Vergara v Bunnings Group Ltd
[2022] FedCFamC2G 818
Federal Circuit and Family Court of Australia
(DIVISION 2)
Vergara v Bunnings Group Ltd [2022] FedCFamC2G 818
File number(s): MLG 403 of 2022 Judgment of: DEPUTY CHIEF JUDGE MERCURI Date of judgment: 10 October 2022 Catchwords: INDUSTRIAL LAW – FAIR WORK – interlocutory application by respondent for summary dismissal – consideration of prospects of success of applicant’s claims – consideration of whether section 351 Fair Work Act 2009 (Cth) applies to adverse action taken on the grounds of ‘social origin’ – consideration of whether having an adverse civil finding constitutes a form of ‘social origin’ –consideration of whether there was a term of the employment contract, implied in law or in fact, imposing a fairness requirement on the respondent’s termination rights – summary dismissal application granted in part – further orders made for future progress of matter. Legislation: Australian Human Rights Commission Act 1986 (Cth), s 3
Civil Procedure Act 2010 (Vic), s 63
Equal Opportunity Act 2010 (Vic), s 6
Fair Work Act 2009 (Cth), ss 336, 351, 381, 385, 386, 387, 390, 400, pts 3-2, 4-2
Federal Circuit and Family Court of Australia Act 2021 (Cth), s 143
Federal Court of Australia Act1976 (Cth), s 31A Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, r 13.13
Discrimination (Employment and Occupation) Convention, 1958, art 1
Cases cited: Commonwealth Bank of Australia v Barker (2014) 253 CLR 169
Commonwealth of Australia v Human Rights & Equal Opportunity Commission (2002) 108 FCR 378
Johnson v Unisys Ltd [2003] 1 AC 518
Lysaght Building Solutions Pty Ltd (t/a Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158
Merlin Gerin (Australia) Pty Ltd v Wojcik [1994] VSC 209
Spencer v Commonwealth of Australia (2010) 241 CLR 118
Starlink International Group Pty Ltd v Coles Supermarkets Australia Pty Ltd & Anor [2011] NSWSC 1154
Division: Division 2 General Federal Law Number of paragraphs: 91 Date of last submission/s: 9 May 2022 Date of hearing: 9 May 2022 Place: Melbourne Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Ms R Preston ORDERS
MLG 403 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CLAUDIO VERGARA
ApplicantAND: BUNNINGS GROUP LTD
Respondent
order made by:
deputy chief JUDGE MERCURI
DATE OF ORDER:
10 October 2022
THE COURT ORDERS THAT:
1.Pursuant to section 143(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), and rule 13.13(a) of the Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021, the following parts of the proceeding (as disclosed in the Originating Application dated 18 January 2022) be summarily dismissed for having no reasonable prospects of success:
(a)paragraph 1 (under ‘Details of claim under the Fair Work Act’), as it refers to an alleged contravention of section 351(1) of the Fair Work Act 2009 (Cth) for termination because of the Applicant’s ‘social origin’; and
(b)paragraph 1 (under ‘Other relief’), as it refers to alleged contraventions of ‘Part 3.2 Divisions 2 and Division 3 sections 385, 386 and 387 of the Fair Work Act 2009’.
2.Within 21 days, the applicant file and serve on the respondent points of claim particularising the remaining parts of the proceeding (‘Points of Claim’).
3.Within 21 days of receipt of the applicant’s Points of Claim under order 2, the respondent file and serve points of defence (‘Points of Defence’).
4.Pursuant to section 169 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the remaining parts of the proceeding be referred for mediation before a mediator nominated by the Registrar, not before 1 December 2022.
5.In the event that the proceeding does not settle at mediation, the Registrar conduct a case management conference immediately after the mediation to make directions for the further conduct of the proceeding, including listing the proceeding for final hearing.
6.To assist at the case management conference, the parties must, at least seven days before the mediation, confer with each other and advise the court of the estimated length of the final hearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
DEPUTY CHIEF JUDGE MERCURI:
Introduction
Before the court is an interlocutory application by the respondent seeking the summary dismissal of certain aspects of the applicant’s initiating application.
Background
By way of background, on 3 November 2021, the respondent terminated the applicant’s employment.[1] The reason given for the applicant’s termination was that the respondent became aware of certain findings made against the applicant in civil litigation conducted in the Federal Court relating to his conduct during his employment in 2009.[2] It is common ground that as a result of those proceedings, findings were made that, during his employment in 2009, the applicant had engaged in sexual harassment in contravention of the Sex Discrimination Act 1984 (Cth).
[1] Respondent’s Outline of Submissions filed on 11 April 2022 at paragraph [1].
[2] Affidavit of Mr Brenton Allen affirmed on 16 February 2022 and filed on 17 February 2022 at Annexure BA-1, page 19.
The respondent has filed, and relies upon, an affidavit of Mr Brenton Allen affirmed 16 February 2022 (‘Allen affidavit’). Annexed to that affidavit are two employment contracts entered into by the applicant and respondent. The first contract is not relevant for present purposes.[3] The applicant’s initial employment was varied on 18 October 2021 when he commenced in the full time position of Pricing Coordinator (‘October 2021 contract’). A copy of the October 2021 contract is at pages 9 to 18 of Annexure BA-1 to the Allen affidavit.
