Hill v Compass Ten Pty Ltd

ALLEGED STATUTORY CONTRAVENTIONS 7 By terminating his employment after he made complaints, Mr Hill alleges that Compass Ten contravened s 340(1) of the Fair Work Act 2009 ('the FW Act'). That section provides: 340 Protection (1) A person must not take adverse action against another person: (a) because the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes, or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or (b) to prevent the exercise of a workplace right by the other person. 8 'Workplace right' is relevantly defined in s 341(1) as: (1) A person has a workplace right if the person: (a) Is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or (b) Is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or (c) Is able to make a complaint or inquiry: (i) To a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or (ii) If the person is an employee - in relation to his or her employment. 9 Mr Hill also alleges that Compass Ten contravened s 772(1)(e) of the FW Act. Such section states: 772 Employment not to be terminated on certain grounds (1) An employer must not terminate an employee's employment for one or more of the following reasons, or for reasons including one or more of the following reasons" […] (e) The filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities

APPLICATION TO STRIKE OUT PLEADINGS AND FOR SUMMARY JUDGMENT 10 On 9 July 2012 Compass Ten filed an application to strike out the proceedings and for summary judgment ('Compass Ten's application). Compass Ten's application is predicated upon three assertions. First, it submits that s 371 of the FW Act prevents Mr Hill from alleging a breach of s 340 of the FW Act because no certificate was issued by FWA under s 369. Secondly, Compass Ten submits that as to the claim under s 772 of the FW Act the proceedings have no reasonable prospect of success because there is no evidence of the filing of any complaint or recourse as required by s 772(1)(e). 11 Thirdly, Compass Ten asserts that Mr Hill would have no reasonable prospects of successfully prosecuting his claim for breach of the employment contract. 12 In respect of the first two assertions relating to contravention of the FW Act, Compass Ten seeks to strike out Mr Hill's claim in relation to contravention of the FW Act pursuant to r 16.21 of the Federal Court Rules 2011 ('the Rules'). In respect of the third assertion, Compass Ten seeks summary judgment pursuant to s 31A of the Federal Court Act 1976 (Cth) ('the Federal Court Act') and r 26.01 of the Rules. 13 Rule 16.21 of the Rules states: 16.21 Application to strike out pleadings (1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading: (a) contains scandalous material; or (b) contains frivolous or vexatious material; or (c) is evasive or ambiguous; or (d) is likely to cause prejudice, embarrassment or delay in the proceeding; or (e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or (f) is otherwise an abuse of the process of the Court. (2) A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court. 14 Section 31A of the Federal Court Act relevantly states: (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. 15 Rule 26.01(1) of the Rules states: (1) A party may apply to the Court for an order that judgment be given against another party because: (a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or (b) the proceeding is frivolous or vexatious; or (c) no reasonable cause of action is disclosed; or (d) the proceeding is an abuse of the process of the Court; or (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. 16 The strikeout application requires the Court, as a threshold matter, to consider the requirements of the FW Act as referred to hereunder.

STATUTORY CONSIDERATIONS 17 If an applicant alleges a breach of s 341 of the FW Act, s 365 enables such person to apply to FWA to deal with the dispute. If FWA forms the view that the dispute cannot be resolved by it, then it will issue a certificate pursuant to s 369 of the FW Act which certifies that FWA is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful. Thereafter an applicant may bring in this Court a 'general protections court application' under s 540 of the FW Act. 18 Similar to the provisions of s 341, if an applicant alleges a breach of s 772, an application lies first to FWA pursuant to s 773. If FWA forms the view that the dispute cannot be resolved by it, then it will issue a certificate pursuant to s 777. Such certificate is in the same terms as a certificate issued under s 369 of the FW Act. If such a certificate is issued, an applicant may bring an 'unlawful termination court application' under s 540 of the FW Act. 19 The question arises whether a certificate is required under each separate section if an applicant simultaneously relies upon both grounds in an application to this Court. This question is discussed below. 20 On 14 June 2012, the Court granted leave to the respondent to issue a subpoena to the Department seeking production of any notes of the meeting that occurred between Ms Nour Abdo and Mr Peter Matthews of the Department and Carolina Torregrossa of Compass Ten and also any notes of the latter part of the meeting which included Paul Hill. Furthermore, the subpoena sought production of any emails from Paul Hill to Ms Abdo to which Ms Abdo referred in an email to Mr Hill dated 4 October 2011. Four documents were produced in answer to the subpoena. 21 On 9 July 2012 Compass Ten filed the present interlocutory application. Compass Ten alleges that Mr Hill is precluded from pleading that Compass Ten breached s 341 of the FW Act because Mr Hill does not have the requisite s 369 certificate from FWA. A certificate under s 777 was filed in this Court on 9 January 2012, but no certificate under s 369 appears to have been filed. 22 As to Mr Hill's claim that Compass Ten breached s 772, Mr Busby, solicitor for Compass Ten, avers in his affidavit affirmed 9 July 2012 that the documents produced under the subpoena to the Department do not reveal the existence of any complaint made by Mr Hill to the Department. Consequently, Mr Hill has not proved the essential element of s 772(1)(e).

