Turner v Ready Workforce

INTRODUCTION 1 By an interlocutory application dated 6 December 2021 the applicant, Mr Simon Turner, seeks Court approval under s 33V(1) of the Federal Court of Australia Act 1976 (Cth) (FCA) to discontinue the class action he brings against the respondents Ready Workforce (A Division of Chandler Macleod) Pty Ltd, Mt Arthur Coal Pty Ltd and Chandler Macleod Group Limited. He brings the class action on his own behalf and on behalf of an estimated 800 persons: (a) who were employed by Ready Workforce to work at Mt Arthur Coal Mine (the Mine) at any time within the period of six years before 19 December 2018 (Relevant Period); (b) who were: (i) at any time from 19 December 2012 to about 10 June 2015, each a coal mining employee within the meaning of cl 4.1(b)(ii) of the Black Coal Mining Industry Award 2010 (Black Coal Award) and, as a result, covered by that Award; and/or (ii) at any time between about 11 June 2015 and the end of the Relevant Period, a party to and bound by the Chandler Macleod Northern District of NSW Black Coal Mining Agreement 2015 (the 2015 Agreement); (c) who worked at the Mine in accordance with the roster system alleged in paragraph 16 and/or 24 of the amended statement of claim dated 19 December 2018; and (d) who were treated as "casual" employees by Ready Workforce, (group members). 2 Broadly, the proceeding alleges that the applicant and group members, although treated as casual employees were in fact not casuals, and they were entitled to but not paid the employment benefits provided for non-casual employees under the Fair Work Act 2009 (Cth) (FWA), the Black Coal Award, and the 2015 Agreement. 3 These reasons should be read in conjunction with my recent reasons in the application for approval to discontinue another representative proceeding, Turner v TESA Mining (NSW) Pty Ltd (No 2) [2022] FCA 435 (Turner v TESA). As in that case, the present application for approval to discontinue is advanced on the basis that the cumulative effect of: (a) the insertion of s 15A into the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2021 (Cth) (the FW Amendment Act) on 26 March 2021, which provided a definition (with retrospective effect) of "casual employee" for the purposes of the FWA; and (b) the High Court decision in WorkPac Pty Ltd v Rossato [2021] HCA 23; 392 ALR 39 (Rossato HCA) handed down on 4 August 2021, means that the proceeding no longer has reasonable prospects of success. The judgment in Turner v TESA concerned the same issues as the present case and I adopt my explanation of the relevant principles and the discussion regarding Rossato HCA and the FW Amendment Act. 4 The applicant relies on four affidavits of Mr Rory Markham, a solicitor and principal of Adero Law, the solicitors for the applicant, being: (a) an affidavit sworn on 30 November 2021 which attaches draft orders for the proposed discontinuance; (b) an affidavit sworn on 6 December 2021 which annexes a confidential Counsel's Opinion of Mr Joel Fetter of counsel; (c) an affidavit affirmed on 25 January 2022 which states: (i) that group members had been given notice of the application including of their right to object to or oppose discontinuance and/or to propose that they be substituted as the representative applicant; and (ii) that no group member had notified Adero Law of any objection or opposition to the discontinuance application; and (d) an affidavit sworn on 25 March 2022 which acknowledges that an objection had, in fact, been received, and further steps had been taken to inform group members of their right to object to the proposed discontinuance and/or to propose that they be substituted as the representative applicant. 5 Mr Sam Stephens, a group member, (with Ms Leanne Harrison as a co-signatory) objects to approval of the proposed discontinuance. He relies on his notice of objection dated 7 January 2022 and on his affidavit sworn on 7 April 2022 (the Stephens' objection). 6 For the reasons I explain, I am satisfied that it is appropriate to approve the discontinuance of the proceeding.