[3] See Affidavit of Mr Brenton Allen affirmed on 16 February 2022 and filed on 17 February 2022 at Annexure BA-1, pages 1 to 8.
At page 19 of Annexure BA-1 to the Allen affidavit is a copy of the letter of termination dated 3 November 2021 (‘Termination letter’). In that letter, Bunnings made reference to the fact that it had recently learned that the applicant had been named as a respondent to proceedings in the Federal Court in which substantiated findings of sexual harassment were made against him. The Termination letter also stated that the conduct described in the judgment was ‘not aligned with Bunnings values’.
Procedural history
On 25 January 2022, the applicant filed an Originating Application in the Federal Court alleging that the respondent had contravened the general protection provisions under the Fair Work Act 2009 (Cth) (‘FW Act’). The application also alleged that the respondent had breached Part 3.2 of the FW Act and alleges various breaches of the applicant’s employment contract.
Specifically, the applicant makes the following claims:
(a)an alleged breach of section 351 of the FW Act, in that the respondent terminated the applicant’s employment for a proscribed reason, namely the applicant’s ‘social origin’ (Social Origin Claim);
(b)an alleged breach of Division 2 and Division 3 of Part 3.2 of the FW Act, in that the respondent unfairly terminated the applicant’s employment (Unfair Dismissal Claim);
(c)a breach of the employee’s employment contract in that the respondent terminated the applicant’s employment contract by terminating his employment without any merit or reasonable basis (Breach of Contract Claim); and
(d)that the respondent failed to provide appropriate notice in breach of the applicant’s employment contract (Notice Claim).
The applicant seeks punitive and exemplary damages.
By its interlocutory application, filed on 17 February 2022, the respondent seeks summary dismissal of the Social Origin Claim, the Unfair Dismissal Claim and the Breach of Contract Claim. The respondent further seeks that the balance of the applicant’s claims, namely the Notice Claim, be referred to mediation.
The applicant opposes the interlocutory application and submits that his substantive application ought to be allowed to proceed to a final hearing.
Applicant’s claims
Social Origin Claim
As stated, it is common ground that in December 2013, the applicant was found to have engaged in sexual harassment against a work colleague by a judge of the Federal Court. In that judgment, certain adverse findings were made about conduct that the applicant engaged in.
It is also common ground that the applicant’s employment with the respondent was terminated upon the respondent becoming aware of the findings made about the applicant in the sexual harassment proceedings.
The applicant asserts that this occurred without any discussion or investigation into his conduct by the respondent, and that in terminating his employment in this manner, the respondent has discriminated against him on the grounds of his ‘social origin’ in breach of section 351(1) of the FW Act.[4]
[4] Originating Application filed on 25 January 2022.
Unfair Dismissal Claim
The applicant also claims that by terminating his employment in the manner in which it did, the respondent has breached the unfair dismissal provisions of the FW Act. In particular, the applicant asserts that the respondent has breached sections 385, 386 and 387 of the FW Act.
At the hearing before me, notwithstanding his written submissions to the contrary, the applicant stated that he did wish to press this aspect of his claim.
Breach of Contract Claim
The applicant asserts that in terminating his employment without a valid reason and without affording him procedural fairness, in circumstances where he did not breach any term of his employment agreement or any policy, the respondent acted in breach of his employment contract.
In his written submissions, the applicant went further and said that Bunnings was ‘under an obligation to accord natural justice to the Applicant whether derived from contract or from the application of general principles of law’.[5] The applicant also said that his employment contract contained an implied term that in exercising a discretionary power under the employment contract, the respondent would act reasonably, only have regard to relevant considerations, act in a procedurally fair manner and a manner free from actual or apprehended bias.[6]
[5] Applicant’s Outline of Submissions filed on 26 April 2022 at paragraph [15].
[6] Applicant’s Outline of Submissions filed on 26 April 2022 at paragraph [15].
Summary dismissal principles
The court has the power to summarily dismiss a claim before it pursuant to section 143 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘FCFCOA Act’) and rule 13.13 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (‘General Federal Law Rules’). Section 143 of the FCFCOA Act relevantly provides that summary judgment may be given in relation to the whole or part of any proceedings where ‘the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding’.[7]
[7] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 143(1)(b).
Section 143(3) of the FCFCOA Act specifically provides that:
(3)For the purposes of this section, a … proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
Rule 13.13 of the General Federal Law Rules further provides that:
The Court may order that a proceeding be … dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) …
(c) …
Because the court’s power to summarily dismiss is exercised at a preliminary stage in proceedings, before the court has the benefit of hearing full argument and evidence, it is a power which ought to be exercised with caution. In Spencer v Commonwealth of Australia (2010) 241 CLR 118 (‘Spencer’), when considering the Federal Court’s power for summary dismissal under section 31A of the Federal Court of Australia Act1976 (Cth) (‘FCA Act’), in similar terms to section 143(3) of the FCFCOA Act, French CJ and Gummow J noted:
24.The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. …
25.Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a ‘fanciful’ prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. …[8]
[8] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [24]-[25].
