Federal Court of Australia

White v Sydney Trains [2026] FCA 1117

ORDERS

THE COURT ORDERS THAT:

Inclusion of the 5 Late Registrants  

1.    Pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) (FCA Act), Mr Darren Wright, Ms Deepthi Kashyap Purigali Nagendra, Mr Giovanni Soccio, Mr Glen Urquhart and Mr Niranjan Fernando are to be treated as Registered Group Members for the purposes of the Settlement Distribution Scheme prepared by the Applicant’s solicitors (SDS) (contained in Annexure 1 of the Approval Application).

2.    The date by which the individuals referred to in order 1 of these orders were required to submit a registration form to the Applicant’s solicitors, pursuant to order 3 of the orders dated 12 January 2026, be extended nunc pro tunc to the date of these orders.

Settlement approval 

3.    Pursuant to ss 33V(1) and (2) and 33ZF of the FCA Act, the settlement of the proceedings be approved on the terms set out in the:  

(a)    Deed of Settlement dated 22 June 2026 (Deed); and 

(b)    SDS. 

(together, the Settlement).

4.    Pursuant to ss 33V and 33ZF of the FCA Act, the Court authorises the Applicant, nunc pro tunc, to enter into and give effect to the Deed (and the transactions contemplated by it) for and on behalf of all class members as those persons are defined in the Further Amended Originating Application filed on 2 December 2025 who did not file an opt out notice in accordance with s 33J of the FCA Act (the Bound Group Members). 

5.    The Court declares pursuant to s 33ZB of the FCA Act, the persons affected and bound by the Settlement are the Applicant, the Respondent, and the Bound Group Members. 

6.    Pursuant to s 33V(2) of the FCA Act, Rory Michael Markham of Adero Law be appointed Administrator of the SDS to act in accordance with the SDS and be given the powers and immunities contained in the SDS. 

7.    The Administrator has liberty to apply in relation to any matter arising under the SDS including for the purposes of seeking orders consequential to or in connection with the Deed and/or the SDS.  

Costs of the proceedings 

8.    Pursuant to s 33V(2) of the FCA Act and for the purposes of the SDS, the following deductions from the settlement sum be approved: 

(a)    the “Applicant’s Legal Costs and Disbursements” (as defined in the SDS), in the amount of $1,997,760 to Adero Pty Ltd; and 

(b)    the “Administration Costs” (as defined in the SDS), in the amount of $302,240 to the Administrator. 

Consequential Matters 

9.    Pursuant to ss 22, 23 or 33ZF of the Act, r 1.32 of the Federal Court Rules 2011 (Cth) and/or the Court’s implied jurisdiction and with effect from the date on which the Administrator provides to the Court the certificate in accordance with the SDS: 

(a)    all remaining claims of the Applicant and all Bound Group Members in these proceedings be dismissed (without the need for any further order); and 

(b)    these proceedings be dismissed (without the need for any further order) on the basis that the dismissal is a defence and absolute bar to any claim (either directly or indirectly) or proceeding by the Applicant or any group member in respect of, or relating to, the subject matter of the proceedings, without prejudice to: 

(i)    any right of any party to the Deed to make an application to enforce the Deed in a new proceeding; or 

(ii)    the right of the Administrator of the SDS to refer any issues relating to the SDS to the Court for direction or determination in accordance with the terms of the SDS;

(c)    there be no order as to the costs between the Applicant and the Respondent; and 

(d)    any and all prior cost orders made in the proceedings be vacated. 

Confidentiality – Confidential Counsel Opinion 

10.    Pursuant to ss 37AF(1) and 37AG(1)(a) of the FCA Act, on the grounds that it is necessary to prevent prejudice to the proper administration of justice, Annexure RMM2-4 to the Affidavit of Rory Michael Markham sworn on 24 June 2026 and Annexure RMM3-9 to the Affidavit of Rory Michael Markham sworn on 17 July 2026, is not to be published or otherwise disclosed to any person or entity except the Court and Court Staff. 

Group Member Status of Mr Paul Ninness  

11.    Pursuant to s 33ZF of the FCA Act, Paul Ninness is granted leave to withdraw the Opt Out Notice previously filed in the representative proceedings on 9 April 2024 and is considered a Registered Group Member able to participate in the Settlement. 