THE RELEVANT PRINCIPLES 7 I set out the relevant principles in Turner v TESA, including that: (a) the applicable test for approval to discontinue a representative proceeding in the circumstances of the present application is whether the Court is satisfied that discontinuance would not be unfair or unreasonable or adverse to the interests of group members (at [6]-[10]); (b) the limitation period applicable to a group member's claim in the proceeding (which limitation period is suspended by operation of s 33ZE(1) of the FCA) does not begin to run again from the date of discontinuance as discontinuance does not constitute a "determination" for the purpose of s 33ZE(2). However, in my view it is appropriate to order, pursuant to the power under ss 33V and 33ZF of the FCA, that the limitation period for a group member's claim begins to run again from 60 days after the date on which a notice of discontinuance is filed. Otherwise, the respondents would remain exposed to the risk of group members' claims in perpetuity (at [11]-[31]); and (c) in circumstances where group members are aware of the proceeding I do not consider it appropriate to approve discontinuance without giving notice to group members who may be affected by that decision (at [32]-[35]). I have applied those principles in making the orders in this proceeding.

The Skene Litigation 8 In Turner v TESA (at [39]-[43]) I summarised the factual background and the result in the Skene v WorkPac litigation. The applicant in that case, Mr Paul Skene, was employed by Workpac, a labour hire company, and hired out to undertake assignments at a coal mine, under contractual arrangements which described him as a casual employee, similarly to the claimants in the present case. Having regard to the reality of the circumstances under which he worked, including his roster, Mr Skene alleged that he was not, at law, a casual employee. On 16 August 2018, on appeal from the Federal Circuit Court, the Full Federal Court held that Mr Skene was not a casual employee for the purposes of the FWA nor the applicable enterprise agreement and therefore was entitled to benefits associated with non-casual employment under the enterprise agreement and under the FWA (Skene FCA).

Commencement of the class action 9 On 27 June 2018 the applicant commenced the class action, funded by a commercial litigation funder, Augusta Ventures Ltd (Funder). 10 The applicant alleges that he and the group members (the claimants) were employed by the first respondent, Ready Workforce, a labour hire company and subsidiary of the Chandler Macleod Group, and were assigned to work at the Mine operated by the second respondent, Mt Arthur Coal, a BHP subsidiary. At the point of hiring, the claimants were required to sign a document entitled "Employment Application" which contained the terms and conditions of Employment (Employment Terms). They were also provided with a letter or other document specifying the conditions of the specific assignment (Conditions), including a specific rate of pay and roster pattern. For at least some group members, the offer of employment also specified an indicative end date to the assignment. 11 The Employment Terms stated that the claimants were employed as "casuals", and would work on particular assignments, but with no guarantee as to the length of the assignment or the minimum number of working hours during the assignment. Within each assignment, the Employment Terms permitted the employee to be absent from their rostered shifts only where the employee was taking limited forms of leave and also in cases where the employee was "unable" to work. They also stated that although the end of an assignment did not entail the end of the employment, there was no "guarantee" of ongoing work; and the employer could end the employment on one hour's notice. The Employment Terms also stated that the agreed rate of pay included a casual loading; while they did not specify the loading amount, they provided that the agreed pay was intended to discharge any loading applicable under any applicable industrial award or agreement. 