French CJ and Gummow J went on to say that section 31A of the FCA Act:
22.… will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is an unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. … The application of s 31A is not, in terms, limited to those categories.[9]
[9] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [22].
In addition, in Spencer, Hayne, Crennan, Keifel and Bell JJ noted that the wording in section 31A of the FCA Act makes it clear that the provision:
51.… departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered. Those earlier provisions were understood as requiring formation of a certain and concluded determination that a proceeding would necessarily fail.
…
58.How then should the expression ‘no reasonable prospect’ be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content.
…
60.Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is ‘no reasonable prospect’ of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. … At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.[10]
[10] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [51], [58] and [60].
In relation to the question of when and how the court should exercise its power of summary dismissal, the applicant refers to and relies upon the decision of Lysaght Building Solutions Pty Ltd (t/a Highline Commercial Construction) v Blanalko Pty Ltd[11](‘Lysaght’) in which the Victorian Supreme Court set out the appropriate considerations which need to be applied to an application for summary dismissal in that court.
[11] [2013] VSCA 158.
At paragraph [15] of the Lysaght decision, the court noted that section 63 of the Victorian Civil Procedure Act was similar to section 31A of the FCA Act. However, at paragraph [16], the court went on to note some of the ‘significant’ differences between those two provisions. In circumstances where section 143 of the FCFOA Act is, for present purposes, in identical terms to section 31A of the FCA Act, I am bound by the High Court decision in Spencer.
In any event, as stated, it is common ground that the court’s power to summarily dismiss ought to be exercised with caution.
The primary issue for determination in this case is whether the applicant has reasonable prospects of success in relation to any or all of those aspects of the claim which the respondent seeks to have struck out. If so, the court must then consider whether to exercise its discretion to strike any or all of those parts of the applicant’s claim.
Given the preliminary stage at which this application is brought, that assessment must be made on the basis of the allegations presently made by the applicant.
Consideration
I will now consider whether the applicant has reasonable prospects of succeeding in respect of each of the claims sought to be struck out.
Social Origin Claim
For the following reasons, I find that the applicant has no reasonable prospects of succeeding in relation to his claim under section 351 of the FW Act and that that part of the applicant’s claim ought to be dismissed.
In his submissions to this court, the applicant said that as a result of the sexual harassment findings made against him, which related to conduct which occurred in 2009, he had lost his employment, had not been able to work in his chosen professional field for many years and had found it difficult to find alternative work. Putting the applicant’s case at its highest, it was that the sexual harassment findings made against him constitute a ‘social origin’ and the decision by the respondent to terminate his employment based on those findings constituted a dismissal for a proscribed reason in contravention of section 351(1). If the applicant were able to show that he had a reasonable prospect of establishing that being the subject of adverse findings was a form of ‘social origin’ then the summary dismissal application would not succeed.
The respondent, however, submits that the Social Origin Complaint has no prospects of success, or at the very least, no reasonable prosects of success at trial, for two reasons.
Applicability of s 351 FW Act to adverse action taken on the grounds of ‘social origin’
The first is that by virtue of section 351(2)(a) of the FW Act, even if one were to accept that the adverse sexual harassment findings constitute a form of ‘social origin’, the conduct alleged is not unlawful. I agree with this submission.
Section 351(1) of the FW Act clearly prohibits adverse action, including, as in this case, the termination of an employee’s employment, for certain proscribed reasons including because of a person’s ‘social origin’. However, section 351(2)(a) goes on to specifically limit the circumstances in which section 351(1) applies. Relevantly, section 352(1)(a) provides:
(2) However, subsection (1) does not apply to action that is:
(a)not unlawful under any anti-discrimination law in force in the place where the action is taken …
Section 351(3) then sets out specified legislation which is deemed to constitute an anti-discrimination law. The alleged adverse action occurred in Victoria. Therefore, for section 351(1) to apply, the action must have been unlawful under an anti-discrimination law in force in Victoria. It is submitted for the respondent that the concept of discrimination on the grounds of social origin is not prohibited under any of the Commonwealth anti-discrimination laws set out at section 351(aa),(ab), (ac) or (ad) of the FW Act. I accept that submission.
Nor is ‘social origin’ a prohibited ground of discrimination under the Victorian Equal Opportunity Act 2010 (‘EO Act’). Section 6 of the Victorian EO Act sets out the attributes on the basis of which discrimination is prohibited in employment, among other areas of public life. That list does not include ‘social origin’. Discrimination on the grounds of social origin is therefore not unlawful in Victoria and consequently section 351(1) does not apply to such action where it occurred in Victoria.
For completeness, I note that the notion of ‘social origin’ is referred to in the Australian Human Rights Commission Act 1986 (Cth) (‘AHRC Act’). Relevantly, that Act defines ‘discrimination’ in the following terms:
Discrimination, except in Part IIB, means:
(a)any distinction, exclusion or preference made on the basis of … social origin that has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation; …[12]
[12] Australian Human Rights Commission Act 1986 (Cth), s 3.
