Della-Franca v Autosports Leichhardt Pty Ltd

GOODMAN J 1 By way of interlocutory application dated 7 December 2021, the respondent seeks an order setting aside two paragraphs of a Notice to Produce dated 21 October 2021 served upon it by the applicant (alternatively, an order providing dispensation from compliance with the Notice to Produce). The order is sought on the basis that the documents likely to be caught by those paragraphs are not of apparent relevance to the issues in the proceeding. 2 The respondent also seeks, in the event that it is required to produce the documents sought in those paragraphs, an order providing dispensation from any requirement to produce personal information of employees contained within such documents.

BACKGROUND 3 Immediately prior to the events the subject of this proceeding, the applicant was employed by the respondent as dealer principal of the respondent's Leichhardt Volkswagen dealership and its Five Dock service and parts business. The respondent is a company within the Autosports Group of companies. 4 It is common ground that the respondent stood down the applicant from his employment on 25 March 2020 and that the respondent terminated the applicant's employment on 11 September 2020. 5 The applicant's claims in the proceeding include a claim that he was entitled to be remunerated during the period from 25 March 2020 to 11 September 2020. 6 Part of the respondent's answer to the applicant's claim is that during that period the applicant could not usefully have been employed by the respondent because of a stoppage of work for a cause for which the respondent cannot reasonably be held responsible, and as such the respondent was not required to make payments to the applicant for that period. The respondent relies upon s 524 of the Fair Work Act 2009 (Cth) which provides insofar as is presently relevant: (1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances: … (c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible. … (3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period. 7 The parties have filed outlines of evidence to be given by various witnesses, ahead of a hearing scheduled to commence on 30 May 2022. In particular: (1) the outline of evidence of the applicant foreshadows that he will give evidence that: 11. There were, as at 24 March 2020, approximately 30 employees employed by the respondent and Group at the levels of Dealer Principal and General Manager. As at 24 March 2020, the applicant was the only person at his (Dealer Principal) level of the respondent to be stood down. No General Managers were stood down. (2) the outline of evidence of Mr Scaife, served by the applicant, foreshadows that he will give evidence that: 6. The Five Dock site managed by Mr Scaife reopened during May 2020, stood down staff returned to work at Five Dock and Rushcutters Bay, but his stand down continued. James Chen took over Mr Scaife's responsibilities when the sites managed by Mr Scaife reopened. (3) the outline of evidence of Mr Pagent, the Chief Executive Officer and Managing Director of the Autosports Group, foreshadows that he will give evidence on matters including: 1. Autosports Group comprises a portfolio of 40 retail businesses throughout Sydney, Melbourne, Brisbane and the Gold Coast representing automotive brands including Alpina, Aston Martin, Audi, Bentley, BMW, BMW Motorrad, Honda, Jaguar, Lamborghini, Land Rover, Maserati, McLaren, Mercedes-Benz, MINI, Rolls-Royce, Volkswagen and Volvo. … 34. A discussion between him and the Applicant and other employees on 23 March 2020 where he advised that the business was intending to implement stand downs. During this discussion, Mr Pagent informed all employees on the call, including the Applicant, that employees in the organisation would be stood down without pay, including having their commission packages suspended and they had to return all company property. 