Lightspeed the business was divided into internal clients, including Kantar, and external clients such as research agencies and direct clients. Mr Wiley stated that as Kantar and Lightspeed were both members of the WPP Group, they had service agreements between them naming Lightspeed as the provider of choice for Kantar work. He stated that at Lightspeed only employees who worked with internal clients could work with Kantar and, implicitly, that Ms Toll would not be one of those employees. Mr Wiley stated that at Global Market Insite Ms Toll had had only one notable project with a Kantar company.
Mr Wiley stated that the identity of the clients to whom Ms Toll had to sell products and services was not a term or condition of her employment. Mr Wiley stated that although Ms Toll would not have been able to sell products to Kantar clients while employed at Lightspeed, she would not have been prevented from targeting other clients in the external market.
Future promotion and commission arrangement
Mr Wiley stated that there was nothing that would have prevented Ms Toll from being considered for regional Asia/Pacific roles within Lightspeed if she met the relevant selection criteria.
Mr Wiley stated that Lightspeed had honoured all of Global Market Insite’s commission arrangements for its employees who had transferred to Lightspeed and that Ms Toll would have been included in that group.
Summary
Mr Wiley stated that Ms Toll was offered employment at Lightspeed on terms and conditions no less favourable because:
a)Ms Toll’s employment with Lightspeed would have been treated as commencing from the date when she was first employed by Global Market Insite and all her accrued leave entitlements would have carried over and been recognised by Lightspeed;
b)Ms Toll’s remuneration would be matched in terms of base salary, commission and bonus structure;
c)Lightspeed was a much bigger player in the Australian market;
d)Ms Toll would have been given the new title of Director which had greater status than Sales Manager;
e)Lightspeed had agreed to a number of Ms Toll’s requests for contractual terms more favourable than those she had had with Global Market Insite;
f)Ms Toll’s overall duties and responsibilities would have remained the same if she had accepted employment with Lightspeed; and
g)aside from the Kantar clients who made up only 2.5% of Ms Toll’s total annual revenue and 2% of her client base, her client base would have remained the same.
Submissions
Ms Toll
Ms Toll submitted that as 60% of her income was derived from sales commissions she was facing “precarious circumstances” because she would no longer be reporting to the head of the business, would no longer be the (sole) territory manager, would no longer be a member of the Asia/Pacific leadership team and would have internal competitors.
Ms Toll submitted that her role at Lightspeed would have been diminished and that the company had failed to provide her with alternative employment that was comparable to what she had had. She submitted that given her experience there was a reasonable expectation that she would have seniority and status within the business and that it would be a term of her employment.
Global Market Insite
Global Market Insite submitted that while there were some necessary differences in its organizational structures and Lightspeed’s, Ms Toll’s overall duties and responsibilities could have remained the same. It submitted that Ms Toll would have performed those duties at a much larger company and that her proposed role of director carried greater status than her existing title of sales manager. It submitted that Ms Toll would have continued to report to Mr Milet and have responsibility for the Australian and New Zealand market. It submitted that Ms Toll would have been able to retain the majority of her Global Market Insite client base and to have the opportunity to pursue new clients in Australian and New Zealand. It submitted that there was nothing that would have prevented Ms Toll from being considered for regional roles within Lightspeed should she have been able to meet the criteria for any such role as might have become available.
Consideration
There was little disagreement between the parties as to the facts relevant to the determination of this matter, their dispute being the significance of those facts. Consequently, it has not been necessary to undertake a separate consideration of the evidence to make findings of fact. The factual statements which follow are the facts found for the purposes of this case.
Redundancy
Although Global Market Insite denied the allegation that it terminated Ms Toll’s employment, the simple fact that Mr Wiley wrote to her at the end of 2012 purporting to transfer her employment from Global Market Insite to Lightspeed with effect from the start of 2013 had that very effect: Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014; Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at 214 [48]. As it was beyond the power of either of the companies to require Ms Toll to work for Lightspeed, the purported transfer was, relevantly, an intimation that Ms Toll’s employment with Global Market Insite would cease on 31 December 2012. In circumstances where this arose out of that company ceasing to trade and its consequential lack of need for Ms Toll’s services, that amounted to a redundancy.
Claim for redundancy payment
In the circumstances, that Lightspeed proposed to recognise her prior service with Global Market Insite, Ms Toll would not be entitled to a redundancy payment if the terms and conditions of Lightspeed’s offer of employment were substantially similar to and, overall, no less favourable than the terms and conditions of her employment at Global Market Insite immediately prior to her termination: s.122(3) FW Act.
I infer that the notices of transfer of employment which Lightspeed gave Ms Toll in November and December 2012, in particular their statements that at Lightspeed her terms and conditions of employment would be the same or not materially different to the terms and conditions of her employment at Global Market Insite, arose out of the parties’ failures to agree contractual terms and what I accept to have been Lightspeed’s desire and intention that Ms Toll’s employment with it be on the same terms as it had been with Global Market Insite, albeit that her role would be somewhat different.
Consequently, I accept that when it came to matters of salary and commission, by December 2012 the terms and conditions of employment which Lightspeed offered to Ms Toll were no less favourable than the terms and conditions of employment which she had enjoyed at Global Market Insite. Similarly, the intention that at Lightspeed she would report to Mr Milet represented no change to what she had done at Global Market Insite.
However, Ms Toll’s case was that the terms and conditions offered to her by Lightspeed nevertheless differed materially and unfavourably from the terms and conditions of her employment with Global Market Insite in other respects. She also argued that Lightspeed had not offered her acceptable alternative employment but that is not the test under s.122(3) of the FW Act and, in any event, Global Market Insite did not allege that Ms Toll had not been made redundant on the ground that it had offered her acceptable alternative employment.
