Wellington v Offermans Partners

[2021] FCCA 1845

FEDERAL CIRCUIT COURT OF AUSTRALIA

Wellington v Offermans Partners [2021] FCCA 1845

File number(s):

BRG 285 of 2020

Judgment of:

JUDGE JARRETT

Date of judgment:

29 January 2021

Catchwords:

INDUSTRIAL LAW – Commonwealth – compliance and enforcement – written contract of employment – pecuniary penalty orders – contravention of the Fair Work Act 2009 (Cth).

Legislation:

Fair Work Act 2009 (Cth) ss 323, 323(1), 325

Federal Circuit Court of Australia Act 1999 (Cth) s 18.

Number of paragraphs:

28

Date of last submission/s:

29 January 2021

Date of hearing:

29 January 2021

Place:

Brisbane

Counsel for the Applicant:

Mr Mackie

Solicitor for the Applicant:

B&G Law

Counsel for the Respondent:

Mr Spence

Solicitor for the Respondent:

Mackey Wales Law

ORDERS

BRG 285 of 2020

BETWEEN:

RYAN WELLINGTON

Applicant

AND:

OFFERMANS PARTNERS

Respondent

ORDER MADE BY:	JUDGE JARRETT
DATE OF ORDER:	29 JANUARY 2021

THE COURT DECLARES THAT:

1.On 1 April, 2020 the respondent, Offermans Partners:

(a)deducted $3,200.00 from the amount payable to the applicant, Mr Ryan Wellington, in respect of the performance of work in circumstances that were not permitted by s.324 of the Fair Work Act 2009 (Cth) (FW Act); and

(b)in so doing contravened section 323(1) of the FW Act by failing to pay the Applicant amounts payable to him in respect of the performance of work in full.

THE COURT ORDERS THAT:

2.The respondent is to pay the applicant within 28 days of the date of this order the sums of:

(a)$3,200.00 under s.545(1) of the FW Act; and

(b)$116.88 interest under s.547 of the FW Act.

3.The respondent is to pay the applicant the sum of $3,188.00 plus interest of $116.44 in respect of breach of contract within 28 days of the date of this order.

4.By 4.00pm on 12 February, 2021 the applicant is to file and serve, in relation to the imposition of penalties and the making of orders for costs:

(a)written submissions; and

(b)any and all affidavit evidence on which the applicant intends to rely.

5.By 4.00pm on 26 February, 2021 the respondent is to file and serve, in relation to the imposition of penalties and the making of orders for costs:

(a)written submissions; and

(b)any and all affidavit evidence on which the applicant intends to rely.

6.By 4.00pm on 5 March, 2021 the Applicant is to file and serve any material in reply.

7.Unless either party requests an oral hearing, the issue of penalties and costs is to be determined on the papers.

REASONS FOR JUDGMENT

JUDGE JARRETT:

1. The applicant commenced his employment with the respondent on 4 December, 2017.  He was employed pursuant to the terms of a written contract of employment.  His employment ceased in March of 2020 when he was made redundant. 

2. The terms of the employment contract required the applicant to undertake study.  I will come to the particular clause in a moment, but the dispute before the Court arises from the costs of that study.  The applicant asserts that there are two amounts that the respondent should pay for him.  One which it did pay on his behalf – but then reimbursed itself from his termination payment and the other which has been paid by the applicant but not reimbursed to him. 

3. The amounts involved in this case are not terribly significant.  And given the extraordinary lengths that have been undertaken by the parties having regard to the material before the Court – the fact that there have been pleadings in this case and the enormous amount of material that has been produced – it is difficult to avoid a conclusion that all sense of proportion has been lost by the parties.  Be that as it may, the issues remain and require resolution.  They are, in my view, easily resolved. 

4. First, a little word about the evidence from the witnesses.  Some of this case turns of whether I accept the evidence of one witness over another.  But to the extent that this case might turn on an acceptance of the contested evidence of any particular witness, it is a minor matter.  All of the witnesses in this case needed to be reminded to answer questions.  Some of them were a little more evasive than others.  But generally speaking there did not seem to be any reason at all to doubt the evidence given by the applicant.  I found the applicant a witness who gave his evidence in a forthright way.  So too, the evidence from Mr Offerman.  Mr Brennan on the other hand I have some difficulty with.  His evidence is inconsistent.  What he said in cross-examination is inconsistent with his evidence-in-chief, specifically in relation to the issue about conversations concerning study that took place at the performance review.  And to the extent that Mr Brennan’s evidence conflicts with that of the applicant, I prefer the evidence of the applicant.  On that point, I am satisfied, on the applicant’s evidence, that at the performance review meeting there were discussions about study and that during the course of those discussions the proposition that the applicant would undertake the Master of Professional Accounting offered by James Cook University was the subject of discussion.  It is unnecessary, in my view, to form a view about whether there was a direction that Mr Wellington should be willing to undertake an MPA.  If it was necessary to make a finding I would be satisfied and I am satisfied on the balance of probabilities that there was, in effect, such a direction.  That finding is supported by what is contained in exhibit 1:  that is, the approval for study leave and for time to sit an exam.  One might think that if that study was not the type of study that was envisaged by clause 23 of the employment contract, that it would not be approved.  I do note the evidence put forward by the respondent that people in their employ undertake study that is not approved by the respondent from time to time.

