FEDERAL COURT OF AUSTRALIA

Turner v TESA Mining (NSW) Pty Ltd (No 2) [2022] FCA 435

ORDERS

THE COURT ORDERS THAT:

1.    Discontinuance of the proceeding be approved pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) (the FCA). The Applicant has leave to discontinue the proceeding by filing a notice of discontinuance, forthwith.

2.    Pursuant to ss 33V and 33ZF of the FCA any limitation period that applies to the claim of the Applicant and any group member, to which the proceeding relates, shall begin to run again from a date 60 days after filing of a notice of discontinuance.

3.    There be no order as to costs of the interlocutory application for approval of the discontinuance.

4.    There be no order as to costs in the proceeding.

5.    All existing orders as to costs are vacated.

THE COURT DECLARES THAT:

6.    Order 1 does not affect any rights of the Applicant or any group member in the proceeding to pursue the claims that are the subject of this proceeding in another proceeding.

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

REASONS FOR JUDGMENT

MURPHY J

INTRODUCTION

1    By an interlocutory application dated 30 November 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 has brought against the respondents TESA Mining (NSW) Pty Ltd, The TESA Group Pty Ltd (together, TESA), and Mt Arthur Coal Pty Ltd. He brought the class action on his own behalf and on behalf of an estimated 700 persons who:

(a)    worked at Mt Arthur Coal Mine (the Mine) and who were employed by TESA at any time during the period 7 December 2012 to 27 September 2014;

(b)    were each party to and bound by the TESA Group - Enterprise Agreement 2012 (TESA Agreement) made pursuant to the Fair Work Act 2009 (Cth) (FWA);

(c)    worked at the Mine in accordance with the roster system alleged in paragraphs 13 and/or 22 of the amended statement of claim dated 19 December 2018; and

(d)    were treated as “casual” employees by TESA,

(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 FWA and the TESA Agreement.

3    The discontinuance application is advanced on the basis that the cumulative effect of:

(a)    the introduction of s 15A into the FWA by 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.

4    The application is supported by affidavits of Mr Rory Markham, a principal of Adero Law, the solicitors for the applicant, being:

(a)    an affidavit sworn on 30 November 2021, which annexes a confidential Counsels’ Opinion of Mr Lachlan Armstrong QC and Mr Joel Fetter who opine that discontinuance is not unfair, unreasonable or materially adverse to the interests of group members; and

(b)    an affidavit affirmed on 14 January 2022 , which states that the parties complied with orders requiring that group members be given notice of the discontinuance application and of their right to object to it and/or to seek to be substituted as the representative applicant, and that no group member did so.

5    For the reasons I explain it is appropriate to approve discontinuance of the proceeding.

RELEVANT PRINCIPLES

The appropriate test for approval of a proposed discontinuance

6    Section 33V(1) of the FCA provides that a representative proceeding may not be settled or discontinued without the approval of the Court. As has been said many times, the Court has an onerous role to protect the interests of group members who are not directly represented in the proceedings. An applicant must demonstrate an entitlement to an order for approval even when the order is not opposed, and the Court should be alive to the possibility that the outcome, whether it be settlement or discontinuance, may reflect conflicts of interest or conflicts of duty and interest between the applicant and group members, or between group members: Parkin v Boral Limited (Class Closure) [2022] FCAFC 47 at [130]-[131] (Murphy and Lee JJ with Beach J agreeing) citing Kelly v Willmott Forests (No 4) [2016] FCA 323; 335 ALR 439 at [63] and McKenzie v Cash Converters International Ltd (No 3) [2019] FCA 10 at [24] (Lee J).

7    Before approving a settlement the Court must be satisfied that the proposed settlement is fair and reasonable in the interests of affected group members, including as between group members: Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [7] (Jacobson, Middleton and Gordon JJ); Kelly at [62]. There is, though, some uncertainty as to the test to be applied when approval is sought for discontinuance, rather than settlement.

8    In Mercedes Holdings Pty Ltd v Waters (No 1) [2010] FCA 124; 77 ACSR 265 at [9]-[10] Perram J held that the test is whether discontinuance is fair and reasonable in the interests of the group members. That test was followed in numerous decisions: see e.g. Adams v Navra Group Pty Ltd [2019] FCA 1157 at [19]; Sister Marie Brigid Arthur (Litigation Representative) v Northern Territory of Australia (No 2) [2020] FCA 215 at [69]-[70]. However, in Laine v Thiess Pty Ltd [2016] VSC 689 at [34] Dixon J applied a slightly less strict test; whether discontinuance would be unfair or unreasonable or adverse to the interests of group members: see also Turner v Bayer Australia Ltd [2021] VSC 241 at [49] (Dixon J).

