Torres v BHP Billiton Minerals Pty Ltd
[2021] WADC 28
•30 MARCH 2021
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: TORRES -v- BHP BILLITON MINERALS PTY LTD [2021] WADC 28
CORAM: FLYNN DCJ
HEARD: 30 SEPTEMBER, 1 OCTOBER & 26 NOVEMBER 2020
DELIVERED : 30 MARCH 2021
FILE NO/S: CIV 1873 of 2019
BETWEEN: FELIPE CARNEIRO DA CUNHA TORRES
Plaintiff
AND
BHP BILLITON MINERALS PTY LTD
Defendant
Catchwords:
Industrial law - Contract of employment - Plaintiff informed by letter of redundancy if he 'was unable to be redeployed' - Whether letter varied contract of employment - Construction of contract of employment - Whether plaintiff made an offer of alternative employment before position made redundant - Turns on own facts
Legislation:
Nil
Result:
Judgment for the defendant
Plaintiff's action dismissed
Representation:
Counsel:
| Plaintiff | : | Mr P A Nevin |
| Defendant | : | Mr R J Price |
Solicitors:
| Plaintiff | : | Taylor Smart |
| Defendant | : | Herbert Smith Freehills |
Case(s) referred to in decision(s):
Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Broadlex Services Pty Ltd v United Workers' Union [2020] FCA 867
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Commonwealth Bank of Australia v Barker [2014] HCA 32
Equuscorp Pty Ltd v Haxton [2012] HCA 7, (2012) 246 CLR 498
FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90
Gallagher v BHP Billiton Nickel West Pty Ltd [2016] FCCA 3367
National Tertiary Education Union v La Trobe University [2014] FCA 1330
Newton v Australian Postal Corp (No 2) [2019] FCA 2192
R v Industrial Commission of South Australia; Ex parte Adelaide Milk Co-operative Ltd (1977) 16 SASR 6
Re Clothing Trades Award 1982(1) [1990] AIRC 980; (1990) 140 IR 123
Sensis Pty Ltd v Gundi [2017] FCA 1519
TRA Global Pty Ltd v Kebakoska [2011] VSC 480
Yousif v Commonwealth Bank of Australia (2010) 193 IR 212
FLYNN DCJ:
Introduction
The plaintiff (Mr Torres) was employed by the defendant (the Company) as a 'manager, project area delivery' in a project in the Pilbara known as 'South Flank'. His employment was on written terms identified in a letter of offer dated 7 November 2017 (the Employment Contract). Clause 29 of the Employment Contract makes provision for payment of a benefit (the Redundancy Benefit) to Mr Torres if his position with the Company is made redundant and 'there is no suitable alternative employment'. By a letter dated 5 June 2018 (the Redundancy Letter), the Company informed Mr Torres that his position was being made redundant. The Redundancy Letter stated that if Mr Torres 'was unable to be redeployed by 3 July 2018, his termination would take effect and his redundancy payment would be processed'.
The Company contends that, before 3 July 2018, it identified a suitable alternative role for Mr Torres by creating a new position of 'manager, logistics' in South Flank and this fact was orally communicated to Mr Torres on a number of occasions between 14 and 29 June 2018.
Mr Torres accepts that a 'manager, logistics' position was suitable alternative employment. However, he contends that this position was not created until after 3 July 2018 and, in any event, he was not informed by the Company of the new position until after 3 July 2018.
Mr Torres argues that the Redundancy Letter resulted in a variation of the Employment Contract (the Varied Employment Contract). Pursuant to the terms of the Varied Employment Contract, the failure of the Company to redeploy him by 3 July 2018 triggered his entitlement to the Redundancy Benefit and the termination of his employment.[1] He seeks an order that the Company pay him damages quantified by reference to the amount of the Redundancy Benefit.
[1] Amended Statement of Claim of 26 July 2019 at par 15.
The Company's position is that the Redundancy Letter did not vary the Employment Contract; it operated as a conditional notice to terminate employment.[2] Mr Torres employment would terminate on 3 July 2018, and he would be paid the Redundancy Benefit in accordance with the Employment Contract, conditional upon the Company being unable to redeploy him by that date. The Company contends that the condition was not fulfilled because it identified suitable alternative employment for Mr Torres when it created the 'manager, logistics' position. Mr Torres' employment did not terminate and he did not become entitled to the Redundancy Benefit. Mr Torres' (admitted) failure to attend the workplace after 3 July 2018 is relied upon by the Company as repudiation of the Employment Contract. The Company accepted the repudiation and terminated the Employment Contract by a letter to Mr Torres of 17 August 2018.
[2] Defendant's Written Closing Submissions of 12 November 2020 (DWCS) at par 13.2.
Two issues arise for my determination. First, I must determine the effect of the Redundancy Letter upon the rights and obligations of the parties under the Employment Contract (the Redundancy Letter Issue). Secondly, I must determine whether Mr Torres has proven the facts necessary to establish his entitlement to the Redundancy Benefit (the Redundancy Benefit Issue).
For the reasons set out below, I have determined that the Redundancy Letter did not vary cl 29 of the Employment Contract on Mr Torres' entitlement to the Redundancy Benefit and that Mr Torres has not proven his entitlement to the Redundancy Benefit under cl 29.
Before considering the Redundancy Letter Issue and the Redundancy Benefit Issue, I will make some observations about the relevant terms of the Employment Contract.
The Employment Contract
Incorporated into the Employment Contract were a number of documents including:
•A document entitled 'remuneration and benefits' sets out amounts against headings for a 'base salary', 'incentive' and 'superannuation'.
•A document entitled 'employment agreement', sets out terms of employment in thirty-one numbered clauses covering matters such as: 'Position, duties and responsibilities' (cl 1); 'Hours of work' (cl 7); 'Remuneration' (cl 8); 'Entitlements' (cl 13) including 'Annual leave' (cl 13.2), and 'Personal leave' (cl 13.3); 'Policies and procedures' (cl 18); 'Redundancy' (cl 29); and 'Termination of employment' (cl 31).
Clause 29 of the Employment Contract on 'redundancy' and cl 31 on 'termination of employment' state:
29.Redundancy
(a)If:
(i)you are a permanent employee;
(ii)your position with the Company is made redundant; and
(iii)there is no suitable alternative employment within the Company or with another BHP Billiton group entity;
you will be entitled to the benefits set out in the Company's Staff Handbook (as amended from time to time) which currently includes:
(i)13 weeks' pay in lieu of notice; and
(ii)8 weeks' pay, plus 2 weeks' pay for each year of completed continuous service.
(b)Payment will be made at your Total Salary Rate.
(c)Your entitlement to severance pay does not apply where the Company obtains suitable alternative employment for you. You acknowledge and agree that this applies irrespective of the location where you have chosen to reside.
(d)If you are a fixed term employee or a casual employee, you are not entitled to redundancy and severance payment.
…
31.Termination of Employment
(a)You or the Company may terminate your employment by giving 4 weeks' written notice, or by paying (in the case of the Company) or forfeiting (in your case) 4 weeks' salary in lieu of such notice.
(b)The period of the notice the Company must give is increased by one week in the event you are over 45 years old and have completed at least two years of continuous service with the Company.
(c)If you are found to have engaged in serious misconduct, the Company may terminate your employment immediately and you will be paid until the time of dismissal only.
(d)If you are a casual employee, you or the Company may terminate your employment by giving one hours' notice, or by paying (in the case of the Company) or by forfeiting (in your case) one hour's salary in lieu of such notice.
Clause 31 of the Employment Contract (quoted above) prescribes the process for the termination of Mr Torres' employment. Termination may be upon the initiative of the Company, by the giving of four weeks written notice to Mr Torres or by paying four weeks salary in lieu of such notice. Termination may also be upon the initiative of Mr Torres, by giving of four weeks written notice to the Company or by forfeiting four weeks salary in lieu of such notice.
