Wooten v TNT Australia Pty Ltd
[2009] WADC 153
•5 OCTOBER 2009
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: WOOTEN -v- TNT AUSTRALIA PTY LTD & ANOR [2009] WADC 153
CORAM: DEANE DCJ
HEARD: 23-24 FEBRUARY 2009
DELIVERED : 5 OCTOBER 2009
FILE NO/S: CIV 2620 of 2006
BETWEEN: LORNA OLIVIA WOOTEN
Plaintiff
AND
TNT AUSTRALIA PTY LTD (ACN 000 495 269)
First DefendantTNT SHARED SERVICES CENTRE PTY LTD (ACN 092 283 415)
Second Defendant
Catchwords:
Damages - Claim for breach of contract relevant to payment of redundancy entitlements - Whether terms as to basis of calculation of redundancy entitlement expressly incorporated into subsequent employment contract with different employer
Legislation:
Workplace Relations Act 1996
Result:
Plaintiff's claim dismissed and no award made as to plaintiff's claim
Representation:
Counsel:
Plaintiff: Mr A P Hershowitz
First Defendant : Mr T H F Caspersz
Second Defendant : Mr T H F Caspersz
Solicitors:
Plaintiff: Kott Gunning
First Defendant : Blake Dawson Waldron
Second Defendant : Blake Dawson Waldron
Case(s) referred to in judgment(s):
Byrne v Australian Airlines Ltd [1995] 185 CLR 410
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181
Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193
DEANE DCJ:
Introduction
In this matter the first and second defendants are registered proprietary companies engaged in trade and commerce. It is common ground that the plaintiff commenced employment with the first defendant on 1 August 1974 and as from 1 October 1988 she transferred to the position of credit controller at Ansett Air Freight a division of Ansett Transport Industries Pty Ltd. On 24 May 1999 it is alleged the plaintiff accepted an offer of employment made by the first defendant ("the first TNT contract"), which was in writing and consisted of a number of documents to which reference will be made in these reasons. It is alleged that the terms of this first contract of employment with the first defendant would be on the whole no less favourable than the plaintiff's current conditions while she was working with Ansett Air Freight and that her employment with them would cease and commence with the first defendant simultaneously. Further, her accrued entitlements to annual leave, sick leave, long service leave and rostered days off as well as time in lieu, would be preserved and carried over to the plaintiff's employment with the first defendant. Service with Ansett Air Freight would count for all purposes as service with the first defendant and in the event that the first defendant and the relevant union could not reach an agreement on an Enterprise Agreement certified by the Australian Industrial Relations Commission then the Enterprise Agreement which would apply would be the Collective Bargaining Agreement of 1999. The first defendant would make superannuation contributions on the plaintiff's behalf on a basis no less favourable than those currently available from Ansett Air Freight. Further sick leave entitlements, long service leave entitlements and travel benefits available to the plaintiff would be consistent with those offered by Ansett Air Freight if she accepted the offer of employment with the first defendant. It is alleged relevantly that the plaintiff would be entitled to a redundancy payment in accordance with the table produced below.
Years of Service
Redundancy Payment
0-5 years
2 weeks pay per year of service
5-15 years
2 weeks pay per year for first 5 years, then 4 weeks pay per year thereafter
15+ years
2 weeks pay per year for first 5 years then 4 weeks pay per year for 5‑15 years, then 6 weeks pay per year thereafter
On 29 March 2001 the plaintiff accepted a written offer of employment with Strat.OS as a credit controller ("the Strat.OS contract") which was in writing and was comprised of a number of documents again to which reference will be made in the course of these reasons. Again it is alleged that the terms of the Strat.OS contract were that employment with it would be on conditions which on the whole were no less favourable than the plaintiff's employment conditions with the first defendant, prior to commencing her employment with Strat.OS and that the plaintiff's existing terms and conditions of employment with Ansett Air Freight and subsequently the first defendant, as annexed to the offer, would be preserved and read in conjunction with the Strat.OS Enterprise Agreement. Again the plaintiff's employment with the first defendant would cease at the same time as her employment with Strat.OS commenced, with full continuity of service from her original employment date of 1 August 1974. As a result the plaintiff's accrued annual sick and long service leave entitlements at the date of transfer would be preserved and transferred to Strat.OS and the plaintiff would be entitled to redundancy payments in accordance with the table produced below.
Years of Service
Redundancy Payment
0-5 years
3 weeks pay per year of service
5-10 years
3 weeks pay per year for first 5 years, then 4 weeks pay per year thereafter
10-20 years
3 weeks pay per year for first 5 years, then 4 weeks pay per year thereafter
20+ years
3 weeks pay per year for first 5 years, then 4 weeks pay per year thereafter
It is alleged that the Strat.OS Enterprise Agreement specifically preserved many of the plaintiff's employment conditions that were more favourable than those contained in the Strat.OS Enterprise Agreement and that the benefits offered to her by Ansett Air Freight would continue to be available to the plaintiff while she remained an employee of Strat.OS.
On 12 January 2002 it is alleged the plaintiff accepted an offer by Strat.OS of employment as a Credit Team Leader, which contract was in writing and comprised a number of documents which again will be referred to in the course of these reasons. On 14 February 2002 the first defendant, a successor company to Strat.OS offered the plaintiff the opportunity to continue in her position as Team Leader Credit Control when once more the first defendant took over the plaintiff's employment, pursuant to "the second TNT contract". That contract also consisted of a number of documents contained in Exhibit 1 to which reference will be made in these reasons. It is alleged that this particular contract was on conditions which on the whole were no less favourable than the plaintiff's contract of employment with Strat.OS, including a condition that the plaintiff would continue employment uninterrupted through the first defendant or, alternatively, the second defendant and her total remuneration would remain unchanged whilst her leave entitlements would be preserved and continued. Further, it is claimed that the plaintiff's service with Strat.OS and her previous service with the first defendant would be recognised by the first or, alternatively, the second defendant as continuous service commencing from 1 August 1974. The other conditions that allegedly applied related to superannuation contributions by the employer, annual, long service and sick leave entitlements.
