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[2019] FCA 1085
Federal Court of Australia
2019-07-11
Collier J
Original judgment source is linked above.
Background 1 This is an appeal from the decision of the Federal Circuit Court in Birner v Aircraft Turnaround Engineering Pty Ltd [2017] FCCA 852 in which the primary Judge dismissed an application for declarations, compensation, damages, a pecuniary penalty and costs that were said to arise from contraventions of the Fair Work Act 2009 (Cth) (FW Act). I note for completeness the primary judgment was followed by a decision dismissing an application for costs in Birner v Aircraft Turnaround Engineering Pty Ltd (No 2) [2018] FCCA 3576; though the costs decision does not form part of the appeal presently before me. 2 Mr Birner, the appellant, was employed from time to time since 2003 by Aircraft Turnaround Engineering Pty Ltd (ATE), the respondent, as a Licensed Aircraft (or as sometimes described, 'Airframe') Maintenance Engineer (LAME). The central issue in this proceeding relates to the classification of Mr Birner's period of employment at ATE that commenced on 1 March 2010. In summary, Mr Birner maintains that he was a full-time employee and was therefore entitled to be paid for a full working week, annual leave entitlements and annual leave loading. ATE, however, rejects those claims arguing Mr Birner was instead a casual employee who had been correctly remunerated for his services and was owed no further entitlements.
In the Federal Circuit Court 3 Mr Birner commenced proceedings by way of an application and statement of claim against ATE in the Federal Circuit Court on 17 September 2015.
Mr Birner's position 4 Mr Birner pleaded in summary, that in relation to his engagement with ATE: He was employed by ATE from 1 March 2010 as a LAME and was a "national system employee" within the meaning of s 13 of the Fair Work Act 2009 (Cth) (FW Act) as extended by s 30C of the FW Act. Approximately two months later, on or about 6 May 2010, he entered into a full-time employment agreement with ATE. The agreement was constituted by a letter from Mr Edward Deeb, the director of ATE, in the following terms (the May 2010 letter): 06th May 2010 … Re. Employment Offer Dear Mr Birner, It is my pleasure to extend the following offer of employment to you on behalf of Aircraft Turnaround Engineering. You will be employed on a Casual full time basis. Title: LAME - Licenced Airframe Maintenance Engineer Hours: 40 hrs a week - 80 hrs a fortnight Base Salary: Is $93,600.00; Paid in fortnightly instalments, which is equivalent to $45.00 an hour. In addition of possible overtime. Start Date: 1st March 2010 Robert has been previously been employed as a LAME and this commencement was on the 20th of June 2005. You acknowledge that this offer letter, represents the entire agreement between you and Aircraft Turnaround Engineering. Yours Sincerely [Signature] [Signature] ---------------------- Edward Deeb Director Aircraft Turnaround Engineering The following terms in May 2010 letter in relation to Mr Birner were express terms of the agreement (express terms): (a) he was employed "on a Casual full time basis"; (b) his title was "LAME - Licensed Aircraft Maintenance Engineer"; (c) his ordinary hours of work were "40 hrs a week - 80 hrs a fortnight"; (d) he would be paid a "Base Salary [of] $93,600.00; paid in fortnightly instalments, which is equivalent to $45.00 an hour"; (e) he would be paid an additional amount in respect of overtime; and (f) the start date for the employment agreement was 1 March 2010. His employment at ATE was covered by the Airline Operations - Ground Staff Award 2010 (Award) and he was a full-time employee who also met the requirements for being a shiftworker. ATE was obliged to expressly notify Mr Birner what his employment classification was at the time he was engaged but the company failed to provide such information. His annual leave entitlements under the Award were aligned with those contained in the National Employment Standards in the FW Act, including that he was entitled to 17.5% loading on his annual leave entitlements. A meeting took place on or about 24 November 2011 (2011 meeting) between Messrs Birner, Deeb and Bowles, during which they discussed Mr Birner's concerns in relation to his employment at ATE and possible litigation. At the meeting, officers of the respondent said words to the effect that: Mr Birner's roster would be reduced if he proceeded with the foreshadowed legal action; ATE would offer Mr Birner a new employment agreement within two to four weeks of the meeting; and The new employment agreement would provide new terms and conditions for permanent employment whilst retaining the existing terms and conditions of his current employment agreement. However, ATE did not provide to Mr Birner the proposed new employment agreement. After obtaining a Dash-8Q400 licence, his base rate of pay increased from 28 February 2012. 5 In relation to periods of absence in 2012 and 2013, Mr Birner pleaded: He was paid for two weeks of annual leave from 8 October 2012 to 21 October 2012 calculated on the basis of an 80-hour fortnight. He was paid for annual leave totalling 39.5 hours between 11 November 2013 and 24 November 2013. On these occasions, ATE failed to pay annual leave loading pursuant to the Award. 6 Mr Birner claimed that he was: underpaid for his services by $58,954.19; owed $993.34 for unpaid annual leave loading; and when his employment ATE ends, he would be entitled as at the relevant date to: payment for 847.28 hours of untaken paid annual leave; and loading of 17.5% on top of that amount. 7 Mr Birner therefore sought the following relief in the Federal Circuit Court: 1. a declaration that the Applicant was, from 1 March 2010, an employee of the Respondent for the purposes of s 87 of the FW Act; 2. a declaration that the Applicant has accrued annual leave amounting to 847.29 hours of paid annual leave, or such other figure as is determined to the date of judgment; 3. a declaration that the Applicant continues to accrue annual leave whilst the Applicant is an employee of the Respondent; 4. a declaration that the Respondent contravened s 45 of the FW Act by: (a) failing to pay the Applicant annual leave loading for annual leave taken in 2012 and 2013; (b) failing to inform the Applicant as to whether he is a full-time, part-time or casual employee at the time of engagement. 5. an order for compensation in the sum of $993.34, being for unpaid annual leave loading from 2012 and 2013, pursuant to section 545(2)(b) of the FW Act 6. damages in the sum of $58,954.19 for the outstanding amount; 7. a pecuniary penalty order for the contraventions at paragraph 4, in such sum as the Court considers appropriate in the circumstances, pursuant to section 546 of the FW Act; 8. an order that the any pecuniary penalty ordered by the Court be paid to the Applicant within 28 days, pursuant to section 546(3) of the FW Act; 9. interest, pursuant to section 547 of the FW Act; and 10. costs, pursuant to s 570 of the FW Act.