The effect of cl 29 of the Employment Contract (quoted above) is that Mr Torres, a permanent employee, became entitled to the Redundancy Benefit upon two criteria being satisfied: 'his position being made redundant' (cl 29(a)(ii)); and 'no suitable alternative employment (existing) within the Company or with another BHP Billiton Group entity' (cl 29(a)(iii)).
In National Tertiary Education Union v La Trobe University,[3] Tracey J said (omitting quotation marks and citations):[4]
The word 'redundancy' is not a concept of clearly defined and inflexible meaning. Nonetheless, it is clear enough, in an industrial context that the emphasis is upon a 'job' becoming redundant rather than a worker becoming redundant. If a workers' [sic] job becomes redundant the consequence may be that the worker will be 'retrenched' in the sense that his or her contract of service will be terminated.
[3] National Tertiary Education Union v La Trobe University [2014] FCA 1330.
[4] National Tertiary Education Union v La Trobe University [27] - [28].
Mr Torres' position would become redundant if the Company no longer wished to have the 'manager, project area delivery' position performed by anyone.[5]
[5] R v Industrial Commission of South Australia; Ex parte Adelaide Milk Co-operative Ltd (1977) 16 SASR 6, 8 (Bray CJ).
The ordinary meaning of the words of cl 29(a) (ii) ('your position is made redundant') has the result that the Company must have made a decision that the 'manager, project area delivery' position of Mr Torres is redundant before this criterion for payment of the Redundancy Benefit is satisfied.
Implicit in the power of the Company to make Mr Torres' position redundant is an obligation on the Company to inform him of the exercise of that power (the Implied Notice of Redundancy Obligation). The Company is required to 'co‑operate in the doing of acts necessary to enable' to enable Mr Torres to 'secure the benefit provided by' cl 29 of the Employment Contract.[6] The obligation is a necessary corollary of the obligation upon the Company to pay the Redundancy Benefit to Mr Torres if the criteria in cl 29 are satisfied.
[6] Commonwealth Bank of Australia v Barker[2014] HCA 32 [61].
The ordinary rules of grammar applied to cl 29(a) have the result that the Redundancy Benefit becomes payable upon the date that two (positive) conditions are satisfied so long as one (negative) condition is not satisfied. The two positive conditions that must be satisfied are found in cl 29(a)(i) (permanent employee) and cl 29(a)(ii) (made redundant). The negative condition that must not be satisfied is found in cl 29(a)(iii) (no suitable alternative employment).
In the result, if no suitable alternative employment is available to Mr Torres as at the date that the Company makes the 'manager, project area delivery' position redundant, the Redundancy Benefit is payable to him on that date.
Clauses 29 and 31 of the Employment Contract operate independently of each other. Clause 29 does not provide for the termination of employment of Mr Torres. In the event that Mr Torres became entitled to the Redundancy Benefit as a consequence of his position being made redundant and no suitable alternative employment existing, cl 31(a) nevertheless operates to require the Company (or Mr Torres) to give notice (or salary in lieu of notice) before his employment terminates.[7]
[7] Contrast the entitlement to redundancy pay under s 119(1) the Fair Work Act 2009 (Cth) which only arises upon termination of employment.
The Redundancy Letter Issue: Introduction
It is not in dispute that on 5 June 2018, Mr Torres attended a meeting at the invitation of his supervisor, Mr Dirk Adams (the 5 June 2018 Meeting). Also present was a human resources consultant employed by the Company, Ms Amanda Banks. The Redundancy Letter was read aloud to Mr Torres and a copy handed to him. Mr Torres said to Mr Adams and Ms Banks that he understood the contents of the letter and agreed with what was proposed in it. Relevantly, the letter states:
As you are aware, the nature of the South Flank Pre-commitment Funding work is for a fixed period, with changes to the organisation required in support of various phases of the project. As we enter into the next phase of a project, it is proposed that restructuring will occur across the South Flank organisation. As result of this re-organisation, a number of positions have been identified as being redundant, including yours.
Over the next 4 weeks we will consult with you about measures to avoid or mitigate the effects of the restructure including trying to identify appropriate redeployment opportunities within Iron Ore and, if necessary, the broader BHP Billiton Group.
During the consultation period, the Company will assist you in seeking redeployment. If you are unable to be redeployed within the business by the 3rd July 2018, your termination will take effect, and your redundancy payment will be processed, in line with the Company's redundancy entitlements summarised in the attachment. Your final pay will be made in the pay period following your last day of employment with the Company.
In the meantime, should you have any queries or wish to discuss anything in relation to this letter, please let me know.
Mr Torres argues that his expression of assent to the Redundancy Letter in the 5 June 2018 Meeting effected a variation of the Employment Contract in two respects.
First, Mr Torres contends that the Employment Contract was varied so that the criteria for payment of the Redundancy Benefit is satisfied if Mr Torres is 'unable to be redeployed in suitable alternative employment by 3 July 2018' (Clause 29 Variation).[8] The criteria for payment of the Redundancy Benefit is said to be found in a combination of the words of cl 29 and the Redundancy Letter. Clause 29 provides for an entitlement to the Redundancy Benefit if there is 'no suitable alternative employment' for Mr Torres with the Company. The Redundancy Letter provides for an entitlement to the Redundancy Benefit if Mr Torres is 'unable to be redeployed' by 3 July 2018.
[8] Plaintiff's Written Closing Submissions (PCWS) at par 24. The defendant correctly observes that Mr Torres has not been consistent when formulating the terms of this alleged variation for the purpose of these proceedings. See DWCS at par 2; pars 19 - 30.
Secondly, Mr Torres contends that the Employment Contract was varied by 'taking away' the notice requirement found in cl 31(a). He argues that termination became 'self‑executing' on no suitable employment being available to him on 3 July 2018 (cl 31 Variation).[9] The Redundancy Letter replaced the requirements for termination of Mr Torres' employment stated in cl 31(a) of the Employment Contract. In the absence of the Redundancy Letter, cl 31(a) of the Employment Contract required a further step to be taken for the termination of Mr Torres employment in the event that he was unable to be redeployed in suitable alternative employment by 3 July 2018. Clause 31(a) required '4 weeks written notice or 4 weeks salary in lieu' by either the Company or Mr Torres.
[9] PCWS at pars 10 - 11.
Mr Torres argues that the consideration for the Varied Employment Contract is said to be found in the mutual promises of each party to vary cl 29 and 31 of the Employment Contract as detailed above.[10]
[10] Reliance is placed upon a principle as summarised by Beech J in Henderson v Curtis [2008] WASC 283, [17] :'When parties to a contract agree to vary the time or the quantum of an unconditional obligation owed by only one of the parties, then there will be no consideration for the promise by the other party to agree to that variation. … However, where parties agree to vary some other aspect of their contract, other than an unconditional obligation owed only by one party, the agreement by each party for the variation of the mutual rights and obligations of the parties will be consideration for the other party's promise.'
The Company argues that the text of the Redundancy Letter and the context of the 5 June 2018 Meeting favour a conclusion that, objectively, the Employment Contract was not varied. The Redundancy Letter constituted a statement of 'future plans' consistent with rights conferred upon the Company by the Employment Contract. It was said that Mr Torres' assent to this representation was no more than an acknowledgment of the Company's rights under cl 29 and 31 of the Employment Contract.
The Company denies that consideration is to be found in the mutual promises of the parties to a non-existent variation. Further, the Company says that it enjoyed a unilateral and unconditional power to terminate employment as a result of cl 31(a) of the Employment Contract with the result that the 'self‑executing' termination said by Mr Torres to be found in the alleged Varied Employment Contract could not be consideration.
The Redundancy Letter Issue: The Facts
In March 2007, Mr Torres came to Australia from his home in Rio de Janeiro, Brazil to commence employment with the Company (or an associated entity) as a graduate mechanical engineer.