Whilst the AHRC Act is not identified as an ‘anti-discrimination law’ for the purposes of section 351(3) of the FW Act, it would not assist the applicant even if it were referred to as such, as it does not itself render discrimination on the grounds of social origin unlawful. ‘Unlawful discrimination’ under the AHRC Act is defined in section 3(1) to mean:
… any acts, omissions or practices that are unlawful under:
(aa) Part 4 of the Age Discrimination Act 2004; or
(a) Part 2 of the Disability Discrimination Act 1992; or
(b) Part II or IIA of the Racial Discrimination Act 1975; or
(c) Part II of the Sex Discrimination Act 1984 …
As stated, none of these Acts make it unlawful to discriminate on the grounds of social origin.
The cumulative effect of these provisions is that in Victoria, section 351(1) of the FW Act does not apply to any adverse action taken because of a person’s ‘social origin’. Consequently, even if the applicant were able to show that the adverse finding made against him constitutes a form of ‘social origin’, he would not be able to succeed on a claim under section 351(1) where that conduct occurred in Victoria. He therefore has no reasonable prospects of succeeding on this on the Social Origin Claim.
Whether having an adverse civil finding constitutes a form of ‘social origin’
Having come to this view, it is not necessary for me to conclude whether the applicant’s primary submission holds, namely, that being characterised as someone who has had an adverse civil finding made against him constitutes a form of ‘social origin’. However, as this matter was argued fully before me, I make the following observations.
The applicant refers to and relies upon comments made in Merlin Gerin (Australia) Pty Ltd v Wojcik [1994] VSC 209 (‘Merlin’) to support his assertion that the concept of ‘social origin’ is a broad one and one which could encompass an adverse finding in civil litigation.[13] Ultimately, the applicant submits that this is an issue which ought to be allowed to proceed to trial for ultimate determination.
[13] Applicant’s Outline of Submissions filed on 26 April 2022 at paragraph [6] and following.
As noted in Spencer, summary dismissal ought not to be used in a way which might preclude the further development of the law.
However, Merlin does not assist the applicant. That case concerned an application to the Supreme Court of Victoria for review of a decision made by the Equal Opportunity Board, as it then was. The applicant in that case asserted that they were unlawfully discriminated against by being selected for redundancy due to the fact that they were not native English speakers or because of their national extraction, social or ethnic origin. The employees in Merlin were employed pursuant to a State Industrial Award, which relevantly included a prohibition on the termination of an employee’s employment in circumstances which were harsh, unjust or unreasonable. That provision in the award relevantly contained the following:
…
Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment.[14] (emphasis in original)
[14] Merlin Gerin (Australia) Pty Ltd v Wojcik [1994] VSC 209 at page 3.
The court then said at page 3:
The words in the Act ‘nationality and ethnic or national origin’ are not quite the same as those in the Award of ‘national extraction or social origin’. In my view the differences show some, but not great, distinction. ‘National extraction’ is a little wider than ‘nationality or national origin’. … ‘Social origin’ is wider than ‘national origin’ in that it includes factors other than country of birth. …
The court then went on to say at pages 11 to 12:
‘National extraction’ means both the nation and the nationality from which a person is derived, either by birth or by self and community identification. A person may perceive themselves to be, and be seen by the community in which they live, work and mix as being non-Australian despite the fact that they may have been born here. ‘Social origin’ has much the same meaning. It comprehends those matters which are formulative of a person’s acculturation. These include language or mother tongue(s), life cycle customs such as initiation into a religious community, affirmation of adulthood, and such things as diverse as dress and diet. The list is not exhaustive, nor could it ever be, each person’s characteristics must be decided individually. The determinants of ‘social origin’ are not merely self-defined, but also depend upon the way in which a person is assigned by the dominant or majority group in the community in which that person socialises, lives or works.
It is important to note that the court’s comments in Merlin relate to the instrument that was before it, and in particular, was considering whether the notion of ‘social origin’ meant more than nationality or national extraction. The court’s comments about the limitations on what might fall within the concept of ‘social origin’ were not made in isolation and must be considered in this context. So much is clear from the court’s comment at pages 12 to 14 where the court said:
… The law must accommodate flexibly the concepts of national extraction and social origin as mentioned in the Award. It must be just as flexible when it comes to the concept of ‘ethnicity’ mentioned in the Act.
I come back to further consider ‘social origin’. It is wider than both nationality and ‘national extraction’.
…
I come back to the Victorian Act and its terms. Section 21 deals with discrimination in employment, it makes it unlawful if it is based upon race which includes ethnic or social origin. …
The decision in Merlin is therefore of little, if any, assistance in determining what is meant by the term ‘social origin’ in the context of section 351(1) of the FW Act and whether the applicant’s adverse findings constitute a form of ‘social origin’.
Relevantly, section 351(1) of the FW Act provides that:
(1)An employer must not take adverse action against a person who is an employee … of the employer because of the person’s … social origin. (emphasis added)
The term ‘social origin’ in section 351(1) of the FW Act is not defined in the FW Act. It has not been the subject of any judicial determination, or at least none that has been brought to the attention of this court.