ATE's position 8 In response to Mr Birner's claims regarding his engagement, ATE denied that it entered into a written employment agreement with Mr Birner by way of the May 2010 letter. Rather, the May 2010 letter from Mr Deeb was authored at the behest of Mr Birner in order to assist him to provide details of his employment arrangements to a financier to obtain a loan. The respondent said that the May 2010 letter merely confirmed that Mr Birner: commenced on 1 March 2010; was employed as a LAME on a casual basis working the equivalent of full time ordinary hours (being 38 hours per week); was working two reasonable additional hours per week; and was being paid $45 per hour, which would amount to $93,600 per year if he worked 40 hours per week. 9 ATE contended that Mr Birner's employment was only constituted by a verbal agreement made during a meeting on or about 22 February 2010 between Mr Birner, Mr Deeb and Mr Tom Bowles in which the parties agreed Mr Birner would be employed on a casual basis at $45 per hour. 10 In relation to Mr Birner's claims that he was paid annual leave and was entitled to annual leave loading for periods of absence in 2012 and 2013, ATE denied that the payments were made as "annual leave" because: Mr Birner was a casual employee and was not entitled to accrue annual leave; and the payments were bonuses offered during a meeting in November 2011 where ATE offered to pay Mr Birner a bonus of agreed leave and one week's wages for each 12-month period he worked for the company.
Primary Judge's findings and consideration 11 In the primary decision, his Honour observed at [74] that it was not in contention that Mr Birner was employed by ATE as a LAME, that he was a national system employee and that ATE was a "national system employer" (FW Act ss 14 and 30D). The primary Judge at [20], [75] and [77] was satisfied that a meeting occurred between Messrs Birner, Deeb and Bowles during which it was agreed that Mr Birner would be employed on a casual basis at the rate of $45 per hour, and therefore his Honour found that Mr Birner's claim that he "was not informed of the terms of his engagement and in particular whether his employment was to be full-time, part-time or casual" failed.
Effect of the May 2010 letter 12 In considering the effect of the May 2010 letter the primary Judge noted at [80]-[81] that it was "couched" as an offer of employment and not drafted as mere confirmation of Mr Birner's employment. In his Honour's view, that the offer was for permanent full-time employment was negated by the word "Casual" that appeared in the first paragraph of the May 2010 letter. 13 At [82] the primary Judge found that the May 2010 letter: came into existence at the request of Mr Birner for the "particular purpose" of taking it to a financier; was not authored for the purpose of offering employment to Mr Birner (his Honour noted "that was unnecessary because he was already working for [ATE] on a casual basis"); and was subsequently used by Mr Birner "for the purpose for which it was obtained." 14 In relation to the contractual relationship Mr Birner argued was established by way of the May 2010 letter, his Honour made the following findings: 83. Thus, whilst on its face the letter purports to be an offer of employment capable of acceptance by Mr Birner, in my view, Mr Deeb (through whom the respondent acted) did not intend for the letter to create a new or different legal relationship between the respondent and Mr Birner. There was no intention on the part of the respondent to create any new or different legal relationship than that which already existed. The information in the letter reflected what was then occurring for Mr Birner in his employment and his hourly rate was annualised to give a base rate. 84. If that is so, then there is no question that Mr Birner's employment, insofar as he and the respondent were concerned, was anything other than casual employment. To the extent then that Mr Birner's case relies upon the proposition that there was a contractual entitlement to at least 40 hours per week of work or payment of an annual salary of $93,600 his claim must fail.