12.    Such further or other order as this Honourable Court deems appropriate.  

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

REASONS FOR JUDGMENT

PERRAM J:

Introduction

1    This is an application to approve the settlement of a class action. The settlement is embodied in a settlement deed dated 22 June 2026 (the ‘Settlement Deed’). The power to approve a class action is conferred by s 33V of the Federal Court of Australia Act 1976 (Cth):

33V Settlement and discontinuance—representative proceeding

(1)    A representative proceeding may not be settled or discontinued without the approval of the Court.

(2)    If the Court gives such an approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court.

2    In order to approve a settlement, the Court must be satisfied that the settlement is fair and reasonable: Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323; 335 ALR 439 (‘Kelly’) at [62] per Murphy J. In approaching an approval application, it is often said that the Court fulfils a protective role: Kelly at [62]. This is because the persons at the bar table are all friends of the bargain and there is, generally, no contradictor to point out any deficiencies in the settlement. This is not a hypothetical concern. Those funding a class action have an interest in a settlement occurring and curtailing their ongoing exposure to the incurring of legal fees. This is true even where, as here, the case is being conducted by a firm of solicitors acting on a ‘no win no fee’ basis.

3    The settlement of a class action is therefore a situation where the interests of the class and those of its financial backers have the potential to diverge. An appreciation of that potential explains the desirability of the Court closely scrutinising any settlement to ensure that what is proposed is, in fact, fair and reasonable.

4    On 27 July 2026 I made orders approving the proposed settlement. These are my reasons for making those orders.

The proceeding

5    The proceeding was commenced on 18 July 2023. The respondent is Sydney Trains, a corporation constituted under s 36 of the Transport Administration Act 1988 (NSW). Sydney Trains operates passenger services on the Sydney rail network.

6    The lead applicant is Mr White who was initially employed by Sydney Trains as a signaller. A signaller operates equipment to control the running of trains, records the details of trains that pass, sets areas of protection so track work can be completed safely and notifies the control centre in cases of delay or accident. From late 2019, Mr White was employed by Sydney Trains as an area controller. Area controllers are more experienced than signallers and generally have greater responsibilities sometimes including the supervision of other signallers.

7    Mr White claims that he was underpaid by Sydney Trains across the period 1 May 2018 to 26 November 2025. He brings his claim on behalf of all signallers and area controllers employed by Sydney Trains during that period. The class consists of approximately 614 members. Five members of the class have opted out of the proceeding. One now seeks to withdraw his opt-out notice to participate in the settlement and he should be allowed to do so. The remaining four members who opted out will not be bound by the settlement.

8    Soft class closure orders were made and, in its final form, there were 387 registered members of the class eligible to participate in the settlement. Subsequent to the cut-off date for registration, five further employees came forward and sought to be permitted to participate in the settlement. As I explain later, they should be permitted to do so.

9    Consequently, there are 392 class members (including Mr White) who are registered to participate in the settlement. The effect of the settlement will be that the class members who have not registered to participate will not share in the settlement proceeds but, more importantly, they will not thereafter be able to sue Sydney Trains in respect of the subject matter of the class action. This is because cl 3.2 of the Settlement Deed operates to give Sydney Trains a release of all claims made by Mr White or the class members and because orders were made on the approval application having the same effect.

10    The evidence concerning the provision of opt-out and registration notices to the class members satisfies me that those who did not register were sufficiently notified that this would be the outcome if they did not do so. Given that, it is fair that their claims should be released in this fashion if the settlement is otherwise approved.

11    Turning then to the claim itself, Mr White’s employment was governed by two successive enterprise agreements in force during the relevant period. These were the Sydney Trains Enterprise Agreement 2018 and the Sydney Trains and NSW TrainLink Enterprise Agreement 2022. For present purposes, the terms of these instruments do not materially differ and may together be conveniently referred to as the ‘Enterprise Bargaining Agreements’.

