Application under s 106 of the Industrial Relations Act 1996
INTERLOCUTORY JUDGMENT
1 On 30 March 2000, Fredrick Bidwell, Brian Eslick and Bronwyn Stockwell filed a summons for relief under s 106 of the Industrial Relations Act 1996. The respondents were named as Exben Pty Limited ("first respondent"), Transfield Holdings Pty Limited ("second respondent"), Transfield Pty Limited ("third respondent"), Transfield Corporate Pty Limited ("fourth respondent"), Franco Belgiorno-Nettis ("fifth respondent"), Amina Belgiorno-Nettis ("sixth respondent"), Guido Belgiorno-Nettis ("seventh respondent") and Luca Belgiorno-Nettis ("eighth respondent").
2 An amended summons was filed on 31 May 2000. In the meantime, Ms Stockwell had filed a notice of discontinuance by consent with the respondents, leaving Messrs Bidwell and Eslick as the first and second applicants. On 24 July 2000, Mr Bidwell filed a notice of discontinuance by consent, leaving Mr Eslick as the sole applicant in the proceedings.
3 On 13 November 2000, Maidment J issued a certificate stating that conciliation in the matter had been unsuccessful.
4 On 22 November 2000, the first to eighth respondents filed a notice of motion seeking to have Marco Belgiorno-Zegna joined as a respondent to the substantive proceedings. The application was opposed by Mr H J Dixon SC, for Mr Belgiorno-Zegna and by Ms E G Pritchard, solicitor, for Mr Eslick.
Background
5 Before dealing with the submissions on the notice of motion, it is necessary to set out the relevant background.
6 Transfield Pty Limited and Transfield Corporate Pty Limited, the third and fourth respondents, are wholly owned subsidiaries of Transfield Holdings Pty Limited, the second respondent. Transfield Holdings is a wholly owned subsidiary of Exben Pty Limited, the first respondent. The shareholding in Exben Pty Limited is held by the fifth, sixth, seventh and eighth respondents. Marco Belgiorno-Zegna also holds shares in Exben Pty Limited.
7 Mr Eslick had been employed as Chief Financial Officer of the Transfield Group of companies (that is, the second, third and fourth respondents) since August 1988 up to the date of the termination of his employment, a date in respect of which there is disagreement but at the latest seems to have been 8 March 2000.
8 A dispute arose between Mr Belgiorno-Zegna and the other members of the Belgiorno family (that is, the fifth to eighth respondents) concerning the management of the Transfield Group of companies. Consequently, Mr Belgiorno-Zegna decided to disassociate himself from the business and affairs of the other members of the Belgiorno family in the Transfield Group and to take a share of the Transfield Group assets on a basis to be agreed.
9 The agreed basis of the split was set out in a Memorandum of Understanding ("MOU") of 25 May 1999. In this respect, the amended summons for relief stated:
27. The MOU contemplated a division of assets of the Transfield Group between two newly created holding companies, yet to be incorporated. Exben I was to be owned as to 10% by Amina and as to 45% by each of Luca and Guido. Exben II was to be owned as to 10% by Amina and 90% by Marco.
28. It provided that subject to a number of conditions, assets identified in Schedule 2 to the MOU were to be transferred to a wholly owned subsidiary of Exben II, intended to be named "Transfield Investments" ("TI"). Under the MOU the date on which the transfer of these assets was to be effective ("Implementation Date") was to occur no later than 20 December 1999.
29. Clause 6.6 of the MOU provided that on the Implementation Date certain employees of the "Transfield Group" listed in Schedule 3 of the MOU would be "transferred" to Exben II subject to their concurrence.
10 Mr Eslick was one of the persons listed in Schedule 3 of the MOU who was to be transferred, with his concurrence, to Exben II on the Implementation Date.
11 Paragraphs 31,32, 33 and 34 of the amended summons stated that:
31. Clause 8.3 of the MOU provides that an "implementation team" be established to assist the parties to the MOU in implementing the various transactions which would ultimately result in the transfer of assets to Exben II or TI.
32. In accordance with this clause 8.3 of the MOU, sometime in May or June 1999 representations were made by Marco to the Applicants on behalf of the Transfield Group regarding their positions with the Transfield Group, with the intention that the Applicants would rely on them in determining whether to continue to work for the Transfield Group or ultimately work for Exben II or TI, once they had been established.