35. On 24 and 25 March 2020, the Board discussed the impacts of COVID - 19 on the business and a staged plan to reduce costs, which included standing down employees effective at 5pm on 25 March 2020. The Board had a number of Board meetings around this time and into the stand down period, many of which were solely focussed on mitigating the effects that the pandemic was having on the Autosports Group. Those discussions included reduction of costs, including employee costs which is approximately 40% of Autosports' expenses in running its business. … 42. His letter to the Applicant on 25 March 2020 confirming that he would be stood down. Mr Pagent, in his role of CEO and with the support of the Board, had decided that the stand down would occur for the reasons in the 25 March 2020 letter. 43. That 20% of its employees were initially stood down in March 2020. The business then stood down a further 15% of its employees in April 2020. The business also stood down other senior managers in the same position as the Applicant (i.e. where multiple sites in the same position had been amalgamated), including in Victoria, the General Manager of the BMW site in Bundoora, Mr Mark Taylor, the Dealer Principal of two Volvo Sites in Sydney, including Mr Rob Scaife and the General Manager of one of our panel sites, Mr Alan MacNamee. (4) the outline of evidence of Ms Lintott, the former General Manager, People, Culture & Strategy for the Autosports Group foreshadows that she will give evidence on matters including: 5. Her correspondence with employees who were stood down, including the Applicant, between March and September 2020, including correspondence that was sent to stood down staff and their managers with respect to matters pertaining to the stand down. Her written correspondence on the following dates is contained in the Respondent's bundle of documents and was sent to the Applicant: a. 25 March 2020; b. 30 March 2020; c. 3 April 2020; d. 9 April 2020; e. 15 April 2020; f. 16 April 2020; g. 23 April 2020; h. 12 May 2020; i. 5 June 2020; j. 19 June 2020; k. 10 July 2020; l. 24 July 2020; m. 29 July 2020; and n. 17 August 2020. 8 The respondent's application was supported by an affidavit of its solicitor, Ms Byrne. At paragraph [12] of her affidavit, Ms Byrne stated: 12. The Respondent seeks the orders set out in the Application on the following basis: (a) the documents specified in categories 7 and 8 of the Notice are communications between the Respondent and the Autosports Group business and their employees about the stand down of those employees from their employment; (b) except for the documents identified in category 7 of the Notice that are communications between the Applicant and the Respondent, the documents specified in categories 7 and 8 of the Notice are not relevant to the issues that the Court needs to determine in this proceeding - that is the lawfulness of the stand down of the Applicant in his employment with the Respondent; (c) the lawfulness of the stand down of employees of the Respondent and the Autosports Group business that are not the Applicant is not a matter to be determined by the Court in these proceedings. In these proceedings the Court will only be required to determine the lawfulness of the stand down of the Applicant, and no other employee including those referred to in categories 7 and 8 of the Notice; (d) the documents identified in category 7 of the Notice that are communications between the Applicant and the Respondent have already been disclosed to the Applicant as part of the bundle of documents the Respondent seeks to rely upon at trial; and (e) while there is a connection between the timing of the Applicant's stand down and the timing of the stand down of employees engaged at the dealerships/sites identified in categories 7 and 8 of the Notice, the stand down of each individual employee (including the Applicant) was an isolated decision made on its own facts and circumstances.