He was continuously employed by the Company (or an associated entity) in a variety of roles until, in November 2017, he accepted the 'manager, project area delivery' position nominated in the Employment Contract.
The full title of the 'manager, project area delivery' position in the Employment Contract is stated to be, 'Manager Project Area Delivery within the PCF Off‑Site Fabrication Department'. To the knowledge of Mr Torres and the Company, 'PCF' is an acronym for 'Pre‑Commitment Funding'. The acronym is commonly associated with the initial phase of a project and is to be distinguished from subsequent stages of the same project.
After signing a document indicating his assent to the Employment Contract, Mr Torres commenced employment on 20 November 2017. He worked in the 'integrated project' team on the South Flank project under the supervision of Mr Adams.
By March 2018, after conversations with other employees of the Company including Mr Adams and Ms Amanda Banks, Mr Torres correctly surmised that the Company was unlikely to require the 'manager, project area delivery' position to continue beyond the middle of 2018 when the 'pre‑commitment funding' phase of the project ended.
In fact, unknown to Mr Torres, Ms Banks had arranged in early April 2018 for the preparation of a draft letter in similar terms to the Redundancy Letter. The existence of the draft was not communicated to Mr Torres.
Encouraged by Mr Adams and Ms Banks, Mr Torres initiated contact with people he knew within the Company (and associated entities) in an attempt to identify a comparable position for himself.These regular informal discussions occurred between March 2018 and 5 June 2018.
One of those discussions, in the first half of April 2018, was with Mr Jaco Botha. Mr Botha, supervised the 'process infrastructure' team, also working on the South Flank project. The evidence of Mr Torres and Mr Botha on that meeting is the same insofar as each said that Mr Botha informed Mr Torres that no relevant vacancies existed for Mr Torres in the process infrastructure team.
It is not necessary for present purposes to reconcile the inconsistent evidence of Mr Botha and Mr Torres on other aspects of that meeting. In particular, Mr Torres gave evidence that he suggested to Mr Botha that a new position might by created in the 'process infrastructure team' by splitting a 'fabrication and logistics' position, then held by Mr Phil Stockdale, into two positions, 'manager, fabrication' and 'manager, logistics'. Mr Botha gave evidence to the effect that Mr Torres did not raise this possibility at this time.
The plaintiff was on leave between 14 - 28 April 2018 and 1 ‑ 11 May 2018. The latter period of leave was necessary as a result of a tragedy involving a person close to Mr Torres.
Immediately before the commencement of the 5 June 2018 Meeting, Mr Torres and, on behalf of the Company, Mr Adams and Ms Banks, must be taken to be aware of a number of matters. Although the Company had not yet informed Mr Torres of the date upon which his 'manager, project area delivery' position would cease, it was likely to do so in the imminent future. The Employment Contract provided for a redundancy benefit, payable in accordance with cl 29. The Employment Contract provided for termination of employment in accordance with cl 31. There existed a distinct possibility, given Mr Torres' unsuccessful efforts before 5 June 2018, that 'no suitable alternative employment' for Mr Torres would be identified by the Company in the near future.
The Redundancy Letter Issue: Analysis
The principles to be applied when determining whether a contract has been varied were summarised by Finn J in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd.[11] I adopt and adapt that summary (omitting citations and quotations):
•Parties to a contract may vary or extinguish some of its terms by a subsequent contract.[12]
•The 'parties will have made 'two contracts' and each is subject to the ordinary rules governing contract formation.[13]
•In an evolving relationship it 'may be necessary to look at the whole relationship'.[14]
•In determining whether the communications between the parties constitute a contract, communications 'must be interpreted by reference to the subject matter and the surrounding circumstances including, inter alia, the nature of, and the relationship between, the parties, and previous communications between them'.[15]
[11] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 [226] ff.
[12] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [226].
[13] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [226].
[14] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [227].
[15] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [228].
The history detailed above suggests that the implied Notice of Redundancy Obligation was at the forefront of the minds of the parties on 5 June 2018.
Mr Torres had been making unsuccessful efforts over preceding months to secure suitable alternative employment with the Company or an associated entity. The unsent draft of a letter written in April 2018 reveals that Ms Banks was cognisant that the 'manager, area project delivery' position was not required after the financial year ending 30 June 2018 and that it was necessary to ensure that the rights and obligations of each party to the Employment Contract were appropriately respected.
Mr Torres particularly relies upon one sentence of the Redundancy Letter to make good his argument for the Clause 29 Variation.[16] The Redundancy Letter includes a sentence:
If you are unable to be re-deployed within the business by the 3rd July 2018, your termination will take effect, and your redundancy will be processed, in line with the Company's redundancy entitlements summarised in the attachment.
However, the text of this sentence is not the same as the text of the Clause 29 Variation.
[16] PCWS at par 9 ff.
The text of the Clause 29 Variation has the result that the Redundancy Benefit is to be paid if Mr Torres is 'unable to be redeployed in suitable alternative employment by 3 July 2018'. The text of the sentence in the Redundancy Letter (quoted above) omits the words 'in suitable alternative employment'. Taken literally, the sentence contemplates redeployment to any position.
However, as at 5 June 2018, Mr Torres had only contemplated working within the Company in a position that was comparable to the 'manager, project area delivery' position. Consistent with this view, the Clause 29 Variation adds that the redeployment be 'in suitable alternative employment'. The emphasised words are found in cl 29 of the Employment Contract.
The Redundancy Letter does not expressly or implicitly contain a reference to cl 29 of the Employment Contract. There is no warrant in the text of the Redundancy Letter for 'cutting and pasting' words from the Employment Contract into the Redundancy Letter and inferring a variation of the Employment Contract.
Mr Torres did not lead evidence of the 5 June 2018 Meeting including an oral agreement in terms of the Clause 29 Variation.
The absence of written evidence or oral evidence of agreement in terms of the Clause 29 Variation necessarily results in a finding that Mr Torres has failed to prove that the Employment Contract was varied in the manner that he contends.
The Redundancy Letter is consistent with cl 29 of the Employment Contract continuing to regulate the rights and obligations of Mr Torres and the Company concerning redundancy. The significance of the letter is that the Company discharged the Implied Notice of Redundancy Obligation by informing Mr Torres of a future date, 3 July 2018, upon which the 'manager, project area delivery' position was to be made redundant. Clause 29 provides for Redundancy Benefits 'set out in the (defendant's) staff handbook'. The Redundancy Letter attached an 'indicative redundancy calculation' that was said to be 'in line with the Company's redundancy entitlements'. This communication did not vary cl 29 of the Employment Contract.
Finally, I note that the Redundancy Letter includes conciliatory phrases: 'we will consult with you about measures to avoid or mitigate the effects of the restructure including trying to identify appropriate redeployment opportunities' and 'the Company will assist you in seeking redeployment'. A party to a contract that is offering to 'consult' or 'assist' the other party, objectively, is not proposing an alteration to existing contractual rights and obligations. This conclusion has added force where the offers of consultation and assistance concern matters that are specifically addressed in the Employment Contract viz. Clause 29 on 'Redundancy'.
I am not satisfied, for the reasons set out above, that Mr Torres' assent to the Redundancy Letter in the 5 June 2018 Meeting resulted in the Clause 29 Variation. However, I am satisfied, for the reasons set out below that Mr Torres' assent to the Redundancy Letter resulted in the Clause 31 Variation.
I have noted that cl 29 and cl 31 operate independently of each other. However, by cl 29 of the Employment Contract, Mr Torres only becomes entitled to the Redundancy Benefit if 'no suitable alternative employment' exists. Unsurprisingly, the parties appear to address, on 5 June 2018, the question of the termination of Mr Torres' employment in the event of his redundancy on 3 July 2018.