12    Mr White alleges that Sydney Trains failed to pay him a number of entitlements due to him under the Enterprise Bargaining Agreements. The alleged underpaid entitlements were as follows:

(a)    overtime loadings;

(b)    interval between shifts entitlements;

(c)    limits of shifts entitlements;

(d)    public holiday penalty entitlement;

(e)    Saturday penalty entitlement;

(f)    Sunday penalty entitlement;

(g)    one-off payment entitlement; and

(h)    back-pay entitlements.

13    In addition to these entitlements, Mr White makes three further allegations: first, that Sydney Trains contravened s 535(1) the Fair Work Act 2009 (Cth) (‘FW Act’) by failing to keep proper records of overtime, allowances and entitlements; secondly, that by failing to pay the entitlements in (a) to (h) above it failed to pay his wages in full at least monthly; and, thirdly, that it failed to provide him with breaks to which he was entitled.

14    Under the terms of the Settlement Deed, the sum to be paid by Sydney Trains is $18.1 million in return for a release of all claims by the class members. From this is to be deducted $1,997,760 for legal fees and disbursements due to Mr White’s solicitors, Adero Law (‘Adero’), together with a further $302,240 for the costs of administering a settlement distribution scheme.

15    The issues requiring consideration are these:

(a)    Whether the settlement sum is a fair and reasonable one;

(b)    Whether the settlement distribution scheme is fair and reasonable as between the members who have registered;

(c)    Whether the legal fees and disbursements incurred by Adero are reasonable and whether the fees for the administration of the settlement distribution scheme are reasonable;

(d)    Whether the group member who has opted out should be permitted to be reinstated and participate in the settlement; and

(e)    Whether the five employees who now seek to register should be permitted to do so.

Whether the settlement is fair and reasonable

Penalties

16    A complexity in settling class action proceedings involving allegations of underpayments of entitlements is that, often, the contravention of the relevant industrial instrument not only gives rise to an entitlement to compensation but may expose the employer to a liability to one or more pecuniary penalty orders. Section 546(3) of the FW Act provides:

The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a)    the Commonwealth; or

(b)    a particular organisation; or

(c)    a particular person.

17    One possible outcome following a trial is that the Court might order pursuant to s 546(3)(c) that any pecuniary penalty be paid to the registered members of the class in accordance with the terms of a settlement distribution scheme. However, as s 546(3) shows, this is not inevitable and the Court could, for example, order that any penalty be paid to the Commonwealth.

18    When an underpayments case settles, therefore, it is practically difficult to include in a settlement sum the amount of any penalty. It is true that the parties could in theory structure their settlement on the basis that they would jointly approach the Court and seek an order imposing an agreed penalty to be paid to the class members. But there is no guarantee either that the Court would agree to impose a penalty in the agreed amount or, even if it did, that it would agree that the penalty should be paid to the class members. That uncertainty provides a practical hurdle for structuring the settlement of an industrial class action in a way which includes a component for a penalty.

19    However, this does not mean that penalties are irrelevant to the settlement process. By settling an industrial class action, a respondent obtains the advantage of not being exposed to the possibility of having to pay a penalty. Thus, whilst it is unclear from the class’s perspective how large a penalty might be imposed or to whom it might be paid, the respondent at least knows that it will not have to pay a penalty and is indifferent to whom it is paid.

20    Any assessment of this economic effect is problematic. The judicial assessment of an appropriate penalty is a complex process. It includes understanding the nature of contraventions, how they came about, the extent of wrongdoing they suggest, the corporate culture surrounding their commission and the respondent’s prior history of contraventions (this list is intended to be illustrative rather than exhaustive). And, of course, it is necessary to bear in mind also whether the conduct revealed involves a course of conduct.

21    There is no practical way such an assessment could be carried out in a settlement approval application. Thus, whilst it is possible to appreciate that the question of penalties will have formed part of the respondent’s rationale for settling in the fashion that it did, beyond that it is difficult to see how it can be brought to bear upon the assessment of the fairness and reasonableness of the settlement. Apart from being aware of the fact that the respondent has avoided a potential exposure to penalties, I am unable to formulate a coherent mechanism by which that fact can be utilised in the assessment of the reasonableness of a settlement. The existence of the economic effect I have described is, however, a relevant matter to be taken into account and I do so. Further than that I do not think it is possible to go.

