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Whelan v Cigarette & Gift Warehouse Pty Ltd

Whelan v Cigarette & Gift Warehouse Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534

File number: QUD 987 of 2015

Judge: COLLIER J

Date of judgment: 19 December 2017

Catchwords:
INDUSTRIAL LAW – alleged contraventions of s 340(1) Fair Work Act 2009 – whether there was a workplace right – whether complaint or inquiry about bonuses is a workplace right – whether complaint or inquiry about request to a third party is a workplace right - whether workplace right was exercised or proposed to be exercised – whether applicant was discriminated against - whether exercise of workplace right was a substantive or operative reason for dismissal – where decision maker gave no direct testimony in the proceedings – whether second respondent involved in the contravention

INDUSTRIAL LAW – alleged contravention of ss 44(1) and 117 Fair Work Act 2009 – refusal to pay statutory entitlements – evidence that entitlements deliberately withheld – whether second respondent involved in contravention

CONSUMER LAW – alleged contravention of s 31 Australian Consumer Law – whether misleading representations were made during offer of employment –whether alleged representations were reasonable

CONTRACTS – contract of employment - whether term of good faith and reasonableness was implied in contract – whether contract breached by failing to pay bonuses and commissions – whether contract breached by failing to set budget targets – whether contract breached for failing to provide additional incentive bonus

CONTRACTS – cross claim – whether payment to applicant was a loan or advance– whether payment was a discretionary bonus

COMPENSATION – claim for loss of opportunity to work for first respondent – whether employment would have continued - claim for loss of opportunity to work at former employer – claim of non-economic loss for hurt and humiliation - whether post dismissal actions of employer are relevant to compensation

Legislation:
Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law ss 4, 31, 224, 236

Fair Work Act 2009 (Cth) ss 44, 44(1), 90, 90(2), 117, 117(2), 324(1), 340, 340(1), 341(c)(ii), 341(c)(iii), 342(1), 342(1)(c), 342(1)(d), 352, 360, 361, 361(1), 545, 545(1), 545(2)(b), 546, 546(3)(c), 547, 550, 550(1), 550(2)

Federal Court of Australia Act 1976 (Cth) ss 51A, 51A(1)

Trade Practices Act 1974 (Cth) s 53B (repealed)

Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 Explanatory Memorandum

Interest on Judgments Practice Note (GPN-INT)

Cases cited:
Armco (Aust) Pty Ltd v Federal Commissioner of Taxation [1948] HCA 49; (1948) 76 CLR 584

Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333; (2011) 193 FCR 526

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

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232

Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169

Concrete Constructions Group v Litevale Pty Ltd [2002] NSWSC 670; (2002) 170 FLR…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FCA 1534
Decision Date: 19 December 2017

CaseChat Overview and Summary

In the Federal Court of Australia, Mr. Whelan brought proceedings against Cigarette & Gift Warehouse Pty Ltd and two other respondents. Mr. Whelan alleged that he was wrongfully dismissed from his position as General Manager of the company, and that his dismissal was discriminatory and in contravention of various provisions of the Fair Work Act 2009 (FW Act). He further claimed that he was not paid certain bonuses and commissions that were due to him under his employment contract, and that he was misled during the offer of employment. The respondents denied all claims and counterclaimed that payments made to Mr. Whelan were loans or advances, not bonuses. The case involved complex issues of employment law, contract law, and consumer law.

The court had to determine whether Mr. Whelan had a workplace right under the FW Act that was exercised or proposed to be exercised, and whether his dismissal was due to the exercise of that right. The court also had to decide whether Mr. Whelan was discriminated against and whether the respondents contravened the FW Act by not paying certain entitlements. In addition, the court had to consider whether Mr. Whelan was misled during the offer of employment, whether an implied term of good faith and reasonableness existed in his employment contract, and whether the respondents breached that contract by not paying bonuses and commissions, not setting budget targets, and not providing an additional incentive bonus. Finally, the court had to determine whether payments made to Mr. Whelan were loans or advances, and whether he was entitled to compensation for loss of opportunity to work, non-economic loss, and hurt and humiliation.

The court found that Mr. Whelan had a workplace right under the FW Act that was exercised or proposed to be exercised, and that his dismissal was due to the exercise of that right. The court also found that the respondents contravened the FW Act by not paying certain entitlements, and that they deliberately withheld those entitlements. However, the court found that Mr. Whelan was not misled during the offer of employment, and that there was no implied term of good faith and reasonableness in his employment contract. The court found that the respondents breached the contract by not paying bonuses and commissions, not setting budget targets, and not providing an additional incentive bonus. The court found that payments made to Mr. Whelan were loans or advances, not bonuses. The court awarded Mr. Whelan compensation for loss of opportunity to work, but found that his claim for non-economic loss for hurt and humiliation was not supported by the evidence.