Interpretation of "Casual full time basis" in the May 2010 letter 15 The May 2010 letter stated that Mr Birner would be employed on a Casual full time basis. In essence, Mr Birner contended that his working arrangement could not be classified as "casual" because that was displaced by the inclusion of the phrase "full time basis". 16 The primary Judge at [86] queried "[w]hich part of the phrase 'casual full time basis' should be subordinated to give effect to the parties' operative intention?" His Honour continued by observing that "[t]he word casual pulls in a different direction than does the phrase 'full time basis'," and found that: 87. … whilst it may seem that there is an apparent inconsistency between the descriptor "casual" and the use of the words "full time basis", in my view the word "casual" is used to differentiate Mr Birner's employment from permanent employment rather than whether he worked full-time hours or part-time hours: see for example Hamzy v Tricon International Restaurants (2001) 115 FCR 79. At the time the letter was given, Mr Birner was working weekend work. He was not working 40 hours per week. According to Mr Bowles unchallenged evidence he did not put Mr Birner into regular weekday work which equated, more or less 40 hours per week until a spot became available after another employee changed their shift arrangements. 88. Moreover, inconsistently with the notion that he was a permanent employee Mr Birner exercised his right to reject an offer of work on at least two occasions in respect of which Mr Bowles gave evidence. 89. For the same reasons, I am of the view that Mr Birner was a casual employee for the purposes of the Fair Work Act. That finding is not inconsistent with the notion that he might have been working "full time hours": Telum Civil (Qld) Pty Limited v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434. In those circumstances I am persuaded that Mr Birner should not be seen as "other than a casual employee" for the purposes of s.86 of the Fair Work Act. (Emphasis added.)
Relevance of the Airline Operations - Ground Staff Award 2010 17 In his statement of claim at the Federal Circuit Court, Mr Birner had pleaded that: The Award 7. At all material times: (a) there was and is a modern award made by the Fair Work Commission entitled Airline Operations - Ground Staff Award 2010 (the Award); (b) the Award provides that its coverage includes persons whose employment is defined or described in Schedule B of the Award; (c) Schedule B of the Award provides the definition of an "Aircraft Maintenance Engineer"; (d) the Applicant's employment by the Respondent fell within the meaning of "Aircraft Maintenance Engineer"; and (e) the Applicant's employment by the Respondent was covered by the Award. 8. The Award expressly provides, relevantly, that: (a) by clause 11.1, there are three categories of employee under the Award, being: (i) full-time employees; (ii) part-time employees; and (iii) casual employees. (b) by clause 11.2, the Respondent is obliged to inform the Applicant of the terms of the engagement and in particular whether the Applicant is to be full-time, part-time or casual at the time of engagement of the Applicant; (c) by clause 11.3, a full-time employee is "an employee who is engaged to work 38 ordinary hours per week or an average of 38 ordinary hours per week"; (d) by clause 34.1, the annual leave entitlements under the Award are they annual leave entitlements under the National Employment Standards in the FW Act; (e) by clause 34.4, contains a definition of "shiftworker", which the Applicant's employment by the Respondent falls within; and (f) by clause 34.5(a), requires that the Respondent pay the Applicant a loading of 17.5 per cent on top of the amount payable for the annual leave entitlement (annual leave loading). 9. In the premises of paragraphs 7 and 8; (a) the Applicant agreed to work in excess of 38 hours per week of ordinary time work; (b) the Applicant was a full time employee of the Respondent under the Award; (c) the Applicant was not a "casual employee" for the purposes of s 86 of the FW Act; (d) the Applicant is, on and from, 1 March 2010, an employee who was entitled, under Division 6 of Part 2-2 of the FW Act, to annual leave; (e) the Applicant was entitled to be classified as a "shiftworker" for the purposes of section 87(1)(b)(i) of the FW Act; and (f) as a consequence of sub-paragraphs (a) to (e), the Applicant is entitled to 5 weeks annual leave, per annum. (Emphasis added.) 18 The primary Judge found at [90] of the judgment that cl 11.3 of the Award did not assist Mr Birner as he pleaded at 8 of his statement of claim. On this point, his Honour preferred ATE's submissions in relation to cll 11.3 and 11.5 of the Award, such clauses being: 11.3 Full-time employment A full-time employee is an employee who is engaged to work 38 ordinary hours per week or an average of 38 ordinary hours per week. … 11.5 Casual employment (a) A casual employee is an employee engaged as such. (b) A casual employee must be paid per hour at the rate of 1/38th of the weekly rate prescribed for the class of work performed, plus 25%. This loading is instead of entitlements to leave and other matters from which casuals are excluded by the terms of this award and the NES. (c) Casual employees must be paid at the termination of each engagement, or weekly or fortnightly in accordance with usual payment methods for full-time employees. (d) Casual employees are entitled to a minimum payment of four hours work at the appropriate rate. 19 His Honour adopted the view that cll 11.3 and 11.5 of the Award do not contemplate that an employee could "automatically become a full-time employee upon working 38 hours in any one week" because, if that were the case, the Award "would have included a provision which might have permitted the employee to transfer to full-time employment."
