Federal Court of Australia

Johnson v CUB Pty Ltd [2021] FCAFC 219

ORDERS

THE COURT ORDERS THAT:

1.    The originating application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH AND O’CALLAGHAN JJ:

Introduction and background facts

1    The applicant, Mr Chaya Johnson, is a maintenance fitter who was employed by Chelgrave Contracting Australia Pty Ltd, the second respondent. Chelgrave is a labour hire company which supplies labour under contract to CUB Pty Ltd, the first respondent. Mr Johnson performed work for Chelgrave at CUB’s brewery under the labour hire contract. CUB exercised its contractual right to request the permanent removal of Mr Johnson from its premises, following issues concerning non-compliance with safety requirements.

2    Chelgrave subsequently terminated Mr Johnson’s employment because it did not have any other position at the same level as the position at the brewery. A Commissioner of the Fair Work Commission (FWC) found that Mr Johnson’s termination by Chelgrave constituted an unfair dismissal and ordered his reinstatement to CUB’s brewery. CUB was not a party to the proceeding before the Commissioner.

3    CUB appealed to the Full Bench of the FWC as a person aggrieved by the Commissioner’s order. The Full Bench granted permission to appeal and quashed the Commissioner’s reinstatement order insofar as it required reinstatement to CUB’s brewery site. The Full Bench found that Chelgrave was unable to comply with that order because of CUB’s contractual entitlement to exclude Mr Johnson from those premises. Mr Johnson applies for judicial review of the decision of the Full Bench under s 39B of the Judiciary Act 1903 (Cth), seeking an order in the nature of certiorari quashing the decision, and an order in the nature of mandamus requiring the Full Bench to determine CUB’s appeal according to law.

Relevant law

4    Chapter 3, Part 3-2, Division 4 of the Fair Work Act 2009 (Cth) provides for remedies for unfair dismissal. Section 390(1) provides that those remedies are confined to reinstatement or compensation. However, s 390(3) provides that the FWC must not order the payment of compensation unless it is satisfied that reinstatement is “inappropriate” and it considers that an order for compensation is “appropriate in all the circumstances”, making reinstatement the primary remedy. Section 391 provides for the remedy of reinstatement. In particular, s 391(1) provides as follows:

An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a)    reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b)    appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.

5    The relevant order made by the Commissioner was (emphasis added to reflect the words effectively removed by the Full Bench):

Pursuant to s.391(1) of the Fair Work Act 2009 (the Act) the Respondent, Chelgrave Contracting Australia Pty Ltd, shall reinstate the Applicant, Mr Chaya Johnson, to his former position as C7 Maintenance Fitter at the Carlton United Breweries Abbotsford site.

6    CUB’s successful ground of appeal before the Full Bench was ground 2A in an amended notice of appeal, addressing the words in bold above, as follows:

In failing to consider [Mr Johnson’s] incapacity to work at the Abbotsford site and the circumstances which gave rise to that reality, in making the reinstatement order the Commissioner failed to take into account a material consideration and made an error of principle.

7    The Full Bench’s consideration and conclusion on that ground of appeal is more usefully reproduced than summarised (omitting footnotes):

[15]    In ground 2A of the appeal, [CUB] contends that by not considering [Mr Johnson’s] incapacity to work at [CUB]’s site, the Commissioner has failed to take into account a material consideration and made an error of principle in ordering reinstatement of [Mr Johnson] directly to [CUB]’s work site.

[16]    The Commission’s powers to order reinstatement are dealt with in s 390 of the Act. Relevantly, s 390(3) states that an order for compensation to a person must not be made unless the Commission is “satisfied that reinstatement of a person is inappropriate”. It is clear from s 390(3) that reinstatement is the primary remedy to unfair dismissal unless and until it is found to be inappropriate.

[17]    In Nguyen v Vietnamese Community in Australia [2014] FWCFB 7198 a Full Bench affirmed the position that in addition to practicability, the appropriateness of reinstatement involves an assessment of a broad range of factors. Circumstances in which reinstatement might be inappropriate include circumstances where the employer no longer conducts a business into which the employee may be reappointed, and if the employee is incapacitated because of illness or injury. In Conlon v Sandlewood Aboriginal Projects Limited [2017] FWC 3186 it was found that incapacity of an employee can also arise in cases where they have been prohibited from entering their work site by a third party. Such incapacity was found to render reinstatement inappropriate.

[18]    [CUB] contends that the proper conclusion that the Commissioner should have reached was that an order for reinstatement would be impractical and inappropriate because [Mr Johnson] was incapacitated from fulfilling his duties. This lack of capacity to work at [CUB]’s site arose from [CUB]’s contractual right to have [Mr Johnson] excluded from its work site.

[19]    The Commissioner knew of the existence of the Contract and knew that its content was critical to an assessment of whether reinstatement of [Mr Johnson] to [CUB]’s site was an appropriate remedy. That Chelgrave did not place the Contract in evidence before the Commission is cause for criticism. However, we note that the Commission is empowered to conduct inquiries and compel production of documents. At [104] of the Decision, the Commissioner observes that had Chelgrave placed the Contract before the Commission, appropriate findings as to its contractual obligations could have been made. Rather than merely make that observation, especially in circumstances where the Commissioner was alive to the critical importance of the Contract to the question of remedy, the Commissioner ought to have availed himself of the Commission’s powers to be more fully appraised of the Contract or have it produced before him to inform his decision-making. Clearly, the Contract would have heavily informed his assessment as to the appropriateness of reinstatement in the circumstances.

[20]    Having had the benefit of seeing the Contract, it is clear to us that [Mr Johnson] was incapacitated from working at [CUB]’s site because Chelgrave has no contractual power to force [CUB] to allow [Mr Johnson] access to their site after his removal. The order to reinstate [Mr Johnson] to the Abbotsford site was inappropriate in all the circumstances.