Ordinary principles of statutory interpretation therefore need to be applied. That requires consideration of the words of the statute themselves and the context in which the provision appears, as well as the objects of the legislation in which they appear. The starting point is to give words their ordinary grammatical meaning, unless a contrary intention clearly appears from the statute itself. In this case, the composite phrase is ‘social origin’.
The term ‘social’ is indicative of something relating to society or its organisation, and generally applies to a collective. The term ‘origin’ is indicative of where something begins, arises or is derived. There is nothing in the ordinary meaning of the term ‘social origin’ which would lend itself to be said to refer to a person who has had an adverse finding made against them as claimed in this proceeding. The finding made in the sexual harassment proceedings was not a finding which identified or categorised the applicant by reference to an identity or grouping to which he belonged, and certainly is not such a characterisation that applied from birth. Rather, the findings made were descriptive of the conduct that the applicant was found to have engaged in, directed at a co-worker at a specific point in time.
Moreover, the applicant’s case is not strengthened by reference to the statutory context in which section 351 appears. That provision forms part of Chapter 3 of the FW Act which deals with the rights and responsibilities of employees, employers and others. Section 336(1) of the FW Act sets out the objects of this part which include ‘to provide protection from workplace discrimination’[15] and ‘to provide effective relief for persons who have been discriminated against, victimised or otherwise adversely affected as a result of contraventions of this Part’.[16]
[15] Fair Work Act 2009 (Cth), s 336(1)(c).
[16] Fair Work Act 2009 (Cth), s 336(1)(d).
The term ‘discrimination’ is also not defined in the FW Act. However, it is clear when one has regard to the various prohibitions in Chapter 3 that that part of the FW Act is directed at prohibiting very specific conduct by employers and employees on proscribed grounds. It is not aimed at regulating all decisions which differentiate and/or discriminate between employees per se. Divisions 3 and 4 of Chapter 3 are directed at protecting employees from adverse action based on specified conduct that they have engaged in or not engaged in, whereas Division 5 is directed at protecting employees from adverse action in respect of attributes which are personal to them (or imputed to be personal to them).
There is nothing in the structure of Chapter 3 which would suggest that ‘social origin’ ought to be interpreted in a manner which would include a finding in a civil claim that a person has engaged in sexual harassment against a co-worker.
As stated, the term ‘social origin’ appears in the AHRC Act. Annexed to that Act at Schedule 1 is a copy of the Discrimination (Employment and Occupation) Convention 1958 (‘the Convention’) adopted by the General Conference of the International Labour Organization on 25 June 1958, as that Convention applies in relation to Australia.[17] Relevantly, section 3(8) of the AHRC Act provides:
(8)Except so far as the contrary intention appears, an expression that is used both in this Act and in the Convention (whether or not a particular meaning is assigned to it by the Convention) has, in this Act, for the purposes of the operation of this Act in relation to the Convention, the same meaning as it has in the Convention.
[17] See Australian Human Rights Commission Act 1986 (Cth), s 3.
The Convention refers to ‘social origin’ as one of the proscribed grounds of discrimination in Article 1, although it is not defined as such in the Convention. As noted by Katz J in Commonwealth of Australia v Human Rights & Equal Opportunity Commission (2002) 108 FCR 378 at paragraph [30] and following:
30.As was pointed out by Black CJ (with whom Tamberlin J agreed…) … in Bradley … ‘The Act was introduced to be the vehicle by which Australia’s obligations under the … Convention … are implemented …’ It is not surprising therefore that the two paragraphs of Art 1 of the Convention … should be the source of the definition of ‘discrimination’ in s 3(1) of the Act …
31.That being the case, the definition of ‘discrimination’ in the Act should be construed in accordance with the construction given in international law to the definition of ‘discrimination’ in the Convention. … In Koowarta v Bjelke-Petersen (1992) 153 CLR 168, Brennan J was concerned with the proper approach to the construction of s 9(1) of the Racial Discrimination Act 1975 (Cth). … Brennan J said (at 264-265):
‘The Act thus makes part of Australia’s municipal law … a key provision of the Convention. When Parliament chooses to implement a treaty by a statute which uses the same words as the treaty, it is reasonable to assume that Parliament intended to import into municipal law a provision having the same effect as the corresponding provision in the treaty. A statutory provision corresponding with a provision in a treaty which the statute is enacted to implement should be construed by municipal courts in accordance with the meaning to be attributed to the treaty provision in international law. Indeed, to attribute a different meaning to the statute from the meaning which international law attributes to the treaty might be to invalidate the statute in part or in whole, and such a construction of the statute should be avoided. The method of construction of such a statute is therefore the method applicable to the construction of the corresponding words in the treaty. …
32.The correctness of that approach in the present case appears to me to be reinforced by the presence in the Act of s 3(8) which provides …
33.So far as the construction in international law of pars 1 and 2 of Art 1 of the Convention is concerned, there exists a committee created by the Governing Body of the ILO known as the Committee of Experts on the Application of Conventions and Recommendations …
…
35.On numerous occasions, the Committee of Experts has issued reports dealing with the Convention and, in the present matter, for the purpose of construing the Convention (and therefore the Act), the Commission relied on one such report …
36.Reliance by the Commission in construing the Convention (and therefore the Act) on an expression of opinion by the Committee of Experts as to the meaning of the Convention was orthodox. …
Justice Katz then went on to refer to other decisions of the Full Court of the Federal Court which referenced the desirability of interpreting terms used in international law in a consistent manner by Australian courts.[18]
[18] See Commonwealth of Australia v Human Rights & Equal Opportunity Commission (2002) 108 FCR 378 at [39] and [43]-[44].