The Clause 31 Variation was said by Mr Torres to be found in the text of the Redundancy Letter and resulted in the replacement of cl 31(a) of the Employment Contract, providing for termination of employment upon notice (or payment in lieu), with a clause providing for 'self‑executing' termination of employment on 3 July 2018.
The defendant argues that the Redundancy Letter is a conditional notice of termination of the Employment Contract[17] or a notice of intention to terminate employment.[18] The Redundancy Letter was said to be notice that, upon satisfaction of the condition that no suitable alternative employment was found for Mr Torres by 3 July 2018, his employment terminated with immediate effect pursuant to the provision of cl 31(a) of the Employment Contract providing for four weeks salary as notice in lieu.
[17] DCWS at par 13.2; See Fardell v Coates Hire Operations PtyLtd [2010] NSWSC 346 [93].
[18] DCWS at par 16(a).
The Redundancy Letter, objectively, reveals a mutual intention that Mr Torres' employment terminate on 3 July 2018, unless suitable alternative employment was identified. The language of the Redundancy Letter is imperative, unequivocal and reflective of terms that appear in cl 31 of the Employment Contract. It is supported by consideration in the form of a mutual variation of the Employment Contract.
In one sentence, the Redundancy Letter states that if Mr Torres is 'unable to be re‑deployed by 3 July 2018', the 'termination of his employment' is to take effect on that date. In the following sentence, Mr Torres is informed that his final pay will be made following his 'last day of employment'. In context, his 'last day of his employment' is synonymous with the contemplated date of termination of his employment ie 3 July 2018.
A reasonable person reading both the Employment Contract and the Redundancy Letter, would understand that the parties had, conditionally, agreed to 3 July 2018 being Mr Torres' last day of employment without any further step being taken by either party.
The Company may have enjoyed the power under cl 31(a) to terminate employment by making a payment in lieu of notice or by giving four weeks written notice. However, the Redundancy Letter does not expressly or impliedly contemplate the exercise of the power to terminate on 3 July 2018 by either method. The letter states, simply, that Mr Torres' employment will terminate on 3 July 2018, conditional upon no suitable alternative employment being obtained. So construed, the letter is not a conditional notice or a notice of intention as submitted by the Company.
The Clause 31 Variation is conditional. The Redundancy Letter expresses the relevant negative condition in terms of Mr Torres being 'unable to be deployed' by 3 July 2018. However, for the reasons noted above when rejecting the Clause 29 Variation, those words, objectively, are not intended to vary or contradict the negative condition found in cl 29 of the Employment Contract. The negative condition which must be satisfied before the employment of Mr Torres terminates on 3 July 2018 is the same negative condition which must be satisfied before the Redundancy Benefit is payable, namely, 'there is no suitable employment within the Company'.
The result of the Clause 31 Variation is to remove the power of the Company and Mr Torres to give written notice (or payment in lieu) to the other of termination of Mr Torres' employment.
The fact that the Redundancy Letter uses the same words as cl 31(a) of the Employment Contract - 'terminate' and 'employment' - supports an inference that, objectively, the parties intended, by the Redundancy Letter to address the rights and obligations created by the same words in cl 31(a) of the Employment Contract.
The Clause 31 Variation resulted in a mutual variation of the rights and obligations of the parties under cl 31(a) of the Employment Contract. It is correct, as the Company contends, that under cl 31(a) of the Employment Contract each party enjoyed the power to terminate employment at any time by notice (or payment in lieu). However, the Clause 31 Variation 'froze' the ability to exercise that power until 3 July 2018 and, if the negative condition of 'no suitable alternative employment' existed on 3 July 2018, the power ceased to exist. The Clause 31 Variation resulted in the following variation of rights found in cl 31(a) of the Employment Contract:
•Mr Torres and the Company no longer enjoyed the power, until 3 July 2018, to give a written notice of termination of employment to each other (or payment of four weeks salary in lieu). If the Redundancy Letter does not expressly so provide, it is to be implied as a fact from those parts of the Redundancy Letter providing for mutual consultation in the period before 3 July 2018 about appropriate redeployment opportunities.
•Upon the negative condition being satisfied (no suitable alternative employment at 3 July 2018), Mr Torres' employment terminated. In that event, Mr Torres forwent the right to receive written notice of termination (or payment in lieu) and the Company was relieved of the obligation to give written notice of termination (or payment in lieu).
The Redundancy Letter Issue: Conclusion
I have concluded that the Redundancy Letter and the 5 June 2018 Meeting did not result in the Varied Employment Contract as contended by Mr Torres. The effect of the letter was to nominate the 3 July 2018 as the date upon which Mr Torres' position would become redundant. If Mr Torres proves[19] that, as cl 29(1)(a)(iii) states, 'there (was) no suitable alternative employment' for him on that date, two consequences follow. First, he is entitled to the Redundancy Benefit. Secondly, as a result of the Clause 31 Variation, his employment terminated.
[19] The onus is upon Mr Torres. In Sensis Pty Ltd v Gundi [2017] FCA 1519, O'Callaghan J held at [33]: 'It was for [the plaintiff employee] to prove that he had not been offered a position meeting the definitions of "Reasonable alternative position" or "Suitable Position", because it was necessary for him to do so to make good his cause of action.'
The Redundancy Benefit Issue: Construction of cl 29
Mr Torres contends that he will have proven that 'no suitable alternative employment' exists if the Company failed to present an employment opportunity to him in a form that enabled him to assess its suitability and to either 'accept or reject it'.[20] He argues that the absence of three matters evidences the failure of the Company to present an employment opportunity to him. First, he was not advised of the 'manager, logistics' position until after 3 July 2018. Secondly, and contrary to the Company's internal policies, he was not supplied with a letter giving effect to the proposed transfer to the 'manager, logistics' position. Thirdly, he did not have any opportunity, before 3 July 2018 (or within a reasonable time commencing before that date) to accept or reject the 'manager, logistics' position.
[20] PWCS at par 25.
Mr Torres draws upon authorities concerning a phrase in an award that relieves an employer of the obligation to pay a redundancy benefit if the employer 'obtains other acceptable employment for an employee'. Clause 29(c) provides that Mr Torres' 'entitlement to severance pay does not apply where the Company obtains suitable alternative employment' for him. In Re Clothing Trades Award 1982(1)[21] the Full Bench of the Industrial Relations Commission state:[22]
The word 'obtains' does not appear in its context to mean actually obtain in the fullest sense possible. In circumstances like those occurring at the company one employer is incapable in law of effecting a contract of employment between his employee and another employer whether by assignment or otherwise; the creation of the legal relationship of master and servant depends on a mutuality being arrived at between the individual and the incoming employer. Therefore, the pursuit of alternative employment by the outgoing employer cannot be expected, by reason of itself alone, to produce new employment; there will usually and perhaps always remain the opportunity for the incoming employer, and the employee, to disagree as to matters such as terms of employment, suitability of the job to the employee and vice versa so that alternative employment may not eventuate.
It follows that 'obtain' must be given some lesser meaning. The Shorter Oxford Dictionary (3rd ed, revised) provides as its relevant meaning, the definition of 'obtain' as 'to procure or gain, as the result of purpose and effort'. It seems to us that meaning is of assistance here; that is, the employer by purpose and effort may establish an opportunity which suits the employee and which crystallises as alternative employment of an acceptable kind.
[21] Re Clothing Trades Award 1982(1) [1990] AIRC 980; (1990) 140 IR 123.
[22] Re Clothing Trades Award 1982(1) (127).
The Company contends that, having identified, created and informed Mr Torres of the 'manager, logistics' role before 3 July 2018, he is unable to prove that no suitable alternative employment existed at 3 July 2018. The notification by the Company to Mr Torres of the creation of the new role 'was sufficient to constitute redeployment'.[23]
[23] DWCS at par 46.
The Company observes that the Clothing Trades Award decision concerns redundancy entitlements under a clause that is markedly different to cl 29 of the Employment Contract insofar as the award contemplates redundancy upon the sale of a business.[24]
[24] DWCS at par 42.
