14

[Extract from Queensland Government Industrial Gazette,

dated 14 January, 2005, Vol. 178, No. 2, pages 64-73]

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Industrial Relations Act 1999 – s. 117 – application for remedy under Chapter 4

Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (for Vincent Fenech) AND CHR Group Pty Ltd (Case No. B2110 of 2003)

COMMISSIONER ASBURY 24 December 2004

Application under Chapter 4 Freedom of Association of Industrial Relations Act 1999 – Respondent labour hire company – Contract to provide labour to host company – Host company sought removal of employee of labour hire company from its worksite – Contention that removal of employee from host company’s worksite was conduct for prohibited reason – Industrial Relations Act 1999 s. 104 and s. 105 – Contention that employee dismissed and/or disadvantaged or injured because he was a member or representative of an industrial organisation – Onus of proof – Attribution of reasons of third party to employer – Commission entitled to consider entire factual matrix in which conduct occurred – Commission may consider conduct of parties other than those in the employment relationship including host company – Decision making by company – Fact that conduct engaged in by host company not fatal to finding that employer has breached freedom of association provisions – Employment contract creates rights and obligations at common law and under Industrial Relations Act 1999 – Employer cannot contract out of obligations arising from employment contract – Where employer gives right to manage and supervise employees to third party it may be held liable for unfair or unlawful conduct by that third party against employees – Employer cannot avoid liability for breach of obligations arising from employment contract by arguing that it was compelled to take action by third party – Duty of employer to ensure that third party exercises rights to supervise and manage employees of employer in a manner consistent with its obligations to employees – Actual knowledge by employer that conduct of third party was for prohibited reason not required for finding of breach of freedom of association provisions – Knowledge which would have been obtained had inquiries been made by a reasonable and honest person may be sufficient for finding that breach of freedom of association provisions has occurred – Finding that evidence led to a reasonable inference that disadvantage or injury to employee caused by conduct on the part of respondent – Finding that evidence led to a reasonable inference that conduct was for a prohibited reason – Finding that evidence led by respondent did not counter inference from applicant’s evidence – Finding on balance of probabilities that applicant had proved allegations – Application granted – Compensation awarded.

DECISION

Overview

This is an application by the Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (AMEPKU) on behalf of Mr Vincent Fenech. The application is brought under Chapter 4 – Freedom of Association – of the Industrial Relations Act 1999 (the Act). Essentially the AMEPKU contended that the respondent engaged in prohibited conduct as described in s. 105 of the Act and that the conduct was engaged in for prohibited reasons as described under s. 104 of the Act. The respondent in this application is CHR Group Pty Ltd (the Respondent). The AMEPKU sought a penalty under s. 120(1)(a) and an order for compensation to be paid to Mr Fenech under s. 120(1)(c), together with any other orders the Commission deems appropriate.

The respondent is a labour hire company. On or around February 2002, the respondent entered into a contract with a company known as Parafield Properties Pty Ltd trading as Mindrill Mining Services (Mindrill) for the supply of labour to undertake work at Mindrill’s worksite at Paget in Mackay. Mindrill had terminated the employment of a number of employees, including Mr Fenech, at this time. To perform the contract with Mindrill, the respondent employed persons formerly employed by Mindrill, including Mr Fenech, and placed those employees at Mindrill’s worksite.

The pleadings in the application included significant detail about alleged conduct by both the respondent and Mindrill. There was also evidence from a number of witnesses for both parties about their dealings with Mindrill. The AMEPKU did not seek to make Mindrill a party to these proceedings. No witnesses from Mindrill were called by either the applicant or the respondent, but evidence was adduced both in chief and under cross-examination by the representatives of both parties, about the dealings of various witnesses with Mindrill. References were also made by the witnesses during evidence-in-chief and cross-examination to other proceedings in the Commission involving the respondent in this matter and the AMEPKU on behalf of Mr Fenech, and to proceedings involving Mindrill and the AMEPKU. Such references were also made in submissions by the representatives of both parties.

