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[2022] FCA 376
Federal Court of Australia
2022-04-08
Mr J, Perram J
Original judgment source is linked above.
AND: WOOLWORTHS GROUP LIMITED (ABN 88 000 014 675) First Respondent
WOOLWORTHS (SOUTH AUSTRALIA) PTY LIMITED (ABN 34 007 873 118) Second Respondent
order made by: PERRAM J DATE OF ORDER: 8 April 2022
AND: COLES SUPERMARKETS AUSTRALIA PTY LTD (ABN 45 004 189 708) Respondent
order made by: PERRAM J DATE OF ORDER: 8 April 2022
Introduction 1 Travelling together are these four separate actions: Fair Work Ombudsman v Woolworths Group Limited (NSD 581 of 2021); Fair Work Ombudsman v Coles Supermarkets Australia Pty Ltd (NSD 1252 of 2021); Baker v Woolworths Limited (NSD 2004 of 2019) ('Baker'); and Pabalan v Coles Supermarkets Australia Pty Ltd (NSD 542 of 2020) ('Pabalan'). 2 Each concerns the alleged underpayment by Woolworths Group Limited bodies (collectively, 'Woolworths') and Coles Supermarkets Australia Pty Ltd ('Coles') of certain employees. In the actions brought by the Fair Work Ombudsman ('the FWO'), the relief sought includes a claim for compensation on behalf of individual employees under s 545 of the Fair Work Act 2009 (Cth) ('FW Act'). The claims in Pabalan and Baker are class actions in which similar allegations are made against the two companies albeit over a longer period of time. 3 I will refer to the suits against Woolworths as the 'Woolworths regulatory action' and the 'Woolworths class action' and the suits against Coles as the 'Coles regulatory action' and the 'Coles class action'.
Three Kinds of Issues 4 The issues in the four actions overlap but are not identical. They may be divided into three categories: (a) Tier 1 Issues: These concern discrete questions of law about the correct interpretation of the General Retail Industry Award 2010 ('Award'), the FW Act, and contracts of employment. An example of such an issue is whether the word 'retailers' in cl 27.2(b)(iii) of the Award means a retail business generally (such as Woolworths or Coles) or whether it refers to a particular retail store. (b) Tier 2 Issues: These concern questions of law mixed with questions of fact. An example of such an issue concerns the position of salaried employees. Some of these employees have been paid benefits and allowances in addition to their base salary. Assuming that they are now found to be entitled to some payment under the Award which they were not paid, are Woolworths and Coles entitled to set off that obligation against the amounts which they have already paid? (c) Tier 3 Issues: These concern questions of fact only. An example of this kind of question concerns whether particular employees were in fact employed in the position of an inventory manager.
The Regulatory Actions and Tiers 1-3 5 The Woolworths regulatory action is to be run on a sample of 32 identified employees: Fair Work Ombudsman v Woolworths Group Limited (The Calculation Employees) [2022] FCA 203. Once it is determined what these 32 employees are entitled to, the parties believe that they will be able to determine what the rest of the 19,000 employees will be entitled to without the assistance of the Court. In the context of a suit which concerns 32 persons, both the identification of issues and the preparation of evidence is now something which can proceed in relation to Tiers 1-3. 6 There is no sampling procedure in place for the Coles regulatory action. The trial preparation orders prepared by the parties do not suggest that either side proposes to embark on such a procedure (at least at this stage). The number of employees involved appears to 8,767. I do not think that it would be desirable for the trial to proceed in relation to 8,767 employees. Since a sampling procedure has been successfully adopted in the Woolworths regulatory action, it appears to me that it is reasonable to expect that it should be achievable in the Coles regulatory action. Once such a procedure is adopted, it will be possible to identify the Tier 1-3 issues and also to prepare evidence by reference to them.
The Class Actions and Tiers 1-3 7 It is apparent from the nature of Tier 3, that unless the parties to the class actions are able to agree on a similar sampling procedure to that which has been adopted in the regulatory actions, none of the issues arising in Tier 3 can be described as common issues. They are thus not suitable for determination at a trial of the common issues of the kind that usually happens in class action litigation. The Tier 3 issues may ultimately be dealt with in the same way that they have been dealt with in the regulatory actions (i.e. by sampling) or it may be necessary for them to be tried as individual claims in due course. Other procedures may well be envisaged. However, as matters currently stand, it seems unlikely that the class action trials will include any determination of the Tier 3 issues. 8 Tier 3 may therefore be put to one side for the purposes of the class actions. Although it is apparent from the pleadings in the two class actions that the issues to which they give rise may be divided into Tiers 1 and 2, there is presently a procedural problem which relates to class action principles. It is not suggested in either class action that the lead applicants themselves are involved in all of the issues arising in Tiers 1 and 2. To the extent that the issues in the class actions are not ones which affect the lead applicants, these issues are presently hypothetical and therefore not susceptible to judicial determination given the absence of a matter. 9 Embarking on the identification of the Tier 1 and 2 issues, or even putting on evidence about them when the proceeding does not currently contain any corresponding justiciable issue, would be misconceived. This problem may be remedied by appointing sub-group members under s 33Q of the Federal Court of Australia Act 1976 (Cth). In practice, however, the Court usually appoints a sample group member under its case management powers rather than exercising the power in s 33Q (which can give rise to issues about security for costs). The recent decisions of Markovic J in Brady v NULIS Nominees (Australia) Ltd [2021] FCA 999 and Lee J in Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896; 252 FCR 150 are examples of the use of the sample group member procedure. 10 The first thing which must therefore happen is the identification and appointment of sample group members. Once that it is done, it will then be meaningful to seek to identify the Tier 1 and 2 issues. It will also be meaningful to embark on the preparation of evidence.