Again it would appear to be common ground that on 30 September 2005 the plaintiff was advised by a representative of the first defendant that she was being made compulsorily redundant. It is alleged that pursuant to the second TNT contract the plaintiff was entitled to 119.76 weeks of redundancy payments amounting to $113,247.45 which in breach thereof the first or, alternatively, second defendant refused to pay. The plaintiff did, however receive on 11 October 2005 eight weeks salary by way of redundancy payment from the first defendant in the sum of $12,293. At trial an alternative basis of calculation of the plaintiff's entitlement to redundancy payments, being for a period of 22 weeks, arose for consideration although it was not pressed as heavily on behalf of the plaintiff as the primary basis of the claim for 119.76 weeks. The defendants' position in the course of argument was that notwithstanding that a calculation on the basis of 22 weeks was the best the plaintiff could achieve, it was not applicable on either a proper construction of the evidence or a proper application of the law.
Although the statement of claim alleged that in the alternative the actions of the first defendant constituted misleading conduct in the course of employment contrary to s 53B of the Trade Practices Act 1974, this cause of action was abandoned at trial. The plaintiff therefore claims damages in the sum of $105,681.97 being 111.76 weeks at $945.61538 per week (having received eight weeks redundancy payment previously).
The first and second defendants admit that the plaintiff was employed with the first defendant from about 1974 pursuant to the first employment contract which they say terminated when the plaintiff left the employment of the first defendant to work for Ansett Transport Industries Pty Ltd ("ATI") in October 1988. It is admitted that on 24 May 1999 the plaintiff executed a letter from the first defendant to her dated 14 May 1999 and that she commenced employment with the first defendant pursuant to that document. It is accepted in that letter that subject to the first defendant and the Australian Service Union ("ASU") not reaching agreement on an Enterprise Agreement certified by the Australian Industrial Relations Commission then the Enterprise Agreement that would apply was the Ansett Collective Bargaining Agreement of 1999. No enterprise agreement between the first defendant and the ASU was reached. It is alleged on behalf of both defendants that prior to commencing her 1999 employment the Collective Bargaining Agreement of 1999 applied to the plaintiff's employment with ATI by operation of the Workplace Relations Act 1996. Further that on a proper construction and interpretation of the letter of 14 May 1999 it was stated that the Collective Bargaining Agreement of 1999 would apply to that 1999 employment by reason of the operation of the Workplace Relations Act 1996.
In addition, both defendants say that cl 21(c)(ii) of the Collective Bargaining Agreement of 1999 provided that all payments (being a reference to redundancy payments) were capped at 104 weeks including the notice period, and that the policy was effective from 1 November 1998 until 31 December 2001, a notice period of four weeks applying or as otherwise specified in the relevant award. It is alleged that cl 21(b) of the Collective Bargaining Agreement of 1999 provided that any entitlements under that clause would cease on 31 December 2001, after which date any redundancy entitlements within Ansett would have to be renegotiated. Therefore it is said that any entitlements that the plaintiff had by reason of the application of the Collective Bargaining Agreement of 1999 to her 1999 employment were capped at 104 weeks, which included a notice period of four weeks and as a result any entitlements that the plaintiff had by reason of the application of the that agreement to her employment in 1999 ceased on 31 December 2001.
There is no dispute that the plaintiff's 1999 employment terminated when she left the first defendant to work for Strat.OS in about March 2001. It is also admitted that in a letter of 14 February 2002 the first defendant to the plaintiff formally advised the plaintiff that she would continue in her position of Team Leader Credit Control (WA) through the second defendant, but it is denied that the first defendant was the successor company, which is said to be Strat.OS. Further it is admitted that the plaintiff commenced employment with the second defendant pursuant to a letter of 14 February 2002. They admit that document stated relevantly that:
"… except for some minor changes … which are necessary because of your employment in the TNT Group … your current terms and conditions of employment will not change."
There is no dispute that the plaintiff was made compulsorily redundant on 30 September 2005 as there was no suitable alternate position for her and that following this the second defendant paid the plaintiff $12,293 gross by way of a redundancy payment. It is admitted by the defendants that in a letter dated 26 March 2001 to Mr Paul Neilsen, ("Mr Neilsen") the plaintiff requested clarification regarding a number of matters including her travel benefits from Ansett, accrued rostered days off and annual leave loading as well as superannuation. Further the defendants say in a letter dated 19 March 2001, Ansett Australia Cargo referred to earlier correspondence to the plaintiff and advised her that following the sale of Ansett Air Freight to TNT Australia Pty Ltd in 1999 and the plaintiff's subsequent transfer from Ansett to TNT as part of the sale process, that earlier correspondence contained an offer from Ansett in relation to travel benefits and that Ansett were made aware that the plaintiff had accepted employment with Strat.OS subject to the clarification of the plaintiff's travel benefits arrangements. Ansett advised that it would honour the original offer of travel benefits whilst the plaintiff remained an employee of Strat.OS, as if she were an employee of TNT.
The defendants admit that in an email of 27 March 2001 from Mr Neilsen, the plaintiff was assured that the benefits offered to her by Ansett in May 1999 would continue to be available to her while she remained an employee of Strat.OS, however it is said that on a proper construction and interpretation reference to benefits in that email was confined to the issue of travel benefits. The defendants deny that the plaintiff is entitled to 119.76 weeks of redundancy payments as claimed, although it admits she was offered $49,172 as a redundancy payment calculated on a basis of salary for 52 weeks. In the end the defendants deny the plaintiff is entitled to the relief claimed or any relief at all.
In her sworn evidence at trial the plaintiff who is 54 years of age told the court she was currently employed by an education association. In 1974 the plaintiff commenced employment as a secretary in the credit department of the first defendant. She remained in that position until October 1988 when Ansett Air Freight took over and managed the area in which the plaintiff was employed. Ansett Air Freight was a division of TNT and the plaintiff moved to Ansett Air Freight as a Credit Controller, remaining in that position until 1999. She received a document from Ansett Australia dated 11 February 1999, Exhibit 1(1) enclosing a copy of the enterprise bargaining agreement ("EBA"). That contained cl 21 referable to redundancy provisions which, at the time the plaintiff understood applied to her situation. By correspondence, Exhibit 1(25) in April 1999 the plaintiff received notification of a proposal that TNT Australia Pty Ltd, the first defendant, were the preferred purchaser of the express freight business operated by Ansett Air Freight. The proposed sale directly affected the plaintiff, who understood from correspondence sent to her that all of her benefits would be preserved and carried over to TNT Australia Pty Ltd. In May 1999 further correspondence was sent to the plaintiff relevant to an update on the handover of the business to the first defendant, Exhibit 1(38). She was requested to sign documentation if she wished to take up the offer of employment in conjunction with associated benefits, including entitlement to redundancy. The plaintiff understood that if she failed to do so she would not be entitled to the benefit of redundancy provisions.
