Tran v Kodari Securities Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Tran v Kodari Securities Pty Ltd [2019] FCA 968

File number: NSD 310 of 2017
Judge: BROMWICH J
Date of judgment: 21 June 2019
Catchwords: INDUSTRIAL LAW – whether employee sought to obtain legal advice in respect of a new contract of employment – whether respondents took adverse action against employee because he proposed to exercise a workplace right – whether respondents coerced employee not to exercise that workplace right – application of principles to civil penalties – consideration of reasonable notice period – held: application granted
Legislation:

Evidence Act 1995 (Cth) ss 60, 136, 140, 140(1), 140(2)

Fair Work Act 2009 (Cth) ss 340, 340(1)(a)(iii), 341, 341(1)(c)(ii), 343, 343(1)(a), 545(2)(b), 547
Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68

Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500

Briginshaw v Briginshaw (1938) 60 CLR 336 at 362

Browne v Dunn (1893) 6 R 67

Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482

Esso Australia Pty Ltd v Australian Workers’ Union [2016] FCAFC 72; 245 FCR 39

Guthrie v News Limited [2010] VSC 196

Hamilton v Whitehead [1988] HCA 65; 166 CLR 121

Hocking v Bell (1945) 71 CLR 430

Murrihy v Betezy.com.au Pty Ltd [2014] FCA 908; 238 IR 307

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449

Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 365 ALR 402

Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170; 171 FCR 357

Rejfek v McElroy (1965) 112 CLR 517

Weissensteiner v The Queen (1993) 178 CLR 217

West v Mead [2003] NSWSC 161; 13 BPR 24,431

Date of hearing: 18-20 March 2019
Registry: New South Wales
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 82
Counsel for the Applicant: Mr D Mahendra
Solicitor for the Applicant: Danny King Legal
Counsel for the Respondents: Mr T Brennan
Solicitor for the Respondents: Kennedys (Australasia) Pty Ltd

ORDERS

NSD 310 of 2017
BETWEEN:

STEVEN TRAN

Applicant
AND:

KODARI SECURITIES PTY LTD (ACN 147 963 755)

First Respondent

YASHAR (MICHAEL) KODARI

Second Respondent

GEORGE KODARI

Third Respondent

JUDGE:

BROMWICH J

DATE OF ORDER:

21 JUNE 2019

THE COURT ORDERS THAT:

1.The parties provide, by email to the chambers of Justice Bromwich, agreed or competing draft orders to give effect to these reasons within 14 days.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

BROMWICH J:

  1. In the period from July 2015 to November 2016, the applicant, Mr Steven Tran, was employed by the first respondent, Kodari Securities Pty Ltd, a family owned investment services firm, with premises in Chifley Tower, Sydney.  The second respondent, Mr Yashar (Michael) Kodari (Mr…

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Details
Case
[2019] FCA 968
Decision Date

CaseChat Overview and Summary

Tran v Kodari Securities Pty Ltd involved a dispute between Mr Tran, an employee, and Kodari Securities Pty Ltd, his employer. Mr Tran sought to obtain legal advice before signing a new contract of employment, a right protected under the Fair Work Act. The employer allegedly took adverse action against Mr Tran for seeking legal advice, contravening the Act. The case was heard by the Fair Work Commission and ultimately reached the Federal Court.

The primary legal issue in this case was whether the employer had taken adverse action against Mr Tran because he proposed to exercise his workplace right to seek legal advice. The court had to determine whether the employer's conduct amounted to coercion, as defined in section 361 of the Fair Work Act. The court also had to consider whether the employer's conduct contravened section 343(1)(a) of the Fair Work Act, which prohibits adverse action for exercising workplace rights.

The Federal Court found that Mr Tran had a workplace right to seek legal advice before signing the new contract, a right protected under section 341(1)(c)(ii) of the Fair Work Act. The court concluded that the employer's conduct amounted to coercion, as the employer threatened to terminate Mr Tran's employment if he did not sign the contract immediately. The court held that the employer contravened section 343(1)(a) of the Fair Work Act by taking adverse action against Mr Tran for exercising his workplace right.

The court granted the application and ordered the parties to provide agreed or competing draft orders to give effect to the court's reasons within 14 days. The entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The parties provide, by email to the chambers of Justice Bromwich, agreed or competing draft orders to give effect to these reasons within 14 days.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

The parties provided both written and oral submissions on what I should make of the evidence and the conclusions that I should draw. This is not a case in which laborious reproduction of those arguments is of assistance. It suffices to say that counsel for both sides, aided by their instructing solicitors, assisted the Court by the way in which they conducted their respective cases and in the submissions that they made. Findings arising from the assessment of the conflicting evidence I am satisfied as to the following on the balance of probabilities, with the evidence being of sufficient quality as to the underlying seriousness of the facts in issue that the following further factual and legal conclusions should be made on the evidence. At the meeting, Mr Tran did say that he wanted to seek legal advice before signing the proposed new contract. He said that both to George Kodari and to Mr Kodari. Seeking such legal advice was a workplace right under s 341(1)(c)(ii) of the Fair Work Act, following the decision of Jessup J in Murrihy at [142]-[143]. The conduct of George Kodari, on his own part, and on behalf of Kodari Securities on whose behalf he was acting at the direction of its sole shareholder and sole director, Mr Kodari, in saying to Mr Tran “If you don’t sign it now, you will not be working here” – that is to say, that if he did not sign the new contract immediately – not long after Mr Tran had said he needed to take the new contract to a lawyer, was an unconscionable threat to take action directed towards Mr Tran wanting to exercise his workplace right to seek legal advice about the new contract affecting his existing contract of employment. That is, there was to be no waiting at all for Mr Tran to obtain legal advice in relation to a contract he had only been asked to sign a relatively short time earlier in the meeting. This was within the context of being summoned to a meeting at about 5.00 pm, without notice, to sign a contract that, if executed, would have contained a falsehood if executed at the meeting by virtue of cl 15.6, which stated “The Employee acknowledges that: (a) the Employee has received independent legal advice about the terms and effect of this Agreement …”. The threat by George Kodari was made with intent to coerce Mr Tran in the sense of intending to negate his choice to exercise that workplace right and to instead sign the new contract: Esso Australia Pty Ltd v Australian Workers’ Union [2016] FCAFC 72; 245 FCR 39 at [174]. The presumption as to that intent under s 361 was engaged, and that presumption was not rebutted by any evidence of the nature or quality adverted to by the High Court in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 (Bendigo TAFE v Barclay) at [41]-[45]. The bare denial in the affidavits of Mr Kodari and George Kodari did not suffice to rebut the presumption in s 361. That bare denial did not require the ritualistic and barren application of the rule in Browne v Dunn (1893) 6 R 67 by Mr Tran to a circumstance in which this was a live issue for which there was an obligation on the respondents (relevantly as it turns out, George Kodari and Kodari Securities) to negate coercion once material facts were pleaded and proven. As Campbell J in substance pointed out in West v Mead [2003] NSWSC 161; 13 BPR 24,431 at [94]-[99], the rule is one of pragmatism and fairness, which did not require those perfunctory paragraphs to be formally challenged. I therefore conclude that s 343(1)(a) of the Fair Work Act was contravened by both George Kodari and through him by Kodari Securities.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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