[21]    An error of principle has occurred in that the Commissioner has made an order with which Chelgrave is unable to comply.

[22]    For the above reasons, Ground 2A of the appeal is upheld.

8    The Full Bench’s ultimate order was that the order made by the Commissioner reproduced at [5] above was quashed insofar as it ordered reinstatement of Mr Johnson to CUB’s brewery site. Unfortunately, that did not clearly spell out what remained of the Commissioner’s order. However, in our view, as the parties submit, the effect of the Full Bench’s order was that the Commissioner’s order became:

Pursuant to s.391(1) of the Fair Work Act 2009 (the Act) the Respondent, Chelgrave Contracting Australia Pty Ltd, shall reinstate the Applicant, Mr Chaya Johnson.

9    The Full Bench necessarily also did not make any addition to the Commissioner’s order to indicate that, as subsequently argued orally by CUB in this Court and addressed below, the Full Bench order was made under s 391(1)(b), while the Commissioner’s order was made under s 391(1)(a).

Grounds of application

10    In substance, the two grounds of review advanced by Mr Johnson are as follows:

(1)    Quashing the order for reinstatement to CUB’s brewery on the basis that CUB was capable of excluding Mr Johnson from those premises constituted a jurisdictional error by the Full Bench. This is said to be by reason of the Full Bench misunderstanding the nature of its jurisdiction, misconceiving its duty, failing to apply itself to the question which ss 390 and 391 of the Fair Work Act prescribes and/or acting on a wrong principle, because, contrary to its conclusion, an order under s 391 for reinstatement would operate to require CUB to permit Mr Johnson’s reinstatement despite it having previously exercised a contractual entitlement or power to have him excluded from the premises.

(2)    In the alternative, in quashing the Commissioner’s order only in so far as it ordered reinstatement of Mr Johnson to CUB’s brewery, the Full Bench made a jurisdictional error because the Fair Work Commission had no power under s 391 of the Fair Work Act to make the balance of the order that would remain after the Full Bench’s order.

11    In relation to ground 2, the jurisdictional error alleged is confined to existence of a power to make the balance of the order after the removal of the words “to his former position as C7 Maintenance Fitter at the Carlton United Breweries Abbotsford site” from the Commissioner’s order. No other jurisdictional error is alleged. That observation is of some importance in the ultimate determination of that ground of review.

Ground 1

12    Mr Johnson contends that upon a proper construction of ss 390 and 391 of the Fair Work Act, the Full Bench erred in concluding that CUB’s exercise of its contractual power to require his permanent removal from its site was effective to render inappropriate his reinstatement to a position at that site. This is said to be so because the ordinary meaning of reinstatement is to “put back in place”, quoting Blackadder v Ramsey Butchering Services Pty Ltd [2005] HCA 22; 221 CLR 539 at [14] per McHugh J. Mr Johnson submits that specificity is given to this requirement by s 391(1)(a) because reinstatement is expressly and ordinarily to be effected by “reappointing the person to the position in which the person was employed immediately before the dismissal”.

13    Mr Johnson relies further upon the reasoning in Blackadder, submitting that:

(a)    McHugh J at [14] gave the power of reinstatement a “muscular” interpretation;

(b)    Kirby J at [33] emphasised the importance of compliance according to the derivation and ordinary meaning of “put back in place”;

(c)    Hayne J at [43] deployed similar reasoning;

(d)    Callinan and Heydon JJ said in substance much the same.

14    Mr Johnson submits that, in that authoritative context, the statutory text is capable of being read so as to preclude CUB from relying upon its contractual entitlement to obstruct his return to work insofar as doing so was necessary to put him back in the position he occupied immediately prior to his unfair dismissal, at least when CUB had materially contributed to that occurring. Mr Johnson submits that once such an interpretation is open on the text of s 391(1)(a), it should be adopted:

(a)    as is compelled by the remedial and beneficial nature of the power; and

(b)    because such provisions should be given a broad construction, citing R v Kearney; Ex parte Jurlama (1984) 158 CLR 426 at 433 per Gibbs CJ and Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638 per Mason, Brennan, Deane and Dawson JJ.

15    Mr Johnson submits that the context and purpose of the statute supports that beneficial interpretation, because it was plain that reinstatement was to be the primary remedy for unfair dismissal, and should ordinarily preclude the alternative remedy of compensation, quoting Regional Express Holdings Ltd v Richards [2010] FWAFB 8753; 206 IR 17 at [23] and Nguyen v Vietnamese Community in Australia [2014] FWCFB 7198 at [10]. Mr Johnson further submits that because the history of the provision is part of a comprehensive unfair dismissal regime, leading to the primacy of reinstatement as a remedy, the discretion not to order reinstatement was to have a minimal operation, quoting Fryar v Systems Services Pty Ltd (1995) 130 ALR 168 at 189 per Gray J.

16    Mr Johnson also submits that making reinstatement the primary remedy was a deliberate departure from the pre-existing law developed by the courts, and quotes Raffoul v Blood Transfusion Service of the Australian Red Cross Society (1997) 76 IR 383 at 395, also per Gray J. He contends that despite a shift in statutory language to “inappropriate” for the exercise of the power, the test remains the same in substance, and a person (in this case, CUB) who was on notice of the unfair dismissal remedy should not be able to thwart this power by watering down its operation.

