Federal Court of Australia

Construction, Forestry, Maritime, Mining and Energy Union v Melbourne Precast Concrete Nominees Pty Ltd (No 2) [2020] FCA 1215

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent reinstate the second applicant to the position he held immediately prior to 20 March 2020 by no later than 7 days of these orders being made.

2.    For all purposes of his reinstatement, the first respondent treat the second applicant as if he had been employed continuously by the first respondent from 20 March 2020 up to and including the date of reinstatement, with there being no loss of continuity of service and with continuity of service being maintained for all purposes.

3.    The first respondent pay the second applicant compensation for economic loss within 28 days of these orders being made as follows:

(a)    $ 23,631.15 in relation to lost wages; and

(b)    $ 3,716.03 in relation to unpaid superannuation.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

1    On 6 July 2020, I declared that the first respondent (Melbourne Precast) contravened ss 50, 340(1)(a) and 340(1)(b) of the Fair Work Act 2009 (Cth) (FW Act) by dismissing the second applicant, Mr Paul Hes, on 20 March 2020. I also found that the second respondent, Mr Thomas Pichler, a director of Melbourne Precast, was involved in each of Melbourne Precast’s contraventions (save for a contravention of s 340(1)(a) premised on Mr Hes’s workplace right to take personal leave): see Construction, Forestry, Maritime, Mining and Energy Union v Melbourne Precast Concrete Nominees Pty Ltd [2020] FCA 931 (Liability Reasons). These reasons should be read in conjunction with the Liability Reasons.

2    On 14 and 21 August 2020 (today), I heard oral submissions on the question of relief. The applicants also relied on written submissions dated 20 July 2020, and on affidavits of Mr Hes (dated 20 July and 12 August 2020) and of his wife, Ms April Hewat (dated 20 July 2020). Mr Pichler, who represented himself, relied on an affidavit he affirmed on 13 August 2020.

3    Mr Pichler appeared on 14 August, but did not appear today. By email to my associate, he applied for an adjournment of the hearing until November. That email is Exhibit A-9. I declined that application because it was late made, because I was not satisfied that Mr Pichler was unable to attend, and because, in any event, fairness to Mr Hes needed to be taken into account. I also made an order under r 30.21(1)(b)(i) of the Federal Court Rules 2011 (Cth) that the hearing proceed in the absence of Mr Pichler.

4    The relief sought by the applicants can be summarised as follows:

(1)    an order reinstating Mr Hes to the position from which he was dismissed;

(2)    an order that Melbourne Precast treat Mr Hes as though he were employed continuously throughout the period between his dismissal and his reinstatement;

(3)    an order that Melbourne Precast pay Mr Hes compensation for economic and non-economic losses he has suffered as a result of the respondents’ contraventions; and

(4)    pecuniary penalties.

5    I will today give judgment in relation to Mr Hes’s claims for reinstatement and compensation for economic loss. I will reserve judgment in relation to compensation for non-economic loss and pecuniary penalties.

6    Before turning to those matters, I should also record that Mr Pichler made two applications at the beginning of the hearing on 14 August 2020. The first was for an adjournment of the hearing. I refused that application, because it was made on the day of the hearing and because no reason was given as to why it had not been made earlier. The second application was for leave for Mr Pichler to appear on behalf of Melbourne Precast. I refused that application, for the same reasons that I refused it at the previous hearing of this proceeding: see the Liability Reasons at [6]-[8].

Reinstatement

7    Mr Hes seeks reinstatement to the position he held immediately prior to his dismissal on 20 March 2020.

8    Section 545(2)(c) of the FW Act provides, without limiting the generality of the power under s 545(1), that the court may order “the reinstatement of a person”. The principles applicable to the exercise of that discretionary power are well established. Generally speaking, such an order is the normal consequence of a successful claim of this type, in the absence of some particular reason why such an order should not be made: see Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 1218; 228 IR 195 at 237 [125] (Jessup J) and the cases there cited. That reinstatement will ordinarily be ordered where an employee is dismissed contrary to s 340 of the FW Act is a consequence of the protective and remedial nature of s 340.

9    While the circumstances where reinstatement will not be ordered are not closed, they include where: (i) the relationship of trust and confidence between the employer and the employee has broken down irretrievably (see, eg, Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 242 IR 1 at 139-141 [850]-[866] (Dodds-Streeton J)); (ii) the employee does not wish to be reinstated; or (iii) the employee is unable to resume employment with the employer (see, eg, Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 at 590 [411]-[413] (Barker J), where the employee no longer possessed a valid visa to work in Australia).

