Zehnder v Sell Lease Property Pty Ltd T/As Sell Lease Property and Ors (No.2)
[2018] FCCA 815
•12 April 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZEHNDER v SELL LEASE PROPERTY PTY LTD T/AS SELL LEASE PROPERTY & ORS (No.2) | [2018] FCCA 815 |
| Catchwords: INDUSTRIAL LAW – Alleged contravention of general protections – alleged breaches of Fair Work Act 2009 (Cth) – National Employment Standards – alleged breach of Real Estate Industry Award 2010 (WA) – whether constructive dismissal – accessorial liability – alleged breach of contract. |
| Legislation: Code of Conduct for Agents and Sales Representatives 2011 (WA), r.8(2) & (3) Fair Work Regulations 2009 (Cth) |
| Cases cited: Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500; (2012) 86 ALJR 1044; (2012) 220 IR 445; (2012) 290 ALR 647; (2012) 64 AILR 101-722 Cheng v Western Pursuits Trust (t/as Vauxhall Inn) [2016] FCCA 3275 Community and Public Sector Union v Telstra Corporation Limited [2000] FCA 872; (2000) 101 FCR 45 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 253 CLR 243; (2014) 88 ALJR 980; (2014) 245 IR 354; (2014) 314 ALR 1; (2014) 66 AILR 102-268 Fair Work Ombudsman v Access Embroidery (Australia) Pty Ltd [2012] FMCA 835 Maslen v Core Drilling Services Pty Ltd & Anor [2013] FCCA 460 |
| Applicant: | LEE ZEHNDER |
| First Respondent: | SELL LEASE PROPERTY PTY LTD T/AS SELL LEASE PROPERTY |
| Second Respondent: | BRETT QUINN |
| Third Respondent: | GRAEME MACEWAN |
| File Number: | PEG 128 of 2015 |
| Judgment of: | Judge Antoni Lucev |
| Hearing dates: | 2, 3 and 4 May 2016 |
| Date of Last Submission: | 4 May 2016 |
| Delivered at: | Perth |
| Delivered on: | 12 April 2018 |
REPRESENTATION
| For the Applicant: | In person |
| Counsel for the Respondents: | Mr RJS French |
| Solicitors for the Respondents: | Barry Nilsson Lawyers |
ORDERS
The parties are to confer with a view to reaching agreement on a minute of proposed consent orders, and if agreement is reached the minute of proposed consent orders is to be filed by the applicant by 4.00pm on 26 April 2018.
If agreement as to a minute of proposed consent orders cannot be reached between the parties, then each party is to file and serve a minute of proposed orders by 4.00pm on 3 May 2018.
Otherwise, the matter is adjourned to 2.15pm on 18 May 2018 for mention and further directions.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 128 of 2015
| LEE ZEHNDER |
Applicant
And
| SELL LEASE PROPERTY PTY LTD T/AS SELL LEASE PROPERTY |
First Respondent
| BRETT QUINN |
Second Respondent
| GRAEME MACEWAN |
Third Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court is a Further Amended Originating Application (“Further Amended Application”) filed on 18 December 2015 by the applicant, Lee Zehnder (“Mr Zehnder”) alleging various contraventions of the Fair Work Act 2009 (Cth) (“FW Act”) by his former employer, the first respondent, Sell Lease Property Pty Ltd T/As Sell Lease Property (“Sell Lease Property”), and accessorial liability in relation to those contraventions for the second and third respondents, Brett Quinn (“Mr Quinn”) and Graeme MacEwan (“Mr MacEwan”) respectively (collectively “Respondents”), who both had senior roles with Sell Lease Property, which is a real estate business for whom Mr Zehnder worked as a part-time sales representative.
There are significant factual and legal similarities between this matter and Eaton v Sell Less Property Pty Ltd & Ors (No 2) [2018] FCCA 558 (“Eaton (No 2)”) delivered by this Court on 9 March 2018, but the two matters are not factually or legally identical in all respects. In the circumstances, the Court has had to consider all of the matters raised in these proceedings afresh.
Claims made in the Further Amended Application
In the Further Amended Application Mr Zehnder alleges that:
a)he was not given a Fair Work Information Statement (see s.125(1) of the FW Act) when he commenced employment with Sell Lease Property, or at any time thereafter;
b)on 9 December 2014 he was requested to sign a new casual employment contract or resign, and Mr Quinn (who was Sell Lease Property’s Chief Executive Officer) told him that this was due to recent legal advice in relation to Sell Lease Property’s employment contracts which indicated that the employment contracts were problematic and must be replaced;
c)on 18 December 2014 Richard King (“Mr King”), a former employee of Sell Lease Property, reached a confidential settlement with Sell Lease Property in relation to a claim he brought against Sell Lease Property;
d)on 19 December 2014 Mr Quinn sent a text message to Mr Zehnder, and the two subsequently met, with Mr Quinn requesting Mr Zehnder’s resignation, and upon an explanation being sought Mr Zehnder was told that it was due to problems with Sell Lease Property’s employment contracts highlighted by a claim brought about by a former employee, whom Mr Zehnder presumed was Mr King;
e)in an email to Mr Quinn on 24 December 2014 Mr Zehnder indicated that he would neither resign nor sign a casual employment contract but would consider a revised part-time employment contract, and also sought advice about unpaid wages from the time he had commenced employment with Sell Lease Property;
f)on 31 December 2014 Mr Quinn and Mr Zehnder met and agreed upon a new mutually agreeable part-time employment contract, and Mr Zehnder also asked Mr Quinn about the payment of his unpaid wages, which he says Mr Quinn refused to back-pay;
g)on 18 January 2015 Mr Quinn sent Mr Zehnder an email in which he threatened to terminate Mr Zehnder’s employment contract (“Original Contract”) if Mr Zehnder did not sign the new part-time employment contract, and Mr Quinn “reiterated previous legal advice that my existing contract was problematic”;
h)on 23 January 2015 Mr Zehnder signed the new part-time employment contract (“Part Time Contract”) “despite ongoing concerns fearing that my employment would be terminated otherwise given the previous attempts to constructively dismiss me on 19 December 2014 and 18 January 2015”;
i)on 30 January 2015 Mr Zehnder sent Mr Quinn an email indicating that he intended to inform him of various issues and concerns with the roster, targets and related matters, and Mr Quinn says that it was also his intention (seemingly not disclosed to Mr Quinn) to discuss bullying;
j)on 31 January 2015 Mr Zehnder received a letter by email from Mr Quinn headed “Introduction to major change”, in which it was stated that a decision had been made to make all part-time sales representative positions redundant;
k)on 3 February 2015 following an email to Mr Quinn from Mr Zehnder indicating that in future he would only deal with Mr MacEwan, Mr Quinn sent an email to Mr Zehnder informing him that Sell Lease Property’s lawyer, Steve Heathcote (“Mr Heathcote”), would be responding to all communications on behalf of Sell Lease Property;
l)Mr Zehnder sent an email to Mr Heathcote on 3 February 2015 asking him “a number of questions regarding the decision to make the part-time sales representative positions redundant, including how many positions were affected; who the decision-makers were; and when I could expect to receive my unpaid wages and entitlements”;
m)Mr Heathcote replied by email the same day “informing … that … [Mr Quinn] was the sole decision-maker; that at least one other person was affected by the decision; and that in the event … [Mr Zehnder’s] employment was terminated … [he] would receive everything to which … [he] was both contractually and legally entitled to under the national employment standards”;
n)on 4 February 2015 Mr Zehnder received an email from Mr Heathcote informing him that Mr Quinn had instructed Mr Heathcote that there were vacancies for full-time commission only sales representatives, and asked if Mr Zehnder would be interested;
o)Mr Zehnder replied and advised Mr Heathcote that he would not accept a commission only role as it would be illegal for him to be employed on a commission only basis as he did not meet the pre-requisite criteria under the relevant industrial award (being the Real Estate Industry Award 2010 (WA) (“Award”); and
p)on 9 February 2015 Mr Zehnder received a letter from Mr Quinn informing him that his employment had been terminated effective immediately on the grounds of redundancy, with payment of a week’s wages in lieu of notice together with accrued annual leave, but none of the other entitlements that Mr Zehnder says that he was owed, and with an amount deducted without Mr Zehnder’s authorisation.