17    On this reasoning, Mr Johnson contends that an order for reinstatement can require a host business such as CUB not to stand on its contractual rights with a labour hire employer to frustrate reinstatement. Thus, he reasons, whether reinstatement is appropriate requires regard to be given to the circumstances of the unfair dismissal, preferring substance over form. The Commissioner had been critical of the conduct of both CUB and Chelgrave, finding that it was CUB’s direction to Chelgrave that led to Mr Johnson’s dismissal. Mr Johnson contends that it would subvert the statutory regime to permit CUB’s conduct to frustrate the primary remedy of reinstatement rather than make its contractual right subordinate. He submits that the approach of the Full Bench would permit a wholesale avoidance by employers of the unfair dismissal regime by the interposing of a third party with a right to exclude. He submits that abrogating CUB’s right to exclude him would leave intact its right to exclude him in the future.

18    CUB, with Chelgrave supporting its stance, primarily seeks to sidestep Mr Johnson’s argument by characterising the Full Bench’s decision differently. CUB advances four cascading submissions in the alternative.

19    First, CUB contends that the Full Bench did not misunderstand its jurisdiction to order reinstatement by failing to appreciate that such an order would be effective to override CUB’s contractual rights at the time of compliance by Chelgrave. CUB submits that the Full Bench did not say anything of that kind, leaving Mr Johnson with an onus to establish the asserted misunderstanding. CUB submits that the more obvious conclusion was that the Full Bench was satisfied that it was inappropriate to make such an order in circumstances in which there would be a future incapacity on the part of Mr Johnson to work at the brewery, given CUB’s absolute right to exclude him from their premises.

20    It should be noted in relation to the above submission that Mr Johnson did not suggest CUB’s contractual right to exclude him from their premises could not be exercised immediately after he entered those premises. CUB’s submission therefore seeks to confine the Full Bench decision to its particular facts and circumstances, so that the conclusion it reached amounts to no more than a factual finding within jurisdiction as to why the Commissioner’s decision was inappropriate as a matter of practical reality, given the clear intent of CUB exclude Mr Johnson from its premises both immediately and permanently.

21    CUB’s first argument cannot be accepted as being a sufficient answer to this review ground, because it does not adequately address the issue raised by Mr Johnson as to the impugned underlying basis for finding that the Commissioner’s order was inappropriate. Mr Johnson’s submissions before the Full Bench, under the heading “Appeal Points—jurisdiction”, made it clear that he understood CUB’s argument to be that because it was not Mr Johnson’s employer nor a party to the application before the Commissioner, the reinstatement power could not enable the Commissioner to impose obligations on it. Mr Johnson conceded that the Commissioner’s order did go beyond the power by bearing upon CUB in that way.

22    The appeal before the Full Bench was expressly run on a practical basis, being the incapacity of Mr Johnson to fulfil his duties towards Chelgrave at the CUB site, and therefore the inappropriateness of ordering reinstatement in those circumstances. However, this unavoidably raised an underlying question of jurisdiction. The Full Bench’s reasons reflect this, holding at [20] that Chelgrave had no contractual power to force CUB to allow Mr Johnson to access their site after his prior removal; and at [21] that an error of principle had occurred in that the Commissioner had made an order with which Chelgrave was unable to comply.

23    It follows that the incapacity found by the Full Bench was not based upon a future right to exclude Mr Johnson after he returned to the premises following reinstatement, but rather arose from an incapacity to be reinstated in the first place. That is, the inappropriateness found by the Full Bench was based upon a finding of Chelgrave’s inability to implement reinstatement at all, rather than an alternative basis for incapacity arising upon him being required to leave again after reinstatement. The latter alternative might have assumed a power to compel CUB’s cooperation, without necessarily deciding the question. This might have sidestepped the jurisdictional question, but whether that is so does not need to be decided. The reasons given by the Full Bench squarely raise the question of the FWC’s jurisdiction to make the Commissioner’s order, even though the conclusion is expressed in the statutory language of “inappropriate”.

24    The Full Bench must have either concluded that the FWC’s power to order Chelgrave to reinstate Mr Johnson to his prior position at CUB’s premises did not extend to compelling CUB to allow that to happen, or, that it failed to appreciate that this was the necessary implication in deciding the issue of inappropriateness in that way. The former is more likely in light of the discussion above. In reaching that conclusion, the Full Bench either did, or did not, misunderstand its jurisdiction (or misconceive its duty, or fail to apply itself to the question which ss 390 and 391 of the Fair Work Act prescribes, or act on a wrong principle) to the extent that it either correctly or incorrectly found, or proceeded upon the basis that, a reinstatement order directed to Chelgrave could be thwarted by CUB denying Mr Johnson entry to its premises. It follows that consideration must be given to whether or not the FWC could make a reinstatement order of the kind made by the Commissioner and directed to Chelgrave, which CUB was obliged in some way to facilitate, or at least not prevent.

25    The substantive question for resolution therefore turns on the nature of the power bestowed by s 391(1)(a) of the Fair Work Act. As summarised above, Mr Johnson contends that the power can and should be construed in a way that does not permit CUB to prevent reinstatement. In response to those arguments, CUB’s primary alternative argument is that even if the Full Bench did do as Mr Johnson contends, this did not involve any relevant misunderstanding because the Commissioner’s order was not effective to override CUB’s common law rights to exclude him from entering its site, and ss 390 and 391 could not be construed in the way he contends to give such a power. CUB submits this is because the FWC and thus the Full Bench only had such powers as are expressly bestowed upon it as an executive body created by statute. CUB points out that the FWC has no power to punish for contempt and, that civil remedy and criminal sanctions in terms can only apply to a person to whom an order applies: see the Fair Work Act civil penalty provision in s 405 and criminal offence provision in s 675.

26    Moreover, CUB submits, a reinstatement order expressly can only be made against the employer of the person reinstated. Any wider application of the power could easily have been provided for and should not be implied. Thus CUB effectively argues, the robust interpretation of the remedy of reinstatement in Blackadder must be understood in the context of reinstatement to a position at an employer’s premises, and cannot change the nature and extent of the reinstatement power provided, which does not extend to a non-employer host.