9    Justice Yates neatly summarised the two approaches and their origins in Simonetta v Spotless Group Holdings Limited [2017] FCA 1071 at [12]. His Honour saw merit in the proposition that the test in Laine might be more apt where the practical effect of the proposed discontinuance will be to return group members to the position they were in before the commencement of the proceeding, but considered it unnecessary to express a concluded view. In Babscay Pty Ltd v Pitcher Partners [2020] FCA 1610 at [28], Anastassiou J concluded that the approach adopted in Laine was correct; and in Watson v Maximus Holdings (NSW) Pty Ltd [2021] FCA 87 at [49] (Wigney J) and Francis (Trustee) v Oculus Accounting Pty Ltd (No 2) [2021] FCA 1275 at [33] (Derrington J), their Honours expressed a preference for the test in Laine but said it was unnecessary to decide which of the two tests was correct.

10    At least in the context of a proposed discontinuance where the practical effect will be to return group members to the position they were in before the commencement of the class action, I consider the test in Laine to be appropriate. It could be said that group members will always have an interest in the applicant being forced to press on with the litigation, even if the prospects of success are remote, because they will share the benefits of any success in the case without having any of the costs and risks. If that approach is taken, a proposed discontinuance may never be positively fair and reasonable in their interests. That would be an unworkable test and in the circumstances of the present case it is appropriate to decide whether to approve the proposed discontinuance through the prism of what would be positively unfair or unreasonable having regard to group members’ interests.

Whether, pursuant to s 33ZE of the FCA, the limitation period(s) applicable to group members’ claims begin(s) to run from the date of discontinuance

11    Section 33ZE provides as follows:

Suspension of limitation periods

(1)    Upon the commencement of a representative proceeding, the running of any limitation period that applies to the claim of a group member to which the proceeding relates is suspended.

(2)    The limitation period does not begin to run again unless either the member opts out of the proceeding under section 33J or the proceeding, and any appeals arising from the proceeding, are determined without finally disposing of the group member’s claim.

(Emphasis added.)

12    There is some uncertainty as to whether the discontinuance of a representative proceeding is a “determination” of the proceeding for the purpose of s 33ZE(2), such that the limitation period applicable to a group member’s claim begins to run again.

13    In Gill v Ethicon Sarl (No 4) [2019] FCA 1814 at [22] Lee J said, in obiter:

There have not been, as far as my researches go, many cases concerning what constitutes a “determination” for the purposes of s 33ZE, although Kenny J in Lowe v Mack Trucks Australia Pty Ltd [2001] FCA 388 observed that a dismissal pursuant to a self-executing order constitutes a determination. Both textually and contextually, it seems to me that s 33ZE(2) is directed to the suspension continuing unless and until a decision has been made by the group member (opting-out) or there has been some judicial resolution of the claim of the group member.

Lee J’s remarks were not though made in the context of a discontinuance application, and it is not clear that his Honour intended to exclude a discontinuance from the concept of a “determination”.

14    Shortly following Gill, Lee J handed down Calinoiu v QLD Law Group – A New Direction Pty Ltd [2019] FCA 2194 which involved the discontinuance of group members’ claims. His Honour allowed the application and said (at [8]) that “the limitation period will again commence to run” as a result. It can be said that it is implicit in this that his Honour considered the discontinuance to be a “determination”. However, in my view his Honour’s remarks are properly understood as having been made in the context of a settlement approval rather than a discontinuance. His Honour described the application (at [2]) as involving a “settlement…which provides for discontinuance of the proceeding and hence requires approval” (emphasis added). It appears that that the settlement concerned the applicant’s individual claim and included a requirement for group members’ claims to be discontinued: Calinoiu at [7]-[8]. Thus, the decision in Calinoiu can be distinguished from the cases concerning approval of a discontinuance.