12 In relation to the period from 20 December 2012 to 10 June 2015 (the first period) the identity of the applicable industrial instrument is in dispute. The statement of claim alleges that the Black Coal Award applied to the claimants; the Award did not permit casual employment for production workers and so made no provision for casual loadings for those workers. In their defences Ready Workforce and Chandler Macleod Group allege that in the first period the Ready Workforce Workplace Agreement 2007 (2007 Agreement) applied to the claimants to the exclusion of the Black Coal Award, and it made provision for casual loadings. In his reply to the respondents' defences, the applicant did not admit that the 2007 Agreement applied in the first period but he said that if the respondents could establish that the 2007 Agreement came into operation as a valid workplace agreement, he would not press any of his claims which depended on the Black Coal Award applying to the claimants. In the discontinuance approval hearing, counsel for the applicant said that the applicant no longer pressed the claims based on the operation of the Black Coal Award. 13 During the first period, Ready Workforce did not treat the Black Coal Award as applying to the claimants and did not pay them remuneration calculated in accordance with the Award. When a claimant left their employment, Ready Workforce did not pay out any accrued annual leave and in the case of dismissal, did not provide any money in lieu of notice; such benefits would have been payable to the claimants if they were not casual employees. 14 From 10 June 2015 to 19 December 2018 (the second period), it is uncontentious that the 2015 Agreement applied, to the exclusion of the Black Coal Award. The 2015 Agreement provided for the employment of casual employees and for payment of a casual loading. The statement of claim, however, alleges that the applicant and group members were not, in law, casual employees. During the second period, Ready Workforce treated the claimants as casual employees employed under the 2015 Agreement and did not provide group members with paid sick leave, paid annual leave or the other benefits applicable to full-time or part-time employees under the Agreement. 15 In substance the proceeding raises three claims: (a) the "Non-Casual Claim"; a claim that in both the first and second periods the applicant and group members were not casual employees for the purposes of the FWA, the 2007 Agreement or the 2015 Agreement and had been wrongly denied entitlements to which they were entitled as non-casual employees (such as annual leave, termination notice and the like); (b) the "Award Claim"; a claim (which, as stated above, will not be pressed if the respondents can show that the 2007 Agreement is a valid workplace agreement) that in the first period, the Black Coal Award rather than the 2007 Agreement applied to group members and that as a result, Ready Workforce had underpaid group members in respect of a range of Award entitlements (shift loadings, weekend and public holiday penalty rates and overtime pay); and (c) the "Accessory Claims"; a claim that Mt Arthur Coal and Chandler Macleod Group were accessories to the two claims pleaded against Ready Workforce.

The Rossato litigation 16 In Turner v TESA (at [45]-[48]) I summarised the factual background and the result in the WorkPac Pty Ltd v Rossato litigation, culminating in Rossato HCA on 4 August 2021, in which the High Court overturned the finding in Rossato FCA and rejected the reasoning in that case and in Skene FCA. The respondent in that case, Mr Robert Rossato, was employed by Workpac and hired out to undertake assignments in the black coal mining industry, under contractual arrangements which described him as a casual employee. Similarly to the claimants in the present case, the contractual arrangements described him as a casual employee. The High Court held that that Mr Rossato, was a casual employee for the purposes of the FWA and the relevant enterprise agreement, and was therefore not entitled to the benefits associated with non-casual employment under the FWA or that agreement.

The retrospective amendments to the FWA 17 In Turner v TESA (at [49]-[53]) I summarised the amendments to the FWA through the FW Amendment Act, which came into operation on 26 March 2021. In short, the amendments retrospectively inserted a restrictive definition of "casual employee" into the FWA together with a mechanism for reducing or "off-setting" the amount payable for the relevant entitlements to an employee who is found to not be a casual employee, against any amount previously paid to that employee by way of casual loading.

The withdrawal of litigation funding and instructions to discontinue the proceeding 18 Mr Markham deposes that following the result in Rossato HCA on 4 August 2021, the Funder informed him that it no longer wished to fund the proceeding. He also deposes that there is no prospect that another litigation funder will agree to fund the proceeding. I accept that evidence. 19 Mr Markham also deposes and I accept that the applicant has instructed him to seek leave to discontinue the proceeding.