Effects of Mr Birner's proposed new employment contracts 20 The primary Judge noted at [50] that after the 2011 meeting, Mr Birner sent to Mr Deeb an email on 30 November 2011 stating: In line with our conversation in the meeting room on Thursday, 24th November, 2011 I have attached the existing Agreement for your infor [sic], and also a draft Agreement with changes to help facilitate your offer of transfer as soon as possible. At [51] of the primary judgment his Honour provided the terms of Mr Birner's proposed contract (proposed contract): Thursday, 1st December, 2011 Dear Mr. Birner, It is my pleasure to extend to you the following offer of transfer from the current Agreement on behalf of Aircraft Turnaround Engineering. Your will be employed on a PERMANENT FULL TIME BASIS and these changes are to commence as soon as possible with both agreeing to the terms below. TITLE: LAME DASH-8 series Mechanical - Licensed Aircraft Maintenance Engineer. HOURS: 40 hrs a week - 80 hrs a fortnight on a rotating roster for four on four eff eleven hour shifts. BASE SALARY: Is $93,600.00; paid in fortnightly instalments, which is equivalent to $45.00 an hour, in addition of overtime, plus Superannuation. LEAVE ENTITLEMENTS: Five weeks Annual Leave, Ten days Sick Leave (personal leave in accordance with National Employment Standards under the Fair Work Act). Robert has been previously employed as a LAME and this commencement was in December, 2003. You acknowledge that this offer letter represents the entire agreement between you and Aircraft Turnaround Engineering. Yours sincerely ………… [Blank] ………… ………… [Blank] ………… EDWARD DEEB ROBERT BIRNER Director Licensed Aircraft The respondent Maintenance Engineer The respondent 21 At [57] his Honour accepted evidence that Mr Deeb responded to Mr Birner on 2 December 2011 in a letter explaining that ATE was unable to offer Mr Birner full time employment. I note the letter cited by the primary Judge was referred to at [96]-[97] and annexed as "ERD16" to the affidavit of Mr Deeb filed in the Federal Circuit Court proceeding (BRG 864 of 2015) on 18 December 2015 (Mr Deeb's 2015 affidavit): … 02 December 2011 Dear Robert Thankyou [sic] for your letter dated 1st December 2011 extending an offer of your services full time. Unfortunately and without prejudice, Aircraft Turnaround Engineering cannot offer you full time employment at the present time. Your faithfully AIRCRAFT TURNAROUND ENGINEERING [Signature] Edward Deeb Director 22 The primary Judge found at [51] that the terms of Mr Birner's proposed contract revealed inconsistency with his claim that he was already a full-time employee of ATE. His Honour contemplated Mr Birner's evidence on this issue at [91] and explained: … Mr Birner has on several occasions since 6 May, 2010 sought to alter the nature of his employment arrangement with the respondent. On his own evidence he has tried to convince Mr Deeb to execute agreements that recognise his employment as permanent, but he has been unsuccessful in doing so. By his draft letter dated 1 December, 2011 (set out above) he proposed "to transfer from the current Agreement" to employment "on a PERMANENT FULL TIME BASIS". That is inconsistent with an understanding that he was already employed on such a basis. (Emphasis added.) 23 At [92] his Honour referred to a further memorandum of 6 March 2012 drafted by Mr Birner seeking to change the terms of his employment with ATE. I note this particular memorandum was cited at [98]-[100] and provided as annexure "ERD17" to Mr Deeb's 2015 affidavit: Tuesday, 6 March, 2012 Effective Monday, 12th March, 2012 are the following additions to the existing agreement between AIRCRAFT TURNAROUND ENGINEERING AND ROBERT BIRNER: • Rate increase $45 TO $47.50 for ADDITION OF DASH-8 Q400 AIRFRAME RATING, • Reiterated guaranteed 40hrs a week, 80hrs a fortnight, • One weeks paid leave credits, • Training assistance for Q400 PW150 Power Plant as soon as possible. ………… [Blank] ………… ………… [Blank] ………… EDWARD DEEB ROBERT BIRNER Director Licensed Aircraft Maintenance Engineer Aircraft Turnaround Engineering Aircraft Turnaround Engineering (Original formatting.) 24 At [101]-[102] of Mr Deeb's 2015 affidavit, he deposed that he was unable to sign Mr Birner's memorandum of 6 March 2012 on behalf of ATE because the company could not guarantee the "40hrs a week, 80 hrs a fortnight" as requested, and that he approached Mr Birner to convey words to the effect of "I cannot guarantee your hours, we can only do the best we can with the hours we have …". Mr Deeb deposed that in relation to Mr Birner's proposal of "One weeks paid leave credits", that was already consistent with ATE's existing offer for bonus agreed leave for each twelve months of service (see above at [10]). 25 His Honour accepted ATE's arguments and concluded: 93. … the very fact that Mr Birner felt compelled to proffer the draft letter dated 1 December, 2011 and the draft memorandum dated 6 March, 2012 tells powerfully against Mr Birner's contention that at any time prior to the May, 2010 letter he had entered into a fixed and full-time hours employment arrangement with the respondent. 94. I accept the respondent's submission that the statement that Mr Birner was employed on a ["]Casual full time basis" in the letter of 6 May, 2010 denoted an arrangement under which Mr Birner was and remained a casual employee, tending to work full time hours on a regular and systematic basis, but without the certainty of permanent full-time employment. 95. In my view Mr Birner has not made out any aspect of his claim and the application must be dismissed. (Emphasis added.)