27    CUB also points out that the primacy of reinstatement is expressly qualified by the exercise of the power being appropriate. Just as there are cases in which reinstatement to a position at a host site has been found appropriate, there are cases, such as the present, in which it has been found to be inappropriate, citing Pettifer v MODEC Management Services Pty Ltd [2016] FWCFB 5243; 261 IR 439, and Conlon v Sandlewood Aboriginal Projects Limited [2017] FWC 3186, the latter cited by the present Full Bench at [17]. CUB submits that certain of the cases cited by Mr Johnson and also Pettifer were directed to the issue of whether there was a valid reason for dismissal giving rise to liability, unlike this case (at least on appeal and on judicial review) and unlike Conlon, which are both focused on the issue of remedy.

28    Viewed in that way, CUB submits that the cases cited by Mr Johnson stand for nothing more than it being no defence to an otherwise unfair dismissal for the employer to rely upon compliance with a direction given by a host, citing Kool v Adecco Industrial Pty Ltd [2016] FWC 925 at [49]. That leaves open the question of whether reinstatement as the remedy for such an unfair dismissal is appropriate: see Kool, a case in which the issue of remedy was not addressed, at [80].

29    Given that there have been cases which have, and have not, resulted in reinstatement to host sites, CUB submits that it cannot be said that the present outcome would permit a wholesale avoidance of the unfair dismissal regime. Putting it another way, the burden of CUB’s argument is that the circumstance that a labour hire arrangement might impede in some way the remedy of reinstatement as being, as a practical matter, inappropriate, does not deny the existence or viability of the unfair dismissal regime as a whole, even if the efficacy of reinstatement as opposed to compensation may, in some cases, be diminished. CUB submits that such an outcome is not a reason to ignore the practical effect of the bona fide involvement of a third party in the employment arrangement, citing Pettifer at [41] as an example. CUB submits in substance that any labour hire arrangement relied upon must still be genuine, with no shelter being given to a real employer by a sham arrangement, citing by way of further examples Fair Work Ombudsman v Crystal Carwash Café Pty Ltd (No 2) [2014] FCA 827 per Buchanan J and Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034; 152 ALD 209 per Katzmann J.

30    CUB accepts that the principle of legality has its limits in the construing of legislation when the curtailment of a particular right, freedom or immunity is an object of that legislation, noting Mr Johnson’s citation of Lee v New South Wales Crime Commission [2013] HCA 39; 251 CLR 196 at [314] per Gageler and Keane JJ to that effect. However, CUB submits that there is nothing in the Fair Work Act or its associated extrinsic material to support the conclusion that parliament intended, as Mr Johnson suggests, to regulate freedom of contract and other common law rights in relation to employment that would otherwise permit an employee to be excluded from an employer’s or third party’s premises. Rather, CUB submits, the Fair Work Act was intended to balance protection from unfair dismissal against fair and efficient workforce management, citing the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) at [r.5] (fourth dot point), [r.9] and [r.360].

31    CUB submits that there is nothing to support an intention to abrogate or curtail the common law rights and freedoms of anyone beyond employers and employees, let alone doing so by unmistakable and unambiguous language as required, quoting Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ. CUB further submits that it is no answer to that requirement to refer to ss 390 and 391 as being remedial or beneficial, quoting New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act [2016] HCA 50; 260 CLR 232 per Gageler J at [92] as to such a characterisation being no more than a manifestation of the general principle that all legislation is to be construed purposively.

32    The arguments advanced by CUB must be accepted over those of Mr Johnson. It is not possible to find in s 390(1)(a) any means of compelling CUB to surrender not only its contractual rights to prevent Mr Johnson from entering its premises, but perhaps even more importantly its ordinary common law rights to decide who may and may not enter its property. The latter rights are protected by the law of trespass, especially from incursion by or on the authority of the executive, for which express authority and strict compliance with any conditions is required: see, e.g. George v Rockett (1990) 170 CLR 104 at 110-111, 113.

33    The Court should not impute to the legislature an intention to interfere with such fundamental rights except where it is “clearly manifested by unmistakable and unambiguous language” (Coco at 437), or at least irresistible inference to the same effect. In Coco at 437, Mason CJ, Brennan, Gaudron and McHugh JJ also cited and quoted with approval:

(a)    A passage from Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523 at which Brennan J observed:

Unless the Parliament makes unmistakably clear its intention to abrogate or suspend a fundamental freedom, the courts will not construe a statute as having that operation.

(b)    A passage from Bropho v Western Australia (1990) 171 CLR 1, at 18, in turn quoting Potter v Minahan (1908) 7 CLR 277 at 304, where O’Connor J reasoned that it is (footnotes omitted):

in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used.

34    The arguments advanced by Mr Johnson do not support any such weighty conclusion being reached that s 390(1)(a) empowered the making of an order having the collateral effect of overriding CUB’s common law rights to refuse his entry, notwithstanding the primacy that the legislature has attached to the remedy of reinstatement by an employer.

35    The Full Bench was correct to find that Chelgrave had no contractual power to force CUB to allow Mr Johnson access to their site after his removal; and also correct to find that an error of principle had occurred in that the Commissioner had made an order with which Chelgrave was unable to comply with given CUB’s stance.

36    That is not to say that this will always be the situation. A host may not have the same or similar contractual rights as CUB, or may have qualified or limited its common laws rights by contract. A host may also indicate, for a variety of reasons, that such rights will not be asserted. In that event the reinstatement power may well be effective and therefore not inappropriate.