In relation to wages, entitlements and allowances Mr Zehnder alleges that he:
a)was not paid wages for the period 2 April 2014 to 4 January 2015;
b)was not paid superannuation on the abovementioned unpaid wages;
c)was required to use his own mobile phone during the course of employment and was not paid an entitlement to a mobile phone allowance;
d)was not paid any entitlement to leave loading upon termination;
e)was required to use his own motor vehicle during the course of employment and was not paid an entitlement to motor vehicle allowance;
f)was not paid accrued annual leave at the applicable minimum wage rate; and
g)was not reimbursed for employer required work-related expenses,
as required under the Award.
Mr Zehnder further alleged that:
a)Sell Lease Property had deducted unauthorised payments from amounts payable to him; and
b)he was unreasonably required to spend part of an amount payable in relation to the performance of work.
Mr Zehnder alleges that his dismissal was not a genuine redundancy but rather a sham redundancy, and that Sell Lease Property took adverse action against him within the meaning of s.342(1) of the FW Act by:
a)injuring him in his employment on 9 December 2014, 18 January 2015, 31 January 2015, 4 February 2015 and 9 February 2015;
b)altering his position to his prejudice on 18 January 2015 and 9 February 2015; and
c)dismissing him on 9 February 2015,
in contravention of s.340(1) of the FW Act because he had workplace rights under s.341(1)(a), (b) and (c)(ii) of the FW Act.
Specifically in relation to the alleged workplace rights Mr Zehnder says that he was:
a)entitled to the benefit of a workplace law under s.341(1)(a) of the FW Act, namely:
i)section 323(1)(a) of the FW Act, which requires an employer to pay an employee, in full, amounts payable in relation to the performance of work, in relation to which he was owed wages and entitlements but was not paid;
ii)clause 19 of the Award which requires employers to reimburse employees for any required work-related expenses incurred, for which he has not been reimbursed;
iii)clause 22.2 of the Award which requires employers to make superannuation contributions to a superannuation fund for the benefit of the employee, which superannuation contributions had not been made on unpaid wages; and
iv)section 119 of the FW Act, which requires employers to pay redundancy pay to employees, which he was not paid because he was dismissed less than two months before the eligibility period of one year’s continuous service;
b)under s.341(1)(b) of the FW Act he was able to initiate a process or proceeding, namely an application for unfair dismissal under s.394 of the FW Act, and that he was prevented from exercising that workplace right as the dismissal was masked as a genuine redundancy;
c)under s.341(1)(b) of the FW Act he was able to initiate a process or proceeding, namely an application for a Fair Work Commission order to stop bullying pursuant to s.789FC of the FW Act, which right he was prevented from exercising when he was dismissed by way of adverse action after mentioning his concerns and issues; and
d)under s.341(1)(c)(ii) of the FW Act he was able to make a complaint or inquiry in relation to his employment, and he had concerns regarding his new roster and consultation requirements under cll.8.2 and 9 of the Award requiring that in the event of a dispute the parties must first attempt to resolve the matter at the workplace by discussions between the employee concerned and the relevant supervisor.
Mr Zehnder also alleges other contraventions of the FW Act, namely:
a)section 44 of the FW Act by:
i)failing to give him a copy of the Fair Work Information Statement; and
ii)failing to pay his accrued but untaken annual leave at the correct base rate of pay on termination of employment as required under s.90(2) of the FW Act;
b)section 45 of the FW Act by:
i)failing to pay superannuation on his wages in contravention of cl.22.2 of the Award;
ii)failing to pay in accordance with the applicable minimum wage set by the Award;
iii)failing to reimburse for work-related expenses therefore contravening the Award; and
iv)failing to pay at least monthly in contravention of the Award during the period;
c)section 323 of the FW Act by failing to pay, in relation to the performance of his work, the full contractual entitlement at least monthly;
d)section 324 of the FW Act by deducting an amount from an amount payable without authorisation;
e)section 325 of the FW Act by unreasonably requiring him to spend part of an amount payable in relation to the performance of work; and
f)section 326 of the FW Act by requiring payment of an amount from an amount payable without authorisation.
The alleged contraventions of ss.324 and 326 of the FW Act were ultimately withdrawn by Mr Zehnder.
Amended Response
In an Amended Response filed on 16 January 2016 the Respondents oppose the making of the orders sought by Mr Zehnder, save that Sell Lease Property consents to the making of orders that:
a)Sell Lease Property pay Mr Zehnder $5,524 in unpaid wages and amounts owing to Mr Zehnder; and
b)Sell Lease Property pay to Mr Zehnder $2,532.36 in unpaid superannuation, allowances, entitlements and reimbursable expenses owing to Mr Zehnder under the Award,
but otherwise deny Mr Zehnder’s claims.
Sell Lease Property also seeks an order that Mr Zehnder pay its costs in accordance with s.570 of the FW Act.
In relation to the adverse action claims under s.340 of the FW Act, Sell Lease Property:
a)denies that it contravened s.340 of the FW Act in relation to any actions it took in relation to Mr Zehnder;
b)admits that it dismissed Mr Zehnder, but says it did not dismiss Mr Zehnder or otherwise alter the position of Mr Zehnder to Mr Zehnder's prejudice:
i)because Mr Zehnder did or did not:
A.have a workplace right;
B.choose to exercise a workplace right;
C.propose to exercise a workplace right; or
ii)to prevent Mr Zehnder from exercising a workplace right; or
iii)because another third person exercised or proposed to exercise a workplace right for Mr Zehnder’s benefit or a class of persons to which Mr Zehnder belongs;
c)admits Mr Zehnder made various complaints to Sell Lease Property during the course of his employment with Sell Lease Property;
d)states that it did not however dismiss Mr Zehnder or otherwise engage in adverse action in respect of Mr Zehnder (which is denied), because of any workplace right Mr Zehnder possessed including because he made any complaint or threatened to make any complaint to any person or organisation during the course of his employment with Sell Lease Property;
e)states that Mr Zehnder’s employment was terminated only because his position was redundant;
f)states that even if Mr Zehnder’s dismissal was a “sham redundancy”, which is denied, this does not, in and of itself, give rise to a contravention of s.340 of the FW Act;
g)states that in relation to allegations about various other incidents made by Mr Zehnder that adverse action was taken against him within the meaning of s.342 of the FW Act, that other than the termination of Mr Zehnder’s employment on 9 February 2015, it does not admit that those incidents occurred as described or that they constituted adverse action within the meaning of s.342 of the FW Act;
h)states that in January 2015 Sell Lease Property did offer Mr Zehnder a new part-time employment contract in order to ensure that his employment complied with the law, and that any request for Mr Zehnder to enter into a new contract was to ensure compliance with the law, and that following negotiation on its terms Mr Zehnder accepted the Part Time Contract on 23 January 2015;
i)states that in any event, all part-time roles with Sell Lease Property were, on 9 February 2015, made redundant, and therefore there was no loss or detriment suffered by Mr Zehnder; and
j)states that in any event, even if it is found that any adverse action was taken in relation to Mr Zehnder, which is denied, such action was not taken because of a workplace right (as defined by s.341 of the FW Act) and therefore Sell Lease Property did not contravene s.340 of the FW Act.