Appeal to the Federal Court 26 Mr Birner filed a notice of appeal in the Federal Court on 16 May 2017 seeking the following orders: 1. That the judgement and order of the Federal Circuit Court Australia be overturned in favour of the Appellant Mr Birner. 2. The orders sought by the Appellant are set out in the claim filed with the application on 17 September 2015 the Prayer for relief. (Errors in original.) 27 Mr Birner expanded upon these orders in his outline of submissions filed on 26 June 2018, including an additional paragraph: 3. That an order for referral be made to the Legal Services Commission QLD, for council [sic] of the Respondent, affirming and tendering an affidavit known to be false and misleading. The following footnote appeared in relation to the additional third order: Part B Tab 14 containing 14.5 ERD5 sworn to be true and correct, rebutted and then tendered in court. 28 The relief Mr Birner referred to in the proposed second order of his appeal was set out in his statement of claim filed in the Federal Circuit Court proceeding on 17 September 2015 at pp 10-11: 1. a declaration that the Applicant was, from 1 March 2010, an employee of the Respondent for the purposes of s 87 of the FW Act; 2. a declaration that the Applicant has accrued annual leave amounting to 847.29 hours of paid annual leave, or such other figure as is determined to the date of judgment; 3. a declaration that the Applicant continues to accrue annual leave whilst the Applicant is an employee of the Respondent; 4. a declaration that the Respondent contravened s 45 of the FW Act by: (a) failing to pay the Applicant annual leave loading for annual leave taken in 2012 and 2013; (b) failing to inform the Applicant as to whether he is a full-time, part-time or casual employee at the time of engagement. 5. an order for compensation in the sum of $993.34, being for unpaid annual leave loading from 2012 and 2013, pursuant to section 545(2)(b) of the FW Act 6. damages in the sum of $58,954.19 for the outstanding amount; 7. a pecuniary penalty order for the contraventions at paragraph 4, in such sum as the Court considers appropriate in the circumstances, pursuant to section 546 of the FW Act; 8. an order that the any pecuniary penalty ordered by the Court be paid to the Applicant within 28 days, pursuant to section 546(3) of the FW Act; 9. interest, pursuant to section 547 of the FW Act; and 10. costs, pursuant to s 570 of the FW Act.
Grounds of appeal 29 In support of the proposed orders, Mr Birner relied on one ground of appeal, namely "error in law". The notice of appeal continues: His Honour Judge Jarrett erred in his conclusion in 94: 1. in 94. His Honour states: I accept the respondent's submission that the statement that Mr Birner was employed on a "Casual full time basis~ in the letter of 6 May, 2010 denoted an arrangement under which Mr Birner was and remained a casual employee, tending to work full time hours on a regular and systematic basis, but without the certainty of permanent full-time employment. 2. In consideration of the legal limits of the course of employment in accordance with the Fair Work Act 2009, the Airline-Operations Ground Staff Award 2010 (the award) and the National Employment Standards (NES). a) At the time of engagement on 1 March 2010, the employee was to be informed of the type of employment being only one of the following, full-time, part-time or casual per the award 3-11.2. b) The Respondent has not provided a classification in writing at the time of employment per the award 4-14. c) The Respondent claims to have employed the Appellant (Mr Birner) as a casual employee however the respondent had not provided any evidence of an identifiable casual loading of 25% required by the award 3-11.5 b). d) The Appellant also informed His Honour Judge Jarrett at trial of section 12 of the Fair Work Act 2009 The dictionary- Long term casual employee b) The employee has been employed by the employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months. Mr Birner has had only one new engagement commencing on 1 March 2010, rosters were provided in Mr Birner's affidavit filed 26.04.2016. e) Section 147 of the Fair Work Act 2009 was also raised to his Honour stating an employee's ordinary hours of work are significant in determining the employee's entitlements under the National Employment Standards. f) The period of employment in dispute is from 1 March 2010 until July 2014, the period after July 2014 is as a result of unilateral changes to the Appellant's employment and is in breach of the consultation requirements per the award 2-9.1. the Appellant did not accept those changes and legal action was taken. 3. The Letter of Offer a) The 6 May 2010 letter of offer was accepted as a contract of employment based on what was going on at the time and formed a representation that the employee can expect the expressed terms contained within. b) The letter states a base salary of $93,600.00. c) His Honour Judge Jarrett in 83. States that in the letter Mr Bimer's hourly rate was annualized to give a base rate, however he has failed to consider that the definition of a base rate is the absence of any loadings and that casual employment would have attracted a loading of 25% in addition. d) Fair Work Regulations 2009-3.46 g) Pay slips must specify separately identifiable amounts. e) The three letters to Mr Deeb RB7 filed 26.04.2016 requesting adherence to the agreement of 40 hours per week were also not mentioned in the judgment. 2. Annual Leave a) Annual leave amounts were paid in 2012 and 2013 and recorded as annual leave on two out of three occasions,(RB10 five pages) His Honour Judge Jarrett in 71.72.73 makes mention of the annual leave however does not turn to the records of annual leave instead states that the leave was claimed to be a bonus by Mr Deeb. b) If it was a bonus then regulations require a record of a bonus paid each time. 3. Pay Records a) The Respondent entered 72 pages of falsified pay records (created on 7.10.2015) at 10:50 am ERD5 in the affidavit of Mr Deeb filed 18.12.2015 that was rejected by the Appellant (Mr Birner) in the following affidavit filed on 11.01.2016, the Respondent's same affidavit was entered into evidence at the trial, Mr Birner raised the issue with His Honour Judge Jarrett and had cross examined Mr Deeb about the records and how the printed details had been added to past closed records, back to 2010. b) All original pay slip records before 27 July 2014 did not contain details of Award, Classification, Employment status, and Casual loading, or Bonus amounts and other discrepancies. c) The Appellant considers that His Honour Judge Jarrett erred in allowing the pay records to be entered into evidence at trial, with reference to Australian Solicitors Conduct Rules 24.1, 24.2 and Fair Work Reg 3.44 Record-accuracy. d) The pay records were not mentioned in the judgment at all and weight was still given to evidence given by Mr Deeb in that affidavit. For the reasons outlined above the appellant seeks to have the findings of His Honour Judge Jarrett overturned and in the interest of the public as to avoid employees being inappropriately labeled as casual employees. For the reasons outlined above the appellant seeks to have the findings of His Honour Judge Jarrett overturned and in the interest of the public as to avoid employees being inappropriately labeled as casual employees. (Errors in original.) 30 In his notice of appeal Mr Birner also noted that he relied on decisions in Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321; (2010) 201 IR 123 and Skene v Workpac Pty Ltd [2016] FCCA 3035.