15    Subsequently, in Babscay, Anastassiou J said that, if Lee J’s construction of s 33ZE(2) in Gill at [22] is correct, it would result in the limitation period for group members’ claims remaining suspended, notwithstanding the discontinuance of the representative proceeding. At [33], Anatasssiou J extracted the following passage from the confidential opinion of counsel in that case, which said:

… if that outcome follows his Honour’s remarks, those remarks are incorrect and ought not be followed. This is because we read the word “determined” in s 33ZE(2) as including one of its verbal senses (“to come to an end”) , and thus being relevantly synonymous with “terminated”, on which basis a discontinuance does involve a determination (or termination) of the proceeding without disposing of the group member’s claim.

16    His Honour said (at [34]) that it was unnecessary to decide whether counsels’ opinion was correct, as it was sufficient for the purposes of the discontinuance application to find there was a “material risk that the suspension of the limitation periods would cease upon discontinuance”. His Honour, however, went on to say in obiter that if it was necessary to determine the question he would respectfully disagree with the construction of s 33ZE(2) in Gill.

17    The issue arose again in Maximus. Wigney J found it unnecessary to decide the question, but said in obiter (at [53]), that “to the extent that there is any issue about whether discontinuance of the proceeding would end the s 33ZE suspension of the running of limitation periods, the better view would appear to be that discontinuation would end the suspension.”

18    Then, in Oculus at [55]-[59], Derrington J considered the issue. His Honour noted the reasoning in Gill, Calinoiu and Babscay, and said that there is at least a real risk that discontinuance might be taken to “determine” the proceedings. His Honour considered that while that might seem to be inconsistent with the plain language of s 33ZE(2), the alternative construction would lead to “the permanent suspension of the running of the limitation period, an extraordinarily unjust outcome from the perspective of the respondent to a discontinued representative proceeding” (at [56]).

19    His Honour contemplated making an order under s 33ZF to provide for the re-starting of the limitation period once the group members were served with the notice of discontinuance, but declined to do so (at [57]) as he considered: (a) it involved impropriety for the applicant to seek an order which adversely affected group members’ interests when the respondent had not sought such an order; and (b) it was “not entirely clear” that s 33ZF empowered the Court to substantially alter the operation of s 33ZE by making an order which allowed the limitation period to begin to run again, citing Wotton v Queensland [2009] FCA 758; 109 ALD 534 at [41] (Rares J).

20    It is high time that this uncertainty is put to bed. I agree with Lee J’s construction of s 33ZE(2) in Gill at [22]. Both textually and contextually, the phrase “the proceeding, and any appeals arising from the proceeding, are determined without finally disposing of the group member’s claim”, indicates that a “determination” is properly understood as a judicial resolution of a group member’s claim. It is directed to the suspension of the limitation period continuing unless and until a decision has been made by the group member opting out or there has been some judicial resolution of the claim of the group member.

21    This construction is also consistent with the statutory purpose. The Explanatory Memorandum to the Federal Court of Australia Amendment Act 1991 (Cth) at [49] states:

[Section 33ZE] is designed to remove any need for a group member to commence an individual proceeding to protect himself or herself from expiry of the relevant limitation period in the event that the representative action is dismissed on a procedural basis without judgment being given on the merits.

22    It is also consistent with Lam v Rolls Royce PLC (No 5) [2016] NSWSC 1332 at [13] where, in relation to the cognate provision of the NSW class action regime, Beech-Jones J said that it “appears to contemplate the Court finally determining a group member’s claim and that must extend to either upholding it or dismissing it in such a way as to finally determine it.”

23    As has been noted, the difficulty with this construction is that it is capable of causing real unfairness to the respondent to a class action. If s 33ZE(2) is construed in this way, upon the Court approving the discontinuance of a representative proceeding, the respondent will be left in the position that the limitation period applicable to a group member’s claim (which is suspended by operation of s 33ZE(1)) will remain suspended and the respondent will be forever exposed to the risk of claims by group members. It is unlikely that the legislature intended such a result.

24    In the circumstances of the present case it is appropriate to address that unfairness by an order, pursuant to the power under ss 33V(1) and 33ZF, that the limitation periods that apply to the claims of the group members to which the proceeding relates begin to run again from the date 60 days after the applicant files a notice of discontinuance.

25    Unlike in Oculus, in the present case the respondents have sought an order in such terms, although seeking that time begin to run again in 30 days rather than 60. I consider such an order appropriately balances the interests of group members and the respondents. It recognises the importance to the respondents of ensuring that they are not forever at risk of being sued (an outcome that Derrington J rightly recognised as “extraordinarily unjust”), and it protects group members’ interests by giving them 60 days to seek advice and commence their own proceeding if they wish, before the limitation period again begins to run.