Settlement sum

22    When the case was commenced on 18 July 2023, the class definition included all signallers and area controllers employed by Sydney Trains during the period from 1 May 2018 to 18 July 2023. Soft class closure orders were made on 21 August 2024 which led to a process whereby the class members could register to participate in the outcome of a proposed mediation. The cut-off date for this was the end of 7 October 2024. By that date 115 employees had registered to participate. A mediation took place on 9 December 2024 but the case did not settle on that day.

23    In the lead up to that mediation, Mr White’s solicitors caused the creation of a model whereby they sought to determine the value of the claims of the registered group members. The process of constructing the model for these 115 employees was pragmatic. The employment records of Sydney Trains consisted of payroll data and timesheet data but neither set was complete. In the case of five of the employees, it was not possible to model their claims at all. In relation to the other 110 employees, there was more information but there remained gaps. The missing information was filled in using the yearly averages which could be derived from the available data. Other assumptions are also built in the model such as, for example, the fact that employees started their shifts 9.5 minutes prior to the time recorded in their timesheets so as to attend pre-shift handovers.

24    Because of the incomplete records, a precise estimation of the claims is not possible. It is possible to point out deficiencies in the model but, in the real world, some practical approach to quantification has to be adopted.

25    The precise values yielded by the model were put before me as part of the confidential opinion of Mr McCabe of counsel who was retained by Mr White for the purposes of the proceeding and by the registered members for the purpose of the s 33V application.

26    There are three aspects of the model which should be highlighted. First, the approach to compensation taken in the model assumes that Mr White’s construction of the various entitlements claimed under the Enterprise Bargaining Agreements is the correct construction. Given the nature of the drafting of the Enterprise Bargaining Agreements, I think it unlikely that the assumption that Mr White is correct about every construction issue will turn out to be wholly vindicated at trial. This tends to suggest that the model may over-estimate the compensation due.

27    Secondly, the model has proceeded on the basis that within the relevant pay periods (which were fortnightly), Sydney Trains was entitled to set off any obligation to pay an entitlement against the amount by which an employee’s salary exceeded the minimum due under the Enterprise Bargaining Agreements. That approach reflects the approach adopted by the Court in Fair Work Ombudsman v Woolworths and related matters [2025] FCA 1092; 343 IR 340. This proposition is contestable and established only by a single first instance judgment which is likely to be appealed and which, in any event, considered the operation of particular contractual set-off clauses in the context of the General Retail Industry Award 2010. Ultimately, the law may be that set-off is not possible at all or, conversely, that it is possible and may be done beyond the limits of a single pay period. Whilst the outcome of that debate cannot presently be known, I do not think that Mr White is to be criticised for applying the law as it currently is.

28    Thirdly, the model derives a figure for compensation for 110 of the original 115 registered members and, as initially proposed, it seems that the parties approached the matter on the basis that the 115 members would share in that amount. Subsequently, as I shall shortly explain, the approach to assessing the claims of the five members whose claims could not be modelled altered from the 110 who were modelled.

29    Pausing there, despite its imperfections and compromises I am satisfied that in principle the initial model was a fair and reasonable way to assess the compensation due to the 110 registered members.

30    Subsequent to its creation and after the initial mediation, the model was provided to Sydney Trains and the parties continued to negotiate and consult with each other for several months. This was a fruitful procedure. On 27 November 2025 they reached an initial in-principle settlement of the proceeding which was formalised in a settlement deed on 19 December 2025 (the ‘first settlement deed’).

31    It was contemplated that Mr White would amend his proceeding so that the class definition was, in class action jargon, ‘brought up to date’. It will be recalled that the initial class definition had an end date of 18 July 2023 (which was the date the action was commenced). The in-principle agreement contemplated that this date would be extended to whatever date Mr White filed his application to amend the class definition. Mr White filed an application on 26 November 2025 to extend the class definition end date to that day. The Court granted that application on 1 December 2025.

32    Expanding the class definition made it necessary for notification to be given to the class of the expansion of the class membership and the provision of a new cut-off date for registration. Inherent in that proposal was that new class members might register.