33. It was represented to the Applicants that:
a) The Applicants would be employed by the new corporate entity, Exben II or TI, once either of those entities had been established and the Schedule 2 Assets had been transferred to it;
b) In the interim the Applicants would work with Marco to manage the Schedule 2 Assets in anticipation of their transfer to Exben II/TI;
c) This would involve changes in the Applicants' work duties and responsibilities. But would not result in a change to the employing entity until the Implementation Date.
34. From about mid June 1999, in reliance on those representations, and in similar fashion to the way the Salteri split had proceeded, the Applicants, as part of the implementation team as contemplated clause by (sic) 8.3, performed services associated with the planned implementation of the MOU, the management of the Schedule 2 Assets as contemplated by the MOU and worked towards the creation of the ExbenII/TI business.
12 The reference to "Applicants" in the amended summons, of course, is to be taken only as a reference to Mr Eslick, the other two applicants having filed notices of discontinuance.
13 In October 1999 it became apparent that the MOU referred to in the amended summons could not be implemented.
14 Paragraph 38 of the amended summons stated:
38. Clause 6.5 of the MOU provided that, in the event that, for whatever reason, the transactions in the MOU were not implemented by 20 December 1999, Marco would resume the position of Managing Director of Transfield as provided in the Corporate Governance Agreement (made in early 1998). The Applicants therefore had a reasonable expectation that, in the event the MOU was not implemented they would be reinstated in their former positions by Marco.
15 On 20 December 1999 Mr Eslick became aware that Guido Belgiorno-Nettis was contending that Mr Eslick had resigned his employment from the Transfield Group in mid-June 1999 and since that date the Transfield Group had been acting as an agent for Transfield Investments for the purpose of paying wages and superannuation contributions. The amended summons also stated that Guido Belgiorno-Nettis contended the agency arrangement ceased on 20 December 1999 and that Transfield would be pleased to re-employ Mr Eslick.
16 Paragraphs 41 and 42 of the amended summons stated:
41. On 21 December 1999, Guido telephoned Mr Eslick to invite both Mr Bidwell and Mr Eslick to rejoin the Transfield Group. Mr Eslick stated that as a mediation process ("Central Mediation") was imminent to resolve the Dispute, and as part of that process it was proposed that a "standstill agreement" would be agreed to preserve the status quo until the end of the Central Mediation or end of the litigation (if (sic) came to that), it was premature to consider such an option.
42. On 14 January 2000, each of the Applicants were advised by the Transfield Group that their employment had ceased on 24 May 1999 and, in case of Mr Bidwell, on 20 June 1999 and that from each of those dates they had accepted an offer of employment by Marco to take up employment with TI. The Applicants were further advised that their respective accrued annual leave and long service leave entitlements, calculated to 24 May and 20 June 1999 as appropriate, would be released to the Applicants or alternatively those accruals could be transferred to the Applicants' "new employer", TI.
Particulars
Each of the Applicants were provided with a letter from Lynne Longbottom, General Manager, Human Resources Transfield, dated 14 January 2000. A sample copy of this letter is served with the summons.
17 Paragraph 49 of the amended summons stated:
49. On 20 January 2000, Luca told Mr Bidwell and Mr Eslick that the Transfield Group considered that the Applicants had resigned from their employment with the Transfield Group effective in May/June 1999 and that from that date the Transfield Group had acted as "agent" of TI in relation to the payment of wages and the making of superannuation contributions. He also stated "Your (the Applicants) employment is of no interest to Transfield ". Messrs Bidwell and Eslick strenuously denied any such agency and that they had resigned their employment.
18 Mediation in February and March 2000 failed to resolve matters insofar as Mr Eslick was concerned. The Transfield Group paid Mr Eslick certain monies related to termination of his employment up to 8 March 2000.
19 Mr Eslick claimed that his contract with each and every respondent was unfair, harsh or unconscionable in failing to provide payment on termination of the following:
· an amount for payment in lieu of notice;
· an amount for severance;
· an amount for annual leave and long service leave entitlements accrued and leave and service leave entitlements;
· an amount for compensation for future economic loss; and
· an amount for loss of future superannuation defined benefits.
Submissions for the first to eighth respondents