CONSIDERATION 23 The Court will first consider the issue of the failure to obtain a certificate under s 369 and will then consider whether the statement of claim, insofar as it deals with the alleged breach of s 772, should be dismissed summarily.

Failure to obtain a s 369 certificate 24 Sections 340 and 341 of the FW Act are located in Part 3-1 of the FW Act. Section 365 of the FW Act states: If: (a) A person has been dismissed; and (b) The person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part [i.e. Part 3-1]; The person, or the industrial association, may apply to FWA for FWA to deal with the dispute. 25 At this point, an applicant could make an application to FWA for FWA to hear and attempt to resolve the dispute. If the dispute resolution in FWA was unsuccessful, FWA would ordinarily issue a certificate under s 369 of the FW Act. Such section states: 369 Certificate if dispute not resolved If FWA is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful, FWA must issue a certificate to that effect. 26 If an applicant received such a certificate, Mr Hill could then bring an action under s 539 of the FW Act. Section 539 allows particular persons to bring an action in relation to a contravention or proposed contravention of a civil remedy provision to a court and seek particular orders from the Court in relation to the alleged contravention. In the present case, for the purposes of s 539 Mr May is a person eligible to bring an action, this Court is an eligible Court to determine such action and the orders sought by Mr May are of the type which under s 545 of the FW Act a court is able to make. To follow the language used in the FW Act, the Mr May's action alleging a contravention of s 340 of the FW Act will be referred to as a 'general protections court application'. 27 Although an applicant who alleges a contravention of s 340 of the FW Act may make a general protections court application, s 371 of the FW Act states: 371 General protections court applications FWA conference to be held before application (1) A person who is entitled to apply under section 365 to FWA for FWA to deal with a dispute must not make a general protections court application in relation to the dispute unless: (a) FWA has issued a certificate under s 369 in relation to the dispute; or (b) The general protections court application includes an application for an interim injunction. 28 Mr Hill has not been issued a certificate issued under s 369. The question now arising is whether s 371 establishes a mandatory prerequisite for general protections court applications such that the Court cannot entertain Mr Hill's general protections court application without a s 369 certificate. 29 In Posner v Collector for Inter-State Destitute Persons (Victoria) (1946) 74 CLR 461, Williams J stated at 490: "Must" is a word of absolute obligation… It is not merely directory. 30 In Pitrau v Barrick Mining Services [2012] FMCA 186 ('Pitrau'), Lucev FM stated at [23]: The use of "must" is indicative of an imperative command, either positive or negative, depending upon the word or words which follow it in the relevant statutory provision. It expresses necessity in the sense of an obligation or requirement. [Footnote omitted] 31 It follows that s 371 of the FW Act prohibits absolutely the making of general protections court applications without a s 369 certificate. This finding accords with the decision of North J in Newman v East Yarra Friendly Society trading as My Chemist Pharmacy [2011] FCA 1262 ('Newman') and with cases such as Poole v Rod Baker & Co (2011) 207 IR 264; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Active Tree Services Pty Ltd (2011) 211 IR 250; and Cavar v Nursing Australia [2011] FMCA 929.

Can the Court amend a s 777 certificate to constitute a s 369 certificate? 32 In Pitrau, Lucev FM stated at [52]: Under s 369 of the FW Act the issuance of a Section 369 Certificate is mandatory if FWA is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful. But it is only FWA that has power to issue a Section 369 Certificate. The issuance of a Section 369 Certificate marks the end of the conciliation or mediation functions of FWA and is the prerequisite for the exercise of judicial power by this Court (or the Federal Court). This Court cannot issue a Section 369 Certificate for the same reasons it cannot issue the Section 777 Certificate. 33 His Honour accordingly concluded at [54] that a s 777 certificate could not be amended to constitute a s 369 certificate. The Court respectfully agrees with his Honour's conclusion. 34 As Mr Hill does not have the necessary s 369 certificate and as the Court can neither waive this requirement nor amend Mr Hill's s 777 certificate, it follows that the Court is without jurisdiction to hear his claim under s 340 of the FW Act. Accordingly, insofar as Mr Hill's statement of claim refers to s 340, it will be struck out.