The Company also contends that, when construing the Employment Contract, no weight may be attributed to the Company's internal policies on the need for a 'transfer letter' whenever an employee moves into a new position from a redundant position. Reference is made to cl 18(c) of the Employment Contract stating that such (policy) documents 'do not create any obligations upon the Company or any enforceable rights for Mr Torres'.[25] Reference is also made to cl 2 of the Employment Contract providing for the terms and conditions of the Employment Contract to continue in the event that organisational requirements require Mr Torres to be transferred to another position.[26]
[25] DWCS at par 43.
[26] DWCS at par 47 ff.
In Black Box Control Pty Ltd v Terravision Pty Ltd[27] the Court of Appeal identified and summarised a number of general principles relevant to the construction of a contract. Relevant to the construction of cl 29 of the Employment Contract, I set out the following principles (omitting citations):
[27] Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 [42].
(1)The process of construction is objective. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean.
(2)The construction of a contract involves determination of the meaning of the words of the contract by reference to its text, context and purpose.
(3)The commercial purpose or objects sought to be secured by the contract will often be apparent from a consideration of the provisions of the contract read as a whole. Extrinsic evidence may nevertheless assist in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding of the genesis of the transaction, its background, the context and the market in which the parties are operating.
(4)Extrinsic evidence may also assist in determining the proper construction where there is a constructional choice, although it is not necessary in this case to determine the question of whether matters external to a contract can be resorted to in order to identify the existence of the constructional choice.
(5)If an expression in a contract is unambiguous and susceptible of only one meaning, evidence of surrounding circumstances cannot be adduced to contradict its plain meaning.
(6)To the extent that a contract, document or statutory provision is referred to, expressly or impliedly, in an instrument, that contract, document or statutory provision can be considered in construing the instrument, without any need for ambiguity or uncertainty of meaning.
…
(9)An instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ.
(10)An instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation.
…
My view is that the application of these principles does not support Mr Torres' contention that he will have proven there is no suitable alternative employment upon proof that the Company has failed to do any one of: inform him of the 'manager, logistics' position; supply him with a transfer letter; and provide him with sufficient opportunity to accept or reject the 'manager, logistics' position.
Clause 29(a)(iii) identifies a circumstance ('there is no suitable alternative employment') that must exist at 3 July 2018. The negative condition is not satisfied by proof that Mr Torres had not commenced employment in a suitable alternative position as at 3 July 2018.
To draw a distinction between employment 'existing' and employment 'commencing', does not necessarily elucidate the meaning of 'suitable alternative employment existing' as at a particular date. However, the distinction draws attention to a matter of significance. The word 'employment' in the phrase 'suitable alternative employment' contemplates the existence of a state of affairs that, if accepted by Mr Torres, will result in an employment relationship between him and the Company.
An employment relationship does not commence until the making of a contract of employment.[28] The making of an employment contract does not commence until an offer of employment is accepted. Although an employment relationship does not commence unless and until a contract is made, the position to which the offer of employment relates may be said to exist upon the offer being made. The corollary is also true. Unless and until an offer of employment is made, an employer is not bound by any communications concerning the position.
[28] Broadlex Services Pty Ltd v United Workers' Union [2020] FCA 867 [61] ‑ [62]:The presence of the word 'employment' in cl 29(a)(iii) points to a construction of the clause that results in Mr Torres having to prove that, by 3 July 2018, the Company failed to make an offer of employment to him of 'suitable alternative employment'.
Clause 29(a)(iii) does not expressly impose any formal requirement that the making of an offer of employment by the Company be in writing. Such a requirement is not, as a matter of fact, to be implied in the Employment Contract. It is not necessary to give efficacy to the operation of cl 29.[29]
[29] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 347 (Mason J (Stephen and Wilson JJ agreeing)); 404 (Brennan J) approving the five criteria for implication of a putative implied term set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283 (Lord Simon) (Viscount Dilhorne and Lord Keith agreeing)): (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.
Clause 18 of the Employment Contract expressly provides that the policies of the Company do not create enforceable rights or obligations upon the parties. There is no reason not to give effect to the clause in accordance with its terms.[30] Any policy of the Company providing for a transfer letter to be given to an employee who is subject to the process contemplated by cl 29 is not a term of the Employment Contract.
[30] Yousif v Commonwealth Bank of Australia (2010) 193 IR 212, 235 ‑ 236 [93], [94], [95].
Clause 29(a)(iii) of the Employment Contract does not expressly require suitable alternative employment to exist for any minimum period of time before the date that a position is made redundant under cl 29(a)(ii). Nor is such a requirement, as a matter of fact, to be implied in the Employment Contract. The offer must be made on or before the date that the position is made redundant under cl 29(a)(ii) and it must be of suitable alternative employment. There may be room for debate about the precise meaning of 'suitable alternative employment'[31] and whether or not a particular position is 'suitable'.[32] The terms of any offer of alternative employment, including the time frame for acceptance, will be relevant to assessing the 'suitability' of the alternative. However, it is not necessary to give efficacy to the operation of cl 29 to require an offer of employment to be made at a particular time or to be open for acceptance for a particular period of time.
[31] See Gallagher v BHP Billiton Nickel West Pty Ltd [2016] FCCA 3367 [18] on whether the body of law on 'acceptable alternative employment' applies to a contractual entitlement contingent upon 'no suitable employment'.
[32] See Newton v Australian Postal Corp (No 2) [2019] FCA 2192 [265] ‑ [268] (Bromberg J).
The suggestion that cl 29(a)(iii) has the result that Mr Torres must prove that, on or before the 3 July 2018, the Company failed to make an offer to him of 'suitable alternative employment' is not inconsistent with the context and purpose of cl 29.
The context of cl 29(a)(iii) includes cl 29(c) providing the 'entitlement to severance pay does not apply where the Company obtains suitable alternative employment.' The Company cannot obtain suitable alternative employment without consciously taking the steps necessary to secure employment ie the making of an offer.[33]
[33] FBIS International Protective Services (Aust) Pty Ltd v Maritime Union ofAustralia [2015] FCAFC 90 [19] - [20].
Clause 29 has a dual purpose evident from the text of the clause.[34] Mr Torres is to be compensated if his position becomes redundant. The compensation increases with each year of completed service, reflecting the increased likelihood of delay before securing further employment. The Company is relieved of the obligation to pay compensation if suitable alternative employment exists within the Company, reflecting an incentive to investigate suitable alternative employment options for Mr Torres. Again, the making of an offer of employment from the Company to Mr Torres on or before the date that he becomes redundant is not inconsistent with these identified purposes.
[34] See also: Andrew Stewart, Stewart's Guide to Employment Law, 5th ed, The Federation Press, 2015, [16.25].
The Redundancy Benefit Issue: Findings of Fact
I have concluded that Mr Torres must prove that, by 3 July 2018, the Company failed to make an offer to him of 'suitable alternative employment' and that no formal requirements exist for the making of the offer. Mr Torres accepts that a 'manager, logistics' position would have been suitable alternative employment.[35] Mr Torres puts in issue whether such any offer was made for that position by 3 July 2018.
[35]Trial Transcript (TT), page 55 in response to a question on whether he 'would have been happy with the logistics role', Mr Torres responded, 'If I was offered [it], I would take it … but I was never offered'.
After the 5 June 2018 Meeting, Mr Torres had a number of meetings concerning possible alternative positions. He met: Mr Adams and Ms Banks on 12 June 2018 (12 June 2018 Adams Meeting); Mr Thomas on 12 June 2018 (12 June 2018 Thomas Meeting); and Mr Adams and Ms Banks on 13 June 2018 (13 June 2018 Adams Meeting). I have already noted that Mr Adams was Mr Torres' supervisor. Mr Thomas was a project director on South Flank and the supervisor of Mr Adams and Mr Botha.
