Note: An appeal pursuant to s.604 (C2013/5651) was lodged against this decision - refer to Full Bench decision dated 17 December 2013 [[2013] FWCFB 9605] for result of appeal.

[2013] FWC 2813

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FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s 394 - Applications for unfair dismissal remedies

Brian Henry & Others
v
FP Group Pty Ltd and Tooheys Pty Ltd
(U2011/15073; U2012/176; U2012/177; U2012/178; U2012/179; U2012/180; U2012/181; U2012/182; U2012/183; U2012/184; U2012/185; U2012/186; U2012/187; U2012/200; U2012/201; U2012/203; U2012/204; U2012/4104; U2012/4341; U2012/4631)

DEPUTY PRESIDENT SAMS

SYDNEY, 31 JULY 2013

Applications for remedies for unfair dismissal - jurisdictional objections - applications filed ‘out of time’ - identity of true employer - labour hire arrangements - joint employment - ‘control’ tests - objective evidence - contractual terms - intentions of the parties - whole relationship to be considered - unremarkable labour hire arrangement - labour hire company true employer of applicants - unnecessary to consider ‘out of time’ applications - applications against Tooheys dismissed - applications against FP remitted for further programming.

INTRODUCTION

[1] This decision will determine two complex jurisdictional objections raised by FP Group Pty Ltd (‘FP’ or the ‘first respondent’) and Tooheys Pty Ltd (‘Tooheys’ or the ‘second respondent’) in respect to a number of unfair dismissal applications, filed pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’). At various points in evidence and other documents tendered in the proceedings, FP Group Pty Ltd is alternatively referred to as FP, FP Group or FPG. For convenience, hereinafter, I shall refer to the first respondent as FP, noting that separate reference will also be made to the FP Group of Companies. The applications for a remedy for unfair dismissal were lodged by:

[2] All the applicants have filed two applications for unfair dismissal remedies - one naming Tooheys as the respondent employer and another naming FP as the respondent employer. Unsurprisingly, each respondent claims that the other was the true employer of the applicants. Essentially, this is the issue to be determined by this decision. It is apparent from the applications that, except for Mr Luke, the other nine applicants claim they were either dismissed by Tooheys on 14 October 2011 and filed their applications naming Tooheys as the respondent some three months later, or they were dismissed by FP (including Mr Luke) on 28 January 2012, and the applications naming FP were filed a few days thereafter.

[3] The applicants had worked at Tooheys’ Brewery in Lidcombe, New South Wales, in most cases, for many years (between five and twelve years). For over 20 years, Tooheys had a continuous, renewable labour hire contract with FP or its predecessor entities. Its most recent manifestation was the 2002 Services Agreement. The contract evolved over time to include the provision of electrical, production and mechanical labour for scheduled and unscheduled maintenance, repair and production work at the Tooheys site at Lidcombe. In return, FP was paid an annual service fee by Tooheys. For the year ending 30 September 2011, that fee was around $8 million.

[4] The genesis of this arrangement arose from a most extraordinary set of circumstances. It was the desire of the then Tooheys’ senior management (none of whom remain employed by Tooheys) to ‘break the grip’ of the respective Unions on site in order to end their perceived hold on maintaining outmoded and restrictive work practices, which Tooheys believed were impediments to improved productivity and efficiency. The lengths Tooheys went to, and the costs it initially expended to achieve its objective were truly breathtaking; suffice to observe that, by any measure, it was a spectacular and unprecedented success. I shall return to the conception of the arrangements later.

[5] The long and mutually beneficial arrangement began to come unstuck around mid 2011 when a contractual dispute with FP seemingly prompted Tooheys to seek tenders for the ongoing supply of all its contract labour requirements. Ultimately, the contract was won by Skilled Engineering. About the same time, there was an overall restructure announced of Tooheys’ operations resulting in 27 roles no longer being required. However, in the process of the restructure of the engineering department, the total number of FP’s contracted employees was reduced immediately. This included nine of the applicants in these proceedings (except for Mr Luke), who were advised on 14 October 2011, that their services from that day, were no longer required at the Tooheys site. While not accepting that the applicants were its employees, Tooheys made an ex gratia payment of two weeks pay to each applicant.