Should the Court grant the applicant leave to amend after receiving a s 369 certificate? 35 In Newman, an applicant erroneously made an application under s 773 of the FW Act for FWA to deal with her unlawful termination claim. In fact, as a national systems employee as defined in ss 13 and 14 of the FW Act, the applicant was required by operation of s 723 to make a general protections claim under s 371 of the FW Act. North J took the course of adjourning the proceedings to allow the applicant to return to FWA, obtain the correct certificate and amend her pleadings in the Federal Court to bring an action under s 371. 36 This case differs from Newman. In Newman, the applicant was merely required to allege the same conduct, but under the correct provision. Mr Hill in this case seeks to bring two different types of action, a general protections court application based on an alleged breach of s 340 (the general protections court application) and an unlawful termination application resulting from an alleged breach of s 773 of the FW Act ('unlawful termination court application'). 37 Section 725 of the FW Act states: 725 General rule A person who has been dismissed must not make an application or complaint of a kind referred to in any one of sections 726 to 732 in relation to the dismissal if any other of those sections applies. 38 Section 725 of the FW Act operates to preclude Mr Hill from bringing a general protections court application so long as his unlawful termination court application is pending. 39 Section 731 of the FW Act states: 731 Unlawful termination court application This section applies if: (a) an unlawful termination court application has been made by, or on behalf of, the person in relation to the dismissal; and (b) the application or complaint has not: (i) been withdrawn by the person who made the application; or (ii) failed for want of jurisdiction. 40 Section 728 is in identical terms to s 731, except that it refers to general protections court applications instead of unlawful termination court applications. 41 It follows that as presently constituted, Mr Hill's application to the Court is defective, since his claim is predicated upon two alleged breaches of the FW Act. Even if the Court were to grant leave to Mr Hill to obtain the correct (i.e. s 369) certificate to pursue his general protections court application, s 725 would preclude the Court from having jurisdiction to hear such application. Therefore, it would be futile for this Court to grant leave to Mr Hill while his unlawful termination court application is pending. Only one proceeding can, by virtue of s 725, be entertained.

SUMMARY JUDGMENT 42 The principles relevant to summary judgment have been conveniently set out in the judgment of McKerracher J in Manday Investments Pty Ltd v Commonwealth Bank of Australia (No 3) [2012] FCA 751 at [8]-[10]. The Court must be satisfied that the grounds set out in r 26.01 exist before allowing such an application. In the present instance, the relevant provision is r 26.01(1)(a) of the Rules. Whether 'no reasonable prospect' is established will depend upon the Court's assessment of the evidence adduced by both parties. 43 As stated in [20], the Department produced under subpoena four documents. The documents are: an email dated 26 September 2011 with the subject line 'Staffing levels sunshine lodge' from Mr Hill to Ms Abdo, who is an employee of the Department; another email of the same date with the subject line 'Act, regulations and recommendations' from Mr Hill to Ms Abdo; an email dated 4 October 2011 with the subject line 'Staffing levels at SL' from Ms Abdo to Mr Hill and a 'Monitoring Inspection Report' which pertained to Sunshine Lodge and was dated 15 October 2011 and prepared by Ms Abdo. 44 In Mr Hill's statement of claim, he alleges he sent an email to Ms Abdo in early October 2011 with the subject line 'Staffing Levels at SL (Sunshine Lodge)' and that Compass Ten dismissed him because he sent such email. 45 The Court notes that the subject line, the date and the parties involved in the emails produced under the subpoena correspond with Mr Hill's description in the statement of claim of the email he sent. The Court therefore infers that the emails sent by Mr Hill which were produced under the subpoena are those which he refers to in his statement of claim.