37    In light of the foregoing, strictly speaking it is not necessary to adjudicate upon CUB’s remaining arguments. The first of these is that even if ss 390 and 391 could be construed in the way Mr Johnson contends, any error in that regard was not jurisdictional because it was not material, with Mr Johnson bearing the burden of proving materiality. CUB argues that, if the Full Bench had appreciated that the Commissioner’s order was effective to override CUB’s common law rights, that would, as Mr Johnson concedes, leave intact CUB’s right to exclude him in the future. Therefore, the Full Bench should not be taken to have considered reinstatement to be appropriate in circumstances in which it would immediately be set at nought by subsequent lawful exclusion. The burden of this submission is that any such error was immaterial (and therefore not jurisdictional) because the same decision would still have been made if done so without that error, with the same end result. If the result would be the same, the error cannot be material and therefore cannot, in this particular set of circumstances, be jurisdictional. If this had been the reasoning deployed by the Full Bench, it might well have found favour. For the reasons outlined above, that was not the basis for the decision that was made, which was confined to the act of reinstatement itself.

38    CUB’s final argument on ground 1, advanced in relation to ground 2 as well, is that even if the Full Bench’s decision was affected by jurisdictional error, there is no utility in granting relief given the immediate and permanent exclusion that will inevitably take place. On that argument, even if Chelgrave was to cause Mr Johnson to put a foot inside the brewery as the only step it could take towards reinstatement, he does not contest that he could be forced to leave again immediately and not be permitted to return. This would make the whole exercise pyrrhic and pointless, giving ample jurisdictional scope to characterise this as inappropriate. Had that point been reached, it is likely that this argument would have prevailed. However, that would only have been so because of the clarity of CUB’s stance. This Court should avoid giving effect to barren remedies, but the better course is to decide this question in response to ground 2 where it squarely arises.

39    As the secondary argument of CUB succeeds because there was no error in the Full Bench concluding that the Commissioner’s order to reinstate Mr Johnson to the Abbotsford site was inappropriate in all the circumstances, ground 1 must fail.

Ground 2

40    Mr Johnson’s alternative ground of review is to the effect that the Full Bench’s decision constituted a jurisdictional error because the FWC had no power under s 391 to make the balance of the Commissioner’s order after part of it was quashed. This ground as pleaded by Mr Johnson turns on the terms of s 391(1)(a) reproduced at [4] above. It should be noted that the Commissioner’s order only refers to s 391(1), omitting any overt reference to either paragraph (a) or (b), a situation that was not overtly cured by the Full Bench. However, that is not where the argument finally rested for determination.

41    It is plain enough that the Commissioner’s original order by its terms was referring to paragraph (a) of s 391(1), not paragraph (b), because of the words “to his former position as C7 Maintenance Fitter at the Carlton United Breweries Abbotsford site”. However, with those words effectively deleted from that order by the Full Bench, it is no longer clear on the face of the order which paragraph of s 391(1) the order was made under. While the words clearly enough drawn from the terms of paragraph (a) were effectively deleted, words drawn from paragraph (b) were not inserted in their place. On its face, the order could be referring to either paragraph, and to that extent it was rendered ambiguous by the Full Bench. Compliance with the mandate in the chapeau to s 391(1) that the reinstatement order be under one paragraph or the other was not overtly observed. Whether the order was made under one paragraph, or the other, or neither, ended up being a threshold question.

42    As it transpired, the written submissions were ships in the night on this point, although the ships did later collide in oral argument, to torture the metaphor. Mr Johnson’s submissions initially proceeded upon the argument that the orders continued to be made under s 391(1)(a) and were invalid by reason of the deletion of the language of that paragraph. The substance of the argument as detailed below was that paragraph (a) was not complied with. CUB’s submissions, at least ultimately, advanced an argument that the orders had changed following the Full Bench’s intervention to being made under s 391(1)(b), even though words in accordance with that paragraph had not been added. With that overview in mind, the competing submissions can be considered.

43    Mr Johnson contends that the mandatory terms of s 391(1)(a) mean what they say, requiring such an order to be that Chelgrave reinstate him by reappointing him to the position in which he was employed immediately before his dismissal. This interpretation did not permit an order to be made in the more general terms effectively arrived at by the Full Bench, which failed to use the language of either paragraph (a) or paragraph (b) of s 391(1). That is, Mr Johnson asserts that the FWC, and thus the Full Bench, had no power to order the lesser remedy of merely reinstating him, without the additional stipulation of the CUB site component of his prior position. He contends that such a lesser order is an order not known to the Fair Work Act and therefore beyond jurisdiction.

44    CUB submits that there is no jurisdictional error of the kind alleged by Mr Johnson because the FWC was empowered by s 391 of the Fair Work Act not to specify a particular position and to leave it to Chelgrave to choose the position itself. This is submitted to be so, as long as Chelgrave selected a position for which the terms and conditions were no less favourable than those on which Mr Johnson was employed immediately before his dismissal, citing Technical and Further Education Commission (t/a TAFE NSW) v Pykett [2014] FWCFB 714; 240 IR 130 at [53]. It was not apparent until oral submissions detailed below that this was intended to be a reference to reinstatement in accordance with s 391(1)(b), rather than s 391(1)(a).

45    In reply to the primary argument initially advanced by CUB in writing, Mr Johnson submits that s 391 (in context, a reference to s 391(1)(a)) did not permit the Commission to “leave it to Chelgrave to choose the position” to which he would be restored, but, to repeat the substance of his argument in chief, required the order to be one “reappointing” him “to the position” in which he was employed. He characterises Pykett as being inconsistent with Blackadder because the High Court construed reinstatement as requiring no more and no less than that the employee be “put back in place”. He refers to this having been identified by Perram J as constituting an arguable case (being a secondary argument) in dealing with an application for a stay of the orders made in Pykett: Technical and Further Education Commission v Pykett (No 1) [2014] FCA 727 at [18]-[19]. The application for a stay was dismissed by Perram J despite an argument by the applicant employer that the FWC order required Ms Pykett to be placed in a position that did not exist. His Honour characterised the applicant’s case overall as arguable although not overwhelming: Pykett (No 1) at [22].