Notice to group members 20 In his first and second affidavits, Mr Markham did not depose as to any proposed regime to notify group members of the proposed discontinuance, nor provide the Court with a proposed notice to group members. In my view that was unsatisfactory and on 16 December 2021 I made orders requiring that by 20 December 2021 : (a) Ready Workforce send a Court-approved notice (Notice) to each group member; and (b) Adero Law send the Notice to each of the approximately 331 group members who had registered an interest in participating in the action, by sending it to their last known email address or, where no email address was held, via text message to their last known mobile number. The Notice informed group members of their right, by 21 January 2022, to object to or oppose Court approval of the proposed discontinuance and/or to seek to be substituted as the representative applicant. The orders provided that if no group member so notified Adero Law, the discontinuance application would be decided on the papers. 21 In his third affidavit Mr Markham deposes that the parties had complied with the orders and no group member had notified Adero Law of any objection or opposition to the discontinuance application nor that any group member was willing to be substituted as the representative applicant. Unfortunately that statement was incorrect. The Stephens' objection had been emailed to chambers on 7 January 2022 and Adero Law was copied into the email. 22 My chambers alerted Mr Markham to his error, which led to a flurry of activity. In his fourth affidavit Mr Markham accepted that the Stephens' objection was received in an Adero Law email inbox, but it was inadvertently marked as "read" and was not identified as an objection. Because the Stephens' objection raised a concern that not all group members had received the Notice, Mr Markham sought orders for a further Notice to be distributed to those group members that did not previously receive it. On 17 February 2022 I made orders to require Ready Workforce to send a revised notice to all group members who did do not receive the earlier Notice; giving group members until 18 March 2022 to object to the proposed discontinuance and/or to seek that they be substituted as the representative applicant. 23 Mr Markham deposes that on 18 February 2022 Ready Workforce sent the revised notice to group members. He also deposes that no further objections were received, and no group member sought to be substituted as the representative applicant. I accept that evidence.

MR STEPHENS' OBJECTION 24 In his letter of objection, affidavit and in oral submissions, Mr Stephens raises several objections to approval of the discontinuance application. 25 First, he submits that during the first period, the claimants were employed by Chandler Macleod Group rather than by Ready Workforce, and that his employment was subject to the Black Coal Award. He argues that, notwithstanding that he was labelled as a casual employee, he was, in fact, a full-time employee at the Mine covered by the Black Coal Award. He says that he was not covered by the 2007 Agreement and should have been paid pursuant to the terms of the Award. 26 For this contention Mr Stephens relies, amongst other things, the following contentions and evidence: (a) that the claimants' payslips during the first period show that Chandler Macleod Group was the employer rather than Ready Workforce, and he argues that the 2007 Agreement only binds employees of Ready Workforce; (b) a letter from the Fair Work Ombudsman (FWO) to Mr Turner dated 18 July 2018 which states that that the Black Coal Award applied to his employment from its commencement on 28 September 2014 until the 2015 Agreement came into force; (c) that a Construction Forestry Mining and Energy Union (CFMMEU) leaflet dated 2 April 2015 to claimants informed them that "there is no casual production classification" in the Black Coal Award and therefore "all labour hire employees currently working for Chandler Macleod at [the Mine] are required to receive annual leave, sick leave and other permanent Award conditions." The leaflet said that the CFMMEU had notified the Fair Work Commission (FWC) of a dispute in relation to the alleged entitlement to Award-based terms and conditions of employment; (d) a copy of the CFMMEU application to the FWC in which it alleged that Chandler Macleod employees working at the Mine were entitled to the terms and conditions provided by the Black Coal Award; and (e) a statement on the FWA website which said that "only Staff employees can be casuals under the Black Coal Award" (emphasis added), and he says that all group members are classified, qualified and certified as production and engineering employees. I infer from this that Mr Stephens considers that the group members were not "staff". 27 Second, in relation to the second period, Mr Stephens argues that the 2015 Agreement was approved by the FWC as the result of false information provided to the Commission, and therefore cannot be taken to apply to the claimants. In this regard he relies on the statistical information included in the Form F17 Employer's statutory declaration in support of an application for approval of an enterprise agreement lodged in the FWC which provided (in tabular form) that no casual employees voted on the 2015 Agreement. Contrary to that, Mr Stephens says that all of the employees covered by the Agreement were labelled as casual employees. 28 He also contends that Appendix C to Form F17, which compared the conditions available under the 2015 Agreement and the Black Coal Award, wrongly stated that accident pay was removed from the Black Coal Award in December 2014. He also says that under the Black Coal Award, an employee working according to the roster at the Mine in 2015 would be paid around $140,000, and yet under the 2015 Agreement, an employee working the same roster would be only be paid around $92,000. 29 Third, he contends that approving the discontinuance application will disadvantage group members. Noting that the class action has been on foot since 2018 he says that if the proceeding is discontinued and group members must commence an individual proceeding if they wish to vindicate their rights, they may be barred by operation of the applicable limitation periods. 30 Mr Stephens submits that group members will suffer a denial of natural justice if the proposed discontinuance is approved, as many of them are not aware of the significant differential between the wages payable under the Black Coal Award and those that they received under the 2007 Agreement or the 2015 Agreement, and are not aware of the factual matters raised in the affidavits before the Court in the discontinuance application. In that regard he says that Adero Law estimated the applicant's unpaid entitlements in the period during which the Black Coal Award applied to be approximately $42,406.21. He says that group members are not aware of the financial implications for them if the proceeding is discontinued. 31 Mr Stephens expanded on these matters and made detailed oral submissions at the approval hearing on 26 April 2022.