10    In this case, Mr Hes desires to return to work for Melbourne Precast. He submits that it cannot be suggested there has been a breakdown in the relationship of trust and confidence between him and Melbourne Precast, because there has never been any suggestion that he was other than a loyal and hard-working employee. He submits that none of the factors which would point against the usual order for reinstatement being made are present, and that he should therefore be reinstated.

11    Mr Hes submits that there was no proper reason for him to have been selected for redundancy. He submits that the evidence before the court demonstrated he was an exemplary, highly skilled, diligent and committed employee, and that the true reasons for his dismissal were prohibited ones which were unrelated to his ability. He submits that unless he is reinstated, Melbourne Precast will be able to take advantage of its contraventions of ss 340(1)(a) and 340(1)(b) of the FW Act, which would be antithetical to the policy and purpose of these remedial and protective provisions, for the reasons described in Bowling v General Motors Holdens Ltd (1980) 33 ALR 297 at 304-305 (JB Sweeney, Evatt and Northrop JJ).

12    Additionally, Mr Hes submits that he should be reinstated as his dismissal was contrary to the requirements of the Melbourne Precast Concrete Nominees Pty Ltd and the CFMEU (Victorian Construction and General Division) Precast Panel Enterprise Agreement 2016-2018 (the Agreement) as:

(1)    there was no consultation in accordance with cl 11 prior to Mr Hes’s dismissal;

(2)    Melbourne Precast failed to comply with its obligation under cl 19.3 to encourage voluntary redundancies before moving to dismiss Mr Hes; and

(3)    Melbourne Precast failed to take into account seniority of employees before making Mr Hes redundant. Had seniority been considered, it cannot sensibly be suggested that Mr Hes could validly have been selected for redundancy.

13    Mr Pichler deposed that Melbourne Precast is facing serious financial difficulties and may enter voluntary administration before the end of the financial year. In those circumstances, he submits that reinstating Mr Hes would necessarily mean making another employee redundant in Mr Hes’s place. He also submits that reinstating Mr Hes would mean removing Mr Fogarassy from his position as health and safety representative.

14    As to his relationship with Mr Hes, Mr Pichler submits that Mr Hes has been critical of him in his evidence, and therefore should not be seeking reinstatement to a position where they will be required to work together.

15    In my view, this is a clear case for reinstatement, for the reasons advanced by Mr Hes.

16    Mr Pichler’s submission as to his relationship with Mr Hes was answered convincingly by Mr Hes in the course of his cross-examination. When Mr Pichler pointed to the fact that Mr Hes had described Mr Pichler’s past behaviour as “inappropriate and bullying”, Mr Hes’s response was that he did not expect such behaviour to continue, and that he thought he and Mr Pichler could still work together provided they “move forward”. Mr Hes acknowledged in his affidavit the difficulties he may face if he returns to Melbourne Precast, but deposed that he has decided nonetheless that he wishes to return. In the circumstances, I am not satisfied that there has been an irretrievable loss of trust and confidence between Mr Pichler and Mr Hes rendering an order for reinstatement inappropriate.

17    As to the financial consequences of Mr Hes’s reinstatement, Mr Pichler has not proved that such an order would necessarily lead to further redundancies or another similarly dire outcome. During cross-examination, Mr Pichler was taken to Melbourne Precast’s financial statements, which record that, as at June 2020, the company held over $1 million in an account with the National Australia Bank. The company also had sales of over $5 million for the April-June 2020 quarter, and the June 2020 balance sheet disclosed net assets of over $1.9 million. Melbourne Precast’s financial statements also record various unsecured loans in favour of entities controlled by Mr Pichler, and a payment of $824,849.60 during the 2019-2020 financial year to a company of which Mr Pichler is the sole shareholder.

18    As to whether Mr Hes will be re-elected as health and safety representative in place of Mr Fogarassy for the purposes of the Occupational Health and Safety Act 2004 (Vic) or the Agreement, that is a question for Melbourne Precast’s employees, and is irrelevant to the question of reinstatement.

19    For those reasons, I will order that Mr Hes be reinstated to his position at Melbourne Precast, and treated as though he has been employed continuously during the period since his dismissal.