In relation to non-payment of wages and entitlements Sell Lease Property:
a)admits that there is an outstanding amount of $5,524 in unpaid wages owed to Mr Zehnder: see [9(a)] of the Further Amended Application – Form 2 (“Form 2”);
b)admits there is an outstanding amount of $2,532.36 in unpaid superannuation, allowances, entitlements and reimbursable expenses, which are owed to Mr Zehnder, and which consist of the following amounts:
i)superannuation in respect of the abovementioned unpaid wages - $524: Form 2 at [9(b)];
ii)work-related expenses - $100: Form 2 at [9(c)];
iii)mobile phone allowance - $1,089: Form 2 at [9(d)];
iv)motor vehicle allowance - $225: Form 2 at [9(e)];
v)underpayment of accrued annual leave - $44: Form 2 at [9(f)]; and
vi)leave loading - $100: Form 2 at [9(g)]; and
c)otherwise denies Mr Zehnder’s claims for work-related expenses.
In relation to the allegations of impermissible spending requirements and deductions Sell Lease Property denies that Mr Zehnder was unreasonably required to spend part of an amount payable in relation to the performance of work in contravention of s.325 of the FW Act.
In relation to Mr Zehnder’s eligibility for a redundancy payment Sell Lease Property denies that Mr Zehnder is entitled to any redundancy payment and says that he was not employed by it for the minimum statutory period of 12 months to entitle him to any redundancy payment.
In relation to the provision of a Fair Work Information Statement to Mr Zehnder by Sell Lease Property, Sell Lease Property admits that it did not provide the Fair Work Information Statement to Mr Zehnder.
In relation to the claims of accessorial liability as against Mr Quinn and Mr MacEwan Sell Lease Property says that:
a)Mr Quinn did not contravene s.550 of the FW Act as there has been no primary contravention of ss.325 and 340 of the FW Act by Sell Lease Property in which Mr Quinn could be involved. No accessorial liability claim in respect of a breach of s.325 of the FW Act has been particularised in the Further Amended Application;
b)Mr Quinn was not a director of Sell Lease Property during the course of Mr Zehnder’s employment;
c)Mr MacEwan did not contravene s.550 of the FW Act as there has been no contravention by Sell Lease Property in which Mr MacEwan could be involved;
d)in any event, Sell Lease Property’s decisions to make Mr Zehnder’s position redundant, and subsequently to terminate his employment, were made without the knowledge of Mr MacEwan. Mr MacEwan only became aware that those decisions had been made after they were made;
e)Mr MacEwan had no knowledge of the amounts that Sell Lease Property paid to Mr Zehnder in respect of wages, commissions, superannuation, entitlements, allowances, work-related expenses or any other amounts and no knowledge of any amounts that Sell Lease Property required Mr Zehnder to spend; and
f)in the circumstances referred to above, Mr MacEwan denies that he was involved in Sell Lease Property’s alleged contraventions for the purpose of s.550 of the FW Act.
In relation to costs Sell Lease Property says that:
a)save for the claims which Sell Lease Property concedes above, Mr Zehnder has acted without reasonable cause, within the meaning of s.570(2)(a) of the FW Act, in instituting these proceedings for the residual claims;
b)Mr Zehnder has acted unreasonably, within the meaning of s.570(2)(b) of the FW Act, in maintaining all of his claims and has caused the Respondents to incur costs; and
c)the Respondents seek the costs of defending Mr Zehnder’s claims.
Evidence
Mr Zehnder relied upon the following affidavits:
a)Mr Zehnder’s affidavit affirmed 2 October 2015 (“Zehnder October 2015 Affidavit”);
b)Mr Zehnder’s affidavit affirmed 29 January 2016 (“Zehnder January 2016 Affidavit”); and
c)Mr Zehnder’s affidavit affirmed 4 March 2016 (“Zehnder March 2016 Affidavit”).
The Respondents relied upon the following affidavits:
a)affidavit of Brett Quinn, affirmed 28 April 2016 (“Quinn Affidavit”);
b)affidavit of Brian McKiernan, affirmed 19 February 2016 (“McKiernan Affidavit”); and
c)affidavit of Graeme MacEwan, affirmed 19 February 2016 (“MacEwan Affidavit”).
The Court has had regard to the admissible evidence in each of the above affidavits, and the exhibits tendered in the proceedings.
The Court has also had regard to the evidence as it appears in the transcript of the proceedings over three days. The transcripts of days 1 and 2, being 2 and 3 May 2016 (which the Court will refer to as “TD1” and “TD2” respectively) are numbered consecutively from page 1 through to page 117, but the transcript of the final day, 4 May 2016, being day 3, re-commences at page 1 and goes to page 21. The Court has read the transcript in its entirety, and re-read several parts of it, during preparation of the Reasons for Judgment.
Insofar as the evidence is concerned the Court has placed more reliance on the evidence of Mr Quinn and Mr McKiernan than that of Mr Zehnder. Mr Zehnder’s evidence, whilst not unreliable, had a tendency to exaggeration (as in his characterisation of a perfectly normal email as a threat: see [57] below) and a tendency to make assertions and treat them as facts. By contrast, both Mr Quinn and Mr McKiernan gave their evidence in a straightforward and believable manner. Mr MacEwan’s evidence was generally to the point, including his admissions against interest in relation to the question of accessorial liability, but there were some elements of his relatively short evidence which were a little vague (but at the end of the day nothing significant turns on them).
Factual background
The business of Sell Lease Property is that of a real estate agent and property manager, operating in both commercial and residential real estate sales. In order to effect sales and run its business Sell Lease Property engages sales representatives: McKiernan Affidavit at [1]-[2]; MacEwan Affidavit at [13]-[14].
The operations structure of Sell Lease Property was that:
a)Mr Quinn was the Chief Executive Officer responsible for running the business;
b)Mr McKiernan was the Operations Manager who assisted Mr Quinn; and
c)Mr MacEwan was a Director and Licensee involved in the overall management of Sell Lease Property.
MacEwan Affidavit at [1]-[9].
Decisions in relation to Mr Zehnder’s employment, and in particular decisions relating to engagement, status and termination were decisions for which Mr Quinn was primarily responsible: Quinn Affidavit at [5]; MacEwan Affidavit at [7].
Mr Zehnder’s employment
Mr Zehnder commenced employment with Sell Lease Property on 2 April 2014, and was employed as part-time sales representative: Zehnder October 2015 Affidavit at [1] and [4], under the terms of the Original Contract which was comprised of:
a)a signed letter of offer; and
b)a schedule of remuneration, benefits and employment conditions, and some other documents: Zehnder October 2015 Affidavit at Annexure A.
