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Wilton v Coal & Allied Operations Pty Ltd

Wilton v Coal & Allied Operations Pty Ltd

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Case Copied 15 May 2007 87 min read

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FEDERAL COURT OF AUSTRALIA
Wilton & Cumberland v Coal & Allied Operations Pty Ltd
[2007] FCA 725
WORKPLACE RELATIONS – applicants provided to respondent coal miner by way of labour hire entity – coal miner additionally retained workers on its own payroll – applicants worked on site alongside coal miner’s employees – whether applicants so hired became employees of coal miner according to law irrespective of extent of contractual relationship subsisting concurrently between labour hire provider and applicants – examination of Australian and United Kingdom authority and of statutory and judicial indicia bearing upon issues arising inclusive of implications of labour hire – whether employment relationship existed between applicants and respondent coal miner irrespective of labour hire arrangement – no employment arrangement in operation between coal miner and applicants according to law
Workplace Relations Act 1996 (Cth) ss 4, 101, 103, 114, 170LT, 178(1) and (6), 179A, 356 and 412
Federal Court of Australia Act 1976 (Cth) ss 21, 22 and 23
Occupational Health and Safety Act 1983 (NSW) s 15(1) (repealed)
Occupational Health and Safety Act 2000 (NSW) s 8(2)
Coal Mines Regulation Act 1982 (NSW) ss 34-36, 37, 38, 42, 43, 101, 103 and 114, Schedule 1 Part B (repealed)
Coal Mine Health and Safety Act 2002 (NSW) (generally)
Coal Mines (Open Cut) Regulation 1999 (NSW) cll 10 and 11 and Part 2
Coal Mines (General) Regulation 1999 (NSW) cl 79 (repealed)
Carter JW and Harland DJ, Contract Law of Australia (4^th ed, Butterworths, 2002)
ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 153 IR 228 referred to
A/asian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd & Ors (T/as Sunland Wholesale Meats) (1998) 24 IR 467 referred to
Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540 referred to
BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2006) 151 IR 361 referred to
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 cited
Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 discussed and distinguished
Building Workers’ Industrial Union of Australia and Others v Odco Pty Ltd (1991) 29 FCR 104 cited
Byrne v Australian Airlines Limited (1995) 185 CLR 410 cited and discussed
Cable & Wireless plc v Muscat [2006] IRLR 354 discussed and distinguished
Carrington Slipways Pty Limited v Callaghan (1985) 11 IR 467 cited
Dalgety Farmers Ltd t/as Grazcos v Bruce & Another (1995) 12 NSWCCR 36 cited
Damevski v Giudice and Others (2003) 133 FCR 438 cited and discussed
Doyle v Sydney Steel Company Limited (1936) 56 CLR 545 cited
Drake Personnel Ltd and Others v Commissioner of State Revenue (2000) 2 VR 635 cited
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 applied
Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1 cited
Hollis v Vabu Pty Limited (2001) 207 CLR 21 referred to
Howard Smith & Company Limited v Varawa (1907) 5 CLR 68 referred…

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: [2007] FCA 725
Decision Date: 15 May 2007

CaseChat Overview and Summary

The case of Wilton v Coal & Allied Operations Pty Ltd involved a dispute between the applicants, Wilton and Cumberland, and the respondent, Coal & Allied Operations Pty Ltd (CAO). The applicants sought declarations and orders for underpayment of wages and penalties under the Workplace Relations Act 1996 (Cth) (WR Act). The dispute centred on whether the applicants were in an employment relationship with CAO or were engaged through labour hire arrangements with MES. The applicants claimed that CAO was responsible for their remuneration, while CAO argued that MES was the actual employer. The Federal Court of Australia was tasked with determining the nature of the relationship between the parties and the liability for the applicants' wages.

The primary legal issue was whether the applicants were employees of CAO or if they were engaged through labour hire arrangements with MES. This question necessitated a thorough examination of the contractual documents, the payment structures, and the control exercised over the applicants by MES and CAO. Additionally, the Court had to consider the implications of the relevant agreements and whether CAO was vicariously liable for the underpayments made by MES. The Court also needed to assess the evidence provided by both parties to ascertain the true nature of the working relationship.

The Court found that the applicants were not employees of CAO but were engaged through labour hire arrangements with MES. The evidence showed that MES was the entity that directly employed the applicants and was responsible for their remuneration. The Court emphasised that the applicants were not in an employment relationship with CAO, and therefore, CAO could not be held liable for the underpayments made by MES. The Court also noted that the applicants had not provided sufficient evidence to establish that CAO exercised the requisite control over them to be deemed their employer. Consequently, the Court dismissed the applicants' claims against CAO.

The Court ordered that the application be dismissed. It also granted liberty to the respondent to apply within 14 days for any ancillary or consequential relief according to law. This decision underscores the importance of clearly defining employment relationships and the need for employers to ensure compliance with labour laws, particularly in the context of labour hire arrangements.