the NOTICE TO PRODUCE 9 The disputed paragraphs of the Notice to Produce are: 7 Communications between the respondent and its employees engaged at its Five Dock or Leichhardt Volkswagen sites of the respondent being notices of the commencement, extension or ending of the stand down of those employees. 8 Communications between the business (as referred to in paragraph 43 of the Pagent Outline of evidence) and the business's employees engaged at: a. its Rushcutters Bay or Five Dock Volvo sites; b. its Bundoora BMW site; being notices of the commencement, extension or ending of the stand down of those employees. 10 The applicant has agreed to limit the production required by paragraph 7 to notices sent to the identified employees between 1 March 2020 and 30 September 2020.

first issue - should paragraphs 7 and 8 OF THE NOTICE TO PRODUCE be set aside for want of relevance? 11 The only ground of objection is relevance. It is common ground that a notice to produce must seek documents that are relevant and that the test is: "whether the documents are 'reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case'": Seven Network Limited v News Limited (No 11) [2006] FCA 174 at [6]. It is also common ground that the onus of establishing relevance is on the applicant as the party that served the notice to produce: Seven at [7].

Applicant's submissions 12 The applicant submitted that the documents sought were reasonably likely to add to the relevant evidence in this proceeding as: (1) the employees identified in paragraph 7 were at the two dealerships managed by the applicant at the time he was stood down; (2) whether such employees were stood down (and for how long) is relevant at least to whether there was a stoppage of work in part of the respondent's business and whether the applicant could have been gainfully employed; (3) while it may be that the reasons for the standing down of employees might differ for each employee (and in particular having regard to their position and duties) the respondent has not put its case on that basis, but instead on the basis that the stand down of the applicant was a result of the impact of COVID-19 on the whole of its business and that of Autosports Group as indicated in paragraphs [15] to [18] of Mr Pagent's outline of evidence. Further, paragraph [12(e)] of Ms Bryne's affidavit recognises the connection between the timing of the standing down of the applicant and of other employees; (4) Mr Pagent, in his outline, refers to communications with other staff of the respondent and the Autosports Group and to the stand down of such staff in his outline (for example at [20], [35] and [43]); (5) accordingly, the extent of the stand down of other employees at the sites in question, particularly the Five Dock and Leichhardt Volkswagen sites, is likely to be directly relevant to the 'genuineness' of the stand down of the applicant. It is, for example, unlikely or less likely, that such stand down would be regarded as being for a 'stoppage of work' if other employees were given a different reason or not stood down at all; and (6) with respect to the documents sought by paragraph 8, Mr Pagent specifically refers to the stand down of such employees including senior managers at the sites in question in paragraph [43] of his outline. These senior managers include Mr Scaife. The applicant has served an outline of evidence of Mr Scaife and intends to call him as a witness. Thus the documents sought by paragraph 8 also go to the issue of whether Mr Scaife and Mr Taylor (another senior manager) were genuinely stood down or were stood down for reasons unrelated to COVID-19 in circumstances where they could have returned to work. The applicant refers in this regard to paragraph [6] of Mr Scaife's outline. 13 The applicant also submitted that the documents sought relate to matters which arise from the respondent's own foreshadowed evidence supporting its purported standing down of the applicant and that it should not now be open to the respondent to object to the production of documents which relate to those matters. The applicant submitted that, as a minimum, he is entitled to these documents to test the veracity of the respondent's evidence. 14 Counsel for the applicant also noted that there would be a clear entitlement to the correspondence referred to in paragraph [5] of Ms Lintott's outline pursuant to r 20.31 of the Federal Court Rules 2011 (Cth) if Ms Lintott's proposed evidence were recorded in an affidavit, rather than in an outline of evidence.

Respondent's submissions 15 The respondent's submissions may be summarised as follows: (1) under s 524 of the Act, an employee can be stood down without pay if they cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible. The onus rests on the employer to establish that it brings itself within the power to invoke such provisions: Townsend v General Motors-Holden's Ltd (1983) 4 IR 358 at 363-367 per Morling J; (2) in the present case, the "stoppage of work" is the reduction in customer demand for motor vehicles which meant that the work of two dealer principals across two dealer sites could be performed by one dealer principal. The applicant does not dispute that the management of the Leichhardt dealership and the Castle Hill dealership was consolidated and Mr Stevens, General Manager of Volkswagen Castle Hill, performed a new role being the consolidated dealership role overseeing both dealerships. This arrangement was approved by Volkswagen on a temporary basis only. This led to the applicant being stood down; (3) when identifying the "cause" of a stoppage of work, the search is not for the immediate "cause" of the stoppage but rather a more broadly based factual inquiry directed to the sequence of events which ultimately led to the stoppage of work: Vehicle Builders Employees' Federation of Australia v Ford Motor Co. of Australia Pty Ltd (1962) 3 FLR 198; (4) the sequence of events which led to the reduction in client demand leading to the Autosports Group's decision to amalgamate the management of the Leichardt and Castle Hill dealerships, was: the onset of the COVID-19 pandemic; the ban on non-essential travel announced by Australian and New South Wales governments; and health directives requiring the community to social distance, avoid non-essential work and movement and ultimately stay at home in response to the COVID-19 pandemic in Australia. The respondent had no control over these events; (5) the details of when and how other employees in various sites operated by entities owned by Autosports Group, namely Five Dock Volkswagen owned by Autosport Five Dock Pty Ltd or Leichardt Volkswagen owned by the respondent (paragraph 7); and Rushcutters Bay Volvo operated by the respondent, Five Dock Volvo owned by Autosports Castle Hill Pty Ltd and the Bundoora BMW site owned by ASG Melbourne Pty Ltd (paragraph 8) were notified of their stand downs will not establish whether there was a 'stoppage of work' at the respondent's site in Leichardt which meant the applicant could not be usefully employed. Further, documents showing the dates these employees were stood down and were therefore absent from the workplace at these sites owned and operated by entities of Autosports Group will not establish that the applicant could have been performing work at the Leichardt site. The reduced level of work these employees had originally been employed to do was being performed by other employees; and (6) similarly, the genuineness of the standing down of employees by other entities owned by Autosports Group, including other senior employees, such as Mr Scaife and Mr Taylor, is not relevant to the Court's determination of whether the respondent has discharged its onus under s 524 of the Act with respect to the applicant's stand down and rather suggests a collateral purpose for the documents being sought.