The court ordered that the respondents pay Mr. Whelan the amount of $129,646.15 as compensation for loss of opportunity to work. The court also ordered that the respondents pay Mr. Whelan’s costs of the proceedings up to a certain amount. The court dismissed the respondents’ counterclaim.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The proceedings were notable for the identity – and absence – of witnesses who were prepared or able to give evidence. Mr Whelan gave evidence in support of his case, as did Ms Parnia Marshall (who identified herself as a “promotional model goddess for The Candy Shop Mansion” employed by the first respondent from May to November 2015). In support of the respondent’s case, evidence was given by Ms Suzanne Ozioko (the National Human Resources and Operations Manager employed by the first respondent), Mr Daniel Hains (an expert forensic accountant with Vincents Chartered Accountants), and Mr Rajesh Lal (the Group Financial Controller for the FreeChoice Australia corporate group). Curiously for proceedings of this nature, the day that he was due to be called as a witness and for unexplained reasons, Mr Beynon’s representatives told the Court he had chosen not to give evidence in the proceedings. This was surprising in circumstances where, in light of s 361 of the FW Act, the onus of proof in claims of adverse action proceedings may shift to the employer, and it is usual for the decision-maker in such proceedings to give evidence.Background Despite the apparent inability of the parties to agree on a joint statement of facts and issues in contention, there is some common ground between the parties as to background facts. The first respondent carries on a business of providing services in the cigarette and gift supply industry by way of franchising. Mr Beynon has been the Managing Director of the first respondent since at least June 2014. He appears to be the public face of the first respondent, and is involved in marketing its business by staging publicity associated with a public persona he has created (I understand that Mr Beynon promotes himself as “The Candyman” and his residence at the Gold Coast as “The Candy Shop Mansion”). Mr Whelan claims that Mr Beynon is the person who exercised full managerial control of the first respondent’s business and had the primary responsibility for, and control of, that business. The respondents deny this aspect of Mr Whelan’s claim. However the respondents do admit that, at relevant times and for the purposes of s 793(1) of the FW Act, Mr Beynon was the person whose state of mind (in respect of the conduct referred to in Mr Whelan’s claim) was the state of mind of the first respondent. In my view this is incontrovertible. Mr Whelan was employed as the National Sales Manager of the first respondent from around 6 June 2013 to 10 November 2013, and General Manager from 11 November 2013 until 24 August 2015. Prior to his employment with the first respondent, Mr Whelan was employed by an entity he described in evidence as British American Tobacco (Aust) (BATA). Mr Whelan met Mr Beynon on a number of occasions, and in May 2013 Mr Beynon, on behalf of the first respondent, offered Mr Whelan the role of National Sales Manager with the first respondent. The parties agree that the salary proposed by Mr Beynon at that time was $205,000 per annum. There is some dispute between the parties about bonuses. Mr Whelan claims that the salary was the sum of $205,000 “plus bonuses” whereas the respondents claim that Mr Beynon offered the sum of $205,000 “with the option of a bonus structure”. Mr Whelan also claims that Mr Beynon also offered him $5,000 to assist him to relocate from Sydney to the Gold Coast. This is denied by the respondents, although nothing appears to rest on this issue.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	QUD 987 of 2015
Judge:	COLLIER J
Date of judgment:	19 December 2017
Catchwords:	INDUSTRIAL LAW – alleged contraventions of s 340(1) Fair Work Act 2009 – whether there was a workplace right – whether complaint or inquiry about bonuses is a workplace right – whether complaint or inquiry about request to a third party is a workplace right - whether workplace right was exercised or proposed to be exercised – whether applicant was discriminated against - whether exercise of workplace right was a substantive or operative reason for dismissal – where decision maker gave no direct testimony in the proceedings – whether second respondent involved in the contravention INDUSTRIAL LAW – alleged contravention of ss 44(1) and 117 Fair Work Act 2009 – refusal to pay statutory entitlements – evidence that entitlements deliberately withheld – whether second respondent involved in contravention CONSUMER LAW – alleged contravention of s 31 Australian Consumer Law – whether misleading representations were made during offer of employment –whether alleged representations were reasonable CONTRACTS – contract of employment - whether term of good faith and reasonableness was implied in contract – whether contract breached by failing to pay bonuses and commissions – whether contract breached by failing to set budget targets – whether contract breached for failing to provide additional incentive bonus CONTRACTS – cross claim – whether payment to applicant was a loan or advance– whether payment was a discretionary bonus COMPENSATION – claim for loss of opportunity to work for first respondent – whether employment would have continued - claim for loss of opportunity to work at former employer – claim of non-economic loss for hurt and humiliation - whether post dismissal actions of employer are relevant to compensation
Legislation:	Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law ss 4, 31, 224, 236 Fair Work Act 2009 (Cth) ss 44, 44(1), 90, 90(2), 117, 117(2), 324(1), 340, 340(1), 341(c)(ii), 341(c)(iii), 342(1), 342(1)(c), 342(1)(d), 352, 360, 361, 361(1), 545, 545(1), 545(2)(b), 546, 546(3)(c), 547, 550, 550(1), 550(2) Federal Court of Australia Act 1976 (Cth) ss 51A, 51A(1) Trade Practices Act 1974 (Cth) s 53B (repealed) Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 Explanatory Memorandum Interest on Judgments Practice Note (GPN-INT)
Cases cited:	Armco (Aust) Pty Ltd v Federal Commissioner of Taxation [1948] HCA 49; (1948) 76 CLR 584 Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333; (2011) 193 FCR 526 Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 Concrete Constructions Group v Litevale Pty Ltd [2002] NSWSC 670; (2002) 170 FLR…