Following this on 14 May 1999, the plaintiff received further documentation from the first defendant, Exhibit 1(40) which included material such as an offer of employment from them, a superannuation pack, information pack and offer of travel benefits from Ansett. However, despite the contents of that document, the plaintiff said it did not include as stated a copy of the EBA. Her understanding of further material sent to her by the first defendant on 14 May 1999, Exhibit 1(43) was that all the benefits that the plaintiff had accrued at Ansett Air Freight would be preserved and would be transferred over when the first defendant became her employer. She understood that her transfer of employment pursuant to the sale would be on terms which were, on the whole, no less favourable than the plaintiff's current conditions. Accordingly, she accepted the terms of the offer by signing the necessary documentation on 24 May 1999. Although the plaintiff moved premises following the sale, she continued in her same role.
In mid‑2000 the plaintiff became aware that it was proposed to out‑source the services of the area in which she was working in credit control and to that end she made reference to Exhibit 1(48), which indicated that the proposed out‑source partner was Strat.OS. Given this change of employer was following very quickly upon the change of employer to the first defendant, the plaintiff had some concerns as to whether her working conditions and associated benefits would remain the same. She was provided with Exhibit 1(51) which contained information about Strat.OS and she read that particular brochure because she was concerned as to whether or not her accrued benefits by way of her employment service would be transferred if and when Strat.OS took over. By letter dated 14 June 2000, Exhibit 1(66), the plaintiff received an offer of employment from Strat.OS confirming her transfer subject to completion of negotiations. She noted in that document that the first defendant and Strat.OS had agreed that any offer of employment from Strat.OS must be on terms which on the whole were no less favourable than the plaintiff's current conditions. She interpreted that to mean that all her benefits were preserved as they had been when she moved from Ansett Air Freight to the first defendant and that the situation would be repeated if and when she moved to Strat.OS. The plaintiff pointed out that although that exhibit referred to an enclosed copy of a negotiated employee agreement and attachments, they did not accompany the letter. She was, however, asked to sign the offer but before doing so the plaintiff said she was concerned to ensure that all benefits and entitlements which had accrued by virtue of her employment to that date would be preserved including those relating to redundancy.
As a result on 23 June 2000 the plaintiff sent a letter, Exhibit 1(70) to Strat.OS setting out five specific enquiries she had in relation to her concerns. In point 5 of that correspondence the plaintiff stated that TNT had not formally advised her that they would effect a transfer nor had she been advised as to what entitlements would accompany that transfer and she was particularly concerned to have confirmation that all of her benefits would be transferred. In reply she received a letter, Exhibit 1(71) dated 28 June 2000 which stated in part, "Strat.OS, like TNT and other leading employers, assures you that your accrued entitlements are protected", which the plaintiff understood to mean that all of the benefits including those relating to redundancy she had accrued with Ansett Air Freight and with the first defendant would be protected and would be transferred, if and when she commenced work with Strat.OS. Following this on 5 July 2000 the plaintiff received Exhibit 1(75) being a letter from Strat.OS which referred to the enclosure of a copy of an employee agreement and associated attachments. Once again the plaintiff said those materials were not included with the letter, although subsequently she confirmed she did receive the copy of the employment agreement and associated attachments. The attachments are reproduced in Exhibit 1(78‑80) and the employee agreement is reproduced in Exhibit 1(81‑94).
On 11 July 2000 the plaintiff signed the offer of employment made by Strat.OS, but in her acceptance of the terms and conditions she added in her own handwriting that they were to be read in conjunction with the letter of attachment to acceptance and offer to which the plaintiff referred which she annexed in her return correspondence as Attachments A, B and C. In doing this the plaintiff said she understood relevant to her redundancy entitlements that they would be preserved and transferred when she went to work with Strat.OS. She accepted in reference to Attachment A, that anything which was to be transferred would only remain in place until 31 December 2001. After that the plaintiff said she understood if there was going to be a new business recovery programme voluntary redundancy instigated, there would be a new agreement reached, otherwise if one was made compulsorily redundant then provisions of attachment C would still apply to compulsory redundancy. In accepting the offer the plaintiff said she also had regard to Exhibit 1(81) being the Strat.OS Employee Agreement 2000‑2003, where by reference to cl 6 relating to preservation of existing benefits, she understood that by virtue of her transfer to Strat.OS she would be entitled to retain the existing terms and conditions that were more favourable than those contained in the agreement, and that she would be provided with written confirmation of those terms and conditions to be read in conjunction with the agreement.
There were difficulties and delays however in negotiations between TNT and Strat.OS, which were referred to in Exhibit 1(96), a letter dated 22 September 2000 that the plaintiff received from TNT. It was proposed in a further letter from TNT, dated 18 December 2000, that the plaintiff would commence to work under Strat.OS as from 1 January 2001. In Exhibit 1(97) by letter dated 18 December 2000, TNT advised the plaintiff that due to the non‑resolution of a travel benefits issue she would remain an employee of the first defendant and would not transfer to Strat.OS on 1 January 2001 as had been proposed. To this end on 29 March 2001, the plaintiff signed Exhibit 1(99) whereby Ansett Australia Cargo referred to the plaintiff having accepted employment with Strat.OS subject to clarification of her travel benefits. The transfer from TNT to Strat.OS was associated with TNT's decision to award Strat.OS a contract to carry out its administration work and the plaintiff was advised in that correspondence that Ansett would honour its original offer of travel benefits as if she were an employee of TNT whilst the plaintiff remained an employee of Strat.OS. The result was that her date of transfer to Strat.OS was proposed to be 1 April 2001 as confirmed in Exhibit 1(100). The plaintiff was required to sign an offer of transfer from Strat.OS dated 23 March 2001, Exhibit 1(101). Prior to doing so however the plaintiff, still concerned about preservation and transfer of accrued benefits, wrote to Mr Neilsen of the first defendant on 26 March 2001, Exhibit 1(102). She requested clarification of a number of points including travel benefits, accrued rostered days off and annual leave loading as well as superannuation. She received a reply dated 27 March 2001, Exhibit 1(103) which said in part:
"Please be assured that this letter has been issued by Ansett in good faith and should be an assurance that the benefits offered to you by Ansett in May 1999 shall continue to be available to you whilst you remain an employee of Strat.OS Pty Ltd."