5. On that point there is a contest about whether a module of the MPA offered by JCU is something that might lead to enrolment as a full member of the Chartered Accountants Australia & New Zealand in Australia for an equivalent course with CPA Australia.  But to say, as the respondent’s witnesses say in their evidence and their defence that it was only one module and that, in itself, could not lead to the relevant qualifications is of no assistance.  That is so because one might expect – and the evidence establishes – that the courses undertaken by the applicant here are modules of a more fulsome course.

6. Paragraph 7 of the defence raises a positive assertion that one module of the Master of Professional Accounting course is not sufficient for enrolment as a full member of Chartered Accountants Australia & New Zealand in Australia for an equivalent course with CPA Australia.  That is a positive assertion of fact by the respondent and accordingly, the evidential onus lays on the respondent to prove that fact.  But the respondent led no evidence about it.  There is no evidence to inform me about what is sufficient for enrolment as a full member of Chartered Accountants Australia & New Zealand. 

7. It was said that perhaps, for the applicant to prove that was he did was within the description of this clause – but having regard to my finding about the conversations that took place at the performance review meeting, it seems to me that I can be comfortably satisfied the course of study – the MPA course – was authorised in accordance with clause 23 of the employment agreement by Mr Brennan.

8. Clause 23 is the focus of the parties’ arguments in this case.  It needs to be examined.  The construction of the contract, of course, is an exercise is divining the true intention of the parties.  But it is the intention of the parties, revealed by the words that they have used in the contract and the context in which they appear that is relevant.  Their subjective views about what they thought was intended are irrelevant.

9. Clause 23.1 imposes no obligations one way or another.  It is a motherhood statement.  Clause 23.2 imposes an obligation, in my view, on an employee to undertake study.  It is phrased in clause 23.2 as an expectation.  But a timeframe is provided and there are particulars about what is necessary to be done: “the necessary studies (Professional Studies) for enrolment as a full member of Chartered Accounts Australia and New Zealand in Australia (CA) or an equivalent course with CPA Australia”.

10. Clause 23.2 imposes an obligation to undertake the requisite study.  Clause 23.3 underscores that because it talks about circumstances where the employee has partially completed professional studies.  The clause records an “expectation” that the employee “will continue those in accordance with this part of the HR Manual” whatever that is intended to be a reference to.  So whilst it is phrased in the language of expectations, my view is that it creates an obligation on the part of the employee to undertake relevant professional study.

11. Clause 23.4 says this, “The firm will fully fund the employee’s enrolment fees for the first attempt at each module.  Subsequent attempts are payable by the employee”. 

12. Clause 23.5 provides that it is the employee’s responsibility to ensure enrolment and payment for their studies as required “is arranged”.  Clause 23.5 supports the view that I have taken about obligation created by clause 23.3 because 23.5 uses the word “responsibility”.

13. Clause 23.8 is also important and central to the issues before me.  It is as well to set it out in full.  It says:

    If the employee’s employment is terminated voluntarily by the employee or for serious misconduct in the course of professional study:  or within 12 months from the date of completion of the professional studies;  the employee agrees to reimburse the costs incurred for modules undertaken by the employee, paid for by the firm in the previous 12-month period.

14. I have included punctuation because the punctuation matters.  The proper construction of clause 23.8 is in dispute between the parties.  There are a number of possible constructions.  The clause is, in my view, ambiguous.  As the submission of the applicant suggests, there are really two parts to the clause.  The first is that part of the clause that deals with the events that need to occur before the clause is engaged.  The second part of the clause deals with the consequences of the clause being engaged.  The first part focuses on the first three phrases.  The clause is engaged in one of three events.  First, when the employee’s employment is terminated voluntarily by the employee.  Second, when the employee’s employment is terminated for serious misconduct during a course of professional study.  Third, when the employee’s employment is terminated within twelve months from the date of completion of the professional study.

15. The alternative interpretation suggested by the respondent is that where the employment is terminated within 12 months from the date of completion of the professional study, all study costs irrespective of when they were incurred, are repayable or deductible.

16. However, in my view the phrase, “within 12 months from the date of completion of the professional study” qualifies the previous phrase, “if the employee’s employment is terminated for serious misconduct”.  So the clause would be engaged where the employee’s employment is terminated for serious misconduct which occurs either during the course of the professional studies or within 12 months from the date of completion of the professional studies.  Ultimately, however, it is not necessary to make a determination about the proper construction of this part of the clause.  That is because even if the clause is engaged, on the facts here the defendant – the respondent’s defence to the claim insofar as at least it concerns the $3,200, must fail. 

