FEDERAL COURT OF AUSTRALIA

James v WorkPower Inc [2019] FCA 1239

ORDERS

THE COURT ORDERS THAT:

1.    The settlement of this proceeding, as set out in the Agreement marked as Annexure “KW2” to the affidavit of Kairstien Wilson, sworn 16 July 2019, be approved.

2.    For the purposes of s 37AG(2) of the Federal Court of Australia Act 1976 (Cth), to prevent any prejudice to the proper administration of justice, Annexures “KW1” and “KW2” to the affidavit of Kairstien Wilson sworn 16 July 2019 must be treated as confidential to the parties in this proceeding and until further order:

(a)    must be marked as confidential to the parties on the Court’s Electronic Court File; and

(b)    must not be available for public inspection, disclosed in open court or disclosed in the open part of any court transcript.

3.    The application be otherwise dismissed.

4.    The respondent pay the applicant’s legal costs, fixed in the sum of $10,000.

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

REASONS FOR JUDGMENT

MORTIMER J:

1    This is an application for approval of a settlement reached between the parties to the proceeding. The applicant, Mr David James, applies for this approval through his litigation guardian, who is his mother.

2    This settlement relates to claims of indirect and direct disability discrimination contrary to ss 5, 6 and 15 of the Disability Discrimination Act 1992 (Cth) and a contravention under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth).

3    For the reasons set out below, I am satisfied the settlement should be approved.

Background

4    Mr James is legally blind and autistic. He has been diagnosed as having what is described as high functioning autism. He has worked for the respondent in the role of factory hand/assembly worker since March 2015.

5    In June 2017 a complaint was made on Mr James’ behalf to the Australian Human Rights Commission under s 46P of the Australian Human Rights Commission Act 1986 (Cth). The complaint was terminated by the Commission on 26 February 2018, and the applicant commenced proceedings in this Court on 17 April 2018.

6    On 21 December 2018 I granted leave to Mr James to make an application to this Court pursuant to s 46PO(1) of the AHRC Act: see James v WorkPower Inc [2018] FCA 2083.

7    The conduct alleged to constitute unlawful discrimination fell into several categories. There were allegations that:

(a)    the wage assessment was undertaken by an employee of the respondent rather than an independent person, took over a year to complete and lacked transparency;

(b)    Mr James was made to sign the assessment even though he is blind and his brother has a power of attorney;

(c)    Mr James’ wages did not reflect his move to a Level B position;

(d)    the Greenacres tool failed to provide a reasonable measure of productivity for Mr James, who was entitled to be paid by reference to his productivity;

(e)    under Greenacres, Mr James’ pay rate was restricted to a range of 15% to 20% of Grade 2 of the award rate before any assessment of his work performance occurred;

(f)    as an element of Greenacres, Mr James was subjected to an assessment of “task skills” that workers with or without disability are not subject to in determining award wages for this type and level of work in the regular labour market (open employment);

(g)    Mr James was also subject to an assessment of “underpinning work skills” (independent work practice, working consistently, flexibility, quality control, workplace health and safety, and teamwork). Workers with or without disability are not subject to an assessment of these matters in determining award wages for this type and level of work in the regular labour market. While these skills may be important, they are not a measure of “work value” and should not be included in a wages assessment for a worker with a disability when they are not included in the wages assessment for workers without a disability;

(h)    workers such as Mr James were “pre-classified” under the Greenacres tool with pre-determined wages less than 55% of the Grade 2 rates, which means that under the Greenacres tool, no matter what their productivity, they were unable to progress to higher wage levels; an

(i)    an alternative assessment tool – the Supported Wages System– would have delivered a fairer outcome to a person with Mr James’ disabilities working in the kind of job he was working in. The complaint alleged that if Mr James was assessed on “straight productivity, such [as] under SWS”, he would have had the potential to earn a higher wage as the Supported Wages System has “the based wage rates from 10% through to 90% of the award”.

The present application

8    The settlement approval application is supported by an affidavit of Kairstien Wilson, the applicant’s solicitor. The settlement and release are exhibited to that affidavit, as is an opinion of counsel concerning whether the settlement reached is in Mr James’ best interests.

9    The applicant seeks orders that the affidavit, and its exhibits, remain confidential to the parties, in particular the settlement agreement.

Resolution

10    Rules 9.70 and 9.71 of the Federal Court Rules 2011 (Cth) provide:

9.70     Compromise or settlement of matter in proceeding

(1)     If a litigation representative agrees to the compromise or settlement of any matter in dispute in a proceeding, the litigation representative must apply to the Court for approval of the agreement.

(2)     If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if:

     (a)     the person were not under a legal incapacity; and

(b)     the litigation representative had made the agreement as the person’s agent.

(3)     The Court may, as a condition of approval, require that any money or other property payable for the benefit of a person under a legal incapacity be dealt with by way of a settlement, or in any other way that the Court considers appropriate.

