Van Efferen v CMA Corporation Ltd

Link copied
Case Copied 47 min read

FEDERAL COURT OF AUSTRALIA

Van Efferen v CMA Corporation Limited [2009] FCA 597

INDUSTRIAL LAW – Australian workplace agreement – principles to be applied in construing a provision of an Australian workplace agreement – whether grievance procedure in Australian workplace agreement applied – whether grievance procedure was a mandatory obligation – whether employer breached grievance procedure in Australian workplace agreement – whether term of mutual trust and confidence implied into contract of employment – whether term of good faith implied into contract of employment  

DAMAGES – basis for calculating damages for breach of Australian workplace agreement

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 referred to
Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 referred to

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 referred to
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 referred to
Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31 referred to

Kucks v CSR Limited (1996) 66 IR 182 applied

Martin v Tasmania Development and Resources (1999) 89 IR 98 followed
McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375 referred to

Pan Foods Company Importers and Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd (2000) 170 ALR 579 followed

Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 at 406 referred to
Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2008) 176 IR 82 referred to
Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2007) 69 NSWLR 198 referred to
Tasmania Development & Resources v Martin (2000) 97 IR 66 followed

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 applied
Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 cited

Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114 referred to
Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687 referred to
Watts v Rake (1960) 108 CLR 158 cited

Workplace Relations Act 1996 (Cth) ss 351 and 721

PETER VAN EFFEREN v CMA CORPORATION LIMITED

VID 525 of 2008

TRACEY J
4 JUNE 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 525 of 2008
BETWEEN:

PETER VAN EFFEREN
Applicant
AND:

CMA CORPORATION LIMITED
Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

4 JUNE 2009

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.On or before 12 June 2009, each party file and serve draft orders giving effect to these reasons for judgment.

2.The parties have liberty to apply.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


The text of entered orders can be located using eSearch on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 525 of 2008
BETWEEN:

PETER VAN EFFEREN
Applicant
AND:

CMA CORPORATION LIMITED
Respondent

JUDGE:

TRACEY J

DATE:

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Van Efferen v CMA Corporation Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2009] FCA 597
Decision Date

CaseChat Overview and Summary

Mr Van Efferen brought an action against CMA Corporation Ltd in the Federal Magistrates Court alleging that CMA breached an Australian workplace agreement (AWA) and implied terms of a common law contract of employment by terminating his employment. CMA denied any breach occurred. The dispute centred on Mr Van Efferen's removal from a project at Port Hedland and his subsequent termination of employment. The court had to determine whether CMA breached the AWA or implied contractual terms by removing Mr Van Efferen from the project and terminating his employment. The court also had to assess the credibility of the evidence presented by both parties regarding the circumstances of Mr Van Efferen's removal and termination.

The court found that CMA had breached the AWA and implied contractual terms by not acting in good faith when it removed Mr Van Efferen from the project and terminated his employment. The court held that the AWA contained specific procedures that CMA was required to follow when dismissing an employee. CMA failed to follow these procedures, and therefore breached the AWA. The court also found that CMA breached the implied duty of good faith in its contractual relationship with Mr Van Efferen. The court concluded that had CMA acted in good faith, it would not have breached the AWA or implied contractual terms.

The court entered judgment in favour of Mr Van Efferen. The court directed the parties to file and serve minutes of orders giving effect to the reasons for judgment. The court also noted that no detailed submissions were made regarding the precise terms of the orders to be made in Mr Van Efferen's favour, including the taxation implications and entitlement to interest. The court granted the parties liberty to apply for further orders.

Orders

Orders of the court

1. On or before 12 June 2009, each party file and serve draft orders giving effect to these reasons for judgment.

2. The parties have liberty to apply.

Note:

Background

Background to the litigation

Mr Van Efferen was employed in various capacities by the respondent (“CMA”) and its predecessors between 2002 and 2006. In October 2006 his employment was terminated by CMA. His application to this Court alleges that CMA, in effecting his termination, breached a term of an Australian workplace agreement (“the AWA”) and implied terms of a common law contract of employment. CMA denies that any such breaches occurred.THE BACKGROUND FACTS Most of the relevant facts are not in dispute. In January 2006 CMA entered into a contract with John Holland under which CMA was to demolish a wharf at Port Hedland in Western Australia. Demolition was to occur at the same time that another wharf was being built. The project was known as the “Dolphin Project”. CMA invited Mr Van Efferen to work on the project. He accepted. He moved to Port Hedland in June 2006 and was initially employed as a Barge Master. Shortly after he commenced work he entered into the AWA with CMA. It will be necessary to return to the details of some of the terms of this AWA. Mr Van Efferen also received and signed a letter of offer dated 27 July 2006. The letter of offer was to be read in conjunction with the AWA. It dealt with matters such as the protection of CMA’s confidential information and intellectual property and the way in which Mr Van Efferen was to perform his duties. In signing the letter Mr Van Efferen acknowledged that he understood and agreed to be bound by these terms. Mr Van Efferen had arranged for one of CMA’s barges to be fitted with spud poles before it left CMA’s Geelong base for Port Hedland. Spud poles were designed to stabilise the barge while demolition activities were in progress. In early August 2006 Mr Alphonse Michael, a CMA Manager, arrived in Port Hedland. He told Mr Van Efferen that the barge was to be refitted. The spud poles were to be removed and the barge stabilised by a set of anchors. Mr Van Efferen objected to this change and made his opposition plain to Mr Michael. When Mr Michael insisted that the changes be made Mr Van Efferen complied with the direction. After the refit had been completed Mr Van Efferen applied to take accrued annual leave until 9 October 2006. He did so because he feared that, if he remained, further disagreement with Mr Michael would occur. His leave application was approved and he left Port Hedland on 21 August 2006. He did not, as counsel for CMA suggested at trial, “walk off” the site. While Mr Van Efferen was away Mr Jim Doyle a Project Director employed by John Holland complained to Mr Shaun Clarke, CMA’s General Manager of its Contracting Division, about the performance of certain CMA staff members at Port Hedland. In late August John Holland advised CMA that it wanted Mr Michael removed from the work site. Early in September John Holland requested that Mr Lloyd Baxter, CMA’s Marine Operations Supervisor on the Project, also leave the site. Under the contract between CMA and John Holland, John Holland had the right to require that CMA remove staff whom John Holland considered to be unsatisfactory. The contract provided for such a direction to be given in writing. CMA, however, was prepared to act on an oral complaint by John Holland in order to maintain cordial business relations with John Holland.