Joint Trials 11 The issues in all four proceedings substantially overlap in relation to Tiers 1 and 2. This suggests that they should be heard together in some fashion in relation to those issues. I do not think enough is presently known to determine just how they should be heard. This will not become clear for some time. It is also clear that the Woolworths regulatory action can proceed in relation to Tier 3 and that there are good reasons to think that the Coles regulatory action can reach a similar position. 12 The parties agreed that, leaving aside the question of how the four cases would be tried together, a period of six weeks would be sufficient to deal with them (this was also on the basis that Tier 3 is not involved in the class actions). Being pessimistic, I propose to treat this as seven weeks. 13 I will therefore make orders at the end of these reasons, fixing all four cases for a seven week trial before me commencing on 5 June 2023. Whether they are heard sequentially, concurrently or by some other means need not yet be determined.
The Problem of Tier 3 14 Some members of the Woolworths class action are amongst the 32 sample 'Calculation Employees' already agreed in the corresponding regulatory action. Further, it is reasonable to expect that compensation may be distributed by the FWO to other persons not amongst that 32 as a result of its action. Consequently, before the class action ever gets to Tier 3, it is likely that some of its members will have received compensation. If so, that will need to be brought to account. The impact of the principles of issue estoppel and res judicata are beyond the scope of these reasons. Whatever those principles require, however, they require, and nothing can be done about it. I therefore note the fact that the resolution of the Tier 3 issues in the regulatory actions may have an impact on the class actions. It may be as simple as the example I have mentioned above, or it may be more complicated. At this stage, it is not necessary to take the matter any further.
Next Steps 15 It is clear that the first thing which must be done is that the class actions must get their houses in order in relation to the sample group members. At the same time, the Coles regulatory action must reach a consensus on a sampling procedure as has been done in the Woolworths regulatory action. I would propose to allow a period of four weeks for the parties to be in a position to inform the Court of what is to be done on both of these fronts. 16 Once that is done, it will be possible for the parties to engage in meaningful discussion of what the issues are. It will also be possible for them to begin the process of putting their evidence on. The FWO favoured putting on evidence in advance of determining the issues whilst all the other parties thought that the determination of the issues should proceed first. 17 The issues in all four actions will be formally defined once the Coles regulatory action sampling question is determined and the two class actions have identified their sample group members (and the allegations made in relation to them). In that circumstance, the preparation of the evidence and the identification of the issues may proceed in parallel. The issues are not determined conclusively until shortly before the trial starts. No doubt the issues will develop as the evidence is progressed. The parties should therefore embark on a regular process of updating a draft statement of issues in all four matters, noting the matters they agree upon and those upon which they disagree. The disputes about the issues do not need to be determined at this stage. It would be appropriate for the parties' views on what the issues are to be exchanged monthly. 18 The broad structure of the directions which the parties should now confer on should have these features: (1) The Coles regulatory action should adopt a process to bring about a consensus on a sampling process. At the same time, the two class actions are to articulate the sample group members and their claims. The parties should report back to the Court during a case management hearing within four weeks. At that time, to the extent necessary, orders can be made in the class actions about any defensive pleadings in relation to the sample group members. The procedure in s 33Q may also be used if that is desired. (2) Once that set of procedural problems is resolved, the parties are to put in place an evidentiary timetable of the usual kind including, if necessary, provision for expert evidence. They should also make provision for: (a) court books; (b) opening written submissions without a page limit which are to be exchanged with the other parties but not provided to the Court. This document may form the basis of the closing written submissions; (c) an outline of opening submissions is to be provided to the Court which expresses in 10 pages the gist of the longer documents the parties have exchanged. The Court will not rely on this document in its deliberations. The parties should view this document not as a means to persuade but rather as a means to explain what the issues are; and (d) objections (which are strongly discouraged). (3) Once the process in (2) is commenced, the parties should also make provision for a monthly iterative process by which their agreement and disagreement on the issues in each proceeding may be tracked. (4) A date should be set a month before the trial to determine the issues in each proceeding to the extent that there remains any dispute about them. (5) After the case management hearing referred to in (1), it would be useful to have monthly case management hearings. 19 The only orders I will make now are: (1) The parties each submit a draft short minute of order setting out their proposed directions giving effect to these reasons within seven days hereof. (2) A case management hearing be fixed for 26 April 2022. (3) Each matter is to be fixed for trial for seven weeks commencing on 5 June 2023 with the mode of that trial to be determined at a later date. 20 I have not made any order in relation to Tiers 1-3 in the order setting down the matters for trial. As these reasons indicate, at present, the trial is likely to proceed on Tiers 1 and 2 for the class actions and Tiers 1-3 for the regulatory actions. This situation may change if more is able to be agreed. The parties should proceed, however, on the basis I have outlined. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.
Fair Work Ombudsman
Woolworths Group Limited