The Contract describes Sell Lease Property, the employer as “the Supplier”, and Mr Zehnder, the employee as “the Customer”. The Contract relevantly provides as follows:
a)that Mr Zehnder was engaged as a “Property Consultant”, and was required to work in accordance with the Original Contract, and the Real Estate and Business Agents Act 1978 (WA) (“REBA Act”), and any regulations thereto, the Real Estate Institute of Western Australia (“REIWA”) Code of Practice, the REIWA Code of Ethics, the REIWA Auction Code of Conduct, the Department of Commerce Code of Conduct and any policies of “the Agent” (a term not defined but presumably intended to include Sell Lease Property ) “as amended from time to time”: Contract at page 1;
b)it was agreed that “in the event of termination, the Customer shall be required to pay to the company, upon invoice, all outstanding personal profile marketing expenses and immediately return all equipment supplied by the company … unless already paid for by the Customer”, noting that “the company” is also a term not defined in the Contract, but presumably intended to mean Sell Lease Property: Contract at page 1;
c)obliged the Customer to comply with all reasonable and lawful directions given by the Supplier from time to time and to adhere to the terms of the Supplier’s Policy Procedure Manual: Contract at page 1;
d)that the “… customer shall not without the consent of the supplier be engaged or interested in either directly or indirectly in any capacity, in any trade, business or occupation which may interfere with the performance of his duties”: Contract at page 2;
e)that the supplier was to provide to the customer, within 7 days of each pay period expiring, a statement detailing all income and expenses for that pay period for which the customer was responsible: Contract at page 2;
f)that the customer was to provide and maintain their own vehicle;
g)that the customer was required to provide and maintain a mobile phone at the customer’s own cost as required;
h)for the customer to pay any penalty, fine, or both, imposed pursuant to the provisions of the REBA Act (and Regulations thereto), and the various Codes of Practice, Ethics and Conduct, as a result of some wrongful act or negligence or default of the customer, to “the Agent” the full amount of any penalty or “fee”, unless such “costs” were covered by the supplier’s Professional Indemnity Insurance Policy: Contract at page 2; and
i)the customer agreed to work “8 hours per week to be averaged over a 12-month period”, and that the “customer’s hours shall be worked as agreed between the customer and the supplier, to suit the operational requirements of the business”: Contract at page 2.
Under the heading “Costs Incurred Upon Commencing Employment”, “Remuneration” and “Superannuation” the Contract at pages 3-4 provided as follows:
Costs Incurred Upon Commencing Employment
All customers will be required upon commencing employment to incur the items indicated below:
• Company Photos At cost
• 500 Business Cards At cost
• Mobile Scanner $410
• Marketing Material Designs $200
• Corflute Home Open Pointers
($40 each incl spike & GST) x _____ = $
TOTAL $
The above total must be paid within 2 business days of signing this contract as payment towards the above costs. Any additional costs that may have been mutually agreed, eg for profile marketing, will be payable in advance upon approval of cost quotation and an invoice will be issued for tax purposes.
Customers will be responsible for maintaining the above equipment. If the equipment is lost, stolen or damaged it will be the customer's responsibility to replace.
In the event that the customer ceases employment with Sell Lease Property all Standard home open signs must be returned to Sell Lease Property.
Remuneration
The customer is employed on a part time basis for 8 hours per week at a rate of $16.50 per hour, as required by the minimum Federal Award.
Sell Lease Property provides two (2) sources of remuneration. These are:
1. Commission = 100% Gross Commission - GST - $2000 SLP Support Fee - Insurance & Payroll tax. For Example Only:
Gross Commission $12,500
GST -$1136
SLP Support Fee -$2000
Insurance -$140
Payroll Tax -This will only be deducted IF it is a statutory requirement
To Employee $9224.00
2. Property Management Authority Equity = As per SLP Agreement
3. The customer will be required to incur a 20% mentoring fee from each gross settled commission for a minimum of six settlements. This fee covers the training and mentoring costs.
All remuneration will be assessed and paid fortnightly into your nominated bank account. All remuneration paid will be based on settled sales accrued during the previous fortnight.
Superannuation
You are entitled to be a member of the AMP Superleader Fund, or nominate an approved superfund of your choice. Sell Lease Property Pty Ltd will make Superannuation contributions to the fund on your behalf. These contributions are currently equivalent to 9.25% and are included in your gross commission as indicated above.
Subject to the rules of the fund and the requirements of the Australian Tax Office, permanent customers may contribute an additional amount to the fund by way of salary sacrifice or after-tax contributions.
The Contract went on to provide:
a)a Fair Treatment System whereby any issues of customer disagreement with decisions of the supplier are to be attempted to be resolved by addressing them with the Licensee, but if they remain unresolved are to “be dealt with by the Sell Lease Property Fair Treatment Procedure” with work continuing normally as directed by the Licensee whilst issues are being addressed: Contract at page 4;
b)for a “Sell Lease Property Equal Employment Opportunity Procedure” (“EEO Procedure”) to define the supplier’s obligations and assist in achieving a harassment free workplace, with any complaint or dispute concerning equal opportunity or discrimination to be dealt with in accordance with the EEO Procedure: Contract at page 4;
c)for attendance at meetings in the following terms:
To maintain a cohesive team Sell Lease Property requires EVERY customer of the su[p]plier to attend as a minimum ONE team meeting each month. If you are absent from the SLP Mandatory Team Meeting more than twice in any given year without approval from the general manager this employment contract will be terminated. You may also be required to attend other meetings as requested by Sell Lease Property from time to time for the purposes of keeping you updated with organizational and industry changes.
Contract at page 4; and
d)in relation to “All profile (Personal) marketing activities” the Contract provides that they are only to be “implemented/produced once full payment is received in advance from the customer” and that it is the customer who is “responsible for all expenses associated with the design, production and distribution of all personal marketing activities”: Contract at page 6.
In relation to termination of the Contract (whether by dismissal or resignation) the Contract provided as follows:
This Employment Agreement may be terminated immediately by the supplier in the event of serious misconduct or for any conduct on the customer's part, which would justify summary dismissal.
Upon termination or resignation, if the customer owes the supplier money either from profile marketing, property marketing, costs incurred upon commencing employment or any other expense, this sum will be recovered by the supplier from any accrued entitlements owing to the customer. The customer authorises the supplier to make any such deductions for the purposes of this clause and the supplier will issue written advice of the amounts owed and debited. If insufficient funds are available from accrued entitlements then the customer hereby agrees to pay all outstanding funds within 7 days of receipt of invoice for these amounts.
Should the contract of employment between the supplier and the customer cease due to the customer's death, a person nominated as the next of kin on the customer's Personal Details Form shall be paid all monies due.
After the completion of the probationary term, the contract of the employment shall be terminable as follows:
Period of Service:
Less than 1year...........................At least 1week notice period
More than 1year........................At least 2 weeks notice period
All books of accounts, records, papers, correspondence and other documents of the supplier's business and any other property of the supplier that is in the possession or under the control of the customer shall be returned to the supplier whenever requested by the supplier and in any event immediately upon termination of employment. This will include signs, keys and any electronic equipment originally supplied by Sell Lease Property.
Upon termination all listings shall remain the property of Sell Lease Property Pty Ltd, however, in the event the customer wishes to terminate Sell Lease Property is happy to negotiate a mutually beneficial arrangement. Any outstanding remuneration owed to the customer as at the time of termination will be paid taking into account any monies due to the supplier. The supplier will provide an itemized account.
Sell Lease Property invests considerable time and money into the recruitment, training and development of its highly skilled customers and support staff. Upon termination or resignation of employment with Sell Lease Property, all customers including property consultants agree that for a period of two years after ceasing employment with Sell Lease Property, they will not hire or work directly with any Sell Lease Property customer in a business of which either is a director or shareholder. If in the event an ex Sell Lease Property customer wishes to hire or work directly with another Sell Lease Property customer in a business other than Sell Lease Property, that ex customer must make a formal request in writing to the general manager of Sell Lease Property to request to directly hire or work with the Sell Lease Property Customer. In the event Sell Lease Property mutually agrees to allow the ex customer to directly hire or work with another Sell Lease Property customer then the ex customer understands and accepts that a $50,000 Recruitment and Training Fee will be paid to Sell Lease Property as compensation. The ex customer understands that this fee is not a penalty fee but rather a fee to be used to recruit, train and develop another customer of similar capability. This fee will be payable within 7 days of the Sell Lease Property customer commencing employment with the ex customer who has terminated their employment from Sell Lease Property.