The plaintiff said as a result she believed that all benefits which had accrued would continue to be available to her and so she signed the offer of employment with Strat.OS shortly thereafter, inserting in her own handwriting reference to the offer and acceptance which the plaintiff signed on 11 July 2000. In reference to the accrued leave entitlements which were to be preserved and transferred to Strat.OS the plaintiff inserted "as per attached letter dated 21 March 2001 from TNT". She also made reference to Mr Neilsen's reply to her queries by attaching a copy of it to her acceptance. The plaintiff did not receive an acknowledgement from Strat.OS in relation to Exhibit 1(101) however she continued working in the same office carrying out the same work for Strat.OS.
On 7 January 2002 in Exhibit 1(119) Strat.OS confirmed the plaintiff's appointment to the position of Credit Team Leader, effective from 4 January and she signed the offer on 12 January 2002, but again inserted in her own handwriting that she accepted the terms and conditions of the offer as per letter of reconfirmation of offer dated 23 March 2001 and acknowledged 29 March 2001, with amendments. In addition, the plaintiff noted that as discussed prior to the interview taking place it was agreed that she could choose or embark upon a TAFE or university course to be funded by Strat.OS. Shortly thereafter on 14 February 2002 by Exhibit 1(121) the plaintiff was informed by TNT that they had decided to integrate various finance and administration functions into a new business model which would, in effect, mean that the plaintiff would remain carrying out her current job. As from 4 March 2002 however she would be working under the auspices of TNT and her employment would continue uninterrupted through TNT Shared Services Centre Pty Ltd, the second defendant, as a successor company to Strat.OS. From this documentation the plaintiff said she understood her employment conditions would not change and that her benefits would remain as they were when she was employed at Ansett Air Freight.
Once again, the plaintiff required clarification before she signed the offer contained in that letter and so she wrote to Mr Neilsen on 23 February 2002, Exhibit 1(125) requesting that the letter of "employment arrangements" be clarified in relation to the plaintiff's terms and conditions of employment, being those relating to ex‑Ansett Air Freight employees with TNT. She raised issues in that correspondence such as location, redundancy payment, long service and sick leave. The plaintiff did not receive a response to this letter however, she moved to the employment of the second defendant.
She was questioned as to why she had not signed the letter of offer of employment and stated that before doing so she required clarification as to certain matters but again received no response. On 11 October 2004 the plaintiff received Exhibit 1(138) from TNT advising that although she was still in their employ as a Team Credit Leader, she was no longer employed under the terms of the Strat.OS employee agreement of 2003, but under an individual contract of employment. Despite a request to sign and accept the terms and conditions offered, the plaintiff did not do so as once again she required a clarification as to her position including the issue of redundancy entitlements. When she was queried by the second defendant as to why she had not signed the documentation as requested, the plaintiff advised that there was no information contained in it regarding redundancy or redundancy entitlements and she was not prepared to sign any documentation until she had a clear indication that the redundancy provision and entitlements which had applied whilst she was employed by Ansett Air Freight continued to be applied. It was at that point that Mr Neilsen advised the plaintiff that those entitlements had expired in 2001 and no longer applied. The plaintiff said she understood as a result that she had no further entitlements beyond that date and she took issue with this, believing that her contract said to the contrary. Following this, on 4 November 2004 in Exhibit 1(143), the plaintiff wrote to Mr Neilsen referring to their conversation and indicating that she intended, before signing any documentation, to seek a legal opinion. She referred in particular to the issue of redundancy and stated she would prefer her contract include a specific reference to the provision currently applying to the plaintiff as an ex‑Ansett Air Freight employee. She did not receive a reply to that letter, albeit the plaintiff said she had several further conversations with representatives of TNT regarding her position in relation to redundancy.
On 30 September 2005 the plaintiff had a meeting with the regional Human Resources director and, in company with a number of other persons at the meeting, she was provided with a copy of Exhibit 1(144),being a deed of release under TNT letterhead in relation to the plaintiff being made redundant. Although the plaintiff said that she was advised that she would not receive any payment unless she signed the deed, she declined to do so. Confirmation of the plaintiff's redundancy was contained in a letter written to her by TNT dated 20 October 2005, Exhibit 1(153) explaining that the credit function of TNT Australia Pty Ltd in Western Australia was to be closed and as there were no suitable alternate positions available the plaintiff would be made redundant as from 30 September 2005. As Exhibit 1(154) indicates by way of a gross redundancy payment the plaintiff received $12,293. The plaintiff said she was not given an employment separation certificate Exhibit 1(154) but pursued the issue through her lawyers and she eventually received that particular redundancy payment. After being made redundant and receiving this payment the plaintiff commenced her current employment in early 2006.
The plaintiff maintained that when she was made redundant she believed that her entitlements governing redundancy contained in the original Ansett Collective Bargaining Agreement applied and each time she had transferred to a new employer, including her final employer, those entitlements were observed and accompanied her transfers. She agreed that the Collective Bargaining Agreement, Exhibit 1(1), according to cl 4 operated from 1 January 1999 with a nominal expiry date of 31 December 2001. She was clear in her understanding that the agreement applied to her and fellow employees and that cl 21 governed her entitlements pursuant to either compulsory or voluntary redundancy. The plaintiff further understood that in 1999, when she ceased working for Ansett Air Freight as a result of the sale of the business to the first defendant, she would take up a new contract of employment with the first defendant, the details of which are contained in Exhibit 1(38). Her understanding was that the benefits and entitlements under the agreement she had whilst working for Ansett Air Freight would transfer across and the first defendant would be obliged to provide the plaintiff with those benefits and entitlements including those relating to redundancy in cl 21. As a result the plaintiff agreed that if this were the case it would not be necessary for it to be expressly stated in her contract with the first defendant when she took up employment with them.