In this case, the definition in the AHRC Act of the term ‘discrimination’, which references ‘social origin’ as one of the proscribed reasons for such discrimination, is in identical terms as the definition in the Convention.
In the absence of a definition of ‘social origin’ in the FW Act, or indeed any alternative construction which one is compelled to adopt by reference to the terms of the FW Act itself, it is appropriate in determining the meaning of ‘social origin’ to have regard to the interpretation of that term by reference to the ILO Committee of Experts considering that term as it appears in the Convention.
In the 1988 Report of the Committee of Experts on the Application of Conventions and Recommendations, Report III (Part 4B),[19] the Committee addressed what was meant by ‘social origin’ at paragraph [54]. Relevantly, it states:
54.During the preparatory work of the Convention, social origin was mainly envisaged in terms of social mobility, defined as the possibility for an individual to pass from one class or social category to another. The problem of discrimination on the basis of social origin arises when an individual’s membership in a class, a socio-occupational category or a caste determines his or her occupational future either by denying him or her certain jobs or activities or, on the contrary by assigning him or her to certain jobs. Although such situations are rarely encountered in so pronounced a form at the present time, prejudices and preferences based on social origin may still persist even where rigid stratification has disappeared. …
[19] International Labour Conference, 75th Session, Geneva 1988.
Similarly, in the 1996 Report of the Committee of Experts on the Application of Conventions and Recommendations, Report III (Part 4B),[20] the following comments were made in relation to the notion of ‘social origin’:
43.The problem of discrimination based on social origin is unquestionably one of the most difficult to define. It arises when an individual’s membership in a class, socio-occupational category or caste determines his or her occupational future, either because he or she is denied certain jobs or activities, or because he or she is only assigned certain jobs. In most countries today, situations of this type are becoming increasingly rare. Social origin may be viewed mainly in terms of social mobility, defined as the possibility for an individual to move from one class or social category to another.
44.Prejudices and preferences based on social origin may persist when a rigid division of society into classes determines an individual’s opportunities in employment and occupation, or when certain ‘castes’ are considered inferior and therefore confined to the most menial jobs. Even in societies with considerable social mobility, where rigid stratification has disappeared, and despite measures adopted to increase training opportunities for those groups that are at a disadvantage because of their origin, there are still various obstacles to equality of opportunity. …
[20] International Labour Conference, 83rd Session, Geneva 1996.
It was submitted for the respondent that whatever meaning is to be ascribed to the term ‘social origin’, it relates to a personal attribute that attaches to an individual.[21] It is submitted that it does not arise from findings made by a court about the person’s conduct at a specific point in time. It is further submitted that the concept relates to the stratification of society and where one sits within that stratification. There is much force to this submission.
[21] See, for example, Respondent’s Outline of Submissions filed on 11 April 2022 at paragraphs [20]-[21].
Putting his submission at its highest, the applicant says that the question of what constitutes ‘social origin’ is sufficiently unclear that it cannot be said that his claim in relation to section 351(1) ought to be struck out at this early stage without more. Rather, he says that due to the lack of clarity about the specific meaning of the term, he has reasonable prospects that he could establish that the term ‘social origin’ encompasses someone with an adverse finding made against him in civil proceedings. I am unable to accept that submission.
Whilst it is clear from the expert committee reports to which the respondent has referred that there is a lack of clarity and specificity about what ‘social origin’ extends to, the presence of the word ‘origin’ in the proscribed ground tells against the interpretation sought by the applicant. If the proscribed ground was that a person was part of a ‘social group’, the applicant’s argument would have greater force. It might be said, for example, that the applicant is part of a group of people who have had adverse sexual harassment findings made against them. However, that is not what is proscribed either in the Convention, or more relevantly, the FW Act.
For each of these reasons, I find that the applicant has no reasonable prospects of success in relation to the Social Origin Claim. That aspect of his claim ought be dismissed.
Unfair Dismissal Claim
The applicant’s claim before this court in relation to the Unfair Dismissal Claim is equally doomed to fail, even though that is not the necessary test to determine whether the court should exercise its power to dismiss the applicant’s claims at this early stage in the proceedings. The court does not have jurisdiction to hear applications in relation to unfair dismissal claims.