[6] On 24 October 2011, as a result of its failed tender, Tooheys notified FP that its services would no longer be required from 28 January 2012. All of FP’s personnel whose services with Tooheys came to an end on 28 January 2012, except for the nine applicants and Mr Ian Luke (also an applicant) were re-engaged by Skilled Engineering under its new contractual arrangements with Tooheys. Most, if not all of the applicants, continued to be paid by FP up to the termination of the labour supply contract on 28 January 2012, and some of them were transferred to other of FP’s clients during, and after the period 14 October 2011 and 28 January 2012. Nevertheless, the applicants claim that they have not been paid their accrued outstanding entitlements, including redundancy pay, when their employment with FP came to an end.

[7] As earlier mentioned, all of the applicants have filed two unfair dismissal applications against both respondents. On the face of the applications, it will be seen that if the true employer is found to be FP and the terminations of employment were on or about 28 January 2012, then the applications have all been filed within the then statutory time period of 14 days as required by s394(2) of the Act. Conversely, if Tooheys is found to be the true employer and their terminations of employment (save for Mr Luke’s) were 14 October 2011, then their applications were filed well outside the statutory time period by several months. In those circumstances, considerations will arise as to whether ‘exceptional circumstances’ exist, under s 394(3) of the Act, for the Commission’s discretion to be exercised to allow for the late filing of the applications. Tooheys strongly resists the extensions of time been granted, notwithstanding its primary position, that it was never the employer of the applicants. Counsel for Tooheys suggested that I should determine the ‘out of time’ issue first, because if no jurisdiction exists under s 394(2) of the Act, then it would be unnecessary for the Commission to determine the question of the identity of the true employer. While this is an attractive way forward, it would still leave Mr Luke’s application against Tooheys to have been filed within time, if it is accepted that his employment came to an end when the services contract ended. Therefore, the identity of the true employer would still need to be determined in his case.

[8] As a matter of practical reality then, I consider the question of the true employer should be decided first. As I have just observed, if FP is found to be the true employer, no ‘out of time’ issue arises. However, if Tooheys is found to be the true employer ‘out of time’ considerations arise, except for Mr Luke’s application.

[9] To complete the jurisdictional background to this decision, presumably both respondents rely on whether the applicants were persons protected from unfair dismissal - a jurisdictional prerequisite under s 396(b) of the Act. It is expressed as follows:

[10] As the argument goes, a person cannot be protected from unfair dismissal unless the person has been dismissed (s 385(a) of the Act). That section is expressed as follows:

[11] A person can only be dismissed according to the definition of dismissal in s 386(1) of the Act which is as follows:

386 Meaning of dismissed

[12] Thus, it is obvious that the meaning of ‘dismissed’ is predicated on establishing the identity of the employer who initiated the termination of the employment.

[13] There have been several attempts at conciliating these matters. Unfortunately, these efforts have proved to be unsuccessful. In addition, there were earlier related proceedings, filed under s120(2) of the Act, by FP, which sought to have Tooheys named as the employer of the applicants in order to establish that redundancy benefits payable to the applicants would be paid by Tooheys. In a decision of 20 March 2012 - FP Group v Tooheys Ltd [2012 FWA 2133] - I dismissed the application as being beyond the jurisdiction of Fair Work Australia (as it then was) and found that s120 of the Act was an inappropriate vehicle for establishing the true identity of the employer. I note that the present applications were filed almost 18 months ago. It is to be regretted that the hearing of this jurisdictional issue has taken some 15 days, involving numerous witnesses and voluminous evidentiary material. Further delays were attributed to finding common agreed dates for the senior legal teams of the three parties in the proceedings. Mr J Phillips SC appeared for the applicants. Mr F Parry SC with Mr Shariff of Counsel appeared for Tooheys and Mr M Seck of Counsel appeared for FP.

THE EVIDENCE

Nature of the Tooheys business

[14] The Tooheys Brewery, owned by Lion, produces approximately 270 million litres of beer each year. The Lidcombe site has approximately 160 permanent staff and a further 50 contractors and casual staff, depending on seasonality and peak demands. The site is also occupied by approximately 100 BevChain employees who are responsible for distribution and warehousing on the Tooheys site.