Evidence

Evidence Before The Court

Towards the end of October 2006 Mr Michael telephoned Mr Van Efferen at Geelong and told him that he (Mr Michael) was coming to Geelong and wanted to meet him. They met on 27 October 2006. Mr Michael advised Mr Van Efferen that it was necessary for CMA to cut costs and then said that “you’re the first and probably not the last”. Mr Van Efferen understood this to mean that he had been dismissed. This was confirmed by a letter dated 31 October 2006 from Mr Bruce Nix, the Employment Relations Manager of CMA to Mr Van Efferen in which he advised that Mr Van Efferen’s employment had been terminated because of “lack of available work your specialised field of work” (sic).THE CONTROVERSIAL EVIDENCE The principal areas of dispute between the parties relate to the circumstances in which Mr Van Efferen was removed from the Dolphin Project and was subsequently declared to be redundant. CMA’s case was that Mr Van Efferen was removed at the insistence of John Holland. Had he not been removed John Holland would have terminated its contract with CMA or not provided CMA with further work. Once Mr Van Efferen had been removed from the Dolphin Project and had returned to Geelong there was no other work to which he could be assigned. At the time at which he was removed from Project Dolphin CMA had pending two other tenders for marine demolition work. By mid October CMA was aware that it had not been successful in these tenders and it could not afford to employ Mr Van Efferen on purely maintenance work. His employment was terminated because he had become redundant. Mr Van Efferen on the other hand, maintained that there was no justification for his removal from the Dolphin Project. He contended that his disputes with Mr Pick related to matters of health and safety and that Mr Pick resented his interventions. Mr Pick had persuaded Mr Clarke to remove Mr Van Efferen from the Dolphin Project. There had been no complaint by John Holland about Mr Van Efferen’s work performance or any demand by John Holland that he be removed from the project. CMA’s principal witness was Mr Clarke. Mr Clarke deposed, in his first affidavit, that “around October 2006 formal verbal complaints were made to [him] about Mr Van Efferen’s conduct by [Mr Doyle], and informally by the Project Manager, Mr Simon Pick.” Mr Clarke said that the complaints “were generally that Mr Van Efferen was argumentative, divisive and unco-operative and as a result the team’s productivity and project performance was suffering.” Mr Pick asked Mr Clarke to direct that Mr Van Efferen be removed from the project because Mr Van Efferen “was uncooperative and the client had requested his removal.” Mr Clarke said that he considered that it was necessary to remove Mr Van Efferen “in order to protect the business relationship with the client and to ensure the effective operation of the Project.” Mr Clarke telephoned Mr Van Efferen while Mr Van Efferen was still at Port Hedland and told him that Mr Pick and the client couldn’t work with him “and therefore we can’t keep you at Port Hedland.” Mr Van Efferen responded by raising examples of disagreements on marine issues with John Holland. Mr Clarke said that whether Mr Van Efferen was right or wrong was not to the point. John Holland did not want him on the site. Following that discussion Mr Clarke spoke to Mr Pick. He asked Mr Pick whether he (Mr Pick) was sure that he had not overreacted by asking that Mr Van Efferen be removed from the project. After speaking to Mr Pick Mr Clarke said that he considered that the decision to remove Mr Van Efferen was correct.

Decision

Reasons for decision

TRACEY J
In any event, in the circumstances in the present case, it is, at best for Mr Van Efferen, doubtful that the two implied terms add anything to CMA’s contractual obligations having regard to the protective procedures incorporated expressly in clause 2.10 of the AWA. CMA was obliged to act in good faith in applying clause 2.10: cf Tasmania Development and Resources v Martin (2000) 97 IR 66 at 72. Had it done so no breach would have occurred.CONCLUSION Judgment will be entered for Mr Van Efferen. No detailed submissions were advanced relating to the precise terms of the orders which should be made were Mr Van Efferen to be successful. In particular no attention was directed as to the taxation implications of any order which the Court might be minded to make in Mr Van Efferen’s favour: see Martin v Tasmania Development and Resources (1999) 89 IR 98 at 121-122. It is also necessary to consider whether any specific provision should be made in the court’s order to deal with Mr Van Efferen’s entitlement to interest. I will, therefore, direct that the parties file and serve minutes of orders which will give effect to these reasons.

Ratio Decidendi

Legal Principle Established

Established by: TRACEY J

Full text does not contain this section.