Consideration 16 The respondent's answer to the applicant's claim for remuneration during the period he was stood down is based on s 524 of the Act. That answer includes the propositions that: (1) there was a stoppage of work; (2) that stoppage was caused by COVID-19 and its economic consequences; (3) as a result the respondent could not have usefully employed the applicant; and (4) thus, s 524 of the Act applied with the result that the respondent was not obliged to remunerate the applicant. 17 The assessment of those propositions will require consideration as to whether there was a stoppage of work and if so, whether it was caused by COVID-19. Evidence as to the reasons provided to other employees of the respondent as to why they were stood down is reasonably likely to add to the relevant evidence in the case. This is so because: (1) it is likely to show the existence (or otherwise), and extent, of any stoppage of work; and (2) it is likely to show the reasons provided to those employees for the stoppage, which will confirm or contradict the respondent's claim that there was a stoppage of work caused by COVID-19 and the evidence of its witnesses to that effect. 18 For example, let it be assumed that the notices given to the other employees each recorded that the respondent was standing them down for a reason unrelated to COVID-19. On this scenario, such evidence would likely show that any stoppage was not caused by COVID-19 and would bolster the applicant's case. The converse would apply if the reasons given to the other employees each related solely to COVID-19. 19 I note that paragraph 8 differs from paragraph 7 in that it seeks notices to persons who were employees of the "business" referred to in paragraph [43] of Mr Pagent's outline and who were engaged at its Rushcutters Bay, Five Dock Volvo or Bundoora BMW sites. As noted above, paragraph [43] of Mr Pagent's outline is: 43. That 20% of its employees were initially stood down in March 2020. The business then stood down a further 15% of its employees in April 2020. The business also stood down other senior managers in the same position as the Applicant (i.e. where multiple sites in the same position had been amalgamated), including in Victoria, the General Manager of the BMW site in Bundoora, Mr Mark Taylor, the Dealer Principal of two Volvo Sites in Sydney, including Mr Rob Scaife and the General Manager of one of our panel sites, Mr Alan MacNamee. 20 It appears from Mr Pagent's outline that "the business" is a reference to the business of the Autosports Group generally and is not limited to the operations of the respondent; and that the effect of his evidence is that decisions to stand down employees because of the effects of COVID-19 were made across the Group. In circumstances where the respondent seeks to deploy this wider evidence in support of the narrower proposition that the respondent stood persons down because of the effects of COVID-19, the scope of relevant notices is not limited to those given to employees of the respondent and extends to at least those identified in paragraph 8. 21 For the above reasons, I decline to set aside paragraphs 7 and 8 of the Notice to Produce.

SECOND ISSUE - SHOULD THERE BE A DISPENSATION FROM THE PRODUCTION OF PERSONAL INFORMATION OF THE RESPONDENT'S EMPLOYEES? 22 The respondent submitted that if it is required to answer paragraphs 7 and 8 of the Notice to Produce then it should be able to redact personal information of employees concerned as those persons have no interest in the proceeding and their personal information is not relevant. 23 The applicant submitted that the personal information might be relevant (for example, positions held) and that the respondent has the benefit of the implied undertaking identified in Harman v Secretary of State for the Home Department [1983] 1 AC 280. 24 The Court is not presently in a position to determine this claim. In Seven, Sackville J noted that the three step process identified in National Employers' Mutual General Insurance Association Ltd v Waind & Hill [1978] 1 NSWLR 372 as applicable to subpoenas also applied to notices to produce. At [5], his Honour said: As with a subpoena, when a notice to produce is issued, three steps must be taken before the documents identified in the notice can be admitted into evidence. The steps were described by Glass JA (with whom Moffitt P and Hutley JA agreed) in National Employers' Mutual General Insurance Association Ltd v Waind & Hill [1978] 1 NSWLR 372, at 381, as follows: The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the judge differs. 25 The respondent seeks an order, as part of the second step, restricting access to documents responsive to paragraphs 7 and 8. However, there is no evidence before the Court (including the documents which answer paragraphs 7 and 8) which provides a basis for such an order and in these circumstances I am not prepared to make the order sought. I will order that the Notice to Produce be returnable before a Registrar on 23 March 2022. If the respondent wishes to make an application for an order restricting access to the documents it produces, supported by evidence, such application may be made to the Registrar and if necessary referred to me. 26 For the reasons set out above, the respondent's interlocutory application dated 7 December 2021 is dismissed. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.