Issues for determination 31 The following issues arise for determination in the present appeal: (1) Whether the primary Judge erred at [75] by finding that Mr Birner had been informed of the terms of his engagement, including his classification as a casual employee. (2) Whether the primary Judge erred at [83] by finding that the May 2010 letter: (a) did not establish a new legal relationship nor change the existing legal relationship between the parties; and (b) correctly reflected the existing arrangement. (3) Whether the primary Judge erred at [94] in holding that the phrase "Casual full time basis" in the May 2010 letter represented "an arrangement under which Mr Birner was and remained a casual employee, tending to work full time hours". (4) Whether the primary Judge erred by accepting evidence that was false and misleading. 32 I will examine each of these issues in turn.
Section 62 47 First, s 62 of the FW Act provides: Maximum weekly hours of work (1) An employer must not request or require an employee to work more than the following number of hours in a week unless the additional hours are reasonable: (a) for a full-time employee--38 hours; or (b) for an employee who is not a full-time employee--the lesser of: (i) 38 hours; and (ii) the employee's ordinary hours of work in a week. Employee may refuse to work unreasonable additional hours (2) The employee may refuse to work additional hours (beyond those referred to in paragraph (1)(a) or (b)) if they are unreasonable. Determining whether additional hours are reasonable (3) In determining whether additional hours are reasonable or unreasonable for the purposes of subsections (1) and (2), the following must be taken into account: (a) any risk to employee health and safety from working the additional hours; (b) the employee's personal circumstances, including family responsibilities; (c) the needs of the workplace or enterprise in which the employee is employed; (d) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours; (e) any notice given by the employer of any request or requirement to work the additional hours; (f) any notice given by the employee of his or her intention to refuse to work the additional hours; (g) the usual patterns of work in the industry, or the part of an industry, in which the employee works; (h) the nature of the employee's role, and the employee's level of responsibility; (i) whether the additional hours are in accordance with averaging terms included under section 63 in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee under section 64; (j) any other relevant matter. Authorised leave or absence treated as hours worked (4) For the purposes of subsection (1), the hours an employee works in a week are taken to include any hours of leave, or absence, whether paid or unpaid, that the employee takes in the week and that are authorised: (a) by the employee's employer; or (b) by or under a term or condition of the employee's employment; or (c) by or under a law of the Commonwealth, a State or a Territory, or an instrument in force under such a law. 48 In submitting that s 62 of the FW Act imposes a cap on the number of hours Mr Birner could work as a casual employee, Mr Birner is incorrect. Rather, s 62 prevents an employer requesting or requiring a casual employee to work more than 38 hours in a week unless the additional hours are reasonable. Whether additional hours are reasonable or unreasonable depends on factors set out in s 62(3) of the FW Act.
Annual leave 49 Second, in relation to Mr Birner's claim of having taken "annual leave", to which only permanent employees are entitled, I note that his Honour did consider evidence relevant to this issue. For example: At [47] his Honour noted evidence of Mr Deeb of a conversation with Mr Birner to the effect that Mr Birner was not entitled to take annual leave because he was a casual; At [51] his Honour referred to a draft letter of offer prepared by Mr Birner for Mr Deeb to sign, referring to "five weeks annual leave"; At [71] his Honour noted: 71. Mr Birner argues that consistent with his claim to be entitled to annual leave, he took, on three occasions, leave for which he was paid. He says that Mr Deeb agreed for him to take annual leave in 2012 to renovate his kitchen. He was absent from 8 October, 2012 to 21 October, 2012, a total of 80 hours. Mr Birner says that he was paid annual leave for that period. Mr Deeb swears that he provided that paid time away from work as the bonus that he spoke of at the meeting with Mr Birner in November 2011. Mr Birner's payslip for that period does not record the leave as taken as annual leave, only as wages. That is consistent with the evidence from Ms Ducksbury. 72. Mr Birner says that he again took annual leave between 11 November, 2013 and 17 November, 2013 for 23.5 hours and a further leave amount of 16 hours from 18 November, 2013 to 24 November, 2013 (a total of 39.5 hours). 73. Mr Deeb swears that this was consistent with his offer to give Mr Birner a week's leave of bonus pay for each year of good service. 50 His Honour did not explicitly dispose of this point, however I am satisfied that the primary Judge rejected Mr Birner's arguments concerning "annual leave", and accepted Mr Deeb's evidence that the additional payment was actually a bonus. Whether or not the respondent recorded the bonus as such was not, in my view, determinative of the proper characterisation of this payment. 51 Further to this point, I note his Honour's consideration at [91] of Mr Birner's attempts, on numerous occasions after May 2010, to alter the nature of his employment with the respondent, including his attempts to convince Mr Deeb to execute agreements that recognised his employment as permanent, and which included provision for "annual leave". As his Honour observed at [91], these attempts were inconsistent with an understanding that he was already employed on a permanent full time basis, and that he had taken "annual leave" as distinct from some other absence for which he was paid.