33    However, as at the date of the first settlement deed, the parties could not know how many new members would register. They nevertheless agreed that the proceeding would be settled for $5,980,308.28 to which would be added an amount of $40,065.49 or $31,405.10 for each additional class member who registered (depending on whether they held a line information controller role). They also agreed to cap the settlement sum and that if the number of members registered caused the settlement sum to exceed the agreed cap then the parties were required to negotiate a revised settlement sum.

34    As contemplated, notice was then given to the class members of these matters and the date for registering to participate in the settlement was extended to 27 February 2026. Following the discovery of an error in the notice distribution process, a further notice was issued to a group of employees with a registration date of 13 April 2026.

35    As a result of these steps, 272 persons then registered which exceeded by far what had been contemplated in the first settlement deed. The new registrations consisted of 258 registrations for signallers and area controllers. It also included 14 registrations in relation to a group known as the additional trainee signallers. In any event, the total was 272 which was in excess of the number necessary to trigger renegotiation of the settlement sum. The parties then returned to further negotiations. These included the provision by Sydney Trains of the employment data which it held concerning these 272 employees to Mr White’s solicitors.

36    There were difficulties with this data. The resolution of those difficulties was thought likely to extend out many months. However, the model could not be applied without this information. To overcome this problem and to facilitate what was thought to be the timely resolution of the matter, a decision was made to calculate the entitlements of the 272 new registered members based on an extrapolation of the claims of the initial 110 registered members whose claims could be modelled. Further, it was decided that the claims of the five original registered members which could not be modelled would be calculated using the same process of extrapolation.

37    It will be observed that the total number of registered members consists of the 110 originally modelled members, the five original unmodelled members and the 272 new members for a total of 387.

38    The resulting figures are set out in Mr McCabe’s opinion. As the compensation has been calculated it has been premised on assumption that, apart from tenure of service, the statistical qualities of the 272 new members are the same as those of the original 110. It is not evident to me that there are any other material differences between the two cohorts.

39    There are two matters I would, however, note.

40    First, it may be statistically open to doubt whether the application of averages obtained from the 110 original members to the larger cohort of 272 is a sound methodology. It would have been of assistance to know what the standard deviations from the means were. It is not necessarily the case that the optimal way to model the data contained in the original 110 is to be derived merely by the application of the rather blunt measure of central tendency which is the mean.

41    On the other hand, we are not here concerned with the actual compensation due at the end of a trial. Rather, what is involved is the question of whether the settlement is fair and reasonable. In my view, the practical exigencies which led to the extrapolation of the position of the original members on to that of the new members should be taken into account too. It is not self-evident that my doubts about the statistical soundness of the methodology lead to the amount of compensation being higher or lower than it should otherwise be. Rather, it is more likely to affect one’s confidence in the outcome. Despite that, I am satisfied that the likely impact of a more rigorous analysis (either by interrogating the data for the original members with something a little more nuanced than a raw mean or by requiring the actual modelling of the position of the new 272 members) would not warrant the likely expense and delay it would involve. I do not think, however, that this kind of evidence would be adequate at the end of a trial at least without some expert evidence from a statistician.

42    Secondly, the process adopted for the 272 new members entails that members whose entitlements are above the average extrapolated from the original group will be under-compensated whilst those who lie below the average will receive more than their due. Since the actual positions of the new members are not known (because they have not been modelled) the magnitude of this effect is not possible to assay. Whilst this is not desirable, I accept that this is, in the circumstances, an acceptable practical cost of achieving a settlement. The actual costs of determining the issue with more precision are likely to outweigh the benefits to be derived from that process.

43    Subject to those remarks which I do not regard as material to the outcome, I am satisfied that the approach taken to the calculation of the value of the registered group members’ claims is fair and reasonable. I have seen the output of the model in Mr McCabe’s opinion. The settlement sum is $18.1 million. This represented a significant but not inappropriate discount on the headline value of the claim. Since I do not think it is likely that the claim would have succeeded on all grounds there are good reasons to discount the headline claim. I am satisfied that the settlement is a fair and reasonable one. This is particularly so where the settlement has been achieved at an early stage of the proceeding, before the preparation of evidence and well in advance of the trial, thereby avoiding the incurring of substantial further legal costs. It is also notable that no notices of objection to the proposed settlement were received.