Part 3-2 of the FW Act deals with unfair dismissal. Relevantly, Division 2 sets out when a person is protected from unfair dismissal. Division 3 sets out the elements that constitute unfair dismissal. Division 4 sets out the remedies that can be granted for unfair dismissals by the Fair Work Commission and Division 5 concerns the procedural aspects of obtaining remedies for unfair dismissal. Relevantly, section 381 of the FW Act set out the objects of that Part and provides that one of the objects is to:
(b)establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees …
Section 390 then provides the circumstances in which the Fair Work Commission can order a remedy for an unfair dismissal. There is nothing in Part 3-2 which confers any power on this court in respect of unfair dismissal claims. Indeed, section 400 deals with appeal rights, which subject to leave being granted, is an appeal to a Full Bench of the Fair Work Commission.
Part 4-2 of the FW Act deals with the jurisdiction of this court and of the Federal Court. There is nothing in that part of the FW Act which confers power on this court to deal with unfair dismissal claims.
Indeed, the applicant seemed to accept that this court did not have jurisdiction to deal with such claims. In his oral submissions, he maintained that whilst the court does not have the power to deal with unfair dismissal claims, it had the power to refer such claims back to the Fair Work Commission. However, when asked to identify which provision in the FW Act conferred such a power, he was not able to point the court to any provision in the FW Act, or elsewhere, which provided a basis for such a power.
This court does not have the power to deal with unfair dismissal claims. As such, the applicant has no reasonable prospects of succeeding in that claim before this court. I therefore find that that aspect of his claim ought to be dismissed.
Breach of Contract Claim
Without being critical of the applicant, who is representing himself in these proceedings, it has been somewhat difficult to clearly understand how he puts this aspect of his claim. In his Originating Application, he says:
Breach of Contract – Applicant did not breach any employment terms or conditions of the mutually agreed and signed employment contract. Therefore, the Respondent breached the agreed terms and conditions by terminating the Applicant’s employment without any merit or reasonable basis whatsoever.
On its face, it would seem from this that the applicant is alleging that the respondent has breached an express term of his employment contract. Such a claim would have no reasonable prospects of success in circumstances where there is no express term which limits the respondent’s ability to terminate the applicant’s employment to those situations where the applicant has breached a term of his employment contract.
However, in his written submissions, the applicant appears to add to his Breach of Contract Claim when he says at paragraph [15]:
15.The Respondent is under an obligation to accord natural justice to the Applicant whether derived from contract or from the application of general principals of law. It is submitted that the contract contains terms implied by law that the Respondent will, in exercising its powers or making a decision or exercising a discretion under contract:
(a) act reasonably;
(b) only take relevant considerations into account;
(c) not take irrelevant considerations into account;
(d) proceed in a manner which is procedurally fair;
(e) proceed in a manner free from actual and apprehended bias.
At the heart of this aspect of the applicant’s claim is that the respondent terminated his employment in circumstances which were unfair.
At the hearing before me, counsel for the respondent put forward a series of arguments in support of the proposition that irrespective of how the applicant’s claim is framed, it does not have reasonable prospects of success.
I am mindful that those submissions and the consideration of those submissions are made at a very preliminary stage of proceedings. In considering whether the application ought be dismissed at this early stage, I am also mindful of the words of the High Court in Spencer and the need to consider whether any defect in the claim could be improved through amendment to the way in which the application is cast. Moreover, I am mindful of the cautionary words in Spencer that ‘summary processes must not be used to stultify the development of the law’.[22]
[22] Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [25].
It is submitted for the respondent that the applicant does not have reasonable prospects of success in relation to the Breach of Contract Claim for the following reasons:
(a)the applicant has not appropriately articulated any terms which he says have been breached in his application;
(b)to the extent that the applicant has sought to identify any such terms in his written submissions, they do not form part of his application and no application has been made to amend his application;
(c)but in any event, even if the applicant were able to identify with sufficient particularity the terms he says ought to have been implied, he would have no reasonable prospect of succeeding in that claim because:
(i)in effect, the applicant is seeking the implication of a term which would fetter the employer’s contractual right to terminate his employment and the implication of such a term is not consistent with the law as it currently stands regarding when terms will be implied in fact into contracts; and
(ii)moreover, the implication of any term is expressly inconsistent with an express term in the contract, under the heading ‘Entire agreement, limitations and severability’ which provides:
The Employment Agreement represents the entire agreement and understanding between you and Bunnings about its subject matter and as at the Commencement Date supersedes all prior arrangements, agreements and understandings …
This Employment Agreement expressly excludes any implied terms or terms incorporated by conduct for your benefit howsoever arising.[23]
[23] Affidavit of Mr Brenton Allen affirmed on 16 February 2022 and filed on 17 February 2022 at Annexure BA-1, page 17.
There is much force to the submissions made for the respondent as to the merits of the applicant’s Breach of Contract Claim. This is particularly in relation to the claim insofar as it invites the court to make a finding that a term importing an element of fairness to the way in which the respondent exercises its right to terminate is implied in law. However, adopting a cautious approach, as required in response to an application to strike out part of the applicant’s claim, I am not satisfied that the breach of contract claim has no reasonable prospects of success such that it would be appropriate to dismiss that part of his claim at this early stage.