17. The second part of the clause talks about the consequences of the clause being engaged.  If it is engaged, it supplies the employee’s authority for the respondent to reimburse itself all costs incurred for modules undertaken by the employee, paid for by the firm in the previous 12-month period.  There is no ambiguity about that.  Despite the submissions made by counsel for the respondent – he said all that he could, I think, in support of the propositions put forward by the respondent – the language is plain.  The amounts to be reimbursed are those that are paid for by the firm in the previous 12-month period.  Here, the relevant payment for $3,200 was paid on either 8 or 9 March.  The evidence suggests one or other of those dates in 2019.  The termination took place more than 12 months after that, at the conclusion of March, 2020. 

18. On any view of the uncontroversial evidence the payment of $3,200 was not within the previous 12-month period for the purposes of clause 23.8.  The deduction of that amount from the applicant’s termination pay was inappropriate and not authorised by clause 23.8.

19. As to the second issue of the reimbursement amount – as I have indicated I am satisfied that the undertaking of the MPA was within provisions of clause 23 of the employment contract.  There is nothing in the employment contract that suggests that approval to undertake that course needed to be in writing.  There was nothing to suggest in the terms of the contract that anything was required to be done by the applicant – in particular – to secure the engagement of clause 23.4:  that is the obligation on the part of the respondent to fully fund the employee’s enrolment fee for the first attempt at each module.

20. The applicant’s evidence demonstrates that the fee for which he now seeks reimbursement was the fee that was payable in respect of the first module that he undertook – or the first attempt at the module he undertook for the MPA.  It is not necessary, in my view, for the applicant to establish that he gave to the respondent the reimbursement form.  That is not a prerequisite to the obligation under 23.4 of the contract to be engaged.  But to the extent that it might be said to be necessary to make the finding about that I prefer the evidence of the applicant.  The respondent’s witnesses freely conceded that it might be possible that the form was given to them and it was lost or something of that nature.  There is no reason to doubt the applicant’s evidence that he completed the form and handed it to Mr Brennan.

21. It might be the case that he made no complaint about not being reimbursed for that sum.  It might well be the case that given what occurred with his employment and his redundancy that he was angry, and that gave rise to him making the claim for the reimbursement.  But none of that means that it is not an amount to which he is contractually entitled.  He is contractually entitled to it in my view.

22. Accordingly, as I have already indicated, the deduction of the $3,200 is inappropriate.  The applicant is entitled to judgment for that sum. 

23. He is also entitled to judgment for the reimbursement sum because it was an amount that his employer was contractually bound to pay to him.  It does not matter, I think, that the applicant has caused it to be paid by putting it onto his HECS.  Nor does it matter, in my view, that the HECS liability is a contingent liability which will only arise upon him earning a certain amount of money.  Once that contingency comes to pass he will be liable for it.  And, in any event, he has discharged the liability to the education provider for the course cost.  He is entitled to be reimbursed for it.

24. The deduction of the $3,200 is a breach of s.323(1) of the Fair Work Act 2009 (Cth). That is because an employer must pay an employee an amount payable to the employee in relation to the performance of work. The amount deducted was not the $3,200 course fee. But it was an amount deducted from amounts otherwise payable to the applicant for the performance of work. The respondents were reimbursing themselves. As the applicant’s submissions make clear recent Full Court authority demonstrates that the breadth of s.323(1) is greater than simply deductions from amounts payable for the performance of work. There is a difference between the words in relation “to the performance of work” and “for the performance of work”. Note 2 to that subsection also makes that clear.

25. So I am satisfied that the deduction from that amount from his final termination pay – whether it is from the pay in lieu of notice or something else – was, in fact, a breach of s.323(1) of the Fair Work Act and I so find.

26. The failure to reimburse the $3,200 however, is not a breach of the Fair Work Act. I am not satisfied that the failure is caught by either ss.325 or 323 of the Act. That is because, first of all, the employer has made no deduction. So s.323 cannot be engaged. But more importantly, the applicant made the payment voluntarily.

27. His evidence was that there was a pressure of time that was involved that required him to pay that money. But I am not persuaded that is so. In any event, even if it was, there is no adequate evidence to persuade me that the respondent was given the opportunity to pay that sum and refuse to do so before the applicant was required to pay it to the education provider. So I am not satisfied that a breach of the Fair Work Act has occurred by reason of the respondent’s failure to reimburse the applicant for that sum.

28. There should be judgment for the amounts I have indicated with interest. There will be now a penalty hearing to determine the penalty that might be imposed for the breach of s.323(1). To the extent that it might be suggested that the Court does not have jurisdiction to make an order in respect of the reimbursement amount it is, of course, something that is a contractual sum to which the applicant is entitled on my findings: but something that is plainly within the associated jurisdiction of the Court under s.18 of the Federal Circuit Court of Australia Act 1999 (Cth).

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Jarrett delivered on 29 January, 2021.

Associate:

Dated:       10 August 2021