The Award 52 Third, I note that Mr Birner's arguments concerning a "flexibility arrangement" were not raised before the primary Judge. Fundamentally this aspect of Mr Birner's case relates to whether, in terms of the Award, his employment was permanent or casual. 53 The primary Judge had regard to the terms of the Award, as follows: 90. Clause 11.3 of the Airline Operations - Ground Staff Award 2010 does not assist Mr Birner. As senior counsel for the respondent submits, if clauses 11.3 and 11.5 (that which deals with casual employees) of the Award contemplated that an employee who is engaged on a casual basis might automatically become a full-time employee upon working 38 hours in any one week, the Award would have included a provision which might have permitted the employee to transfer to full-time employment. Such a provision is not contained in the Airline Operations - Ground Staff Award 2010, but exists in other Awards: see for example cl.10.3(e) of the Electrical, Electronic and Communications Contracting Award 2010 and cl.13.4 of the Hospitality Industry (General) Award 2010. 54 His Honour's reasoning in this respect is sound. 55 However in ground 2(b) of his notice of appeal and in his submissions Mr Birner relies on other clauses of the Award. Clause 14 of the Award provides: 14. Classifications Classification definitions are set out in Schedule A. Employers must advise their employees in writing of their classification upon commencement and of any subsequent changes to their classification. 56 Relevantly clause 15 of the Award provides: 15. Minimum wages 15.1 … 15.2 … 15.3 Maintenance and engineering stream Classification Rate per week $ Trades assistant 543.90 Aircraft Maintenance Engineer 637.60 Licenced Aircraft Maintenance Engineer - Grade 1 682.40 Licenced Aircraft Maintenance Engineer - Grade 2 715.00 Licenced Aircraft Maintenance Engineer - Grade 3 750.40 57 To the extent that Mr Birner claims a notification deficiency on the part of the respondent referable to clauses 14 and 15.3 of the Award, this was not pleaded. Mr Birner relied on paragraph [10] of the statement of claim which read: Failure to inform at time of Engagement 10. In the premises pleaded in paragraphs 3, 4 and 5: (a) the Respondent has failed to inform the Applicant as to whether he is a full-time, part-time or casual employee at the time of engagement; and (b) breached s 45 of the FW Act by contravening a term of a modern award. 58 The classifications in clause 15 of the Award are not relevant to whether an employee is employed on a permanent or casual basis. Mr Birner has not explained how alleged breach of clause 14 of the Award is relevant to the issue of formation of his contract of employment, his claim against the respondent, or indeed this appeal (cf observation of Bromwich J in similar circumstances in Symons v White (Sydney Catholic Schools) [2018] FCA 949 at [63]). 59 In relation to Mr Birner's contentions concerning a failed "flexibility arrangement", in this appeal Mr Birner submits that the May 2010 letter should be seen as a "failed individual flexibility arrangement" within the meaning of s 145 of the FW Act. In this regard I note the following statutory provisions: Section 143 provides that a modern award must include terms (coverage terms) setting out the employers, employees, organisations and outworker entities that are covered by the award, in accordance with the section (s 143(1)). Section 144 provides that flexibility terms must be included. In particular s 144(1) provides that a modern award must include a term (a flexibility term) enabling an employee and his or her employer to agree on an arrangement (an individual flexibility arrangement) varying the effect of the award in relation to the employee and the employer, in order to meet the genuine needs of the employee and employer. Section 144(2) and (3) outline the effect of individual flexibility arrangements, and s 144(4) sets out the requirements for flexibility terms. Section 145 provides as follows: Effect of individual flexibility arrangement that does not meet requirements of flexibility term Application of this section (1) This section applies if: (a) an employee and employer agree to an arrangement that purports to be an individual flexibility arrangement under a flexibility term in a modern award; and (b) the arrangement does not meet a requirement set out in section 144. Note: A failure to meet such a requirement may be a contravention of a provision of Part 3-1 (which deals with general protections). Arrangement has effect as if it were an individual flexibility arrangement (2) The arrangement has effect as if it were an individual flexibility arrangement. Employer contravenes flexibility term in specified circumstances (3) If subsection 144(4) requires the employer to ensure that the arrangement meets the requirement, the employer contravenes the flexibility term of the award. Flexibility arrangement may be terminated by agreement or notice (4) The flexibility term is taken to provide (in addition to any other means of termination of the arrangement that the term provides) that the arrangement can be terminated: (a) by either the employee, or the employer, giving written notice of not more than 28 days; or (b) by the employee and the employer at any time if they agree, in writing, to the termination. 60 Mr Birner points further to clause 7.4 of the Award which provides: Award flexibility … … … 7.4 The agreement between the employer and the individual employee must also: (a) be in writing, name the parties to the agreement and be signed by the employer and the individual employee and, if the employee is under 18 years of age, the employee's parent or guardian; (b) state each term of this award that the employer and the individual employee have agreed to vary; (c) detail how the application of each term has been varied by agreement between the employer and the individual employee; (d) detail how the agreement results in the individual employee being better off overall in relation to the individual employee's terms and conditions of employment; and (e) state the date the agreement commences to operate. 61 In relation to this point, Mr Birner submits that the annualised salary arrangements as set out in the May 2010 letter were not under the Award - they had to constitute a flexibility arrangement. 62 In my view this argument has no substance. His Honour at [83] dealt with the issue of the "annualisation" of Mr Birner's hourly rate, to give a base rate, for the purposes of the May 2010 letter. As I have already observed, the findings of his Honour in respect of that letter, including its purpose and contents, were open. The May 2010 letter simply reflected the already existing arrangement between the parties, and identified an "annualised" sum for purposes referable to Mr Birner's loan application. In my view the submissions of Mr Birner seek to substantiate a relationship referable to ss 144 and 145 of the FW Act where the foundations of that relationship do not exist. I am not persuaded that the contents of the May 2010 created a failed individual flexibility arrangement between Mr Birner and the respondent as he alleges.