Contract at pages 6-7.
The Contract also provided that any amendments to the Contract might be made “as and when required to meet the ongoing needs of the Company. No changes will be made without consulting the relevant customer first”: Contract at page 7.
The Contract is signed by Mr MacEwan in his capacity as “Licensee/Director”: Contract at page 7.
Mr Zehnder had no prior work experience within the real estate industry before he was employed by Sell Lease Property: Zehnder October 2015 Affidavit at [2]; and as such he was referred to (as were other sales representatives without prior real estate experience) as a “rookie”: Quinn Affidavit at [11].
The mode of payment of Mr Zehnder under the Contract was by way of commission payment only: Zehnder October 2015 Affidavit at [4].
Commission payments
Although the Original Contract provided for Mr Zehnder to work an average of 8 hours per week, and was effectively a contract for a part-time sales representative, it would appear that Sell Lease Property either engaged or treated the majority, if not all, of its sales representatives as if they were employed on a commission only basis, and did so because:
a)this was perceived to offer greater incentive to perform; and
b)Sell Lease Property financial and managerial resources were not sufficiently large to support a large inexperienced salary based workforce of sales representatives: Quinn Affidavit at [10].
Concerns with respect to the commission only method of payment of sales representatives arose during the latter half of 2014 when an employee of Sell Lease Property raised concerns as to whether or not he had been properly paid: Quinn Affidavit at [11].
The effect of the legality of the commission only payments for the sales representatives’ workforce being raised was that Sell Lease Property sought legal advice as to whether it could employ “rookies” on employment contracts which provided for payments on a commission only basis: Quinn Affidavit at [11].
The legal advice received by Sell Lease Property, on or about 21 November 2014, was that:
a)“rookie” sales representatives could not be employed on contracts which provided for commission only payments as that did not satisfy the requirements of the Award; and
b)Sell Lease Property ought to terminate the contracts of employment for rookie sales representatives which provided for payment on the basis of commission only, as those contracts did not meet the minimum requirements of the Award: Quinn Affidavit at [12]-[13] and Annexure BRQ-2; McKiernan Affidavit at [20].
Commission and casual contracts
The consequence of the receipt of advice that commission only contracts did not meet the requirements under the Award for “rookie” employees was that Sell Lease Property determined that commission only contracts would only be offered to its more experienced sales representatives in accordance with the requirements of the Award, and that those who did not meet the Award requirements for commission only contracts would be asked to enter into casual wage based contracts: Quinn Affidavit at [15]. The rationale behind offering casual wage based contracts was that:
a)it reduced the risk of an unproductive sales representative (that being someone not selling houses) who might be an ongoing financial and practical burden on the business;
b)they require less management than a part-time employee who had to be rostered for consistent weekly hours and who had to be found work for that time; and
c)casual employees could be asked to work whenever they were needed, and could deal with any surplus work that warranted extra workers: Quinn Affidavit at [15]-[16].
Put shortly, in Mr Quinn’s view, a casual employee offered flexibility whereas a part-time employee was a fairly rigid obligation: Quinn Affidavit at [16].
A spreadsheet was created by Mr Quinn in which he identified employees by name, and where those employees were to be on commission only contracts the number “4” appeared next to their name: Quinn Affidavit at [317] and Annexure BRQ 3. In relation to Mr Zehnder, Mr Quinn identified that Mr Zehnder did not meet the requirements for a commission only contract and therefore required a new casual contract, and in that regard he was one of 13 or so other employees who were in the same situation: Quinn Affidavit at [19]. Mr Quinn determined to deal firstly with those employees who were to be offered a replacement casual contract, and then to roll out new commission only contracts to employees who met the Award requirements for commission only contracts: Quinn Affidavit at [19].
The offer of casual contracts
Employees who were to be offered casual contracts were emailed by Mr Quinn on 9 December 2014: Quinn Affidavit at [20] and Annexure BRQ-4. The terms of an email sent by Mr Quinn to those being offered casual contracts:
a)indicated that as a result of a recent event Sell Lease Property had been required to seek independent legal advice concerning employment contracts;
b)indicated that the lawyers had advised Sell Lease Property that current employment contracts were “problematic and should be cancelled ASAP”;
c)indicated that the present contract needed to be replaced with one that was more appropriate;
d)included the terms of the Award provision concerning commission only employment, that being cl.16; and
e)included some analysis of the possible upside and downside to being employed on a casual basis: Quinn Affidavit at Annexure BRQ-4.
The email also:
a)requested that Mr Zehnder provide evidence that he had earned at least $35,000 per annum in commission in any 12 month period over the previous five years in case he was eligible for a commission only contract, and this was done because it appeared to be the relevant requirement under the Award for commission only contracts; and
b)states that if the employee does not meet the criteria for a commission only contract then they will be offered a casual employment contract: Quinn Affidavit at Annexure BRQ-4
The email also expressly said as follows:
Even if you don’t meet the criteria to be on a commission only contract, you can still continue to work as a “Casual” sales representative of SLP.
Quinn Affidavit at Annexure BRQ-4.
Mr Zehnder asserts that the purport of the email was that he had to sign a new casual contract or resign. Sell Lease Property submits that the email did not state that Mr Zehnder’s employment would be terminated or that he would be forced to resign if he did not sign the casual employment contract.
The casual employment letter of offer sent to employees was in the following terms:
We are pleased to offer you the Casual Employment Position of Sales Representative.
You will be employed on a casual basis. Your direct supervisor, Brian McKiernan, must make a written request of you for all hours worked. All hours worked must also be approved in writing on the time sheet provided to you and submitted to your direct supervisor, Brian McKiernan, no later than the close of business Monday each week. You will not be paid for any hours worked that are not requested or approved in writing by your direct supervisor.
According to the Relevant Real Estate Industry Award, you will be paid not less than $22.35 Per Hour which includes a 25% loading to cover all Leave Entitlements.
As a condition of remaining eligible as a casual employee, you must attend a monthly update event, which is charged at $100. This update event is to ensure you remain current in SLP's Practices, Procedures and Policies so that you can conduct the work as a casual SLP real estate Sales Representative safely and effectively as and when required by SLP.
Please indicate your acceptance of this offer by signing below and returning this letter via Australia post or scanned on email to [email protected]
We look forward to working with you to create a world-class real estate organisation.
The letter was sent from Mr Quinn: Quinn Affidavit at Annexure
BRQ-4
Mr Zehnder replied to the 9 December 2014 email from Mr Quinn querying whether the email was intended for him as he thought that it was only for people who were currently on commission only contracts, and that he was on a part-time, 8 hours per week, contract “at the federal minimum award rate”: Quinn Affidavit at Annexure BRQ-5; Zehnder October 2015 Affidavit at [15] and Annexure F.
Mr Zehnder said that Mr Quinn said that he would check Mr Zehnder’s employment status with Mr McKiernan and get back to Mr Zehnder: Zehnder October 2015 Affidavit at [15] and Annexure F.