[15] The brewery produces some of Australia’s major beer brands, including Tooheys New, Hahn Super Dry, XXX Gold and Tooheys Extra Dry to name a few, as well as premium international brands under license, including Heineken, Becks and Stella Artois. The international brands are distributed nationally, while local brands supply New South Wales and Victoria.

[16] The site’s operating budget is approximately $200 million, with capital expenditure projects worth over $60 million currently underway. The Tooheys Brewery is the largest site within the group and generates over 40% of the sales for the Australian beer business. There are two distinct departments on the site:

[17] Both departments are supported by the Engineering and Utilities Group, Technical Quality and Manufacturing Excellence.

[18] At its peak, FP supplied 120 workers to the Lidcombe site, consisting of Core Trades and Non-Core Trades. Core Trades are the maintenance trades that cater for continuous production in both the Brewing and Packaging departments, 8 hours, 5 day rotating shifts, or 12 hours 7 day rotating roster, dependent upon Tooheys’ requirements. An electrician and fitter are supplied to each Production Team. Non Core Trades are the maintenance trades that cater for the Planned and Preventative Maintenance in both the Brewing and Packaging departments. Non-Core Trades also cover the Core trades in terms of sick or annual leave and are groomed for potential Core positions.

[19] The following persons provided written and/or oral evidence in the proceedings:

a) The applicants

b) For Tooheys

c) For FP

For the applicants

[20] In order to minimise repetition, I shall structure the applicants’ written and oral evidence under relevant headings.

Recruitment and selection

[21] Mr Sands annexed a copy of his resumé to his statement. He said that he had started working as a Production Technician at Pepsi in July 1991. Pepsi was owned by Lion-Nathan at that time. He was subsequently promoted to Production Team Leader. It was around this time that he had his first contact with the FP Group of Companies as he managed and supervised workers from FP which were supplied to Pepsi. This was how he had first met Mr Moston. The Pepsi franchise was subsequently bought out by Cadbury/Schweppes in 1999. He was appointed as a Plant Analyst, meaning that he managed the contract between FP and Cadbury/Schweppes. After he was made redundant in 2003, he had been contacted by Mr Moston about three months later in relation to possible work at Tooheys through FP. He was subsequently interviewed in November 2003 by Mr Luke Sawyer and Mr Peter David (Brewing Manager, Tooheys). Mr Porretta was also present. He was approved to begin work as Site Maintenance Manager. Mr Sands said he may have received a letter of offer, but he no longer had it in his records.

[22] In cross examination by Tooheys, Mr Sands agreed he knew that Mr Moston worked for a labour hire company. He knew what the type of business a labour hire company was when he was contacted by Mr Moston in 2003. He had been given a brief explanation by Mr Moston of what the role of Site Maintenance Manager involved. He was told about pay, hours of work, but not the bonus structure. He had said he was interested and was told that an interview would be organised with Mr Porretta, whom he had dealt with in his previous job at Pepsi. He agreed that he understood that it was FP that had recommended him and that he would be working at the Tooheys site, subject to Tooheys’ approval. He understood that his employment would be with FP and was under ‘no illusion’ that Tooheys would not be employing him. There had been some discussion between Mr Porretta, Mr Sawyer and Mr David about his rate of pay and there was also discussion of the bonus structure. He was aware that there was a labour hire agreement between FP and Tooheys, saying that he ‘assumed it was the same agreement as proposed at Pepsi.’

[23] Mr Sands agreed that he had told Mr Porretta of his intention to accept the position after his interview and that he had signed a letter headed, GTG Investments Pty Ltd, confirming his acceptance of the position of Maintenance Manager, effective 10 November 2003. He also agreed that he had signed a GTG Investments branded document marked ‘Employment Agreement’ on 17 November 2003 at the FP office in Glendenning. He had read the document and raised a concern as to whether a particular clause would prevent him running his martial arts business. When Mr Gorman and Mr Porretta told him that this was not an issue, he signed the Agreement.

[24] Mr Sands said that in his role as FP Site Maintenance Supervisor, he had duties related to recruitment, including advertising, interviewing and checking the references of new candidates for employment. He explained that Tooheys had ‘strong guidelines’ in relation to recruitment and described the process of recruitment as a ‘collaborative process’ between himself and Tooheys. These guidelines required external advertising, reference checking and Saville and Holdsworth ability testing (testing on numerical computation, mechanical comprehension and technical understanding). Ms Natalie Radburn (Tooheys HR) had also directed that a fourth test be carried out in fault diagnosis.