Ms Toll argued that the terms of Lightspeed’s offer were less favourable than her contract with Global Market Insite in the following respects:
a)she was no longer going to report to the head of the business in the Asia/Pacific region;
b)she was no longer going to be the sole territory manager for Australia and New Zealand;
c)she was no longer going to be a part of the Asia/Pacific leadership team; and
d)at Lightspeed there would have been limitations on which potential clients she could target for work whereas at Global Market Insite there had been none.
In order to succeed, Ms Toll had to demonstrate that in 2012, immediately prior to Lightspeed’s acquisition, her contract of employment with Global Market Insite included the following terms and conditions and that a failure to include them in the Lightspeed offer made it a less favourable option:
a)she was to report to the head of the business in the Asia/Pacific region;
b)she was to be the sole territory manager for Australia and New Zealand;
c)she was to be a part of the Asia/Pacific leadership team; or
d)she was to have no limitations on which potential clients she could target for work.
However, Ms Toll did not suggest that terms of the sort mentioned in (a), (c) or (d) above were expressly included in her contract of employment with Global Market Insite in 2012. Nor did she allege that they were implied terms and it is unlikely that they would have been because it is not apparent that they were necessary to give the contract businesses efficacy such that one ought to infer that the parties would have necessarily agreed to them if they had turned their minds to their inclusion. While I accept that Ms Toll reported to the head of Global Market Insite’s business in the Asia/Pacific region, was part of its Asia/Pacific leadership team and was not limited in the potential clients she could target for work, these aspects of her work were incidents of her role, not terms and conditions of her employment.
However, Ms Toll’s allegation that she had been employed to be Global Market Insite’s sole territory manager for Australia and New Zealand was a different matter. The evidence satisfies me that in 2012 Ms Toll was employed by Global Market Insite to be the Sales Manager for the Australian and New Zealand territory of its Asia/Pacific business. The singular nature of that role was apparent from the fact that Ms Toll:
a)reported to the head of the business in the Asia/Pacific region;
b)was part of the Asia/Pacific leadership team; and
c)had no limitations on which potential clients she could target for work.
Lightspeed’s takeover of Global Market Insite changed the structure of the business, as might be expected, and so some aspects of the territory sales manager’s role might be expected to change too. However, in this case the takeover had the effect of abolishing the role of territory sales manager for Australia and New Zealand and replacing it with three sales directors, none of whom had sole responsibility for that territory, as Ms Toll had had at Global Market Insite. Although much of the work Ms Toll had done at Global Market Insite would also have been undertaken by her at Lightspeed, she went from being a territory manager to being a team manager who might, as Mr Milet’s evidence implied, ultimately be required to report to a yet to be appointed territory manager.
Ms Toll’s complaint was, in essence, that she had been demoted in the restructure. I find that she was. The inflation of her title from Sales Manager to Director, although presumably welcome, was not a matter of substance and did not alter the fact that her new position was, in reality, a demotion. In reaching this conclusion, I have taken into account the larger size of the Australian operation once the two companies’ businesses were merged but that did not affect the reduction in seniority involved in Ms Toll sharing responsibility for a territory for which she had previously had sole responsibility and associated organizational status.
I therefore find that the terms and conditions of employment which Lightspeed offered to her were less favourable than those she enjoyed at Global Market Insite. Consequently, she is entitled to be receive a redundancy payment of 13 weeks’ pay which I calculate to be $19,278.38
Long service leave
Section 113 of the FW Act makes provision for long service leave in certain circumstances but none of them applied to Ms Toll. Instead, pursuant to s.27 of the FW Act, such long service leave entitlements as Ms Toll had were governed by state legislation, specifically the LSL Act. Her claim to have such entitlements falls within Court’s accrued jurisdiction because it is part of the same controversy as the one she raised pursuant to the FW Act and so they make up one federal matter under s.76(ii) of the Constitution: see Keldote Pty Ltd v Riteway Transport Pty Ltd (2010) 195 IR 423 at 444 - 458 [77] – [136].
As Ms Toll’s employment was terminated by her employer after she had been employed for five years, pursuant to s.4(2)(a)(ii) of the LSL Act she was entitled to a pro-rata long service leave payment for seven years’ employment which I calculate to be $8,996.56
Payment in lieu of notice
Ms Toll had been on notice from June 2012 that her employment with Global Market Insite was to cease and in November 2012 the date of that cessation was made clear when Lightspeed sent her the transfer letter. Ms Toll was thereby given more than the four weeks’ notice of the termination of her employment with Global Market Insite which s.117 of the FW Act required. Consequently she was not entitled to any payment in lieu of notice.
Limit on compensation
Because the FW Act and the LSL Act claims made up one matter and were brought in one proceeding, one set of procedural rules must apply to the matter’s determination. Although claims in this Court under the LSL Act would not normally be subject to a monetary jurisdictional limit, Ms Toll’s choice of the small claim procedure for the determination of her matter has the effect of imposing the small claim limit of $20,000 across the whole matter because, once the procedure is engaged in respect of a matter, then the limit applies to the whole matter regardless of the issues which go to make it up.
Work in 2013
As a final issue, although Lightspeed’s 11 December 2012 notice of transfer of employment stated that Ms Toll would be treated as being a Lightspeed employee if she turned up for work after 31 December 2013, at all times she had made it clear that she did not accept the terms which Lightspeed had offered to her. Consequently, however her 2014 period of work should be characterised, I do not find that it amounted to an acceptance by Ms Toll of the terms offered to her by Lightspeed or that she had accepted the proposal that her employment be transferred to that company.
Conclusion
For the above reasons I find that Ms Toll is entitled to judgment for $20,000 plus interest of $2,770.96.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Associate:
Date: 27 January 2015
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