Alleged constructive dismissal
Mr Zehnder asserts that on 18 December 2014 Mr King, a former sales representative at Sell Lease Property reached a confidential settlement with Sell Lease Property in relation to a claim he brought against it for unpaid wages and commissions.
Mr Zehnder says that on 19 December 2014 he received a text message on his mobile phone from Mr Quinn asking him to attend a meeting regarding the 9 December 2014 email. Mr Zehnder says that he attended the meeting with both Mr Quinn and Mr McKiernan and that during that meeting:
a)Mr Quinn asked him to resign;
b)Mr Zehnder was shocked by this and when he asked Mr Quinn further questions Mr Quinn mentioned that a former employee had taken legal action due to problems with Sell Lease Property’s contract;
c)in response to a question from Mr Zehnder Mr McKiernan indicated that Mr Zehnder did not have to leave immediately but could have a week to sort things out and find new employment; and
d)when Mr Zehnder asked where would he go, Mr McKiernan suggested a couple of other agencies: Zehnder October 2015 Affidavit at [17].
Although it is not set out in his account of the 19 December 2014 meeting it is apparent that Mr Zehnder was offered a casual contract at that meeting (or, that the offer previously made was renewed or reiterated) because Mr Zehnder subsequently sent an email to Mr Quinn indicating that he would neither resign nor accept a casual contract: Zehnder October 2015 Affidavit at [18].
The evidence of Mr Quinn and Mr McKiernan indicates that at the meeting on 19 December 2014 it was explained to Mr Zehnder by them that:
a)Mr Zehnder could not continue on the current part-time contracts which were “problematic”;
b)Mr Zehnder could not go on to a commission only contract because he did not meet the Award requirements for a commission only contract; and
c)together with other employees who did not meet the Award requirements for a commission only contract, Mr Zehnder was being offered a casual contract: McKiernan Affidavit at [25]; Quinn Affidavit at [26].
Sell Lease Property does not dispute that Mr Quinn admitted that he told Mr Zehnder that if Mr Zehnder did not sign the casual contract of employment then Sell Lease Property would not be able to offer him further employment, and that he would have to resign. In response to Mr Zehnder questioning what else he could do Mr McKiernan suggested that he could go to another real estate agent that offered more one-on-one training and mentoring: McKiernan Affidavit at [25]; Quinn Affidavit at [26]. Mr Quinn says that at the end of the discussion Mr Zehnder asked for a couple of days to think about his options and Mr McKiernan and he told Mr Zehnder “that was fine”: Quinn Affidavit at [28]. There is no dispute that there was, at the 19 December 2014 meeting, the offer of a casual contract made to Mr Zehnder by Sell Lease Property: Zehnder October 2015 Affidavit at [18].
On 24 December 2014 Mr Zehnder sent an email to Mr Quinn: Zehnder October 2015 Affidavit at Annexure G, indicating that:
a)Mr Zehnder would not sign the casual contract he had been offered;
b)Mr Zehnder would not resign from Sell Lease Property;
c)Mr Zehnder would consent to having his current part-time contract reviewed; and
d)Mr Zehnder raised the issue of not having received wages since commencing employment and noting the minimum rate in the Award.
Further emails were exchanged between 24 and 26 December 2014 between Mr Zehnder and Mr Quinn. Mr Quinn replied to Mr Zehnder’s email of 24 December 2014 later that day, and made a number of comments as follows:
a)“We do not have a problem with you not wanting to resign. As mentioned at our meeting your resignation was purely discussed as an option for you to consider in light of our comments made at our meeting on 19th Dec in respect to us having limited ability to support you in achieving your goals at such an early stage of your career”;
b)“Thank you for clarifying your position in relation to our offer of casual employment. As I’m sure you’re aware this change of employment contract would need to be mutually agreed to by both parties. Again this is not a problem for us”;
c)said that Mr Zehnder had received $8,162 in gross payroll since the commencement of his employment at Sell Lease Property and that that was in excess of the requirement and in Mr Quinn’s view this exceeded the minimum requirements under the Award; and
d)said that Mr Zehnder was required to attend a meeting with Mr McKiernan and Mr Quinn on December 30, 2014 at 10.30am “to discuss your continued employment”.
Quinn Affidavit at Annexure BRQ-6.
On Christmas Day 2014 there was an exchange of emails concerning the proposed meeting in the course of which:
a)Mr Quinn indicated to Mr Zehnder that he was happy for Mr Zehnder to bring a support person to the meeting; and
b)Mr Zehnder asked whether the meeting could be re-scheduled to 10.30am on Wednesday, 31 December 2014: Quinn Affidavit at Annexure BRQ-6.
On Boxing Day 2014 at 11.08am Mr Quinn emailed Mr Zehnder to indicate that the meeting on 31 December 2014 at 10.30am “is fine. Please ensure that this appointment is not re-scheduled”, to which Mr Zehnder replied a few minutes later at 11.16am “Or what Brett? Are you threatening me?” Mr Quinn then responded (perhaps unsurprisingly given the tenor of the previous emails) that he was “not sure how you’ve interpreted that from my email”. He went on to say that he was “keen to ensure that we get this outstanding issue resolved quickly for your sake and ours” and that he had to coordinate other people to be at the meeting and that it was difficult when the meeting gets re-scheduled: Quinn Affidavit at Annexure BRQ-6. Mr Zehnder subsequently indicated that he and his support person “unless due to unforeseen circumstances, … will be attending this important meeting …”. Mr Quinn replied saying as follows:
I am genuinely at a loss as to why you seam (sic) to becoming (sic) very angry (Please accept my apologies if I am misinterpreting your emails Lee). I have just attempted to call you for a civilised discussion about what is concerning you. I am happy to wait and have this discussion with you on the 31st.
Mr Zehnder replied confirming attendance at the 31 December 2014 meeting and indicating that he would outline his issues and concerns to Mr Quinn at that time.
The various emails between 24 and 26 December 2014 are in the Quinn Affidavit at Annexure BRQ-6.
The meeting took place on 31 December 2014 between Mr Zehnder (who had a support person present), and Mr Quinn and Mr McKiernan. Mr Zehnder:
a)expressed disappointment at what he perceived to be an attempt to constructively dismiss him by asking him to resign and making him feel that he had no alternative;
b)stated that if there were genuine concerns regarding his contract he was willing to consider a new contractual arrangement by mutual agreement; and
c)asked about outstanding wages, and Mr McKiernan’s statement during his induction that there was no requirement to pay him on a regular basis and that he would be paid at the end of the year, and says that Mr Quinn responded that he would not back-pay any wages: Zehnder Affidavit at [19]; Quinn Affidavit at [30].
Mr Quinn also says that mention was made of errors in the frequency of payment and that he accepted that that was the case: Quinn Affidavit at [30]. Mr McKiernan says that when the issue of what Mr Zehnder was told when he was signed up was raised he indicated to Mr Zehnder that he had been employed on a commission only basis, and that Mr Quinn reiterated this point: McKiernan Affidavit at [29]. Strictly speaking this view held by Mr Quinn and Mr McKiernan as to the Original Contract being on a commission only basis is wrong, as that contract provided for Mr Zehnder to be employed part-time with payment pursuant to the minimum rate under the Award, but the mistaken view reinforces the Court’s view, expressed earlier: see [36] above, that Sell Lease Property either engaged or treated the majority, if not all, of its sales representatives as if they were employed on a commission only basis.