The settlement distribution scheme

44    The settlement distribution scheme is unremarkable. It does not treat the new group members differently to the original group members. The amount determined will be a function, inter alia, of the period for each member’s employment. Since the difference in tenure between the two cohorts has been accommodated in the process of determining the headline compensation figure there is no need for further adjustment at the level of the settlement distribution scheme. In that circumstance, I am satisfied that the scheme is fair and reasonable.

The reasonableness of the deductions

45    Mr White seeks an order that from the $18.1 million an amount be deducted of $1,997,760 for the legal costs and disbursements of his solicitors together with an amount of $302,240 for the cost of administering the settlement distribution scheme. It will be seen that these total $2.3 million which, as it happens, is the figure at which Adero agreed to cap its fees. This figure includes the costs of the application for approval of the settlement.

46    The evidence includes an expert report from Ms Toni Mossman, a senior costs lawyer with DGT Costs Lawyers, a firm of lawyers specialising in legal costs. Ms Mossman approached the task on two alternate assumptions. The first was that the data analysts utilised by Adero would be charged at a fixed hourly rate and the second was that they would be charged at a fixed fee. The hourly rate takes the fees above the cap agreed by Adero and Ms Mossman has therefore utilised the fixed fee basis. On that basis, she concludes that the reasonable costs and disbursements up to and including the s 33V approval application are $1,991,848.24 and that reasonable costs of administering the settlement distribution scheme are $302,240.

47    These total $2,294,088.24. It will be seen that this is $5,911.76 less than the agreed maximum capped costs agreed by Adero of $2.3 million. I deal below with the five employees who sought to register after the cut-off date. The effect of their late notification required the settlement hearing to be adjourned and further work done on determining what impact admitting them to the settlement would have on the other group members. I also deal with that issue below. However, Adero says that as a result of those matters it has incurred further expenses and it therefore seeks a further $5,911.76. This is the difference between the figures accepted as reasonable by Ms Mossman and the capped fee of $2.3 million. If granted, it will result in Adero being entitled to $2.3 million.

48    I am satisfied that the work done as a result of the late registrants was worth at least that much. This means that the total legal fees will be $2.3 million. This represents 12.7% of the overall settlement sum which is within the range for proceedings of this kind. In those circumstances, I approve the deduction of $1,997,760 for Adero’s legal fees and disbursements and $302,240 for administering the settlement distribution scheme.

Reinstatement of group member

49    Mr Ninness seeks to withdraw his opt-out notice and be reinstated as a group member. He explained he opted out because he did not understand the proceeding. Mr Ninness was accounted for in the negotiation of the revised settlement sum as he attempted to register within the registration deadline. I am satisfied that he should be permitted to withdraw his opt-out notice.

Late registrations

50    The addition of five new group members will increase the number of registered group members from 387 to 392. Although each of the group members will receive different amounts due to the operation of the settlement distribution scheme, on average the inclusion of a further five group members will reduce the average share per person of that pool from $46,770.03 to $46,173.47 which is about $600 difference. In some cases, the effect will be less and some it will be more. However, I do not think, in the overall context, that this is a material reduction. I therefore do not think that by permitting the five late employees to register that there will be material prejudice to the balance of the group members.

51    In the case of four of the employees, I am satisfied that they have a good explanation for why they failed to register on time which relate to communications failures. Given the absence of material prejudice, I would permit them to be added as group members.

52    In the case of the fifth employee, Mr Fernando, the evidence shows that he spoke with Adero on 16 February 2026 (11 days before the registration cut-off date) and was advised to register. He did not do so because he was assisting with the care of his mother-in-law who suffers from Parkinson’s Disease, was organising a family reunion and managing family-related matters in Sri Lanka and had learnt that his brother-in-law’s health was deteriorating after being diagnosed with a brain tumour.

53    If the addition of Mr Fernando caused material prejudice to the other registered members, I would not permit him to be added. However, in his case, the effect of admitting him to the registration group is very minimal. In those circumstances, he should be added as a registered group member.

Conclusion

54    It was for these reasons that on 27 July 2026 I made the orders provided to my chambers after the hearing on 22 July 2026. The orders include a confidentiality order over the privileged parts of the evidence put before me for settlement purposes.

Associate:

Dated:    11 August 2026