Evidence for the AMEPKU was given by:

Vincent Charles FENECH – on whose behalf the application was brought by the AMEPKU;

Darren TRASK – State Organiser of the AMEPKU

Evidence for the respondent was given by Neale MULLER – formerly employed by the respondent and now employed by IPA Pty Ltd, purchaser of business interests from the respondent.

Evidence

The evidence disclosed a sequence of relevant events which can be summarised as follows. The AMEPKU had been unsuccessfully attempting to negotiate a certified agreement with Mindrill since June 2001. Mr Fenech was employed by Mindrill Mining Services on a casual basis with effect from 7 November 2001. In November 2001 Mr Fenech and a number of other employees of Mindrill joined the AMEPKU. By a notification under s. 229 of the Act on 5 December 2001, the AMEPKU sought the assistance of the Commission in making a certified agreement with Mindrill. A number of conferences were conducted by Commissioner Brown in D380 of 2001. During conciliation proceedings, Commissioner Brown asked that a vote of Mindrill employees be taken to ascertain whether they wanted a certified agreement.

According to the uncontested evidence of Mr Fenech, on 27 February 2002, Mr Todd Haines, the owner of Mindrill, advised the workforce that they were no longer working for Mindrill, and that if they wanted to continue at Mindrill they would be required to sign a contract with the respondent. This took place just before a vote of Mindrill employees was undertaken to ascertain whether a certified agreement should be made.

Mr Trask said that on 27 February 2002 Mindrill “transferred” its casual workforce to the respondent. According to the evidence of Mr Trask this action on the part of Mindrill was taken to remove employees supportive of the making of a certified agreement. No evidence in relation to this matter was called by the respondent. Mr Muller said that he did not know Mindrill’s motives for the transfer. In cross-examination the following exchange occurred between Mr Trask, and Mr Joy the Advocate for the respondent:

“MR JOY: Mr Trask, in your affidavit you talk about the situation where the employees were moved over from Mindrill to CHR. At point 7 you say, ‘This matter was raised in a Commission shortly afterwards. Mindrill said that this was because the Union had raised a number of concerns about award breaches and they thought CHR would be better able to meet the award requirements. I believe it was because Commissioner Brown had asked for a vote of employees to be taken and that this move would remove supportive employees from Mindrill to CHR.’ So what you’re saying there is that if Mindrill says the reason was based on an award concern, that’s completely false and its’s an ulterior motive and the ulterior motive is to rig the vote on the certified agreement. Is that it? [MR TRASK:] Well you were involved Craig. You saw what happened. That’s entirely correct.

[MR JOY:] Well, that’s what you’re saying ? - - [MR TRASK:] Well that’s – ‘cause that’s what happened, yes.”.

Mr Joy then put to Mr Trask that Mindrill had been faced with a significant claim for award entitlements by its employees, a proposition with which Mr Trask agreed (Transcript p. 20 lines 40-44). Mr Trask did not agree with the proposition put by Mr Joy that the quantum of the claim was $80,000 (Transcript p 21 lines 1-10). Mr Trask also did not agree with the proposition that the transfer of Mindrill’s employees to the respondent had been a response to the claims with respect to award breaches (Transcript p. 22 lines 1 – 20).

Whatever the motive, and however it was described – “transfer” or employees being “moved” from Mindrill to the respondent – the result was that Mindrill terminated the employment of Mr Fenech and other casual employees on 27 February 2002 and Mr Fenech (and presumably other casual employees) were immediately thereafter employed by the respondent. It is also clear that pursuant to a contract with Mindrill, the respondent placed Mr Fenech (and presumably other employees terminated by Mindrill) at Mindrill’s worksite, to perform substantially the same work that they had previously performed for Mindrill. Mr Muller said that the respondent had not conducted interviews with the employees who had been employed by Mindrill and subsequently became employees of the respondent at Mindrill’s worksite as this was not the respondent’s practice in such circumstances.