In referring to Exhibit 1(43) the plaintiff agreed the letter from TNT to her of 14 May 1999 referred to agreements it had made with Ansett in relation to the plaintiff's terms and conditions of employment and that if the first defendant and the A.S.U. could not reach an agreement in relation to an Enterprise Agreement, the Ansett Collective Bargaining Agreement of 1999 would apply. In the end, although there was some confusion in cross‑examination, the plaintiff appeared in my view, to agree that the Ansett Collective Bargaining Agreement is contained in Exhibit 1(43). She accepted that following negotiations her contract of employment with TNT was to terminate and she would take up a new contract of employment with Strat.OS, effectively carrying out the same type of work. She further agreed that before 14 June 2000 she had no direct negotiations with either TNT or Strat.OS regarding the nature of her employment conditions with Strat.OS. The plaintiff also accepted that in her letter to Strat.OS, Exhibit 1(70) of 23 June 2000, she did not make explicit reference to redundancy as she said she assumed it was "already in there" because it was on the attachments she had sent. Similarly she agreed that the reply to her letter, Exhibit 1(71), made no express mention of redundancy or redundancy entitlements. It simply assured the plaintiff that her accrued entitlements were protected, albeit that she had not been made redundant at that point. Again in Exhibit 1(73), which the plaintiff wrote to Strat.OS in July 2000 she made no express mention of redundancy nor did their reply to her, Exhibit 1(74). This was at a point prior to 31 December 2001 so it was necessarily the case that the Ansett Collective Bargaining Agreement was still in operation. The plaintiff reiterated that her understanding was that any entitlements pursuant to the redundancy provision in that agreement would in effect follow her to Strat.OS. Preserved benefits under that agreement she accepted were those referred to in Exhibit 1(78‑80) and these were the attachments to which the plaintiff referred in her letter, Exhibit 1(77).
Although the plaintiff agreed that the Strat.OS Employee Agreement 2000‑2003, Exhibit 1(81), would apply to her as an employee of Strat.OS she disagreed that cl 11.2 appearing at p 9 of the document, capping redundancy entitlements at 22 weeks, would apply to her as the plaintiff said she understood that provision only related to new Strat.OS employees and persons such as the plaintiff who had transferred to Strat.OS, had considerably greater benefits because of their preserved benefits.
In cross‑examination the plaintiff accepted that she received Exhibit 1(138), a letter from TNT Australia Pty Ltd dated 11 October 2004, the first paragraph of which in part confirms the plaintiff's continued employment with TNT Shared Services Pty Ltd as a Team Leader Credit. However, it then goes on to make reference in the first paragraph to the details of the plaintiff's terms and conditions which would be available to the plaintiff, noting that she was no longer employed under the terms of the Strat.OS Employee Agreement 2000‑2003, but under an individual contract of employment. The plaintiff said when she read this document she did not understand it.
In essence it was put on behalf of the plaintiff that she accepted the offer of 5 July 2000, Exhibit 1(75) but on the basis of the attachment and attachments A, B and C contained in her return correspondence of 11 July 2000, Exhibit 1(80) which expressly incorporated the terms and conditions in Attachment C regarding the issue of voluntary or compulsory redundancy, based on years of service. The defendants reject the assertion that this then constituted part of the contract of employment of the plaintiff with Strat.OS and submit the real issue is whether it was an express term of the written contract or whether it was an express term of the contract with the second defendant that the plaintiff be entitled to a redundancy benefit in terms of Exhibit 1(80), specifically Attachment C as it relates to the heading "Previous Compulsory Redundancy Benefit".
Issues, legal principles and findings
I accept the submission on behalf of the defendants that a central issue in this matter is whether as at 30 September 2005 when the plaintiff's employment with the second defendant was terminated, her contract of employment contained an express term as alleged on behalf of the plaintiff, entitling her to a redundancy payment in the amount claimed being for a period of 119.76 weeks (excluding the eight weeks redundancy payment already made to the plaintiff). It is therefore for the plaintiff to prove to the requisite standard that when the contract with the second defendant was made the parties to it agreed to this alleged term. The amended statement of claim pleads this contract was wholly written and consisted of a number of documents including that found in Exhibit 1(80), following which the plaintiff was employed by Strat.OS. She worked with them until advised on 14 February 2002 that this employment would cease and she would continue to work under TNT through TNT Shared Services Centre Pty Ltd, a successor company to Strat.OS, Exhibit 1(121). That document refers to a number of matters including remuneration, leave entitlements and previous TNT Service but makes no specific reference to redundancy or redundancy entitlements. In particular it makes no reference to Exhibit 1(80), so there was no express incorporation of that material or its terms into Exhibit 1(121).
It is evident in my view that the plaintiff understood this express incorporation had not occurred because she did not signify her acceptance of the employment arrangements outlined in Exhibit 1(121), rather she wrote to Mr Neilsen at TNT Australia Pty Ltd, Exhibit 1(125) requesting clarification in relation to the terms and conditions of her employment as an ex‑Ansett Air Freight employee with TNT, including the situation involving redundancy entitlements. I accept the submission by counsel for the defendants that this response on the part of the plaintiff is inconsistent with her assertion that she relied on Exhibit 1(121) as incorporating the contents of Exhibit 1(80) and its terms. The plaintiff did not receive a reply to Exhibit 1(121) but in the absence of this and despite not signing the offer, she went to work for the second defendant. Over two years later in late 2004 it is apparent from the evidence that there was no agreement regarding whether the contents of Exhibit 1(80) had been incorporated into the plaintiff's contract with the second defendant because when she received Exhibit 1(138) she did not sign her acceptance of those terms and conditions, rather once more she sought clarification as to her position concerning redundancy entitlements and made it plain she was not prepared to accept any offer until this occurred. When she was advised that the redundancy entitlements applicable to her when employed by Ansett Air Freight had expired in 2001 and did not extend beyond that date, not only did the plaintiff indicate by way of Exhibit 1(143) that she wished to seek legal advice but stated that she would prefer the contract make specific mention to include the provision concerning redundancy as currently applying to herself as an ex‑Ansett Air Freight employee. It is not to the point that the plaintiff may have believed not only that the former redundancy provisions had been expressly incorporated into her contract of employment with the second defendant and had been specifically extended beyond 31 December 2001 in relation to her, rather the question is one of determining whether this was so on an objective interpretation in the context of the surrounding circumstances, which include the exhibits before the Court. It is the case that neither the subjective intention of plaintiff nor the second defendant determines the meaning or intent of a contract between them. The contents of Exhibit 1(143) following the plaintiff's telephone conversation with Mr Neilsen on 2 November 2004 clearly indicate there was no consensus between the parties to the contract in relation to the issue in question.