26    Such an order falls comfortably within the power conferred by ss 33V(1) and 33ZF.

27    As to the power under s 33V(1), the order imposes a condition on approval of the discontinuance. It is established that the Court may order a discontinuance subject to a term or condition: Note 2 of r 26.12 Federal Court Rules 2011 (Cth); see e.g. O’Neill v Mann [2000] FCA 1680; 175 ALR 742 at [11] (Finn J).

28    As to the power under s 33ZF, the Full Court in Boral (at [143]) explained that power as follows:

[Section] 33ZF provides power to make an order only where the order is appropriate or necessary to ensure that justice is done in the proceeding. To state the obvious, the question as to whether the Court has power under s 33ZF to make an order…requires consideration of the circumstances of the case, and more particularly, what is appropriate or necessary to ensure justice is done in the particular case. We also note that in [BMW Australia Ltd v Brewster [2019] HCA 45; 269 CLR 574] (at [46]) Kiefel CJ, Bell and Keane JJ observed that “[t]he power conferred by s 33ZF is broad, but it is essentially supplementary”. To similar effect their Honours noted (at [60]) that when dealing with contextual considerations the statutory context in which s 33ZF appears shows that it “is a supplementary source of power”, and (at [70]) that it would be an error to exalt the role of s 33ZF above that of a “supplementary or gap-filling provision”. Nettle J adopted the same characterisation of the power (at [124]) as did Gordon J (at [145] and [147]). Thus, the question as to whether the Court has power to make such an order also requires consideration of whether there is a lacuna for the “gap-filling” power in s 33ZF to fill.

29    In the circumstances of the present case there is a gap to be filled and such an order is appropriate or necessary to ensure justice is done in this proceeding. Having regard to the reasons set out at [61]-[73] below, it is plain that the Court should approve discontinuance of the proceeding, but if that is done the respondents will be left in a position where the limitation periods applicable to group members’ claims will remain suspended and their claims will never become time-barred. The respondents would be exposed to a risk of claims by group members in perpetuity.

30    The criterion in s 33ZF, “appropriate or necessary to ensure justice is done in the proceeding”, involves consideration of the position of the parties and group members. An order preventing unfairness to a particular party may be appropriate or necessary to ensure justice is done in the proceeding: McMullin v ICI Australia Operations Pty Ltd [1998] FCA 658; 84 FCR 1 at 4 (Wilcox J). In the circumstances the present case, it is in the interests of justice in the proceeding that the respondents do not remain exposed to the risk of group members’ claims in perpetuity. To adapt the words of the plurality in Brewster (at [47]), an order that the limitation periods applicable to the claims of the group members to which the proceeding relates begin to run again from the date 60 days after the applicant files a notice of discontinuance, will assist in ensuring that “the proceeding is brought fairly and effectively to a just outcome”. Such an order is within power.

31    To make such an order is not to rewrite or modify s 33ZE (cf Oculus at [57]), but merely to recognise that there is a gap in the legislative regime. As Wilcox J said in McMullin at 4:

In enacting Pt IVA…Parliament was introducing into Australian law an entirely novel procedure. It was impossible to foresee all the issues that might arise in the operation of the Part. In order to avoid the necessity for frequent resort to Parliament for amendments to the legislation, it was obviously desirable to empower the Court to make the orders necessary to resolve unforeseen difficulties; the only limitation being that the Court must think the order appropriate or necessary to ensure “that justice is done in the proceeding”.

Whether notice to group members is required

32    Section 33X(4) requires that, unless the Court is satisfied that it is just to do so, an application for approval of a settlement under s 33V must not be determined unless notice has been given to group members, but there is no equivalent notice requirement for an application for approval of a discontinuance. Section 33X(5), however, authorises the Court to require that notice be given to a group member or group members of “any matter” at “any stage”, provided the Court is satisfied that the proposed notice is to contain material or information which may be relevant to a group member or group members.

33    The authorities show that judges have taken different views as to whether group members should be given notice of a proposed discontinuance: e.g. Simonetta at [27] and Maximus at [50]-[60] in which notice of the proposed discontinuance was not required; Babscay at [40] in which notice of the proposed discontinuance was only required for those group members who had “demonstrated an interest in the proceeding by entering into a funding agreement”; and Oculus at [23] in which it was held to be inappropriate to discontinue the representative proceeding without notice to group members whose interests might be affected.