Was any 'complaint' made? 46 The question is whether anything in the emails from Mr Hill to the Department constitute a complaint for the purposes of s 772(1)(e) of the FW Act. The first email, sent at 7:02 pm on Monday 26 September 2011, relevantly states: This mail is about our obligation and our desire to include the residents in our community, they have a right to be included and to participate in their community. This community in my opinion starts in the lodge, this is their home and I believe (and I think I am clearly supported by the department) that they have a right to be involved, indeed when you consider the tedium and boredom of the non working residents, I think it vital to foster any interest's [sic] they have in their home. […] I am seriously proposing and seeking your support to employ a number of our residents (protected employment like DSA), we in fact would pay them more than DSA and this would cover all the bases. However, what is the departments [sic] opinion? Can we employ and pay our own residents? I would also like to maintain the gardens, grow seedlings for sale at the local markets with all profits returned directly to the residents. I can pay them to paint the cottages etc, it costs Carolina less that cannot be avoided so there is a commercial benefit but that is not the intention. The intention is to occupy the residents with meaningful paying jobs that benefits [sic] them and the other residents. 47 The second email, sent at 7:27 pm on Monday 26 September 2011 relevantly states: As the applicant for licensed manager, I have read and understood my personal and professional obligations under the act. I also understand that my responsibilities to the residents, the act and to the department do in fact have precedence over my contract of employment. In short my obligations under the act are higher than my obligations to the commercial entity that owns the lodge. Having said this I do request your discretion as my obligations under the act do at times clash with the commercial realities of my relationship to the director. While I can and will run a profitable enterprise, there are certain responsibilities that I as the manager must meet regardless of the profit motive. With our current resident numbers of approximately 85, considering the closing of 9/11 as the distance from the other cottages is not viable, placed in 3 cottages and the main lodge, what expectation does the department have of staffing levels. If the department is hesitant in prescribing a staffing level, could you supply me with a guideline, or numbers that you are comfortable with. […] Are there any guidelines that I could refer to? In a commercial enterprise it is very useful to have a "the department suggests". I am hoping you can appreciate my position, I believe my main responsibility is to the efficient running of the lodge, guaranteeing the well being of the residents, improving everyday and where possible, while the director may consider their main responsibility to be return on investment. 48 Nothing in either of these emails constitutes a complaint. A complaint must state a particular grievance or finding of fault. A complaint should be distinguished from a mere request for assistance: see Zhang v Royal Australian Chemical Institute Inc (2005) 144 FCR 347 at [36]-[37]. Although Mr Hill in these emails makes oblique reference to tension between his perceived responsibilities to residents and responsibilities to the director, he fails to mention any particular issue with which he has a grievance. 49 It is possible that the phrase 'recourse to competent administrative authorities' might encompass more than the making of complaints to relevant bodies: see CSR Viridian Limited (formerly Pilkington Australia Limited) v Claveria (2008) 171 FCR 554 at [35]. However the word 'recourse' is defined in the Macquarie Dictionary as 'resort or application to a person or thing for help or protection, as when in difficulty'. In the emails, Mr Hill does not identify any particular problem or issue and thus it cannot be said that Mr Hill was seeking recourse to the Department in respect of any specific grievance. 50 For the above reasons, Mr Hill's emails cannot be the foundation of an action under s 772(1)(e) of the FW Act. 51 With respect to Mr Hill's alleged complaints to the Council building officer, no documents have been produced from the Council to support the making of such a complaint. However, the Court does not rule out the possibility that had such a complaint been made to a competent administrative authority (in this case, the Council), such a complaint might qualify as one referred to in s 772(1)(e). As the Court has received conflicting evidence from the parties, it is unable at this point to determine this issue. 52 It follows that Mr Hill's claims under s 340 fail in the absence of a s 369 certificate. Further, no claim can be brought by Mr Hill under s 772(1)(e) in respect of his alleged complaint to the Department. It remains to be established whether a complaint was made by Mr Hill to the Council and if so, whether such complaint was the reason for his dismissal. If the Court should be satisfied that such a complaint was made, the onus of proof moves to Compass Ten to prove that any such complaint was not the reason for Mr Hill's dismissal: see s 783 of the FW Act. 53 It follows that summary judgment should be entered in favour of Compass Ten in respect of Mr Hill's claim that Compass Ten committed a breach of s 772(1)(e) in relation to his alleged complaints to the Department as described in [6], [7], and the words found in [10], specifically 'because he sent the email in paragraph [6]'. However, the remainder of Compass Ten's application for summary dismissal will be dismissed.