Orders

Orders of the court

1. The application be dismissed.

2. There be liberty to the respondent to apply within 14 days in relation to any ancillary or consequential relief according to law.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

CONTI J

The concluding observations of the United Kingdom Court of Appeal in Cable & Wireless at [54] may therefore be conceivably pertinent to the approach which the courts may take in Australia in circumstances involving an employer’s endeavour to alter an originally established relationship from that of a conventional contract of employment of a natural person to that of some form of principal and agent, such as was sought unsuccessfully to be achieved in Damevski (ante), but they have no sufficient connection to the circumstances of the present case, which involve no such alteration to the status quo of an employment relationship in favour of a natural person established in the conventional way, but rather the structure of genuine labour hire arrangements undertaken from the outset at arm’s length. Conclusions Subsequent to the hearing of the oral evidence in the proceedings, which had taken place over four hearing days, the parties provided the following extensive written submissions:(i)applicants’ written submissions in chief comprising 43 pages filed on 16 October 2006;(ii)CAO’s written submission in reply comprising 59 pages filed on 27 October 2006;(iii)applicants’ written submissions in reply comprising 10 pages albeit of compressed word processing filed on 3 November 2006. The parties made oral submissions to the Court on 20 and 21 November 2006 though largely by way of amplification of the written submissions. Each of the parties has provided to the Court extensive references to the evidentiary material placed before the Court and comprehensive written submissions supplemented by oral submissions. Apart from material comprising common ground and recorded at the threshold of these reasons at [1]-[10], the parties have mutually agreed upon numerous matters contextual to the relationship and dealings between each of the applicants and MES and separately with CAO, and also between MES and CAO discretely, which matters have been recorded comprehensively at [11]-[19]. The formal circumstances additionally recorded at [20] and [22] were not in issue and were in any event duly established. The relief sought by the applicants, and wholly put in issue of course by CAO, is set out at [21]. The parties are in agreement as to what may be described as the ultimate issue arising, that being whether each of the applicants on the one hand, and CAO on the other, were placed in an employment relationship inter se at the material times, which of course the applicants asserted CAO put in issue. Relevant to and on CAO’s contention discretely critical to the resolution of that ultimate issue is whether each of the applicants was placed in a contractual relationship with CAO at any material time, which CAO further of course put in issue. Apart from the existence of the so-called ‘Employment Undertaking’ signed by Mr Wilton and provided to MES as set out at [15] above, each being implicitly predicated upon the signatory being ‘placed for casual work on a [MES] client’s work site’, and upon documents not dissimilar in effect signed by Mr Cumberland and provided also to MES as set out at [19 (iii)] above, which documents reflected relevantly the records kept and maintained by MES, and did not apparently contradict any records maintained by CAO, a critical circumstance was that MES alone remunerated each of the applicants at the material times in relation to the provision of their labour to CAO, and did so in line with the apparent structure of so-called labour hire arrangements.

Ratio Decidendi

Legal Principle Established

Established by: CONTI J

The following documentation of the foregoing description was provided by MES:(i)on or around 8 April 2004, each of the applicants received a document from MES entitled ‘Mining & Earthmoving Services Pty Ltd Certified Agreement 2004 Draft 08.04.2004’; a copy of that document is exhibited at pages 1425 to 1439 of Exhibit 1;(ii)on 5 May 2004, each of the applicants received a memorandum from MES in relation to the representation of MES casual operators working on the HVO mine site; a copy of the memorandum is exhibited at page 1440 of Exhibit 1;(iii)on 22 November 2004, each of the applicants received a letter from MES enclosing a draft certified agreement; a copy of the letter and that attachment are exhibited at pages 1441 to 1458 of Exhibit 1;(iv)on 11 March 2005, each of the applicants received a letter from MES enclosing a proposed certified agreement; a copy of the letter and that attachment are exhibited at pages 1459 to 1476 of Exhibit 1;(v)at some time between 1 June 2001 and 31 December 2004, each of the applicants received from MES a document bearing the title ‘MES certified agreement discussions schedule’; a copy of that document is exhibited at page 1477 of Exhibit 1;(vi)during 2004, Mr Cumberland received from MES a document bearing the title ‘Mining and Earthmoving Australian Workplace Agreement (AWA)’; a copy of that document appears at pages 1478 to 1489 of Exhibit 1;(vii)at some time after 25 August 2003, Mr Wilton received from MES a document entitled ‘Fitness for Work’; a copy of that document is exhibited at pages 1490 to 1499 of Exhibit 1; (viii)at some time between 23 August 2002 and 31 December 2004, each of the applicants received from MES a document entitled ‘Introduction of Drugs & Alcohol Testing in the Workplace’; a copy of that document is exhibited at page 1500 of Exhibit 1.The relief sought by the applicants against Coal & Allied Operations Pty Ltd (‘CAO’) and the issues raised by the applicants and CAO respectively in relation thereto I have already extracted the full text of the relief sought by each of the applicants against the respondent CAO pursuant to the WR Act and the Federal Court of Australia Act (Cth) (‘the Act’); the monetary significance of that extensively framed relief may be summarised as follows:(i)declarations that CAO breached the terms of the 2000 Agreement in that for the period of time from 1 July 2002 to 30 June 2003, CAO failed to make payment to each of the applicants of the annual salary as required by cl 19 of that Agreement;(ii)declarations that CAO breached the terms of the 2003 Agreement in that for the period of time from 1 July 2004 to 31 December 2004, CAO failed to make payment to each of the applicants of the annual salary as required by cl 17 of that Agreement;(iii)orders that CAO make payment to the respective applicants of the relevant amounts in satisfaction of the asserted underpayments together with interest thereon, being in the case of Mr Wilton the sums of $4,697.00 and $12,845.31 in relation to those successive periods and in the case of Mr Cumberland the sums of $8,410.00 and $20,531.20 in relation to those successive periods;(iv)orders by way of imposition of penalties upon CAO for breaching each of the said Agreements and that the penalties be paid to the respective applicants pursuant to s 356 of the WR Act.