Compensation for economic loss

20    Section 545(2)(b) of the FW Act provides that the court may order compensation for loss that a person has suffered because of a contravention of a civil remedy provision.

21    Mr Hes submits that he would have remained in employment with Melbourne Precast if it were not for the respondents’ contraventions. He seeks an order compensating him for lost earnings in the period between his dismissal and his reinstatement.

22    As to causation, Mr Pichler appeared to contend that Mr Hes’s loss was not totally attributable to the respondents’ contraventions, because Mr Hes has failed to seek alternative employment. That contention cannot be sustained, even assuming it is relevant. Mr Hes deposed that he has made numerous attempts to find other work, and in fact has succeeded in part, finding limited casual work with a company known as Capital Fusion Stud Welding Pty Ltd.

23    Mr Hes deposed to calculations of his losses, which were summarised in Mr Boncardo’s amended written submissions as follows:

But for the contraventions, Mr Hes would have remained in employment with Melbourne Precast. In the 13-week period prior to his dismissal, he averaged gross weekly earnings of $2,538.41. This is a reasonable and appropriate amount to utilise to calculate lost weekly wages.

As at the date of the hearing, Mr Hes will have been dismissed for a period of 21 weeks. Consequently, but for his unlawful dismissal, Mr Hes would have earned $53,306.61.

In the period since his dismissal, Mr Hes has earned $2,197.06 working for a company known as Capital Fusion Stud Welding Pty Ltd. An amount of $168.97 has been paid for by this company for his benefit in relation to superannuation. Mr Hes has also been in receipt of social security payments via the JobSeeker program, receiving a total of $3,478.40.

It is accepted that amounts earned by Mr Hes and received via JobSeeker should be deducted from the amount of lost wages to which he would otherwise be entitled.

Mr Hes has also received payments from Incolink totalling $24,000 since dismissal. By clause 32.1.1 of the Agreement, Melbourne Precast is obliged to remain a member of Incolink funds concerning redundancy and enrol employees covered by the Agreement in such funds. Clause 32.1.2    obliges Melbourne Precast to make weekly contributions to Incolink on behalf of employees. Clause 32.1.3 permits an employee to access their redundancy payments when they cease being employed. Ordinarily, amounts paid to an employee in relation to redundancy are able to be set off against entitlements to arrears of wages or salary. It is accepted that the amounts paid to Mr Hes via Incolink can be taken into account in determining what compensation is payable to him for past economic loss as a result of the contravention. It is, however, not appropriate to offset compensation in relation to payouts Mr Hes received for accrued but untaken annual leave.

… Presuming that no further moneys are earned by him and no further payments made to him prior to hearing, his loss of wages will total $23,631.15 …

As a result of the contraventions, Mr Hes has lost superannuation contributions which Melbourne Precast was obliged to make for his benefit of $185 per week under clause 31 of the Agreement. This totals a loss of $3,885.00 in relation to superannuation, being the sum of $185 multiplied by 21. Mr Hes has received $168.97 in superannuation contributions meaning his loss in relation to superannuation contributions is $3,716.03.

(Citations omitted.)

24    I accept those submissions and the evidence upon which the calculations are founded.

25    Mr Pichler submitted in his email (Exhibit A-9) that I should use a 36-hour working week as a yard-stick for compensation. I do not agree. Mr Hes is entitled to compensation in an amount that reflects what would likely have occurred had the FW Act not been contravened (see Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120 at [28] (Allsop CJ, Mansfield and Siopsis JJ), so it is appropriate to take into account the fact that Mr Hes habitually worked overtime and was paid penalty rates.

26    Mr Pichler submits that Mr Hes should receive only “minimal” compensation. He submits that anything more would have an adverse effect on Melbourne Precast and its employees, and may lead the company into administration. As I have explained above, however, I am not at all persuaded that the financial position (assuming it to be relevant) of Melbourne Precast is as dire as Mr Pichler asserts, because the financial statements suggest otherwise, and it provides no basis for refusing Mr Hes compensation for lost earnings.

27    Accordingly, I will order that Melbourne Precast pay to Mr Hes compensation in the amount that he seeks.

28    As I said earlier, I will give judgment today on the reinstatement and economic loss claims, and reserve judgment on the claims for compensation of non-economic loss and penalties.

Associate:    

Dated:    21 August 2020