46    In oral argument, CUB made it clear for the first time that it is not asserting that the order as amended complied with s 391(1)(a). Rather, CUB submits that the Court should infer that the order effectively made by the Full Bench was not an order under s 391(1)(a), but rather should be interpreted as being, of necessity, an order instead made under s 391(1)(b). This argument had the practical effect of implicitly conceding that it was not possible to make a valid order under s 391(1)(a) because of the impossibility of reinstating Mr Johnson to the position in which he was employed immediately before his dismissal.

47    CUB’s argument is therefore that the effect of the order, once the reference to the CUB site was removed, was to reinstate Mr Johnson by appointing him to another position on terms and conditions no less favourable than those on which he was employed immediately before his dismissal. Such an order did not have to stipulate a work site, which left it to Chelgrave to choose a position meeting that description, even though, as it transpired, there was no such position, leading to Mr Johnson’s redundancy. In support of that argument, CUB points to the finding of the Full Bench at [20] (reproduced above at [7]) that it was inappropriate to order that Mr Johnson be reinstated to the position at the CUB site, implicitly ruling out the making of an order under s 391(1)(a). That had the practical effect that the only viable order was one made under s 391(1)(b).

48    CUB also submits that it was clear that the Full Bench was empowered by reason of the decision in Anthony Smith & Associates Pty Ltd v Sinclair (1996) 67 IR 240 to make an order under s 391(1)(b). Sinclair is a decision of the former Industrial Relations Court of Australia (Wilcox CJ, Moore and Marshall JJ, all of whom were also formerly judges of this Court). Their Honours addressed the predecessor of s 391(1)(b), cast in substantially identical terms, being s 170EE(1)(a)(ii) of the Industrial Relations Act 1988 (Cth). Their Honours said in Sinclair at 244 that the requirement to reinstate under that provision

might be [to] a specific position, the availability and suitability of which is revealed by the evidence. On other occasions, the Court will not specify a particular position. Provided that the Court is satisfied that reinstatement is practicable and appropriate, it is open to the Court to make an order in terms of par (a)(ii), leaving it to the employer to choose the position and to comply with the Court’s order to provide terms and conditions that are no less favourable than those on which the employee was employed immediately before the termination.

49    In relation to the question of construction to permit the order made being understood as being under paragraph (b) rather than paragraph (a) of s 391(1), CUB submits that orders of a court or tribunal are subject to the ordinary rules of construction, relying by analogy upon Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483. This was a contempt of court case in which a penalty for breaching an undertaking was set aside. The majority (Windeyer J and Owen J) held that this was because of an ambiguity in the language of the undertaking. Windeyer J said at 503 that if the true meaning of the undertaking, although “not immediately plain”, could be ascertained according to ordinary rules of construction, then the person giving the undertaking is bound by it in that sense: see also Repatriation Commission v Nation (1995) 57 FCR 25 at 33G (Beaumont J, with whom Black CJ and Jenkinson J agreed).

50    CUB further submits that orders should, if possible, be construed to give them valid effect, citing in support of that proposition Ross v Lane Cove Council [2014] NSWCA 50; 86 NSWLR 34, a case involving the procedural requirements for making remedial orders against a former owner of property, including joining the current owner to the proceeding. A threshold question in Ross was the construction of the order under challenge. Leeming JA, with whom Meagher JA and Tobias AJA agreed, observed at [30] that it is open to have regard to extrinsic evidence, at least if the language of an order is ambiguous or susceptible of more than one meaning, with a primary source of such material being the reasons for judgment. A caveat on that is that such material cannot be used to contradict the plain meaning of the text: Repatriation Commission v Nation at 34B. More recent authority also suggests that ambiguity is not necessarily required, because the purpose of an order is to give effect to a judgment, and is therefore the source of the order to which effect must be given: Lim v Comcare [2019] FCAFC 104; 165 ALD 217 (McKerracher, Markovic and Snaden JJ) at [40], citing and quoting Athens v Randwick City Council [2005] NSWCA 317; 64 NSWLR 58 at [129] to that effect (Santow JA with whom Hodgson and Tobias JJA agreed).

51    In oral reply to CUB’s argument that the Full Bench order was to be construed as being made under paragraph (b) rather paragraph (a) of s 391(1), Mr Johnson submits that there were no submissions made and no evidence tendered that could ground an order under s 391(1)(b), such that it was a jurisdictional error to make such an order. Mr Johnson’s final resting place was, curiously, that no reinstatement at all was appropriate if his argument in relation to ground 1 did not succeed, and that this is where the Full Bench would end up on remittal. Such a remittal would entail the Full Bench determining whether compensation should instead be made, in the context of the back pay payment and redundancy payment that Mr Johnson had already received. In combination these were in excess of the statutory cap on compensation of six months’ pay. Mr Johnson urged caution in simply offsetting the redundancy payment against any compensation payment, that being a matter for the Full Bench, but did not provide any clear basis upon which he would be able both to retain his redundancy payment and back pay, and secure compensation on top of that in the event of remittal.

52    It follows that there is now apparently no dispute that the remnant order of the Commissioner does not conform with the requirements of s 391(1)(a) by reason of it not being possible to reinstate Mr Johnson to the position in which he was employed immediately before his dismissal. The questions that Mr Johnson seeks to have determined are:

(a)    whether the Court can construe the order that was left after the Full Bench’s intervention as having been made under s 391(1)(b), for if it cannot, there was no power to make that order, as alleged by ground 2; and

(b)    if so, whether the Full Bench had a sufficient jurisdictional foundation for such an order to be made.