[25] The process would commence during the weekly meetings with Tooheys, if gaps were identified which Tooheys required to be filled. Mr Sands would identify whether the vacant position could be filled with existing Trades workers after discussion with the relevant Tooheys Engineer. He would then draft an advertisement and sent it to the FP office, which would cause it to be published. Job applications were directed to him. He made a short list after contacting each of the applicants by telephone and asking them some basic questions. He referred to this phone call as a ‘first interview’. The relevant Tooheys Engineer would review the shortlist and ‘flag’ those who should proceed to aptitude testing. This would be conducted at the FP office. An interview (the ‘second interview’) would be booked with the candidate, Mr Sands and the Tooheys Engineer. Mr Sands said that he asked most of the questions in this interview. His questions were based on a template which had been prepared by him and approved by Tooheys Engineers. To be successful, candidates had to have been chosen by Tooheys Engineers and the Engineer would inform Mr Sands of which candidate was successful at the end of the interview. Once an applicant had been deemed successful, Mr Sands would organise FP induction training and Tooheys’ induction training for the new worker. He would also provide two red Tooheys’ padlocks for use in Tooheys Lock-out/Tag-out procedures.

[26] Mr Sands emphasised that where someone was appointed from a Non Core position to a Core position, this was subject to the relevant Engineers’ approval. He noted that there were occasions where he had been approached by Tooheys’ Engineers about such changes. In cross examination, Mr Sands agreed that he was aware of, and understood that the appendices to the 2002 Services Agreement set out the competency and skills requirements of Trades workers. It required that these be backed up by a resumé and reference documentation to the satisfaction of Tooheys’ Team Leaders and Engineers.

[27] Mr Sands also agreed that FP would place general advertisements in order to build up a pool of workers that may be needed, especially coming into peak periods. They would be put through the testing regimes, but might not be placed on the Tooheys site for a period. Some workers might be used by Omni Engineering and he would occasionally use people from Omni to cover leave or training at Tooheys. Mr Sands was shown the Employment Agreement for Mr Wilczewski. He agreed that this was indicative of the document that would be given to Trades workers who were to be given permanent positions. In cross examination, Mr Sands conceded that when looking for people to work at the Tooheys site, the advertising would usually refer to work at a brewery, without naming Tooheys directly.

[28] Also annexed to Mr Sands’ statement was email correspondence between himself and Mr Hayhow (Packaging Maintenance Leader, Tooheys) which related to the replacement of a FP Core Trades Worker. Mr Sands had said in response to a query from Mr Hayhow:

[29] When Mr Sands identified a temporary replacement to fill the role, Mr Hayhow responded with a concern that FP currently only had one candidate. He asked if there were other persons within FP who could be considered. Mr Sands replied with an outline of the recruitment process as follows:

[30] Mr Sands explained that they had other candidates that would be suitable for the temporary position and concluded by noting that:

[31] Mr Sands drew a distinction, between Core Trades and Non Core Trades. While Core Trades workers were directly attached to production teams in the Packaging and Brewing departments and rotated with their teams shift roster, Non Core Trades workers were generally day shift Trades that worked on planned maintenance or corrective maintenance and who were retained on a permanent and casual basis. He noted that previously there had been two Non Core Trades working in Racking (an electrician and a fitter). However, they had been removed by Mr Speck in 2004. He also said that there were four Maintenance Coordinators who were classified as Non Core Trades. Non Core Trades were also to provide coverage for leave, absences and training.

[32] In cross examination by FP, Mr Sands agreed with the proposition that clause 5.2(a) of the 2002 Services Agreement, which set out that FP was to ‘promptly provide Personnel to meet Tooheys’ requirements from time to time’ related to recruitment. However, this recruitment process ultimately required Tooheys’ approval.