To determine whether a contract of employment objectively contains a term or terms relied on by a party to it requires the focus to be on that contract rather than on any notion of unfairness or unreasonableness in the relationship between the parties to the contract. One must take into account what the contract would have meant to a reasonable person in the light of the circumstances objectively known to the parties at the time of making the contract; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181. Whilst clearly an express term of a contract is a matter that has been agreed between the parties, the express term may not always be found in a single document but may be inferred on an objective assessment that the parties agreed that the express term be incorporated by reference, for example, by way of reference to another document. It is still necessary however to have the contract before regard can be had to incorporating terms by reference to another document or documents; Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193.
In that particular case Mr McCormick executed a written contract of employment with his employer which provided among other things that "you agree to abide by all Company Policies and Practices currently in place, any alterations made to them, and any new ones introduced" (the policies clause). At that time the employer used a loose‑leaf spiral bound Human Resources Policies and Procedure Manual, the major part of which addressed matters which were for the benefit of employees, albeit that some burdens were placed on them. Following the execution of the written contract the employer inserted a redundancy policy into the manual which provided for certain payments to be made to employees whose services were terminated on the ground of redundancy. Mr McCormick's employment was terminated on this ground by the employer, but no payment was made to him pursuant to that redundancy policy. In commencing proceedings against the employer Mr McCormick alleged breach of contract, estoppel and misleading and deceptive conduct. At trial the Judge found the manual was incorporated into the contract of employment by reference and that the contract contained an implied term that Mr McCormick would receive redundancy benefits if he were made redundant.
On appeal the majority in dismissing the appeal held among other things that the expression "abide by" in the policies clause embraced both compliance by Mr McCormick with the obligations imposed by the manual and acceptance by him of the benefits conferred by it, so the policies clause thereby imposed an obligation on an employer to make such redundancy payments to an employee in accordance with the redundancy policy contained in that manual. That case may be distinguished from the present situation in the sense that there is no reference in Exhibit 1(121) being TNT's letter to the plaintiff of 14 February 2002 to either Exhibit 1(80) or the contents of any of the documents that comprise the whole of that particular exhibit. Whilst Exhibit 1(121) refers specifically to "termination" and "provision of assistance after termination" there is no reference whatsoever in the document to redundancy or any terms and conditions which might apply in relation to it. For this reason the plaintiff has not proved that the contents of Exhibit 1(80) and in particular the contents of Attachment "C" relating to a previous compulsory redundancy programme, was an agreed express term of her contract of employment with the second defendant.
There was a suggestion in submissions made on behalf of the plaintiff at trial that the Court should draw an adverse inference against the defendant for failing to call Mr Neilsen to explain what the second defendant understood to be the basis of the plaintiff's employment. In the circumstances however I am not prepared to draw this adverse inference as the relevant documentation speaks for itself. The plaintiff argues that it is clear from the letter of 14 February 2002, Exhibit 1(121), that even though it post‑dated 31 December 2001, whatever conditions the plaintiff had pursuant to her contract of employment at Strat.OS would be transmitted to her employment with the second defendant and that this was specifically agreed between the parties. It is put that it may be that the calculation in relation to redundancy payments would be based on 104 as distinct from 119.76 weeks because the plaintiff would not be able to demonstrate that she would have been advantaged under the previous scheme. Counsel for the defendants however, properly in my view submitted that the 104 weeks cap period would not apply to the plaintiff as she would be financially better off under the old policy award of redundancy entitlements. It is further submitted on behalf of the plaintiff that par 5 of Exhibit 1(66) which states "Your existing terms and conditions at TNT that have been transferred from Ansett Air Freight are preserved and these are summarised on the attachment and should be read in conjunction with our standard Employee Agreement" is a term of the offer of employment. It is argued that the offer was repeated in a further letter to the plaintiff of 5 July 2000, Exhibit 1(75), and that when the plaintiff replied to that offer on 11 July 2000 it was on the basis of Attachments A, B and C forwarded with that reply. It is said this did not constitute an acceptance of the offer of employment by the plaintiff, rather it was a counter‑offer. There is no basis in my view for concluding that the defendant accepted or agreed to this alleged counter‑offer on the part of the plaintiff, particularly as the plaintiff herself continued after that date to seek clarification as to the issue of her position regarding redundancy entitlements and how they should be calculated, therefore it is clear the issue was not resolved between the parties by way of acceptance of the alleged counter‑offer. It is clear that there was no reply by the second defendant to that correspondence from the plaintiff, for example, by way of an explicit rejection of that material, but in my view this was not necessary in any event as the Collective Bargaining Agreement 1999 came to an end on 31 December 2001. That documentation does not on an objective construction permit the inference that it was an individual contract of employment between the plaintiff and Strat.OS, even though in July 2000 there was no Strat.OS agreement in relation to redundancy which had been certified. There is nothing in the documentation which would support a finding that there was an express agreement or contract between the plaintiff and Strat.OS, governing what would occur in relation to any redundancy of the plaintiff up to and beyond 31 December 2001. Rather it was simply a reiteration of the arrangements that would apply in that regard up until 31 December 2001, albeit a reiteration was unnecessary as such arrangements applied at the time as a matter of law. The Attachments A, B and C were simply summaries of the existing Collective Bargaining Agreement.