53    As to the first of those steps, it is clear enough that the Full Bench considered that an order under s 391(1)(a) was inappropriate because Chelgrave could not compel CUB to allow Mr Johnson to go onto its Abbotsford site, such that reinstatement to his former position was not possible. It is equally clear that the Full Bench must have been aware of the terms of s 391(1)(b) and that when it came to reinstatement a binary choice had to be made. Once s 391(1)(a) was ruled out, the only reasonable inference to draw from the face of the Full Bench reasons is that it intended to order reinstatement by exercising the power in s 391(1)(b). Accordingly, it should be concluded that this was the order that the Full Bench purported to make, even though the words in paragraph (b) of s 391(1) are absent. As CUB correctly submits, this is the only practical outcome. This aspect of Mr Johnson’s ultimate argument should therefore fail. Because ground 2 is confined in terms to a question of jurisdiction by way of power in s 391(1) to make the order left after the Full Bench’s intervention to effectively strike out the words “to his former position as C7 Maintenance Fitter at the Carlton United Breweries Abbotsford site”, this conclusion also means that ground 2 as pleaded must fail. That is because there was a power to make a s 391(1)(b) reinstatement order, subject to that being enlivened on the established facts before the Full Bench.

54    For completeness it is appropriate to address the second question raised by Mr Johnson, albeit not supported by a pleaded ground of review, as to whether the Full Bench had before it sufficient material to exercise the jurisdiction under s 391(1)(b) in circumstances in which that was not overtly sought. The Court can readily infer that there could not have been before the Full Bench evidence by which it could have been satisfied that reinstatement was practicable and appropriate for the purposes of making an order under s 391(1)(b). That is because the evidence before this Court via the affidavit of Mr Mark Hale on behalf of Chelgrave is that, from the time Mr Johnson’s reinstatement was ordered by the Commissioner in November 2020 until February 2021 when the Full Bench decision was handed down, there was no position as a C7 maintenance fitter available at any of the sites of Chelgrave’s customers other than CUB. There could not have been evidence before the Full Bench to establish a fact that did not exist. Accordingly, the Full Bench did make a jurisdictional error in that there was, as Mr Johnson contends, no sufficient jurisdictional foundation for an order under s 391(1)(b) to be made.

55    No application was made to amend ground 2 to accommodate this conclusion. Even if such an application to amend had been made, it is doubtful leave would have been granted because of the futility of granting relief in circumstances in which Mr Johnson cannot now be restored to his former position. This is especially so given the combination of his redundancy payment, and back pay, both dependent upon reinstatement having validly been ordered, exceeds any compensation that he could have been awarded instead. It would not have been appropriate to remit the matter to the Full Bench in circumstances where there was nothing more than speculation advanced before this Court to suggest that Mr Johnson might possibly be able to secure an award of compensation without both the payments that were made to him being offset to the point of nothing being payable at all, or even theoretically at least, some amount being required to be paid back.

Conclusion

56    As both grounds of review have failed, the originating application must be dismissed.

Associate:

Dated:    3 December 2021

REASONS FOR JUDGMENT

COLVIN J:

57    Mr Chaya Johnson sought an order by the Fair Work Commission (FWC) for his reinstatement to work at the premises of CUB Pty Ltd in Abbotsford. He did not claim to be an employee of CUB. Rather, he claimed to be an employee of Chelgrave Contracting Australia Pty Ltd (Chelgrave), a labour hire company. The proceedings he brought in the FWC were against Chelgrave. CUB was put on notice that he sought reinstatement to work at the CUB premises in Abbotsford but it did not seek to be joined as a party. Mr Johnson succeeded in obtaining an order for reinstatement to what was described as his former position as C7 Maintenance Fitter at the CUB site in Abbotsford. CUB sought and obtained leave to appeal to the Full Bench of the FWC.

58    Before the Full Bench, the contract between CUB and Chelgrave was received. The contract provided for Chelgrave to provide services and personnel to CUB for an agreed term. The personnel requirements were specified in a schedule to the contract. The contract provided that CUB may issue a notice to Chelgrave requiring Chelgrave to remove any personnel from the performance of the services. It further provided that if such a notice was issued that Chelgrave must remove the person from the performance of the services and, at Chelgrave’s cost, replace the person with a suitable replacement. There was no dispute that a notice had been given by CUB to Chelgrave in respect of Mr Johnson.

59    The Full Bench expressed its conclusion on the appeal in the following terms:

Having had the benefit of seeing the Contract, it is clear to us that [Mr Johnson] was incapacitated from working at [CUB’s Abbotsford site] because Chelgrave has no contractual power to force [CUB] to allow [Mr Johnson] access to their site after his removal. The order to reinstate [Mr Johnson] to the Abbotsford site was inappropriate in all the circumstances.

60    The phrase ‘inappropriate in all the circumstances’ reflects the terms of s 390 of the Fair Work Act 2009 (Cth) which are to the effect that a person who has been unfairly dismissed must be reinstated unless the FWC is satisfied that reinstatement is inappropriate and an order for compensation is appropriate. It is to be noted that s 391(1) then provides that an order for a person’s reinstatement ‘must be an order that the person’s employer at the time of the dismissal reinstate the person’. There is also express provision in s 391(1A) to deal with instances where the position in which the person was employed at the time of dismissal ‘is no longer a position with the person’s employer’ and that position (or an equivalent) is a position with an associated entity of the employer.

61    Therefore, even though Mr Johnson had been found to be dismissed in circumstances that were harsh, unjust and unreasonable and his former position at the Abbotsford site was still required to be performed, Mr Johnson was not reinstated to that position.

62    Mr Johnson has been dealt with on the basis that the original order by the FWC reinstated him to employment by Chelgrave. After efforts were made by Chelgrave to place him in a similar position with another client, he was made redundant and paid out.