On 1 January 2015 Mr Quinn received a phone call from Mr Zehnder in which Mr Zehnder said he was “happy to consider a revised part-time contract”: Quinn Affidavit at [31]. Subsequently, on 1 January 2015 Mr Zehnder received an email from Mr Quinn outlining some of the points from the meeting on 31 December 2014: Zehnder October 2015 Affidavit at [20] and Annexure H; Quinn Affidavit at [31] and Annexure BRQ-7. Mr Quinn’s 1 January 2015 email was in the following terms:
Hi Lee,
Thanks for meeting with us yesterday. I believe that together we have been able to resolve our outstanding issues and have found a path forward. Just to confirm a few points from our meeting:
We have both agreed that
1. Over the next few days I will be providing you with a revised part-time employment contract to review and sign that outlines the ability for SLP to recover from commissions any part-time salary paid to you. (This will not include any monies already paid to you).
2. SLP Will provide you with a work roster outlining the schedule for your 8 Hours of work Per Week.
3. SLP will provide you with a comprehensive role description.
4. SLP & Lee will meet each fortnight to discuss.
5. We appreciate you offering in good faith that you would like to “draw a line in the sand” and not make any future claim against SLP arising from this matter.
6. SLP has recognised that we have breached the frequency in which you should have been paid and will immediately correct this with your next salary being paid on our next due pay fortnight.
7. You will receive all documentation and then we will both meet late next week to discuss any points for discussion.
Thanks again for your participation and willingness to find a solution.
Please let me know if I’ve forgotten anything.
Brett
Mr Zehnder responded to Mr Quinn’s 1 January 2015 email the same day saying that he believed that the issues had been resolved insofar as the continuing employment relationship was concerned, and that he would await a copy of the proposed new employment contract: Quinn Affidavit at Annexure BRQ-7. Mr Zehnder admitted in his evidence that after 31 December 2014 “I thought things were good”: TD1 at 21.
Part-time contracts
In January 2015 Mr Quinn decided that Sell Lease Property would create a new salaried part-time contract that was compliant with the Award: Quinn Affidavit at [32].
Following emails concerning the new part-time contract there was a meeting between Mr Quinn and Mr Zehnder on 12 January 2015 to discuss the terms of his new part-time contract: Quinn Affidavit at [33]-[34]; Zehnder October 2015 Affidavit at [22].
On 18 January 2015, Mr Zehnder emailed Mr Quinn a list of concerns regarding the proposed new part-time employment contract and position description: Zehnder October 2015 Affidavit at [23] and Annexure J, including the following:
a)the rate of pay being lower than the Award rate;
b)a penalty provision in the restriction of trade clause; and
c)key performance indicators that Mr Zehnder felt were unachievable based on his limited sales experience.
Mr Quinn responded by email on the same day agreeing to correct the rate of pay and to reduce the penalty in the restriction of trade clause, but Mr Zehnder says that he also threatened to terminate Mr Zehnder’s employment if Mr Zehnder did not sign the proposed new part-time employment contract: Quinn Affidavit at Annexure BRQ-9; Zehnder October 2015 Affidavit at Annexure J. In his email Mr Quinn said as follows:
Please let me know if you are happy to sign the new employment contract. We have been told by our lawyers that our current contracts are problematic and we may be required to ask you to sign the new contract or terminate your employment if you won’t accept the new contract on the basis that it will be illegal to continue to operate under the current arrangement. Of course I’d rather we just made it work between us.
Quinn Affidavit at Annexure BRQ-9.
On 22 January 2015 at 11.18am Mr Quinn sent to Mr Zehnder a revised part-time contract of employment and position description following the changes requested by Mr Zehnder: Quinn Affidavit at BRQ-9.
On 23 January 2015 Mr Zehnder:
a)signed the Part Time Contract despite what he says were ongoing fears that his employment would be terminated, based upon the previous attempts to allegedly constructively dismiss him: Zehnder October 2015 Affidavit at [25] and Annexure L; and
b)raised concerns with Mr Quinn concerning the new position description, and the roster, and claimed he was not consulted on their terms: Zehnder October 2015 Affidavit at [25] and Annexure K.
The Part Time Contract provided for a commencement date of 12 January 2015 with Mr Zehnder to work in the role of part-time sales representative: Part Time Contract, items 1-4. In relation to hours the Part Time Contract essentially required Mr Zehnder to work 8 hours per week: cl.8.1, and for him to have leave entitlements arising under the National Employment Standards and the Long Service Leave Act 1958 (WA). The part-time contract provided for two hourly rates, one being $16.50 per hour and the other $16.87 per hour: Part Time Contract at cl.10.1 and item 5.
In relation to termination of employment the Part Time Contract provided for termination by Sell Lease Property “giving at least two weeks’ notice” to Mr Zehnder: Part Time Contract at cl.15.1(b), and that if the termination was as a consequence of redundancy the entitlement to redundancy payment only arose from the National Employment Standards: part-time contract, cl.16.
Clause 15.3 of the Part Time Contract also provided that if the employment of Mr Zehnder was terminated, regardless of how that happened, Mr Zehnder “must immediately repay any debt he owes to SLP, without SLP being obliged to demand payment”.
Clause 15.2 of the Part Time Contract provides for Sell Lease Property to be able to discharge its obligation with respect to notice of termination by paying Mr Zehnder the amount that he would have been entitled to receive as remuneration during the notice period or any unexpired portion of the notice period.
On 25 January 2015 Mr Zehnder received an email from Mr Quinn concerning the expectations in relation to key performance indicators: Quinn Affidavit at [36] and Annexure BRQ-10; Zehnder October 2015 Affidavit at Annexure M. Mr Zehnder says that he had misinterpreted an earlier email from Mr Quinn and had inadvertently failed to complete certain tasks within certain timeframes or deadlines: Quinn Affidavit at Annexure BRQ-10. Mr Zehnder says that the 25 January 2015 email from Mr Quinn, and subsequent email replies on 26 January 2015, constituted bullying behaviour by micro-managing him and trying to create a power imbalance.
Mr Zehnder says that the evidence shows that Mr MacEwan was:
a)the sole director of Sell Lease Property;
b)the company secretary of Sell Lease Property;
c)the licensee and person in bona fide control of Sell Lease Property under the REBA Act;
d)aware that Mr Zehnder commenced employment with Sell Lease Property around March 2014;
e)signed Mr Zehnder’s offer of employment letter;
f)signed Mr Zehnder’s Original Contract on behalf of Sell Lease Property;
g)aware that Mr Quinn made the decision to make Mr Zehnder’s position redundant;
h)aware that Mr Quinn made the decision to terminate Mr Zehnder’s employment;
i)aware of Mr Zehnder’s allegations of bullying against Mr Quinn before his employment was terminated;
j)aware that Mr Zehnder was seeking payment for outstanding wages and allowances before his employment was terminated;
k)reckless; and
l)wilfully blind, and in this regard submits that it has been held that wilful blindness suffices as “actual knowledge” for the purposes of accessorial liability: Fair Work Ombudsman v Liquid Fuel Pty Ltd & Ors [2015] FCCA 2694.
Position of Mr Quinn and Mr MacEwan
In relation to accessorial liability Mr Quinn and Mr MacEwan say that:
a)these claims should fail on the basis that the primary contraventions against Sell Lease Property have not been made out. In the case of Mr MacEwan he was not involved in the dismissal or any other incident of alleged contravention that could give rise to accessorial liability;
b)as the claim in relation to the alleged contravention of s.340 of the FW Act cannot be established, there can be no accessorial liability, pursuant to s.550 of the FW Act, in respect of it; and
c)Mr Zehnder has not pleaded any facts that demonstrate the involvement or knowledge of Mr MacEwan, in any of the contraventions alleged by Mr Zehnder. Although Mr MacEwan signed his employment documents on behalf of Sell Lease Property there are no alleged contraventions relating to the terms of these documents. Further, Mr MacEwan has given evidence that he was not involved in any way in the decision to abolish part-time roles or terminating Mr Zehnder’s employment: MacEwan Affidavit at [15]-[18] and [21].