I accept Mr Torres' account of the meetings on 12 and 13 June 2018. The Company did not lead evidence from Mr Thomas or Mr Adams to contradict Mr Torres.
In the 12 June 2018 Adams Meeting, the 12 June 2018 Thomas Meeting, and the 13 June 2018 Adams Meeting, Mr Torres was encouraged by Mr Thomas and Mr Adams to accept a 'project engineer' position on the South Flank project. The 'project engineer' position was at a level below Mr Torres' current 'manager, project area delivery' position. In each meeting, Mr Torres stated that he was not willing to accept the 'project engineer' position. Mr Thomas, apparently only recently aware of the Redundancy Letter, expressed to Mr Torres a desire to retract any offer of redundancy in the letter. Mr Thomas did not want to proceed with a process that would result in the termination of Mr Torres' employment. Mr Thomas expressed similar sentiments in his email communications with other staff.
It was disconcerting to Mr Torres that Mr Thomas and Mr Adams made repeated and insistent requests that he give consideration to accepting a position that was below the level of his current position. It was also disconcerting to him that Mr Thomas had, without identifying any alternative position at the level of his current position, raised the prospect of not proceeding with payment of the Redundancy Benefit.
These concerns prompted Mr Torres to attempt to have a conversation with Mr Botha. However, by the time of their telephone conversation on 12 June 2018 Mr Torres was unwell and Mr Botha suggested Mr Torres go to a doctor. Mr Torres reported to Mr Botha that he had attended a doctor and been prescribed medication.
Mr Torres gave evidence that at the time of the meetings on 12 ‑ 13 June 2018, 'my wellbeing was deteriorating quite quickly'.[36] I accept his evidence. The recent tragedy in his life continued to pre‑occupy Mr Torres. The uncertainty Mr Torres felt about his future employment with the Company was exacerbated by the apparent insensitivity of Mr Thomas and Mr Adams in insisting he consider a position at a lower level than his current position. Mr Torres commenced sick leave on 13 June 2018.
[36] TT page 18.
Commencing 15 June 2018, as a result of the absence of Mr Adams on annual leave, Mr Botha assumed the role of the immediate manager of Mr Torres.
There is a dispute about whether Mr Botha and Mr Torres had conversations on 14 June 2018 and 18 June 2018. Mr Torres gave evidence that he had no recollection of any meeting with Mr Botha on 14 June 2018 or any telephone conversation with Mr Botha on 18 June 2018. He gave evidence that Mr Botha had no conversations with him about a 'manager, logistics' position before 3 July 2018. For reasons given below at [102] ff, I accept the evidence of Mr Botha on conversations on 14 and 18 June 2018.[37]
[37] It is convenient to record at this point that I do not attach weight to the lift records of the building in which Mr Botha worked that were relied upon by the Company to support an inference that Mr Torres and Mr Botha met at a café on 14 June 2018. It is apparent from the evidence of Mr Botha that he had no independent recollection of leaving the building at that time or the reason for doing so. He had a recollection of two café meetings with Mr Torres and he relied upon the lift records to draw his own inference as to the date of the first meeting. In those circumstances, the lift records are also consistent with an inference that Mr Botha left the building on 14 June 2018 for an unknown reason that he cannot now recall.
Mr Botha met with Mr Torres at a Dome café near his workplace on 14 June 2018. Mr Botha also initiated a telephone call to Mr Torres on 18 June 2018. During these conversations he conveyed to Mr Torres that the Company proposed to create a 'manager, logistics' position for Mr Torres by 'splitting' a 'logistics and fabrication' manager position currently held by Mr Smithdale. Mr Botha told Mr Torres that the 'manager, logistics' position: would result in Mr Torres performing so much of Mr Smithdale's current role as involved 'logistics'; was to be at the same level as Mr Smithdale (and accordingly at the same level as the 'manager, project area delivery' position); and that Mr Torres would report to Mr Botha. Mr Botha's evidence was that Mr Torres responded positively to the prospect of the new position.
On 18 June 2018, Mr Torres had a conversation with Mr Furrer. Mr Furrer was employed in the role of 'vice‑president, projects' by the Company and was the supervisor of Mr Thomas. Mr Torres gave evidence that no discussion of a 'manager, logistics' position took place. I accept his evidence on this point. It is uncontradicted.
On 19 June 2018, Mr Torres sent a text to Mr Botha reporting that his medical advice was to the effect that he was 'on the right track' and requesting a meeting 'to talk about your plans'.[38] I infer the reference to 'your plans' is a reference to the matters they discussed on 14 and 18 June 2018.
[38] Exhibit 22, page 327.
On 25 June 2018, Mr Torres sent an email to Mr Botha, attaching a copy of a medical certificate, stating that he had 'been advised to stay home longer' and reiterating his desire to 'catchup' with Mr Botha.[39] Mr Botha noticed that the certificate was for a period until mid‑July 2018.
[39] Exhibit 33, page 120.
On 27 June 2018, Ms Banks requested human resources staff of the Company create a 'manager, logistics' position 'matched to the parameters of the role held by Mr Smithdale' and that the position was to be 'effective immediately'.[40] Ms Banks sent a copy of this request to Mr Botha.
[40] Exhibit 38, page 129.
The communications from Mr Torres on 19 and 25 June 2018 resulted in a meeting between Mr Torres and Mr Botha at the Dome café near Mr Botha's workplace on 28 June 2018 (28 June 2018 Botha Meeting).
There is a dispute about what was said during the Botha 28 June 2018 Meeting. Each account is summarised below. For reasons given below at par [102]ff, I accept the evidence of Mr Botha on what was said during this meeting:
•Mr Botha's says that two relevant points were made by him to Mr Torres during this meeting. First, formal documentation for his transfer to the 'logistics, manager' position was being prepared by human resources staff of the Company. Mr Botha promised to make enquiries as to the progress of preparation of the documentation. Secondly, upon completion of his sick leave, Mr Torres was to commence work in the new 'logistics, manager' position, reporting to Mr Botha.
•Mr Torres disputed the characterisation of the 28 June 2018 Botha Meeting as a 'meeting'. He gave evidence of an informal catch‑up in which nothing was said of any 'logistics, manager' role or any specific role.
On 28 June 2018, after the 28 June 2018 Botha Meeting, there was an exchange of emails between Mr Botha and Ms Banks to the effect that she had requested the documentation necessary for the 'logistics, manager' be generated with a view to Mr Botha presenting that documentation to Mr Torres.
I accept the evidence of Mr Botha that he left a voice message for Mr Torres on 29 June 2018 informing Mr Torres of progress, in accordance with Ms Banks email from the previous day, in creating the 'logistics manager' position in the Company records (29 June 2018 Botha Voicemail Message). Copies of text messages between Mr Botha and Mr Torres include a message from Mr Torres on 29 June 2018 acknowledging receipt of a 'message' from Mr Botha. I draw the inference from the timing of this text that the 'message' was the 29 June 2018 Botha Voicemail Message.
On 2 July 2018, human resources staff reported to Ms Banks that her request of 27 June 2019 to create a 'logistics, manager' position had been completed. This fact was not conveyed to Mr Torres or Mr Botha.
On 3 July 2018, Mr Torres sent a text message to Mr Botha in the morning noting that his 'termination letter' was due that day and seeking a response. Mr Botha responded with a text message stating, 'HR are working on creating your new position …, does the letter you have say your employment terminates today?'
On 4 July 2018, Mr Torres sent an email to Mr Botha stating, 'I am taking that the Company was unable to redeploy me by 3 July 2018 (as per the [Redundancy Letter]), hence termination took effect'. Mr Botha responded by email on the same day stating:
Your services with [the Company] has [sic] not been terminated and as previously communicated to you we found a suitable role for you within my South Flank Process team, for you to return to once you return from sick leave.