34    In my view it is likely that many of the estimated 700 group members are aware of the class action. I say that because of Mr Markham’s evidence of media reporting of the proceeding, the promotion of the proceeding on Adero Law’s Facebook page and website, and the fact that approximately 152 group members have registered a claim with Adero Law. The registered group members are likely to have discussed the proceeding with any former workmates with whom they are still in contact.

35    In circumstances where it is likely that many group members are aware of the proceeding, I consider it to be plainly inappropriate to grant leave to discontinue the proceeding without giving notice to group members. The principal purpose of a notice under ss 33X and 33Y of the Act is to ensure that group members can make informed decisions concerning their rights or interests: Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited [2017] FCAFC 98; 252 FCR 1 at [88] (Jagot, Yates and Murphy JJ). Unless group members are given notice of the proposed discontinuance and the terms upon which that is proposed to occur, they may not know: (a) that their claims are no longer being pursued in the proceeding and that they may lose their rights to bring their own claim by operation of the applicable limitation period; (b) that the proposed discontinuance is on terms that they remain able to bring any individual claim connected to their employment with TESA; (c) the reasons for the proposed discontinuance and therefore whether they should object to it; and (d) that they may seek to be substituted as the representative party on the basis that the applicant is no longer adequately representing his or her interests (s 33T).

THE BACKGROUND

The factual background

36    The applicant and the group members (the claimants) were employed by TESA which is a labour hire company. TESA supplied them to work at the Mine operated by a BHP subsidiary, the third respondent, Mt Arthur Coal. Upon hiring the claimants, they were provided with a document entitled Casual Employment Agreement and a covering letter which provided that the agreement was contractual and excluded previous representations made by TESA. The Casual Employment Agreement stated that the claimants were employed as “casuals”; that they would work hours that may vary; that they had no guarantee of ongoing employment; and provided a flat hourly rate which was determined “having regard to” the casual loading applicable under any applicable enterprise agreement made under the FWA, in this case, the TESA Agreement. It also provided that variations would be in writing only.

37    After hiring, the claimants were assigned to work at the Mine, where they were allocated to crews that worked according to a regular roster. On 1 September 2014, the claimants were told that TESA would no longer be supplying labour to the Mine after 27 September 2014. After that last shift, most of the claimants remained at the Mine working for another employer, although some (including the applicant) went to work for TESA at other mines, and others exited the mining industry altogether.

38    After the last shift on 27 September 2014 TESA did not pay the applicant or group members any moneys on account of accrued annual leave, accrued personal leave or redundancy pay. The proceeding alleges that, at law, the applicant and group members were not casual employees, and that they were wrongly denied paid annual leave and other entitlements of non-casual employees under the FWA and the TESA Agreement.

The Skene litigation

39    On 24 November 2016 a judge of the Federal Circuit Court delivered judgment in Skene v WorkPac Pty Ltd [2016] FCCA 3035 (Skene FCC). The applicant, Mr Paul Skene was employed by WorkPac, a labour hire company, to undertake assignments at a coal mine in central Queensland from 17 April 2010 to 17 July 2010 and then again from 20 July 2010 to 17 April 2014.

40    Mr Skene claimed that he was a permanent full-time employee of WorkPac and that he was entitled to annual leave and consequential entitlements, or payment in lieu of annual leave upon his employment coming to an end. He contended that his entitlement to annual leave derived from cl 19.1.1 of the WorkPac Pty Ltd Mining (Coal) Industry Workplace Agreement 2007 (2007 Agreement) and also the National Employment Standards as provided for by ss 87 and 90 of the FWA. WorkPac contended that Mr Skene was a casual employee and not entitled to annual leave and the related entitlements he claimed, either under cl 19.1.1 of the 2007 Agreement or under the National Employment Standards. Clause 19 of the 2007 Agreement provided for paid annual leave to “Permanent FTMs” (meaning Permanent Field Team Members) and had no application to “Casual FTMs”.

41    The primary judge held that Mr Skene established an entitlement to be paid monies on termination in lieu of untaken annual leave under the National Employment Standards, but rejected Mr Skene’s claim that he had an entitlement to monies in lieu of annual leave pursuant to cl 19.1.1 of the 2007 Agreement.

