Schanka v Employment National

REASONS FOR JUDGMENT 1 This is an application by Employment National (Administration) Pty Ltd ("EN") to strike out a statement of claim filed in a proceeding brought under Pt IVA of the Federal Court of Australia Act 1976 (Cth). On 24 September 1999 I gave judgment on another issue arising in the proceeding: (1999) 166 ALR 663, which contains a description of the background, relevant legislation and the central issues in the proceeding. An appeal against that judgment was dismissed: [2000] FCA 202. 2 Directions have since been given requiring the applicants to file a statement of claim. An amended version was filed in Court during the hearing of the strike out application on 11 May 2000. A further version was forwarded to the Court on 16 May 2000. I will treat the submissions that were made at that hearing as if they were made by reference to the further version (where relevant) and not distinguish between the submissions made orally and submissions made in writing on 22 May 2000. 3 The focus of the submissions of counsel for EN were two parts of the statement of claim which, as I apprehend the submissions, were said to be embarrassing or tending to cause prejudice. The essential complaint was that EN did not know the case that was made out against it and accordingly could not plead to it or, as I infer from the submissions of counsel for EN, assess whether an application should be made under s 33N. 4 It is unnecessary to set out the pleadings in a summary way other than to say that the statement of claim recites essential features of the factual background set out in para 1 of the judgment of 24 September 1999. However the statement of claim does contain what appears to be an allegation that all employees to which the proceeding relates were employed, at relevant times, under the provisions of the Public Service Act 1922 (Cth) (par 9) (though this could probably be made more clear in the pleading as the allegation is not directly linked to the group identified in par 1 of the statement of claim). It also contained an allegation that group members applied for positions with EN in or about late October 1997 (par 27). 5 The first part of the statement of claim addressed by counsel for EN was: "44. By virtue of the matters referred to in paragraphs 33-41 above, there was a substantial risk to members of the group that if they did not gain employment with ENA they would be made redundant or be redeployed within the APS. 45. By virtue of the matters referred to in paragraphs 33-41 above, the risk of redundancy or redeployment of persons who did not gain employment with ENA was known to group members. 46. By virtue of the matters referred to in paragraphs 33-43 above, group members were required to accept employment with ENA if they wished to continue to perform work the same as or substantially the same as that which they had previously performed working for the Commonwealth." 6 It was submitted by counsel for EN that underlying this pleading were several assumptions, namely that employees did not want to be redeployed or made redundant, wanted to continue to do work they had done to that point and EN was the only employer for whom that work could be done. It was contended that the facts which might support these assumptions have not been pleaded. I accept that the word "risk" tends to imply that there are negative aspects of the consequences referred to, namely redundancy or redeployment and, if that forms part of the applicants' case, those consequences have to be particularised. However counsel for the applicants pointed to par 27 and submitted that the allegation was that the relevant employees sought employment with EN and the applicants relied on that fact to sustain an inference that the alternatives of redundancy or redeployment were not the preferred course or outcome of the employees in the representative group. Whether that inference can be drawn is a matter to be considered later. However it is sufficient, at this stage of the proceeding, in my opinion, for counsel for the applicants to have made clear that the facts already pleaded are the facts relied on. 7 The second part of the statement of claim addressed by counsel for EN concerned the allegation that EN had applied illegitimate pressure to members of the group such as to contravene s 170WG (1). The particulars of the illegitimate pressure included: "(b) The pressure was applied in circumstances where, to ENA's knowledge, group members did not know whether, if they did not enter into an AWA with ENA: (i) they would be made redundant or (ii) they would be redeployed within the APS and (iii) if they were redeployed within the APS what the circumstances of that employment would be. … (e) The pressure had, to ENA's knowledge, the effect that group members in order to avoid the risk of redeployment or redundancy, and to continue to perform work the same as or work substantially the same as that which they performed prior to 1 May 1998, had no choice but to relinquish their right to be employed under the terms of any applicable industrial awards or agreements; (f) The pressure had, to ENA's knowledge, the effect that group members in order to avoid the risk of redeployment or redundancy, and to continue to perform work the same as [or] work substantially the same as that which they performed prior to 1 May 1998, had no choice but to relinquish their right to: (i) any benefits to which they may but for the AWA have been entitled under the terms of any applicable industrial awards or agreements; (ii) any benefits to which they may but for the AWA have become entitled under the terms of any future industrial awards or agreements." 8 Paragraph (b) and sub-pars (i) and (ii) of par (f) were introduced into the pleading in the version of the statement of claim forwarded to the Court on 16 May 2000. The criticism of counsel for ENA of these particulars was that the relevant awards were not identified nor were the disadvantages of not being employed under them or the detriment suffered by group members as a result identified. However counsel for the applicants submitted that the applicants' case concerned the alteration to the source the entitlement (to be employed on particular terms and conditions of employment) that would arise if the employment was regulated by an AWA. The applicants' case was not that there was to be or had been any particular alteration or alterations of the terms and conditions themselves. It was further submitted on behalf of the applicants that the effect of the alteration to the source of the entitlement simply involved an analysis of the Act. Accepting that this is the way the applicants will ultimately put their case, the particulars pleaded sufficiently identify, in my opinion, the detriment relied upon in support of the pleaded contention that EN applied pressure to group members. 9 A submission was made by counsel for EN that the final version of the statement of claim had many features found to be unacceptable in East-West Airlines (Operations) Ltd v Commonwealth of Australia (1983) 49 ALR 323. The import of the submission, which was not elaborated upon, is not entirely clear though I take it to be a submission that the statement of claim in this matter is based on speculation which is not capable of admission or denial. In a sense this is so. But the fundamental contention of the applicants is that pressure was applied which was illegitimate and intended to induce entry into AWAs. In my view it is open to an applicant to point to consequences or effects of the impugned conduct which are identified for the purpose of founding a submission that pressure, if proved, was illegitimate. I am not satisfied that grounds have been made out for striking out the statement of claim. 10 Counsel for EN did not press a submission concerning whether there was a substantial common issue of fact or law to satisfy the procedural requirement established by s 33C. 11 Counsel for EN submitted that particulars should have been provided of various contentions in the statement of claim. The illustration discussed during the hearing, par 22, is not one which, in my opinion, would require further particulars from the applicants. However, there may be matters raised in the statement of claim that require further particularisation. In my view the appropriate course is for a request to be made and answered in the ordinary way. The alleged lack of particulars does not support a conclusion that the statement of claim should be struck out. 12 As I indicated to the parties at the hearing on 11 May 2000, I rather apprehend that the ultimate issue, and probably the only issue, in this proceeding will be whether the conduct of EN can be characterised as constituting illegitimate pressure which was duress and thus conduct contravening s 170WG (1) of the Workplace Relations Act 1996 (Cth). I also apprehend that there will be no real dispute about the facts upon which the applicants seek to make out a case. 13 However whether this is so will be revealed when the defence is filed and if my apprehensions are correct then it may well be that the hearing can be conducted on the basis that the argument is substantially a legal one only. 14 I dismiss the application to strike out the statement of claim and I direct EN to file its defence within 14 days of this judgment. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.