Each party maintained their respective positions, articulated in the email exchange of 4 July 2018, until 17 August 2018. On 17 August 2018, Mr Thomas, on behalf of the Company, wrote to Mr Torres and purported to terminate his employment because he had failed to attend the workplace to perform has duties in the 'logistics, manager' position when directed to do so (at the conclusion of his most recent period of sick leave).
In the period between 4 July 2018 and 17 August 2018, the Company's efforts to persuade Mr Torres to its position included, on 13 July 2018, sending to Mr Torres, by email attachment, a copy of a letter dated 1 July 2018 and signed by Mr Botha, on behalf of the Company. The letter states, 'I am pleased to confirm your appointment to the role of [logistics, manager], reporting to me effective 18 June 2018'. (Purported 1 July 2018 Letter). Contrary to appearances, Mr Botha did not in fact sign the Purported 1 July 2018 Letter on 1 July 2018. It was created by Ms Banks, bearing a date of 1 July 2018, and sent to Mr Botha on 4 or 5 July 2018. He subsequently signed it and sent it to Mr Torres on 13 July 2018. The practice of representing, by signature, that a letter was signed on a date other than the date on the letter is to be deplored. Given the chronology described in this paragraph, the Purported 1 July 2018 Letter is accorded no weight in my determination of whether the Company made an oral offer of the 'logistics, manager' position to Mr Torres on or before 3 July 2018.
There are six reasons why, with respect to the disputed conversations of 14 and 18 June 2018 and the 28 June 2018 Botha Meeting, I accept the evidence of Mr Botha and do not accept the evidence of Mr Torres.
First, Mr Botha's account of the 28 June 2018 Botha Meeting is consistent with his email communications with Ms Banks on 27 June 2018 and on 28 June 2018. On the day before the meeting (as described above), Mr Botha received an email from Ms Banks confirming that human resources staff of the Company were proceeding to create a new position, based on an existing position held by Mr Smithdale, reporting to Mr Botha and to be 'effective immediately'.[41] Within an hour of meeting Mr Torres, Mr Botha sent an email to Ms Banks asking her to contact Mr Torres and provide him with official documentation to move him to the 'logistics, manager' role reporting to Mr Botha. Later the same day, Ms Banks sent an email to Mr Botha informing him that she had requested that the position be created and upon this occurring a letter would issue for Mr Botha to present to Mr Torres.
[41] Exhibit 34, page 121.
Secondly, Mr Botha's account of the 28 June 2018 Botha Meeting as including his promise to follow up with 'HR' on the progress of documentation for the 'logistics, manager' position is consistent with the fact of Mr Botha initiating a telephone call to Mr Torres on 29 June 2018, described above as the 29 June 2018 Botha Voicemail Message.
Thirdly, Mr Botha's account of the circumstances surrounding the Company's decision to create the 'manager, logistics' position and his account of what he said in conversations with Mr Torres on 14 and 18 June 2018 is consistent with email communications to which he was a party before and after the date of those conversations with Mr Torres. Mr Botha gave evidence of a meeting with Mr Thomas early in the morning of 14 June 2018 during which Mr Thomas made the decision, against a background of previous discussions of each of them with Mr Smithfield, that Mr Smithfield's role be split into two with one position done by Mr Torres and the other by Mr Smithdale. Mr Botha gave plausible evidence of wanting to communicate with Mr Torres as soon as possible after Mr Thomas' decision of 14 June 2018 so that Mr Torres was aware of the 'logistics, manager' position before Mr Torres met with Mr Furrer.
The email communications that are consistent with the account of Mr Botha described in the previous paragraph include an email from Mr Thomas to Ms Banks (and a copy to Mr Botha) of 14 June 2018 requesting her assistance 'with the formalities required to inform Mr Torres of our request for him to transfer him into Mr Botha team'.[42]
[42] Exhibit 25, page 102.
Also relevant is an email from Mr Thomas to Mr Furrer (with copies to Mr Botha and Ms Banks) on 18 June 2018. The email notes that Mr Furrer is meeting Mr Torres later that day and proceeds to outline in some detail the decision made by Mr Thomas on 14 June 2018 to split Mr Smithdale's position and the reasons for that decision. The language is unequivocal and answers the submission by Mr Torres that the Company persisted (after 18 June 2018) with a proposal for Mr Torres to accept a project engineer position, 'It is our intent to offer Phil Smithdale the Fabrication Management and for Mr Torres to manage the Logistics'.[43]
[43] Exhibit 29, page 111.
The emails described in the previous two paragraphs are consistent with the evidence of Mr Botha that the Company made the decision on 14 June 2018 to create the 'logistics, manager' position and to offer it to Mr Torres. They are also consistent with Mr Botha's evidence that he believed it is was necessary to communicate the fact of this decision to Mr Torres before Mr Torres met with Mr Furrer. The meeting with Mr Furrer occurred on 18 June 2018, albeit there is no evidence of any discussion of the 'logistics, manager' position in that meeting.
The decision to create and offer the 'logistics manager' position to Mr Torres was the subject of advice from Ms Banks. In an email from her to Mr Thomas and Mr Botha on 14 June 2018, she proposes to investigate whether the new position was a 'like' position to 'manager, project area delivery'.[44] A subsequent email from Mr Botha to Ms Banks on the same day suggested that the documentation for another recent appointment (Mr Trigwell) be used as a template for Mr Torres' new position. His email reveals Mr Botha's confidence that the 'logistics, manager' position was a 'like' position to Mr Torres' existing position.
[44] Exhibit 25, pages 104 - 105.
Fourthly, Mr Botha was a careful witness. He distinguished between matters he recalled and those that he did not recall. For example, when giving evidence on the date that it was proposed Mr Torres commence in the 'logistics, manager' position, Mr Botha was careful to distinguish between his certainty as to his belief as to the proposed start date and his uncertainty as to whether the proposed start date was discussed with Mr Torres on 14 June 2018.
Mr Botha also had the capacity to accurately recall the detail of conversations with Mr Torres. When giving evidence of his conversation with Mr Torres on 14 June 2018 he spoke of the conversation including three matters: Mr Torres' health; the 'manager, logistics' position; and their mutual interest in Coral Bay as a holiday destination. Mr Torres confirmed in cross‑examination that he had a forthcoming trip to Coral Bay planned and that it is likely that they discussed their mutual interest in that location.
Fifthly, on his own account, as a result of a conversation with Mr Botha in April 2018, Mr Torres had an awareness that a role akin to the 'logistics, manager' position had been raised by him as worthy of consideration.
Sixthly, my view is that Mr Torres is not a reliable witness as to the content of critical conversations on 14, 18 and 28 June 2018.
The mobile telephone records of Mr Botha reveal that there was a 15 minute call on 18 June 2018 between the mobile phone of Mr Botha and the number usually called by Mr Botha when he wanted to speak to Mr Torres. Mr Torres did not recall having a telephone conversation with Mr Botha on that date, casting doubt on his ability to accurately recall the content of other conversations with Mr Botha in the second half of June 2018. I note that Mr Torres was also unable to recall the content of the 29 June 2018 Botha Voicemail Message.
When cross‑examined, Mr Torres was sometimes argumentative and, as a result, unresponsive to questions of relevance. For example, in evidence‑in‑chief, Mr Torres stated that during the 28 June 2018 Botha Meeting, Mr Botha had spoken about 'forming a team (for) a major project ahead of him'.[45] Understandably, there was an attempt to cross‑examine Mr Torres on whether, in the same conversation, Mr Botha made mention of a place for Mr Torres in Mr Botha's new team. Mr Torres did not admit what he had stated in evidence‑in‑chief and gave answers that were not responsive to the cross‑examination on that topic.
[45] TT page 19.