It may well be that the plaintiff in accepting the offer of employment on 11 July 2000 wished to ensure that her redundancy entitlements would be preserved by reference to Attachment C (although this is not expressly stated in the documentation), but in any event this is inconsistent with the Strat.OS agreement which expressly provides for a period of 22 weeks relevant to calculation of redundancy payments. There is no apparent or persuasive reason on the materials before the Court why Strat.OS would agree with an individual in the position of the plaintiff to what, in effect, was a considerably more generous arrangement than that relating to other employees or prospective employees relevant to the calculation of redundancy payments. Further, there is no express acknowledgment on the part of Strat.OS to such an arrangement. The argument advanced on behalf of the plaintiff in this regard does not gain any further weight or substance by reason of the fact that on 29 March 2001, when the plaintiff replied to Strat.OS's letter to her of 23 March 2001, Exhibit 1(101), she referred to the offer and acceptance which she had signed on 11 July 2000. Additionally, it should be noted that in Exhibit 1(102), a letter of 26 March 2001 from the plaintiff to Mr Neilsen (with a copy to Mr Khamma of Strat.OS), the plaintiff queried a number of matters but made no reference to the issue of redundancy payments or entitlements.
Although it was submitted on behalf of the plaintiff that no reliance was placed by way of operation of law on the Strat.OS entitlements to benefits, including redundancy, being transmitted when the plaintiff took up employment with the second defendant (rather it is asserted they applied as a result of contractual arrangements between the parties), it is still necessary to consider whether by way of operation of law there was a transmission whereby the plaintiff had an entitlement to redundancy under the contract with the second defendant. In a letter to the plaintiff of 11 October 2004, Exhibit 1(138), the second defendant stated in part:
"Detailed below are your terms and conditions which will be available to you noting that you are no longer employed under the terms of the Strat.OS Employee Agreement 2000 – 2003 but under an individual contract of employment."
The effective date of the plaintiff's transfer, subject to the approval of the Enterprise Agreement was to be 1 November 2004, so if the Strat.OS agreement did apply to the plaintiff as at 30 September 2005 when she was made redundant, the submission on behalf of the defendant is that the plaintiff would be entitled to redundancy calculated on the basis of 22 weeks according to Exhibit 1(114 ‑ 115). I accept the argument advanced on behalf of the defendants that there is no basis for a finding that this was expressly agreed pursuant to the contract between the plaintiff and the second defendant, or that it was an implied term of the contract or had been imported into it when it would only apply by operation of law.
The evidence in relation to this issue is comparatively scant in that the only evidence is that Strat.OS would cease to render service from the proposed date of 4 March 2002 and that the second defendant would conduct the same type of business in which Strat.OS had been engaged, in that the functions carried out by Strat.OS would be resumed and carried out in‑house by TNT, Exhibit 1(121). As counsel for the defendants submitted, industrial awards and certified agreements in the absence of clear contractual intention to incorporate them as express terms into a contract, apply by operation of law in the form of the relevant industrial legislation, being the Workplace Relations Act 1996; Byrne v Australian Airlines Ltd [1995] 185 CLR 410. As a result the Collective Bargaining Agreement of 1999 applied with legislative force, so that it was not possible for an individual to contract out of the rights and obligations the legislation created, by for example, entering into a private contract. In order to find that the obligations in the Strat.OS agreement under which the plaintiff was employed, were transmitted by law when the plaintiff's employment changed from Strat.OS to the second defendant either expressly or impliedly or by importation, there would have to be a basis on which to conclude that the Strat.OS agreement became part of the contract of employment between the plaintiff and second defendant.
There is no question that the Strat.OS agreement applied to the plaintiff when she was employed by them and a copy of a version of that agreement was available for the plaintiff when she signed her letter of acceptance on 11 July 2000. The uncontradicted evidence is that agreement came into operation on 16 October 2000 and was to remain in force until 15 October 2003, therefore binding Strat.OS in relation to its employment of the plaintiff when she began working for Strat.OS in April 2001. A question then arises whether there was a transmission of the business carried out by Strat.OS to the second defendant, where the latter acquired the obligations which Strat.OS had towards the plaintiff, including those in relation to redundancy and the calculation of redundancy entitlements in approximately March of 2002.
Certainly when the first defendant acquired the business of Ansett Air Freight in 1999 by way of a sale of the business to the first defendant, the Collective Bargaining Agreement of 1999 with Ansett Air Freight was transmitted to the first defendant, which then took over those obligations in relation to the plaintiff. The situation, however, in relation to the business of Strat.OS and the subsequent involvement of the second defendant is somewhat different. Exhibit 1(121) simply refers to the services Strat.OS were performing for TNT Australia Pty Ltd ceasing from a particular date and being resumed and carried out in‑house by the second defendant.
The clear import of that correspondence in my view is that as from a particular projected date, being 4 March 2002, there was to be a complete cessation of financial and administration services carried out by Strat.OS and those functions were to be resumed, in the sense of being started afresh, and be carried out by the second defendant. As previously noted, it is not contended on behalf of the plaintiff that there was such a transmission by operation of law of the Strat.OS obligations to the second defendant in April or March of 2002 because it is argued that in Exhibit 1(121) there was an express agreement specifically incorporated into the conditions which applied with respect to Strat.OS in its employment of the plaintiff being transferred to the second defendant. Despite this and the fact that were the plaintiff to have pursued that line of argument and thus borne the burden of proof, it is nonetheless a question of law which must be considered.
The defendants' position is that on an objective assessment Exhibit 1(80) being Attachment "C", was not an express agreed term of the Strat.OS contract and further it does not have the meaning relied on by the plaintiff. There is no doubt that the Ansett Collective Agreement 1999, applied to the employment relationship between Ansett Air Freight and the plaintiff as an employee of that organisation. It is also clear that when the plaintiff entered the employment of the first defendant it was to be on terms no less favourable than the conditions which she had enjoyed when employed by Ansett Air Freight and in the event of a failure by the first defendant and the A.S.U. to reach an enterprise agreement, appropriately certified, then the Ansett Collective Agreement 1999 would apply. As there was an actual transmission of the business of Ansett Air Freight to the first defendant, who then acquired those statutory obligations previously imposed upon Ansett Air Freight it was not necessary for those obligations to also be contractual because they applied as a matter of law in any event. In those circumstances on an objective assessment Exhibit 1(43) can be categorised as an advice or confirmation to the plaintiff by the first defendant that she was being offered employment with the first defendant, subject to completion of the sale on terms which were on the whole no less favourable than her current conditions and that if an Enterprise Agreement was not reached and certified then the Ansett Collective Agreement 1999, a copy of which was attached, would apply.