Note:    The Court may give approval subject to conditions—see rule 1.33.

(4)     If the Court does not approve the agreement, the agreement is not binding on the person under a legal incapacity.

9.71    Application by litigation representative for approval of agreement

(1)     An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application.

   (2)     The interlocutory application must be accompanied by the following:

(a)     an affidavit stating the material facts on which the application relies;

     (b)     the agreement that is sought to be approved;

(c)     an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity.

11    As I noted in my reasons for approving the settlement in Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 (at [10]), in determining whether or not to approve a settlement, for the purpose of rendering it binding on an applicant under a legal incapacity, the Court must be satisfied the settlement is in the applicant’s best interests, or beneficial to the applicant’s interests. That is not a requirement of the Rules themselves but stems from the nature of the jurisdiction exercised by the Court where a party is under a disability and unable to conduct or conclude a proceeding himself or herself.

12    In Scandolera v State of Victoria [2015] FCA 1451; 331 ALR 525 at [27]-[29] I said, referring to both the applicable principles and their application to that proceeding:

It is the Court’s responsibility to determine, for itself, whether the settlement is beneficial to the interests of the person under a disability: see Somerset v Ley [1964] 1 WLR 640 sub nom Re Ley’s Trusts [1964] 2 All ER 326; Permanent Trustee v Mills [2007] NSWSC 336; 71 NSWLR 1 at [29] per Hammerschlag J; Fisher v Marin [2008] NSWSC 1357 at [29] per Rothman J; Button v CSL Ltd [2014] FCA 601 at [31] per Barker J.

The Court is assisted in that determination by the provision of an opinion by an independent lawyer who has been briefed fully on the facts and relevant evidence, and may have access to more material than the Court. However the Court is not bound by the independent opinion, and indeed there have been situations where the Court has not approved a settlement despite the advice of an independent lawyer: see for example Rothman J’s decision in Fisher disapproving settlement (under equivalent NSW legislation). The circumstances of that case were somewhat particular, because the plaintiff’s litigation guardian had changed her mind and sought that the settlement not be approved. Rothman J ultimately agreed the settlement should not be approved.

The determination whether the proposed settlement is in the best interests of, or beneficial to the interests of, a person under a disability requires the Court to weigh, at least as an important consideration, the prospects of the applicants if the proceeding were continue[d]: see Fisher at [35]-[37]. Since the approval of a settlement will bind the party under the disability and bring the litigation to an end, the Court should consider the advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on Matthew and Harley if the litigation were to continue to what is estimated to be a five-week trial.

13    I refer also to my reasons in Elliott v State of Victoria [2018] FCA 1029, Kemp v State of Victoria (Department of Education and Training) [2018] FCA 1327 and Tsirigotis v The Ivanhoe Grammar School [2018] FCA 2038, in all of which I have adopted the same approach.

14    I adhere to the views I expressed in Butler and Scandolera. I also adopt the observations I made in those cases about the emotional and psychological strain of litigation as an important factor in considering the risks attending the full litigation of a proceeding. Those matters are of particular significance where, as here, the applicant remains in contact with the respondent. In the present case, Mr James continues to be employed by Workpower, and the existence of this proceeding must have put the working relationship under some additional strain. Therefore, it is in Mr James’ best interests to bring that potential source of tension to an end, if the settlement is otherwise appropriate.

15    I have considered the opinion of counsel. To be satisfied that a proposed settlement is in the best interests of the person under a disability, the Court need not agree nor disagree with such an opinion, although of course counsel’s opinion may be of considerable assistance. In the present situation, I am satisfied counsel’s opinion fairly sets out some of the benefits of the settlement, and some of the risks of the matter proceeding to trial.

16    Having considered the terms of settlement it is apparent the settlement provides some substantive benefits to Mr James, including ongoing benefits. Considered overall, I am satisfied the settlement is in Mr James’ best interests.

17    The orders made reflect that part of the parties’ agreement which is not to remain confidential. The Court commends the parties’ responsible resolution of the proceeding.

Confidentiality

18    I am also satisfied it is appropriate to make limited orders pursuant to s 37AG of the Federal Court of Australia Act 1976 (Cth), preserving the confidentiality of the opinion given by counsel, and the terms of settlement. I am satisfied that the protection afforded by the prospect of a confidentiality regime under s 37AG as to the final terms of settlement, including but not limited to any payment made, is likely to have encouraged and facilitated the resolution of the proceeding. I consider it unlikely that such a settlement would have occurred without the prospect of such protection. The interests of the administration of justice are served by the making of limited orders to preserve the confidentiality of the terms of settlement, and of counsel’s opinion. The interests of justice are served not only for these parties, but so that future parties can also have confidence the Court may facilitate the resolution of these kinds of proceedings by including such orders in any approval of a settlement.

Associate:

Dated:    8 August 2019