In his evidence in chief about what was discussed during the 28 June 2018 Botha Meeting, Mr Torres said:[46]
[Mr Botha] was forming a team, [he had a] major project ahead of him. We didn't talk much. My - my - my - my head was already – not – not already but I had big issues in my mind bigger than that.
[46] TT page 19.
I infer that Mr Torres was distracted. This is not surprising. I have noted that Mr Torres was on leave from 1 ‑ 11 May 2018 as a result of matters personal to him. Those matters continued to impact Mr Torres in June 2018. I have noted that Mr Torres was surprised and frustrated by the insensitivity of his managers during the 12 June 2018 Adams Meeting, the 12 June 2018 Thomas Meeting and the 13 June 2018 Thomas Meeting. Commencing on 13 June 2018, Mr Torres was, appropriately, receiving regular medical treatment while on sick leave. Neither his illness nor his treatment was debilitating. However, it is apparent from his communications to Mr Botha on 25 June 2018 that he had been advised not to return to work.
Mr Torres submits that a number of matters speak to the Company not offering the 'logistics, manager' position or any position to him before 3 July 2018.[47] There is no written communication from the Company to Mr Torres before 3 July 2018 that offers a 'logistics, manager' position or any position. Mr Thomas revealed a reluctance, in the middle of June 2018, to offer a Redundancy Benefit to Mr Torres. A 'logistics area project manager' position is first mentioned by that name in records of the Company dated 13 July 2018. Communication between the Company and Mr Torres was impeded by his sick leave commencing 13 June 2018 and by confusion as between Mr Botha and Ms Banks as to their respective roles in dealings with Mr Torres.
[47] PWOS at pars 33 - 39.
Each of the matters identified in the preceding paragraph may be admitted. However, none of those matters, individually or collectively, answer my finding of fact that Mr Torres did not to pay attention to those parts of three conversations on 14, 18 and 28 June 2018 in which Mr Botha made clear to him that a 'logistics, manger' position was available to him on his return from his sick leave that had commenced on 13 June 2018.
The Company attacked the creditability of Mr Torres on the basis that, before 3 July 2018, he had decided to cease employment with the Company and commence alternative employment with another entity. This attack on creditability was unpersuasive. It relied upon evidence of communications from Mr Torres that were consistent with him genuinely investigating alternative employment in the event that his employment ceased on 3 July 2018.
The Company also attacked the creditability of Mr Torres on the basis that, after 3 July 2018, his conduct was inconsistent with his employment having ended on 3 July 2018. I agree with the submission of Mr Torres that, taken as a whole, the conduct of Mr Torres after 3 July 2018 is not inconsistent with an honest, albeit erroneous, belief that his employment terminated on 3 July 2018.[48]
[48] PWOS at par 40 ff.
The Redundancy Benefit Issue: Conclusion
The reasonable observer of communications by Mr Botha, on behalf of the Company, to Mr Torres on 14 and 18 June 2018 and during the 28 June 2018 Botha Meeting as recorded above would reach two relevant conclusions.
First, as a result of the 28 June 2018 Botha Meeting, the Company orally communicated to Mr Torres an offer to enter into a contract of employment for a 'logistics, manager' position under the supervision of Mr Botha. Mr Torres' acceptance of this offer of employment was to occur not later than the date upon which Mr Torres was due to return from his sick leave that commenced on 13 June 2018. The essential terms of the offer were known to Mr Torres as a result of his discussions with Mr Botha in June 2018. The duties had been discussed. The level (including remuneration), to the knowledge of Mr Torres, was to be the same as his current position of 'manager, project area delivery'.
Secondly, if the oral offer was accepted, the parties intended to enter a written contract on terms not inconsistent with those offered by Mr Botha. The written contract was being prepared by human resources staff of the Company under the direction of Ms Banks. Mr Torres submitted that the Company decision to create the 'logistics, manager' position was not given effect because it relied upon 'an offshore human resources team that was experiencing delays'.[49] Whatever the state of the Company records regarding any 'logistics, manager' position, Mr Botha had actual and apparent authority to make the offer of employment that he made to Mr Torres on 28 June 2019. His offer was not expressed to be subject to any further step by the Company.
[49] PWOS at par 35.
It follows that, as a result of my finding that Mr Botha made an offer of a 'logistics, manager' position to Mr Torres on 28 June 2018, that Mr Torres has failed to prove that, by 3 July 2018, the Company failed to make an offer to him of 'suitable alternative employment'.
Other Issues
As a result of my findings on the Redundancy Letter Issue and the Redundancy Benefit Issue, it has not been necessary to address the arguments of the parties concerning estoppel[50] or the quantum of Mr Torres' damages. For completeness, I briefly address each of these issues below.
[50] PWOS at par 19 ff.
Mr Torres argues that the Redundancy Letter evidences a promise by the Company that if Mr Torres is unable to be redeployed by 3 July 2018 his employment will end and that Mr Torres has acted upon the promise to his detriment by 'treating his employment as being at an end on 4 July 2018'.[51] The Amended Statement of Claim relies upon an estoppel in relation to so much of Mr Torres' claim for certain bonus payments referred to in the Redundancy Letter. The Company correctly observes that, accordingly, Mr Torres' estoppel argument must be confined to his claim concerning bonus payments.[52] In any event, The Redundancy Letter, properly construed, is a promise by the Company that is consistent with the rights and obligations of each party found in cl 29 of the Employment Contract. Further, Mr Torres has not suffered a detriment of a type recognised by law in circumstances where Mr Botha's communication to Mr Torres on 4 July 2018 made plain to Mr Torres that the 'logistics, manger' position was available to him when he completed his sick leave.
[51] PWOS at par 19 ff.
[52] DWOS at par 54 ff.
Mr Torres pleaded claim is for loss and damage in the sum of $224,386.90 plus interest and costs. This claim is comprised of amounts for: payment in lieu of notice, redundancy pay (base and years of service); 'shareplus' scheme; 2018 bonus; 2019 bonus. In oral closing submissions, counsel for each party indicated that, subject to one matter, they had agreed that, if successful on his claim for the Redundancy Benefit, the quantum of Mr Torres loss and damage was the amount pleaded. The qualification concerned whether, if Mr Torres was successful, the Company was entitled to set off against the pleaded loss and damage, an amount paid to Mr Torres after 3 July 2018 for sick leave. The amount is $10,600. I consider that, if Mr Torres had been successful, payments of sick leave on account of employment after 3 July 2018 are payments on account of a mistaken belief of the Company as to a matter of law, namely, that employment had not terminated. The Company would be entitled to set off those payments, in accordance with the principles concerning restitution on the basis of a mistaken payment, against Mr Torres' entitlement to the Redundancy Benefit.[53]
[53] Equuscorp Pty Ltd v Haxton [2012] HCA 7, (2012) 246 CLR 498 [30]; TRA Global Pty Ltd v Kebakoska [2011] VSC 480.
Conclusion
I have concluded that the Redundancy Letter did not vary cl 29 of the Employment Contract. By that letter, the Company informed Mr Torres that it proposed to make his position redundant on 3 July 2018. Mr Torres' entitlement to the Redundancy Benefit under cl 29 required him to prove that no suitable alternative employment (for him) existed within the Company as at 3 July 2018. In fact, Mr Torres was made an offer of suitable alternative employment on 28 June 2018 when Mr Botha, on behalf of the Company, made an oral offer of a 'logistics, manager' position to Mr Torres. Mr Torres has failed to discharge the onus on him to prove a breach of the Employment Contract.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
SC
Associate to Judge Flynn
29 MARCH 2021
[61] The employment relationship is 'inherently' a contractual one. Consequently, there can be no employment relationship without a contract of employment. ….
[62] Nevertheless, there is a difference between the employment relationship and the contract of employment. A contract of employment can come into existence before the employment relationship is formed and an employer who withdraws an offer of employment after it has been accepted or an employee who resigns before the starting date can be liable for breach of contract: …
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