Mr Fenech’s evidence in this regard was that he signed a document headed “Conditions of Employment” on 27 February 2002, and was “placed” by the respondent at Mindrill’s worksite where he had previously been employed by that company with effect from 28 February 2002. Initially, Mr Fenech performed work including painting, grinding of bits and unloading drill rods from trucks. Mr Fenech said that these duties were the same as those he had previously been employed by Mindrill to perform but that he now completed timesheets for, and was paid by, the respondent. After about six months, Mr Fenech was moved to the sub-arc welding side of Mindrill’s operations, and his responsibilities then included loading of drill rods onto a bench with rollers; spraying drill rods; checking the measurements of drill rods; and welding threads onto drill rods. Mr Fenech said that this was a new task for him and he had found it challenging and difficult at first. However, Mr Fenech had become proficient at this task and had performed it for some three months without any issue being raised about his work.

On 17 November 2002, Mr Fenech was elected as AMEPKU delegate for the respondent’s employees at Mindrill. Mr Trask said in his evidence that he had not advised the owner of Mindrill, Mr Todd Haines, of Mr Fenech’s election as delegate. Mr Trask also said that at this time he had changed focus and was attempting to negotiate a certified agreement with the respondent to cover its employees at Mindrill.

On 18 November 2002 Mr Fenech said that he was approached by Mr Haines and asked whether he had heard from the respondent yet. When Mr Fenech responded in the negative, Mr Haines said that Mr Fenech would be hearing from the respondent soon. Mr Fenech said that he did not hear anything further until 25 November 2002 when Mr Muller; Mr Laurie Minnecon and Mr Peter Carney of the respondent arrived at Mindrill’s worksite to talk to him, with such discussion taking place in the presence of Mr Haines of Mindrill. Mr Fenech said that this meeting took him by surprise and he had no opportunity to arrange for Mr Trask of the AMEPKU to be present. At the meeting Mr Fenech was provided with a letter entitled “First Written Warning”. Mr Fenech said that the only criticism that was made of his performance was that it was below an 80% productivity rating. There was no criticism of what Mr Fenech was doing or not doing, but only reference to figures contained in a spread sheet which he understood had been provided to the respondent by Mindrill.

Mr Fenech said that he did not understand the productivity rating and that it had only been introduced in October. Further, Mr Fenech maintained that he was the only employee doing the relevant task and he was not underperforming at this or any time during his employment. There was no evidence of any warning or counselling of Mr Fenech in relation to his conduct, capacity or work performance by either the respondent, or for that matter Mindrill, in the period from 28 February 2002 until 25 November 2002.

Mr Fenech said that he told those present at the meeting that they were picking on him, and refused to sign the warning letter as he did not agree with its contents or think that he deserved a warning. Mr Fenech referred the matter of the warning letter to Mr Trask, and was told by Mr Trask later in the week that he had spoken to Mr Muller and explained that the warning was because Mr Fenech was the AMEPKU delegate. Mr Trask also advised Mr Fenech that he did not have to worry about the warning because Mr Muller would not use it.

In relation to the warning issued on 25 November 2002, Mr Muller said that during the course of Mr Fenech’s placement with Mindrill, there had been expressions of dissatisfaction with Mr Fenech’s performance on the part of Mindrill. Mr Muller had no direct knowledge of this dissatisfaction. At or around the time the warning was issued to Mr Fenech, Mindrill had advised the respondent that it had a system of monitoring in place which recorded the efficiency and productivity of each employee. The recording of the information for that system was done by employees themselves as they undertook their tasks. Mr Muller said that prior to issuing the warning to Mr Fenech he had visted Mindrill and looked at printouts for each employee. These had been posted on Mr Haines’ office wall and had been available for perusal by employees. Further, Mr Muller had been shown productivity reports for Mr Fenech which indicated that at times he had exceeded the required efficiency level of 80% but at other times his productivity had been half of that level.