42    Both parties appealed the decision to a Full Court of this Court. WorkPac’s appeal raised only one ground; that the primary judge erred in failing to find that Mr Skene was a casual employee for the purpose of s 86 of the FWA. It sought to set aside the order that it pay compensation to Mr Skene and sought that his application be dismissed. The first ground of Mr Skene’s appeal was that the primary judge erred in holding that he was a casual employee for the purpose of the 2007 Agreement because, objectively determined, he was not a casual employee. He sought a declaration that he was a Permanent FTM and entitled to annual leave in accordance with cl 19.1.1 of the 2007 Agreement.

43    On 16 August 2018, in WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 (Skene FCA) (Tracey, Bromberg and Rangiah JJ) the Full Court dismissed WorkPac’s appeal and allowed Mr Skene’s appeal. It held that Mr Skene was not a casual employee for the purposes of the FWA nor the 2007 Agreement.

Commencement of the class action

44    On 27 June 2018 the applicant commenced the present case, funded by a litigation funder Augusta Ventures Ltd (Funder). In substance the proceeding raises four claims:

(a)    the “Non-Casual Claim”; a claim that the applicant and group members were not “casuals” within the meaning of the FWA or the TESA Agreement and, on that basis, when their employment with TESA ended, they should have been afforded the entitlements which permanent employees would have received under the FWA and the TESA Agreement, namely notice of dismissal, redundancy pay, accrued annual leave and accrued personal leave;

(b)    the “Penalty Rate Claim”; a claim that the applicant and group members had been underpaid shift loadings, overtime, Saturday, Sunday and public holiday entitlements, based on the proposition that where the TESA Agreement requires, for example, “double time” to be paid, that meant double the contractual rate of pay, rather than double the minimum base rate of pay under the TESA Agreement;

(c)    the “Misrepresentation Claim”; a claim that TESA misrepresented to the applicant and group members that they were casual employees and not entitled to the benefits available under the TESA Agreement, in contravention of s 345 of the FWA; and

(d)    the “Accessory Claim”; a claim that Mt Arthur Coal is an accessory to the three claims pleaded against TESA.

The Rossato litigation

45    Rather than appealing Skene FCA, on 8 October 2018 WorkPac commenced WorkPac Pty Ltd v Rossato (QUD 724/2018) against another ostensibly casual employee, Mr Robert Rossato. In essence the proceeding sought to overturn the decision in Skene FCA.

46    Mr Rossato was a production worker in the open-cut black coal mining industry who was employed by Workpac between 28 July 2014 and 9 April 2018, when he retired. On entering employment with WorkPac he signed a document entitled “General Conditions” which applied to all “assignments” with WorkPac and provided for employment on an assignment-by-assignment basis. An “assignment” represented a discrete period of employment and each individual assignment was agreed by a “Notice of Offer of Casual Employment” (NOCE) proffered by WorkPac and signed by Mr Rossato. The NOCE fixed the assignment length and described the employment as casual. The General Conditions provided that, during each assignment Mr Rossato was required to work at least 35 hours per week according to a roster, to be advised; the length of any assignment could be varied by WorkPac; and assignments could be terminated upon one hour’s notice. Mr Rossato was paid a casual loading pursuant to clauses of the relevant enterprise agreement, the WorkPac Pty Ltd (Coal) Industry Enterprise Agreement 2012 (2012 Agreement), which clauses were incorporated into each of the NOCEs he signed.

47    On 29 May 2020 in WorkPac Pty Ltd v Rossato [2020] FCAFC 84; 278 FCR 179 (Rossato FCA) the Full Court dismissed WorkPac’s application and declared that Mr Rossato was not a casual employee for the purposes of the FWA nor the 2012 Agreement.

48    The position, however, changed on 4 August 2021 when, in Rossato HCA, the High Court rejected the reasoning in Rossato FCA and Skene FCA and allowed WorkPac’s appeal. The High Court held that Mr Rossato was a casual employee for the purposes of the FWA and the 2012 Agreement; and therefore was not entitled to the benefits of non-casual employment under the FWA nor the 2012 Agreement.

The retrospective amendments to the FWA

49    On 26 March 2021, before Rossato HCA was handed down, the Commonwealth Parliament enacted the FW Amendment Act to address business concerns arising out of Skene FCA and Rossato FCA.