DETERMINATION 32 Having regard to the retrospective amendments to the FWA and the decision in Rossato HCA it is appropriate to approve discontinuance of the proceeding. I am satisfied that doing so is not unfair, unreasonable or adverse to group members' interests. 33 First, I am satisfied that the proceeding has little prospect of success. The Counsel's Opinion of Mr Fetter is significant to my view in this regard. As Counsel's Opinion is confidential it must suffice to note that it analyses the likelihood of the applicant and group members being able to establish liability and an entitlement to relief against the respondents. It is thorough and cogent; and it supports approval to discontinue the proceeding. 34 In respect of the Non-Casual Claim, as I said in Turner v TESA (at [63]-[66]), the central issue is whether, during the first and second periods, the claimants were "casuals". The Employment Terms which they signed said that they were employed as "casuals", and would work on particular assignments, but with no guarantee as to the length of the assignment or the minimum number of working hours during the assignment. They also said that although the end of an assignment did not entail the end of the employment, there was no "guarantee" of ongoing work; and the employer could end the employment on one hour's notice. The Employment Terms also stated that the agreed rate of pay included a casual loading. Further, both the 2007 Agreement and the 2015 Agreement contemplated casual employment by allowing for a casual loading. 35 In my view s 15A of the FWA, which has retrospective effect, will apply. Section 15A(1) essentially requires the Court to ask, in relation to each offer of employment, whether there was a firm advance commitment by the employer to continuing and indefinite work according to an agreed pattern. The Employment Terms expressly disavowed any guarantee of ongoing work and are likely to be sufficient to show the absence of the requisite firm advance commitment of work. The effect of s 15A(5) (coupled with Rossato HCA) is that if no such commitment is made at the start of the employment, the conduct of the parties throughout the period of employment, in the following months or years, is not relevant to the question of whether or not the applicant and the group members were "casual employees" under the FWA. 36 Further, in Rossato HCA, the High Court considered the system of employment that applied to Mr Rossato in his employment with WorkPac, which is analogous to the system of employment that applied to the applicant and group members' employment with Ready Workforce. The High Court unanimously determined that Mr Rossato was a casual employee, and a material consideration was that his contract expressly disavowed the notion that the employment was ongoing: see [65], [88], [105] (Kiefel CJ, Keane, Gordon, Edelman, Steward and Gleeson JJ) and [118] (Gageler J). Mr Stephens put on nothing to show why the reasoning in Rossato HCA did not apply to the analogous employment arrangements in the present case. 37 In relation to the second period I doubt that the allegedly false and misleading information which Mr Stephens says lies behind the approval of the 2015 Agreement means that the agreement has no legal effect. In my view the 2015 Agreement remains valid and in effect unless or until set aside. The proceeding does not challenge its validity. 38 In my view the retrospective amendments to the FWA and the decision in Rossato HCA mean that it is highly unlikely that the applicant and group members in the present case will be found not to be casual employees in either the first or second periods. 39 In respect of the Award Claim which relates to the first period, the applicant no longer presses that claim provided that the respondents can show that the 2007 Agreement is a valid workplace agreement. The respondents contend that they can establish that fact, and Mr Stephens put on nothing to the contrary. His argument is only that the 2007 Agreement does not apply because, by reference to employee pay slips and other supporting material, the claimants were employed by Chandler Macleod Group, rather than Ready Workforce. On that basis he contends that the 2007 Agreement does not apply to the claimants and therefore the Black Coal Award applied during that period. It should be kept in mind that Ready Workforce is a wholly-owned subsidiary of Chandler Macleod Group. Mr Stephens' contention that claimants were employed by Chandler Macleod Group rather than Ready Workforce is contrary to both the applicant's amended statement of claim and Ready Workforce's defence. Assessed at an impressionistic level this claim looks weak, but I accept the possibility that the 2007 Agreement made with Ready Workforce may not apply to the group members if they can show that they were, in fact, employed by Chandler Macleod Group. 