Exhibit 2, which is a letter from Ansett Australia to the plaintiff dated 14 May 1999, provides further information in relation to the specific issue of travel benefits offered to the plaintiff on and from her departure from Ansett, subject to her acceptance of the first defendant's offer of employment. I accept the submission made on behalf of the defendants that the contents of Exhibit 1(43) are not evidence of any objective common intention on the part of the parties that the Ansett Collective Agreement 1999 was to be a contractual term of the first defendant's contract with the result that the entire redundancy clause 21, Exhibit 1(18 – 19) would apply to the plaintiff pursuant to the first defendant's contract.
It is then necessary to determine the meaning of that clause of the agreement by examining the objective intention of the parties to it. Those parties were Ansett Air Freight and various unions, with cl 5 indicating the identity of those bound by the agreement. -
"Where compulsory redundancy is necessary and an employee would be disadvantaged under the new programme either the previous CR policy (ie: the May 1991 "Ansett Airlines of Australia and subsidiary airlines non‑voluntary redundancy plan and procedures document") or award entitlements will apply, but only up until 31 December 2001."
Clause 21(c) then sets out a table of the entitlements of the policy relevant to redundancy payments calculated on years of service. It is important to appreciate, however, that the table of entitlements of the policy and the method of calculation by reference to the scale of years of service only operated and applied until 31 December 2001 when it ceased. Clause 21(b) states that option to the previous compulsory redundancy policy ceases on 31 December 2001 and makes it plain that the replacement of the existing compulsory and voluntary redundancy policies, subject to the option to the previous compulsory redundancy policy, are the "new business recovery redundancy programme", whereby all payments are capped at 104 weeks including the notice period of four weeks or as specified in the relevant award. Further, cl 21(c)(ii) states that the new business recovery redundancy programme, which replaced the existing voluntary and compulsory redundancy policies, was effective from 1 November 1998 until 31 December 2001. The cl 21 obligation in this agreement was necessarily imposed on the first defendant in May 1999 when Ansett Air Freight transmitted its business to the first defendant. The plaintiff was therefore subject to the cl 21 obligation if she was made redundant by the first defendant whilst employed by it up to and including 31 December 2001 when the cl 21 obligation expired. There is nothing in the document or in other material before the Court which demonstrates that after that date cl 21 had any application or was preserved in any way such as to impact upon the plaintiff if she remained employed. If she had been made redundant whilst employed by Strat.OS thereafter the plaintiff would have been entitled under cl 22 of the Strat.OS agreement to a redundancy payment capped at 22 weeks. When the plaintiff was made redundant in September 2005 however she was not employed by Strat.OS but by the second defendant and the business of Strat.OS had not been transmuted to the second defendant.
Prior to this in signing the letter of 5 July 2000 on 11 July 2000 and returning it with Attachments A, B and C, it appears the plaintiff was subjectively attempting to ensure her acceptance of the offer of employment would be on a particular basis, which included her entitlement to redundancy payments. Those Attachments summarise the preserved benefits when the plaintiff was an employee of Ansett Air Freight.
As has been previously noted in these reasons, the contents of those documents were not on an objective analysis expressly incorporated into the contract of employment between the plaintiff and Strat.OS. It was unnecessary that this occur because they applied as a matter of law until 31 December 2001 when they ceased to be operational. Therefore by February or March in 2002 when the plaintiff commenced employment with the second defendant, they no longer had application. The fact that there is no reference to this expiry date in Exhibit 1(80) can hardly be taken to mean that the provision continued to be operational.
During the course of the trial reference was made to a deed of release on TNT letterhead which commences at Exhibit 1(148). That was prepared so it would appear on its face on 28 September 2005, which was shortly before the meeting the plaintiff had on 30 September 2005 where she was provided with a copy of that deed of release which is also produced as Exhibit 1(144). As is evident from Exhibit 1(148) and the evidence at trial the plaintiff refused to sign the deed of release and on Exhibit 1(151) there is a notation in the handwriting of an unknown individual noting "Not paid, will not sign deed of release". From what appears to be a copy of an email Exhibit 1(160) dated 11 October 2005 from Mr Neilsen to a Mr Shrubsole there is a request to process a revised payment to the plaintiff in the amount of $38,101. It is unclear how this email came about or what it means as it was not the subject of any particular or detailed evidence at trial. Further, an unidentified individual has noted in handwriting on that exhibit "Paid 8 weeks plus 5 weeks notice and leave. We still owe 52 weeks – 13 weeks = 39 weeks at $945.61" there is then some further handwriting which may or may not be by the same author and which is not particularly clear nor is it the subject of any particular evidence at trial and this is followed by the figure $36,879. In submissions, counsel for the plaintiff noted in passing that suggestion that a redundancy payment to the plaintiff be calculated on the basis of 52 weeks salary minus eight weeks salary already paid being 44 weeks at $945.61 was a possible finding that the court could make as to the plaintiff's entitlement, but it was also noted that whilst it appeared to be some offer in the form of a deed of release the plaintiff refused to sign it and counsel did not press the court to find that it formed the basis of any contract or agreement between the parties. This was echoed in the brief submission of counsel for the defendants that the deed itself could not provide a basis for inferring or concluding that it was a term of contract between the parties. There is very little evidence concerning this particular aspect of the issue and it was clear from the submissions of counsel both for the plaintiff and the defendants that no real reliance was placed on this method of calculation by way of a redundancy entitlement to the plaintiff.
For the foregoing reasons the plaintiff has not established that when she was made redundant on 30 September 2005 she was entitled on the basis of a contract or on any basis to a redundancy payment as claimed or any redundancy entitlement and the plaintiff's claim is therefore dismissed.
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