50    The FW Amendment Act inserted s 15A into the FWA (with retrospective effect) which provides a definition of “casual” employment. In summary, s 15A(1) provides that a casual employee is a person who becomes an employee by acceptance of an offer, made and accepted on the basis that the employer makes “no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person”. Section 15A(2) sets out an exhaustive list of four factors that must be taken into account in assessing whether such an offer of employment was made. The four factors are: (a) whether the employer can elect to offer work and whether the person can elect to accept or reject work; (b) whether the person will work only as required according to the needs of the employer; (c) whether the employment is described as casual employment; and (d) whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

51    In summary, the new definition relies solely on the terms of the employment offered and accepted and expressly does not take into account inferences that might be drawn from other interactions between the employer and the employee throughout the course of employment, or the post-contractual conduct of the employer and the employee. A regular pattern of hours is also expressly stated to not, of itself, indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

52    Section 15A(5) provides that a person who commences employment as a casual employee in accordance with the tests in s 15A remains a casual employee for the duration of the employment unless they accept an alternative, non-casual offer of employment, or their employment is converted into full-time or part-time employment under the new Division 4A of Part 2-2 of the FWA.

53    The amending legislation also inserted a new s 545A into the FWA, again with retrospective effect, which provides 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.

Withdrawal of litigation funding and instructions to discontinue the proceeding

54    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 would agree to fund the proceeding. I accept that evidence.

55    He deposes and I accept that the applicant has instructed him to seek leave to discontinue the proceeding.

Notice to group members

56    Mr Markham proposed the following regime to notify group members of the proposed discontinuance:

(a)    immediately upon sealing the discontinuance application his office intended to send an email to the approximately 152 group members who had registered their interest in the proceeding to notify them of the proposed discontinuance and attach the application and a copy of his affidavit, save for the Counsels’ Opinion;

(b)    his office would place the same documents on Adero Law’s Facebook page and website; and he

(c)    would advise his “usual media contacts” of the proposed discontinuance, noting that the media had previously reported on the proceeding.

He also deposed that the solicitors for TESA, had informed him that their clients would be amenable to the respondents, or a third-party provider engaged by the respondents, sending a notice of the proposed discontinuance to each group member’s last known email address (or where no email addresses is held, last known postal address) recorded in their files. Mr Markham deposed that the applicant supported that course.

57    I considered the proposed notice regime to be unsatisfactory. It did not compel the applicant to take the steps indicated; nor was the Court provided a draft of the proposed notice. The Court was being asked to approve the discontinuance without knowing whether group members would be clearly informed: (a) that it was proposed to discontinue the proceeding; (b) that the discontinuance would be on terms that they remain able to bring any individual claim connected to their employment with TESA; (c) of the reasons for the proposed discontinuance so that they could decide whether they should object to it or seek to be substituted as the representative party; and/ or (d) that the limitation period in relation to their claims may or will again begin to run from the date of discontinuance, and they should urgently seek their own legal advice.

58    On 3 December 2021 I made orders to require that by 10 December 2021:

(a)    TESA Mining send a Court-approved notice (Notice) to each group member;

(b)    Adero Law send the Notice to each group member who had registered an interest in participating in the action,

by sending it to their last known email address or, where no email address is held, their last known postal address.

59    The Notice informed group members of their right, by 10 January 2022, to object to or oppose Court approval of the proposed discontinuance and of their right to seek to be substituted as the representative applicant if, after receiving independent legal advice, they wished to take up that role. The orders provided that if no group member so notified Adero Law, the discontinuance application would be decided on the papers.

60    Mr Markham deposes, and I accept, that the Notice was sent to group members in accordance with the orders and that no group member informed Adero Law of any objection to the proposed discontinuance nor advised of a willingness to be substituted as the representative applicant.

DETERMINATION

61    As I have said, it is appropriate to approve discontinuance of the proceeding. I am satisfied that doing so is not unfair, unreasonable or adverse to the group members’ interests.

62    First, the proceeding has very limited prospects of success, which points in favour of approving its discontinuance. The Counsels’ Opinion of Mr Armstrong QC and Mr Fetter is significant to my view in this regard. As is standard in an application of this kind, Counsels’ Opinion is the subject of a confidentiality order, and it is necessary to be circumspect in these reasons in order to preserve confidentiality. That is particularly so where the opinion addresses whether the proceeding has a reasonable prospect of success, as that analysis may prejudice the claims of a group member who chooses to bring his or her own proceeding. It must suffice to note that Counsels’ Opinion 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.