40 If the Award Claim and the Non-Casual Claim are likely to fail then the Accessory Claim is also likely to fail. 41 Secondly, the Funder has withdrawn funding of the proceeding, and given its prospects of success it is unlikely that any other organisation or person will agree to take on the costs and risks of the proceeding. I infer that Adero Law is not willing to continue to bring the case on a no-win no-fee basis and given its prospects of success it is unlikely that any other law firm would do so. 42 Mr Stephens says that he would be able to fund his own individual proceeding, or perhaps an action on behalf of himself and half a dozen others in a similar position, but he accepts that he is not in a position to fund the class action. 43 Thirdly, group members will be returned to the legal position they were in before the proceeding was commenced, and their rights against the respondents will not be affected. The orders include a declaration that the approval of the discontinuance does not affect the rights of the applicant or group members to pursue the claims in this proceeding in another proceeding. 44 Fourthly, group members have been given notice of the proposed discontinuance and of their right to object and/or to seek substitution as the representative applicant, and only Mr Stephens and Ms Harrison made an objection. No group member expressed a willingness to be substituted as the representative applicant or proposed someone else to take up that role. Mr Stephens expressly declined to be substituted into that role. 45 I have given careful consideration to the Stephens' objection but I am not persuaded it is a good reason to refuse the discontinuance application. It is significant that the Funder no longer wishes to fund the case, Adero Law did not offer to conduct the case on a no-win no-fee basis, Mr Stephens does not offer to be substituted as the representative applicant and he made no suggestion as to how the case could be funded if it was to continue. If Mr Stephens wishes to pursue his own case in respect of one or more of the claims made in this proceeding, he is at liberty to do so. He will have had the benefit of the suspension of the applicable limitation period from the commencement of the case on 27 June 2018, and the limitation period will not begin to run again until 60 days after filing of the notice of discontinuance. Should he wish to, he will have ample time to obtain legal advice and to commence his own case, or indeed a case for a group of employees, against Ready Workforce or Chandler Macleod Group, in respect of such claims. 46 Approval of the proposed discontinuance will return Mr Stephens and the rest of the group members to the same legal position that they would have been in if the proceeding had never been commenced. 47 I am satisfied that it is not unfair or unreasonable or adverse to group members' interests to approve discontinuance of the proceeding. I accept that it may be in a group member's interests that the proceeding continues so that he or she can obtain the fruits of any success, even if success is unlikely, but having regard to the matters set out above I am not persuaded that group members will suffer any material detriment by the discontinuance. 48 Mt Arthur Coal consented to the discontinuance application save that it sought an order under s 33V(1) and s 33ZF of the FCA providing that any limitation period that applies to the claims of the applicant and group members to which the proceeding relates begins to run again from a date 30 days after the proceeding is discontinued. For the reasons I explained in Turner v TESA I am satisfied that such an order is appropriate, save that I consider that any limitation period applicable to a group member's claims should begin to run again from a date 60 days, rather than 30 days, after the notice of discontinuance is filed. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Murphy.