63    Mr Johnson now seeks review in this Court of the decision of the Full Bench of the FWC.

64    I am most grateful for being provided with a draft of the joint reasons of Justice Bromwich and Justice O’Callaghan which set out the competing contentions of the parties in relation to the two grounds of appeal. For the reasons expressed by their Honours, I agree that ground 2 fails.

65    As to ground 1, the key issue is whether the FWC misapprehended the nature and extent of its jurisdiction to order reinstatement.

66    It was submitted for Mr Johnson that the Fair Work Act regulated freedom of contract and other common law rights in relation to employment. It was said, in effect, that the right of CUB under its contract with Chelgrave to exclude particular persons from its site was abrogated by the terms of s 391 which conferred a broad statutory right to reinstatement where unfair dismissal had been demonstrated. The existence of the contractual provision between Chelgrave and CUB was said not to be a reason why it was inappropriate to order reinstatement. Rather, it was said to be trumped by the conferral of the statutory power to make an order for reinstatement. In effect, both Chelgrave as Mr Johnson’s employer and CUB as the third party who, by agreement with Chelgrave, was providing the place and circumstances of employment, could be made to comply with an order for reinstatement.

67    The case for Mr Johnson did not go so far as to contend that the FWC could make an order directed to CUB or that CUB could not, after the reinstatement, again give notice under its contract with Chelgrave requiring the removal of Mr Johnson from the Abbotsford premises. Rather, the case advanced seemed to be to the effect that an order by the FWC directed to Chelgrave could require reinstatement at the Abbotsford site even though Chelgrave would remain subject to the terms of its contract with CUB (under the terms of which notice might again be given that required Chelgrave to remove and replace Mr Johnson).

68    Precisely how the argument rested with the terms of the legislation and the terms of the contract was not clear.

69    The legislation does not provide for the making of an order for reinstatement that speaks to the world at large or indeed to any particular person whose actions may prevent the reinstatement of the employee. Rather, it provides that an order for reinstatement must be directed to a person’s employer. It does so within legislation that regulates the relationship between employer and employee.

70    There are many lawful reasons why a third party may stand in the way of the ability of an employer to effect reinstatement. An employee who needs a licence or statutory permission in order to carry out particular types of work is an example. In such a case, an order for reinstatement would not mean that the third party must issue the required licence or statutory permit.

71    In the present case, the contract between Chelgrave and CUB provided for the giving of a notice with ongoing effect whereby CUB may require a particular person who was one of the personnel undertaking the services provided by Chelgrave to be removed from providing the services and replaced with a suitable replacement. The notice did not cease to have effect once the person the subject of the notice was removed such that the person might return at a later time as part of the personnel. The consequence of the exercise of the right by CUB was that Chelgrave could no longer provide that person as one of the personnel who was to perform services under the contract. Unless and until the notice was withdrawn or some change to the position agreed by CUB the notice continued to have operative effect.

72    There was no suggestion that CUB was an associated entity of Chelgrave. There was no claim that CUB was the employer of Mr Johnson. There was no claim that the relevant provision of the contract between CUB and Chelgrave was void or unenforceable as being contrary to the Fair Work Act or the public policy expressed in that legislation or for some other reason. There was no claim that CUB had not validly exercised its contractual right or that it no longer relied on the notice. There was no claim that the contract was some form of sham. There was no claim that the action of CUB was taken to prevent the exercise of a workplace right. In short, the existence and validity of the contractual right of CUB to give notice that a person provided by Chelgrave as one of the personnel performing the services be removed from the Abbotsford site and replaced by another person was not in question.

73    The legislation provides for reinstatement as a remedy for unfair dismissal. An application for unfair dismissal may be brought only where a person’s employment has been terminated (or the person has been forced to resign from their employment). It is an application that must be brought against the employer. The legislation then states in mandatory terms that an order for reinstatement must be an order directed to the person’s employer at the time of the dismissal. It provides for one exceptional instance where the position is, by the time of the order, a position with an associated entity of the employer. The existence of that exception confirms the intention that the reinstatement order would otherwise only speak to reinstatement by the employer. Likewise, an order for the payment of compensation must be an order that the person’s employer at the time of dismissal pay compensation to the person in lieu of reinstatement (see s 392(1)). The matters that may be brought to account in determining that compensation are quite broadly stated.

74    Nothing in the scheme of the protections to employees afforded in respect of unfair dismissal extends to the making of reinstatement or compensation orders that speak to any party other than the employer. The contentions for Mr Johnson reduce to a claim that the FWC could make an order for reinstatement that would speak to third parties in a manner that could abrogate their accrued rights. There is no foothold for such a conclusion in the statutory language. The relevant contractual rights of CUB have been exercised and are being insisted upon.

75    In those circumstances, it has not been shown that the decision by the Full Bench of the FWC was infected with an erroneous view of the relevant statutory provisions, particularly insofar as it informed the conclusion that an order for reinstatement directed to Chelgrave which could only be performed by Chelgrave breaching its contract with CUB was inappropriate.

76    Otherwise, I agree with Bromwich and O’Callaghan JJ for the reasons their Honours give that the authorities concerned with reinstatement, particularly Blackadder v Ramsey Butchering Services Pty Ltd [2005] HCA 22; (2005) 221 CLR 539 do not assist Mr Johnson. I also agree that the submissions advanced by the parties to the Full Bench raised the question whether the first decision in the FWC was based upon an incorrect view of the nature and extent of the Commission’s jurisdiction.

77    For those reasons, I agree that ground 1 has not been made out by Mr Johnson.

78    It follows that I agree that the application for judicial review should be dismissed.

Associate:

Dated:    3 December 2021