63    The central issue in the Non-Casual Claim is whether, during the relevant period, the group members were “casual employees” as they were described in the Casual Employment Agreements which they signed. In my view s 15A of the FWA, which has retrospective effect, will apply and s 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. In my view the Casual Employment Agreements which were signed by group members were part of the offer of work by TESA. The Casual Employment Agreements, which could only be varied in writing, stated that the group members were employed as “casuals”, would work hours that may vary, and would be paid a flat hourly rate which was determined by “having regard to the casual loading applicable” under the TESA Agreement. The agreement expressly disavowed any guarantee of ongoing 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.

64    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 TESA. 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). In the present case, it is my view that the terms of the Casual Employment Agreements are likely to be sufficient to show the absence of the requisite firm advance commitment of work.

65    Having regard to the systems of employment summarised earlier in these reasons, the retrospective operation of s 15A of the FWA, and the decision in Rossato HCA, in my view it is quite unlikely that the common questions in the Non-Casual Claim will be answered in favour of the applicants and group members in this proceeding.

66    Even if (contrary to my view) the applicant and group members are likely to be held to be casual employees, the new off-setting provisions in s 545A of the FWA are likely to apply. The effect of s 545A is that, if it is established that a person has accrued paid leave entitlements, in circumstances where the terms under which the applicant and group members were employed provided that their pay was inclusive of casual loadings, it is likely that a significant proportion of the causal loading paid to group members would be set-off against the employer’s liability to make any further payment.

67    In respect of the Penalty Rate Claim, it is established that references in an award or agreement to work at particular times being paid at, for example, “double time” rates, usually take as their reference the single time rate of pay under the same instrument, rather than the contractual rate of pay: see, e.g. Automotive, Food, Metals Engineering, Printing and Kindred Industries Union v Mechanical Engineering Services Pty Ltd (No 2) [2008] FCA 1249; 175 IR 351 at [4] (Finkelstein J). In my view the Penalty Rate Claim has poor prospects of success.

68    If the Non-Casual Claim and the Penalty Rate Claim have poor prospects of success then the prospects of the Misrepresentation Claim and the Accessory Claim are similar.

69    That is not to suggest that there are not claims that may be available to group members based on their individual circumstances, but it is likely that any such claim would need to be articulated on a fundamentally different basis to those in the present proceeding.

70    Secondly, group members have been given notice of the proposed discontinuance and of their right to object to the discontinuance and/or to seek substitution as the representative applicant, and no group member has done so.

71    Thirdly, the Funder has withdrawn its funding of the proceeding, and the prospects of success in the proceeding are such that it is unlikely that any other commercial third-party funder will agree to take on the costs and risks of the case. I also infer that Adero Law is not willing to continue to bring the case on a no win no fee basis.

72    Fourthly, the group members will be returned to the position they were in before the proceeding was commenced, and their rights against the respondents will not have been affected. There has been no hearing or judicial determination in relation to the merits of their claims and no question of res judicata or issue estoppel arises. Thus, any group member who wishes to commence his or her own proceeding against one or other of the respondents will be free to do so. The orders include a declaration that the discontinuance does not affect the rights of the applicant or group members to pursue the claims brought in this proceeding, in another proceeding. There is utility in such an order because it will mean there can be no doubt that any rights group members may have against the respondents are not foreclosed or affected by approval of the discontinuance: see Maximus at [60]; Babscay at [43] Simonetta at [29].

73    Fifthly, while I accept that it can be argued that it is in group members’ interests that the class action continues so that group members can obtain the fruits of any success in the proceeding, having regard to the matters set out above, I am not persuaded that group members will suffer any material disadvantage if the proceeding is discontinued.

74    As I have said, I consider it to be appropriate to also order that any limitation period that applies to the claim of the applicant and any group member, to which the proceeding relates, shall begin to run again from a date 60 days after filing of a notice of discontinuance. Thus, the suspension of the limitation period under s 33ZE(1) will continue for a further 60 days which will allow group members sufficient time to obtain legal advice and commence their own proceeding should they wish to do so, before the limitation period commences to run again.

Associate:

Dated:    26 April 2022