WorkPac Pty Ltd v Skene 63 Finally I consider that his Honour's reasoning at [86] and [87] concerning the meaning of "casual full time basis" is careful and thoughtful. However does it survive the decision of the Full Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 362 ALR 311? 64 The Full Court of the Federal Court delivered judgment in Skene on 16 August 2018 after judgment was reserved in this appeal. As reference had been made in earlier submissions to the first instance decision in Skene, I ordered that the parties file supplementary written submissions addressing the relevance of the Full Court's subsequent decision. In summary, Mr Birner submitted that the primary Judge's findings and conclusions were not in keeping with the reasoning and conclusions of the Full Court in Skene, whereas the respondent submitted that a multi-factorial analysis of the kind expounded in Skene entirely justified the primary Judge's reasoning and conclusions at first instance in this case. 65 In Skene the Full Court considered, inter alia, the concept of "casual" employees. Relevantly their Honours observed that: In their ordinary conceptions, casual employment and full-time and part-time employments are mutually exclusive categories of employment ([177]). Over time, repetition of a particular working arrangement may become so predictable and expected that, at some point, it may be possible to say that what began as discrete and separate periods of employment has become, upon the tacit understanding of the parties, a regular ongoing engagement ([179]). The conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship need to be assessed ([180]). In such an assessment the nature of the relationship may be legitimately examined by reference to the actual way in which the work was carried out ([180]). Whether the requisite firm advance commitment to continuing and indefinite work (subject to rights of termination) is absent or present must be objectively assessed including by reference to the surrounding circumstances created by both the contractual terms and the regulatory regime (including the FW Act, awards and enterprise agreements) applicable to the employment ([181]). The payment by the employer and the acceptance by the employee of a casual loading, like the description of the type of employment given by the parties in their contractual documentation, speaks to the intent of the parties to create and continue a casual employment. But the objective assessment will need to consider whether that intent has been put into practice and if achieved, has been maintained ([182]). The description of the employee as a "casual" employee in the contract is a relevant factor ([187]). Engagement by the hour may be a relevant factor in some circumstances, but is not a necessary characteristic of casual employment ([188]). Contractual provision for termination at very short notice may be a relevant factor indicative of casual employment ([191]). 66 Turning now to Mr Birner's employment, I am satisfied that the decision of his Honour that Mr Birner was a casual employee was correct. In so finding I have had regard to the conduct of the parties to the employment relationship in this case and the real substance, practical reality and true nature of that relationship, in particular the following facts as found by the primary Judge: That the parties agreed in February 2010 that the employment relationship between them would be casual; That the parties agreed in February 2010 that Mr Birner would be paid at the rate of $45.00 per hour; That Ms Ducksbury was informed by Mr Deeb that Mr Birner would be resuming employment with ATE as a casual employee; That Ms Ducksbury conducted her payroll and record keeping for Mr Birner on the understanding that he was a casual employee; That the hours available to Mr Birner to work were set out in a roster available to him one month at a time, and seven or so days in advance; That all casual staff including Mr Birner were at liberty to reject rostered shifts, and if they did so they were not paid for those shifts, they were not required to complete a leave application form in relation to rejected shifts, and they were not required to give a reason for rejecting those shifts; That Mr Birner had on at least two occasions since March 2010 chosen not to work rostered shifts; That Mr Birner was only rostered on weekend shifts when he resumed with the respondent in March 2010; That Mr Birner's roster changed, and became more variable, after he suffered a workplace injury, such that he worked a varied roster with some weeks working three days and others working four-five days in a week; That Mr Birner's shifts were sometimes seven hours, and other times nine hours in duration; That Mr Birner was, on occasion, rostered to work for fewer than 40 hours in a given week, and never more than 40 hours per week; That his Honour appeared to accept evidence of Mr Deeb concerning the bonus payable to Mr Birner rather than "annual leave"; and That Mr Birner endeavoured to persuade Mr Deeb to sign a document effecting a "transfer from the current agreement" to employment "on a permanent full time basis", which suggested Mr Birner's acknowledgment that he was not a permanent employee. 67 The absence of specific reference to a casual loading is not, by itself, determinative that the employment relationship was not casual, as submitted by Mr Birner. 68 In my view the decision of his Honour is not disturbed by the Full Court authority of Skene.
Conclusion 77 In my view none of the appellant's grounds of appeal are substantiated. The appropriate order is to dismiss the appeal. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.
Birner
Aircraft Turnaround Engineering Pty Ltd
[2013] FWCFB 2434
(2013) 230 IR 30
(2010) 201 IR 123
(2018) 362 ALR 311
(2001) 115 FCR 79