[33] In his statement, Mr Coombes said that he had contacted FP in or around August 1999 after being informed by a friend of casual work being available with Tooheys. He was asked to attend FP’s office to sit a fitter/machinist test. He was later contacted by FP and told to begin working at the Lidcombe site. He was initially engaged as a casual employee, but began working permanently as a Core Fitter on or about January 2000. Mr Coombes said that on his first arrival at the Lidcombe site, he met Mr Doug Fuller, the FP Maintenance Supervisor at that time. Mr Fuller arranged for him to undertake the Tooheys’ induction. Mr Coombes said that when he began working as a Core Fitter, he understood that his name had been put forward by Mr Craig Higgins, a FP Maintenance Coordinator, although he thought that approval would have come from Tooheys Management and Engineers.

[34] Mr Coombes was shown a document in cross examination by Tooheys, that was said to be a record of his initial interview. He agreed it was probable that he was interviewed by Doug Fuller on behalf of FP, on 9 July 1999 and that it was Mr Fuller who had told him when he was going to start working for Tooheys and what he was to be paid. Mr Coombes could not remember having seen a FP branded letter confirming his permanent appointment to the Fitter’s position on 25 October 1999. He conceded that this was when he was made permanent and had occurred after discussions with Mr Fuller and Mr Higgins. Mr Coombes agreed that his signature was on a document marked ‘Employment Agreement - Particulars of Terms of Employment’, which began: ‘This agreement confirms the employment by F.P. Group Pty Ltd of Mark Coombes. Your terms and conditions of employment are as follows.’ He accepted that he had not raised any concerns with Mr Porretta or Mr Gorman when he signed this document. However, in cross examination by FP, Mr Coombes said he had only flicked through this document at the time.

[35] In further cross-examination by FP, Mr Coombes agreed that in 1999 he had ticked ‘Fitter’, rather than ‘Labour Hire’ on the ‘Employee Details Form’ as he understood he was going to work at Tooheys as a Fitter. He said that at the time he was interviewed, he was looking for a long term position with Tooheys with a view to moving into a supervisor’s job within five years. This was reflected in the record of interview. He also said that he had received feedback from Craig Higgins and Team Leaders employed by Tooheys, prior to being made a permanent Fitter, that they wanted him to go ‘on the line’. He understood that they had approved his appointment. He believed that he had been engaged by Tooheys at this stage. Mr Coombes agreed that he had filled out a FP branded document marked ‘Private and Confidential - Employee Details’ on 2 August 1999. He also agreed that a document provided by FP marked ‘Application form for casual employees only’ was filled out by him.

[36] It was Mr Hancock’s evidence that he had spoken to Mr Sands by telephone after finding a job advertised in a newspaper. He had subsequently sent his resume to him. He was made an offer by Mr Sands and Mr Paul Eason for a ‘non-core position working at Tooheys on the AB 4 maintenance workshop.’ In cross examination, he said he understood at this time that he would be employed by FP. No Tooheys officer or agent was involved at this stage.

[37] Mr Hulbert said that he had responded to a newspaper advertisement in October 2001 for a casual day shift maintenance position with FP at a brewery in Western Sydney. He spoke to FP Site Supervisor, Mr Rodney Paulson and subsequently met him at the Lidcombe brewery. They had a brief meeting, at the end of which Mr Paulson invited him to attend the site the following Monday. He began working as a casual maintenance fitter on 22 October 2001. In December 2001, he was approached by Mr Paulson, who said that Mr Luke Sawyer, Tooheys Factory Manager, wanted him to apply for a Core Tradesperson position. He did so and attended an interview with Mr Sawyer. He was offered the position of Core Fitter during this interview.

[38] Mr Hulbert attached a FP-branded letter confirming his employment with FP as a Core Fitter. It was signed by Mr Stig Falster, FP’s Site Supervisor at the time. At some time in early 2004, he was approached by Mr Falster, who said words to the effect of ‘Tooheys want you to apply for a core role down in racking.’ He was made aware by Mr Falster that the job was his, and he subsequently met with Mr Sean Symons, Tooheys Team Leader/Engineer, Racking. He commenced as a Racking Core Fitter after the meeting and stayed in this position up until October 2011. In cross examination by Tooheys, Mr Hulbert agreed that he had been told during the discussion with Mr Paulson that he would be employed by FP. He had known that he would be employed by FP at the time that he began working as a casual maintenance fitter. He agreed that he had signed a FP-branded document headed ‘NEW EMPLOYEE DETAILS (Private & Confidential).’ He accepted that it was possible that when he had had discussions with Mr Falster in relation to the Core Fitter role, he ‘must have’ discussed pay rates, hours and performance incentives with him. He agreed that he had signed an employment agreement confirming the employment between himself and FP. There was nothing surprising in the employment agreement referring to Mr Falster as his manager.