Mr Hill's breach of contract claim 54 The operation by Compass Ten of Sunshine Lodge is regulated by various provisions of the Youth and Community Services Act 1973 (NSW) ('the Youth Act') which authorises the licensing of Sunshine Lodge to operate as a Licensed Residential Centre. The Youth Act authorises the making of regulations and pursuant thereto the Youth and Community Services Regulation 2010 (NSW) has been promulgated. Such regulations have also made provision for a practice guide known as the Licensed Residential Centre Compliance Practice Guide ('the Guide'). 55 Pursuant to the Guide, provisions are made relating to staffing arrangements (see cl 18). The Guide recommends that interviewees for staff positions at a Licensed Residential Centre be asked whether they have a first aid certificate as 'It would be expected that all staff be able to affirmatively provide this information'.

The employment contract 56 On an unspecified date prior to 10 August 2011, Compass Ten placed an advertisement on the internet seeking applicants for the position of 'Facilities/Operational Manager' for Sunshine Lodge. The advertisement stated, inter alia: A First Aid Certificate is required and some medical background is an advantage, but not a requirement. 57 Mr Hill responded to the advertisement and was interviewed by Compass Ten on 10 August 2011. In support of his application, Mr Hill provided certain documentation which included a certificate purporting to verify his first aid training from Allens Training Pty Ltd. The person identified as having attained the relevant qualification is 'Simon Peter Christopher Hill'. The certificate was dated 23 October 2010 and was current to 23 October 2013. 58 Thereafter a written employment contract was entered into between Mr Hill and Compass Ten ('the contract'). At present, the Court has been provided with a draft of such contract, but there does not appear to be dispute that the final contract, which was signed between the parties, corresponds to the draft. It appears to have been signed some time within two weeks following 17 August 2011. 59 The contract provided that on completion of a three month trial, or within one week of the trial concluding, a meeting would occur between Mr Hill and Carolina Torregrosa, the Licensee and Director of Sunshine Lodge. If the Director was satisfied that certain itemised conditions had been met by Mr Hill and both parties agreed to continue the employment, Mr Hill's employment would continue and his salary would be increased. However, if the conditions were not achieved, an extension of three months would be provided to comply with the conditions. 60 One condition required that Mr Hill receive a licence from the Department, another condition required that Mr Hill hold a current 'Senior First Aid Certificate'. 61 As referred to above, relations between the parties became strained. Numerous emails accusatory emails passed between the parties. 62 On 26 October 2011 Mr Hill's employment was terminated. The grounds of termination that Compass Ten relies upon relate to Mr Hill's alleged unsatisfactory performance. Subsequently, Compass Ten supported its course of action in terminating Mr Hill's employment by reference to the fact that the first aid certificate provided by Mr Hill as his first aid certificate and purporting to be issued to himself was in fact not issued to him. 63 Compass Ten submits that based upon the provision of such a certificate, Mr Hill was guilty of a serious breach of the contract. The contract provided for termination 'immediately and without notice' in the event of the employee being considered to have committed serious misconduct or a serious breach of the contract. Serious misconduct is relevantly defined in the contract as: Without limitation… dishonesty, fraud, assault…or failing to comply with any of [Compass Ten's] policies or procedures from time to time. 64 Mr Hill maintains that he did not dishonestly include the first aid certificate in his employment application, but rather he mistakenly included the first aid certificate of his son. However, he now acknowledges that when he lodged the application for employment he did not possess any current first aid certificate. 65 Prima facie, the failure to possess this requisite qualification may constitute a breach of the conditions of the offer of employment. However, the section of the contract entitled 'Remuneration' seems to suggest that the certificate could be acquired over the probationary period of employment and was not necessarily a fundamental requirement of commencing employment. Because Mr Hill's employment was curtailed prior to the expiry of his probationary period, it is arguable that Mr Hill would have acquired a first aid certificate during the course of his employment. 66 Furthermore, the Court has not received any evidence which would allow it to come to a view as to whether the incorrect first aid certificate was mistakenly included as Mr Hill submits, or whether it was deliberately included by Mr Hill to deceive Compass Ten, as Compass Ten submits. Consequently, the Court cannot grant summary dismissal of Mr Hill's claim on this point. 67 Compass Ten also maintains that it was entitled to terminate Mr Hill's employment at any point during the three month probationary period. However, the relevant section of the contract commences with the words 'On completion of your three month trial'. This suggests that it is not possible for Compass Ten to terminate Mr Hill's employment prior to the expiration of the three month period without notice unless it be for gross misconduct or summary dismissal as described under the contract heading 'Termination'. However, the Court does not reach a final view on this point. 68 These issues raise questions to be tried. They are not appropriate to be resolved on an interlocutory application for summary judgment as the Court is deprived of hearing all of the evidence. Accordingly, the application for summary judgment in respect of the breach of contract claim fails. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.