I accept that for the applicant to succeed, he would need to establish that a term is implied in his employment contract, either in law or in fact, which imposed an obligation on the respondent to act fairly in the way in which it went about terminating his employment. If successful on that legal point, he would then have to establish that the respondent had breached that term as a factual issue.
As noted by Gageler J in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 (‘Barker’) at paragraph [113]:
113.Contractual terms implied in fact are ‘individualised gap fillers, depending on the terms and circumstances of a particular contract’. Contractual terms implied in law … are ‘in reality incidents attached to standardised contractual relationships’ operating as ‘standardised default rules’. The former are founded on what is ‘necessary’ to give ‘efficacy’ to the particular contract. The latter are founded on ‘more general considerations’ which take into account ‘the inherent nature of [the] contract and of the relationship thereby established’. (citations omitted)
The October 2021 employment contract provides for termination by either party. Absent that provision, the law would have implied a term which permitted the parties from terminating the employment on the giving of reasonable notice. Such a term would be said to be necessary to give effect to the contract entered into by the parties.
Contract term implied in law
The respondent submits that for reasons similar to those given in Barker, the court would not find that a term imposing a fairness requirement on the respondent’s termination rights is implied in law in Australia. I agree with this submission.
In Barker, the High Court made it clear that whatever the nature and extent of any term of trust and confidence was, which was the term sought to be implied in that case, it could not apply to an employer’s termination of an employee’s employment for the reasons identified in Johnson v Unisys Ltd [2003] 1 AC 518. As stated by Kiefel J (as she then was):
92.… That decision may be taken to acknowledge what Gleeson CJ referred to as the ‘symbiotic relationship’ of the common law and legislation, and that neither operates alone.
93.Commonwealth legislation has made provision for unfair dismissal since 1994 … Prior to this, provision was made by State legislation. The system as it existed at the time of the decision in New South Wales v Paige was described by Spigelman CJ as a ‘carefully calibrated balancing of the conflicting interests involved’.
94. Claims of unfair dismissal are determined by a tribunal which has the power to grant the remedies provided by statute. The test of unfairness has for some time been whether the dismissal is harsh, unjust or unreasonable. Since 2006, the definition of dismissal in Commonwealth legislation has included the circumstances where a person is forced to resign from his or her employment because of conduct engaged in by the employer.
95.The current legislation places restrictions on when an employee can bring a claim of unfair dismissal where the termination of the employment was a case of ‘genuine redundancy’. …
96.In any event, the respondent is unable to make a statutory claim for unfair dismissal because, since 1994, provisions respecting unfair dismissal have not applied to a termination of employment if an employee’s wages exceed a certain amount, which the respondent’s did. Contrary to the respondent’s contention, this does not create a gap which the common law can fill. In Johnson v Unisys, Lord Hoffmann noted that certain classes of employees were excluded from the protection of the legislation there in question. Yet, as his Lordship observed, it was the evident intention of the Parliament that the statutory remedy provided be limited in its application. Likewise, the Australian Parliament has determined what remedies are to be provided for unfair dismissal and it has determined who may seek them. (citations omitted)
A similar analysis would apply in the present case. The term, however framed, that the applicant says ought to be implied into the employment contract is akin to an unfair dismissal right. For the reasons articulated in Barker above, in circumstances where Parliament has established a statutory scheme regulating when and how remedies might be sought for unfair dismissal, the applicant has no reasonable prospects of succeeding in a claim which seeks the implication by law of such a clause into employment contracts.
Contract term implied in fact
That leaves the question as to whether the applicant has reasonable prospects of establishing that a term imposing an obligation on the employer to act fairly in determining whether, and if so, how to terminate his employment ought be implied in fact into his employment contract with the respondent.
The law in relation to the implication of terms in fact is well settled. As noted in Starlink International Group Pty Ltd v Coles Supermarkets Australia Pty Ltd & Anor [2011] NSWSC 1154 at paragraph [21]:
21.… the principle of contract law that before a term will be implied into a commercial contract it must be: reasonable and equitable; necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; so obvious that ‘it goes without saying’; capable of clear expression and must not contradict any express term of the contract: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.[24]
[24] See, also, Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [21]-[22].
It is said for the respondent that any implied term would be inconsistent with an express term in the contract which provides:
This employment agreement expressly excludes any implied terms or terms incorporated by conduct for your benefit howsoever arising.[25]
[25] Affidavit of Mr Brenton Allen affirmed on 16 February 2022 and filed on 17 February 2022 at Annexure BA-1, page 17.
Ultimately, whether the applicant is able to succeed in his claim will involve consideration of the validity and effect of that term as well as an application of the principles regarding terms implied in fact. It is premature at this stage to dismiss this aspect of the applicant’s claim without at the very least giving him the opportunity to properly plead his claim.
I therefore am unable to find that the applicant does not have reasonable prospects of succeeding in relation to the Breach of Contract Claim.
Conclusion
I therefore make the orders set out at the commencement of these reasons.
I certify that the preceding ninety-one (91) numbered paragraphs are a true copy of the Reasons for Judgment of Deputy Chief Judge Mercuri. Deputy Associate:
Dated: 10 October 2022
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