Legal principles
Section 550 of the FW Act provides as follows:
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
Section 550 of the FW Act provides for accessorial liability for a breach of civil remedy provisions. Sections 340 and 352 of the FW Act are civil remedy provisions. Section 550 of the FW Act provides that involvement in a contravention of the FW Act shall be treated in the same way as an actual contravention.
The relevant principle in federal civil litigation in relation to legislative provisions such as s.550 of the FW Act is derived from the High Court’s judgment in Yorke & Anor v Lucas [1985] HCA 65; (1985) 158 CLR 661; (1985) 59 ALJR 776; (1985) 61 ALR 307; [1985] ATPR 40-622, and the numerous cases which have followed that judgment, which indicate that to be liable a putative accessory must intentionally participate in a contravention, and that to form the requisite intent the putative accessory must have knowledge of the essential matters going to make up the contravention, whether or not the putative accessory knows that those matters amount to a contravention. Necessary intent will be absent if the putative accessory does not know or believe that the assistance or encouragement given is something which goes to make up the facts which constitute the contravention. The principles concerning accessorial liability under federal workplace relations legislation are further expounded in Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299; (2007) 59 AILR 100-686 (“Clarke”) at [26] per Tamberlin, Gyles and Gilmour JJ, where the Full Court of the Federal Court observed that:
Regardless of the precise words of the accessorial provision, such liability depends upon the accessory associating himself or herself with the contravening conduct – the accessory should be linked in purpose with the perpetrators (per Gibbs CJ in Giorgianni v The Queen (1985) 156 CLR 473 at 479-480; see also Mason J at 493 and Wilson, Deane and Dawson JJ at 500). The words “party to, or concerned in” reflect that concept. The accessory must be implicated or involved in the contravention (Ashburyy v Reid [1961] WAR 49 at 51; R v Tannous (1987) 10 NSWLR 303 per Lee J at 307E- 308D (agreed with by Street CJ at 304 and Finlay J at 310)) or, as put by Kenny J in Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588; 112 IR 388 at [34], must participate in, or assent to, the contravention.
Section 550 of the FW Act does not require knowledge that there has been a contravention for the purposes of imposing accessorial liability, and ignorance of the law is no excuse: Fair Work Ombudsman v Access Embroidery (Australia) Pty Ltd [2012] FMCA 835 at [41] and [50]-[54] per Turner FM. Suspicious circumstances and a wilful failure to make enquiry may result in an inference being drawn as to actual knowledge for the purposes of imposing accessorial liability: Giorgianni at 482, 487 and 507-508 per Wilson, Deane and Dawson JJ; Fair Work Ombudsman v Devine Marine Group Pty Ltd [2013] FCA 1135 (“Devine Marine”) at [43] per White J. Being knowingly concerned in a contravention requires association with, or implication in, or a practical connection with the contravening conduct: Clarke at [26] per Tamberlin, Gyles and Gilmour JJ; Qantas Airways Limited v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 211 IR 1; (2011) 280 ALR 503; (2011) 62 AILR 101-349; ALR at 324 per Moore J. A person may be involved in a contravention by act or omission: Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 at [44] and [49] per Besanko J.
Consideration – accessorial liability
There is no doubt that Mr Quinn was knowingly involved in the contraventions that have been found. Mr Quinn was in day-to-day control of the management of Sell Lease Property, and was aware of the relevant employment arrangements and day-to-day dealings with Mr Zehnder which gave rise to the contraventions found.
Mr MacEwan was directly involved in the wages and entitlements contraventions because he was the person who signed the Contract, pursuant to which the wages and entitlements which were in contravention of the Award, were paid (or not as the case may be) to Mr Zehnder: TD2 at 112. Furthermore, Mr MacEwan as Licensee had an obligation to ensure that other employees of Sell Lease Property complied with the provisions of “relevant statutes”: Code of Conduct, r.8(2) and (3). There can be no doubt that in relation to the employees of a real estate business the FW Act is a “relevant statute”, and there is no dispute in this case that it was applicable to Mr Zehnder. As such, Mr MacEwan had a responsibility to ensure compliance with it, and in circumstances where he was the Licensee, signed the Contract, had been kept informed from time to time of various developments in the relevant period, at least by email, he cannot be said to not have had knowledge of the relevant facts giving rise to the contraventions. Finally, and conclusively, Mr MacEwan’s own evidence, repeated more than once, was that he knew what was going on in relation to Mr Zehnder, and that he had to know what was going on, because ultimately he was the licensee who was statutorily liable under the REBA Act: TD2 at 113-114.
In determining that each of Mr Quinn and Mr MacEwan are accessorially liable for the contraventions found by the Court, the Court has also had regard to the fact that they were members of a small, and seemingly close-knit, management team, and that Mr MacEwan had overall responsibility for the business activities of Sell Lease Property as Licensee, and that Mr Quinn had day-to-day responsibility for the management of Sell Lease Property in his capacity as Chief Executive Officer.
In all the above circumstances, the Court finds that Mr Quinn, and Mr MacEwan are accessorially liable for the contraventions found by the Court.
Breach of Contract
In Mr Zehnder’s submissions he alleges a breach of contract under the heading “Breach of Contract (Part Time Employment Agreements)” as an alternative if any of the alleged contraventions against the FW Act or the Award are not found.
The Court has found a breach of contract with respect to the failure to pay in lieu of notice, and indicated that it may be arguable that there is either a failure to pay commission in full for the purposes of s.323 of the FW Act, or possibly pursuant to the Original Contract, for the superannuation deductions referred to at [152]-[172] above. Save for those matters, the alleged breaches of contract referred to in Mr Zehnder’s submissions and said to be an alternative if any of the alleged contraventions against the FW Act or the Award are not found, are vague and not readily ascertainable, not properly pleaded, and not particularised at all in terms of a breach of contract (and it is not apparent whether it is the Original Contract or the Part Time Contract which is being referred to as the relevant contract), and in those circumstances the Court cannot properly deal with the alleged breach or breaches of contract. Therefore, save as indicated above, the Court finds that any alleged breach of contract must fail.
Conclusions and orders
By reason of:
a)the number of matters to be the subject of declarations and orders in these proceedings;
b)those matters referred to at [152]-[157] and [221]-[223] above which need to be the subject of further submissions prior to any final declarations or orders with respect to them,
the Court considers that it would be appropriate for the parties to confer with respect to appropriate orders and directions with a view to preparing a consent minute of proposed declarations and orders by 26 April 2018. If the parties are unable to reach agreement on a minute of proposed consent declarations and orders then each party is to file and serve a minute of proposed declarations and orders by 4.00pm on 3 May 2018, and the matter will otherwise be adjourned for mention and further directions at 2.15pm on 18 May 2018. The Court will then deal with directions generally, but in particular in relation to the matters (and only those matters) to be the subject of further submissions, any future penalty hearing and costs. The Court notes that on the face of it this is a no costs matter: FW Act s.570(1). In that regard the parties might also note the authorities referred to in Eaton (No 2) at [205] per Judge Lucev, and the observations in Celand at [70]-[74] and [89] per Logan J and [161]-[164] per Bromberg J.
I certify that the preceding two hundred and sixty (260) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Date: 12 April 2018
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