[39] It was Mr Llagas’ evidence that he answered a newspaper advertisement for a Fitter/Machinist to work in the Auburn area of Sydney. He spoke to Mr Falster, who arranged for him to meet Mr Rodney Paulson. He was subsequently interviewed by Mr Falster and Mr Paulson, although he understood that a Tooheys manager was also expected to attend the interview, but had been unable to do so. At the interview’s conclusion, he was told that his resumé would be forwarded to Tooheys Management for their approval. A few hours afterwards, he was informed that his application had been successful and that he was to start work on the following Monday. He could not recall ever having received a contract of employment or letter of offer, although he had signed some documents which related to Tooheys’ policies.

[40] In cross examination by Tooheys, Mr Llagas ackonweledged that he had signed a document which ‘confirms the employment by FP Group of Dennis Llagas’. He agreed that this was what he thought was the position at the time. He also agreed that it required him to report to both the client supervisor and Mr Sands. In cross examination by FP, Mr Llagas said that he had responded to an advertisement which referred to work at the specific brewery site. He had had previous experience of working for labour hire companies, where he would deployed to different sites. However, this was not his experience while working at the Tooheys site.

[41] Mr Henry had been a self-employed electrician prior to commencing work at Tooheys in 2006. However, he had previously worked for Tooheys from 1978. He had been told in November 1991 that he could be made redundant and then continue working at Tooheys for Feyman. However, if he did not take up this offer, he would be made redundant and would cease working at Tooheys. He recalled other electrical tradespersons being offered this arrangement as well. He said that he ‘left work on the Friday as a Tooheys employee and returned to work on the Monday on the payroll of Feyman and supposedly as a Feyman employee.’ However, he continued to wear a Tooheys’ uniform and perform the same duties, although he was now paid by Feyman and was required to apply to it for any leave. He noted that he was paid in the same manner on the same day; only the name on his payslip changed. Mr Henry resigned in 1994 to start his own business.

[42] Mr Henry recommenced working at Tooheys again after he saw an advertisement in a newspaper in or around May 2006 for an electrician on a high speed packaging line. After taking a competency test with FP, he met with Mr Sands and Mr Owen Maher (Tooheys’ Brewing Engineer) at the Tooheys site to be interviewed. He was asked where he saw himself in five years and he replied that he expected to be still working at Tooheys. He was subsequently told that he had been successful and started working casually at Tooheys in the packaging section on a Monday in June 2006. He worked as a Maintenance Electrician on the bottling line from August 2006. At some time in early 2008, he began working in Brewing as a Maintenance Electrician on the basis of rotating shifts. At some time in the second half of 2008, Mr Henry said that he was made a ‘Tooheys core electrician/tradesperson’, which he understood to mean that he had a permanent role with associated benefits of annual and personal leave. This had been after asking Mr Sands early in 2008 when this would occur, who replied that it was up to Mr Barrowman (Tooheys Team Leader). He understood that all employees, including Tooheys employees were initially employed on a casual basis, in order for them to be assessed. Permanent workers would be offered Core positions through FP if their assessment was positive.

[43] Mr Henry conceded in cross examination by Tooheys, that he had not approached Tooheys’ management or staff in relation to his appointment to a permanent role. Rather, he had approached Mr Sands in his capacity as Site Manager for FP. He agreed that his signed contract of employment was a FP document which referred to him being employed by FP. He conceded that he would not have signed it, if he had thought that the arrangement presented within it, was a ‘sham’. He agreed that this contract referred to his direction by the client supervisor and Mr Sands.

[44] In cross-examination by FP, Mr Henry agreed that prior to 1991, he had been a member of the ETU and that the Tooheys site operated on a ‘no ticket, no work’ basis. Mr Gorman was the delegate at that time. He agreed that, at the time, a number of practices existed at the site, including minimum personnel levels, a mandatory overtime roster, payment of taxi fares where employees were called back to work for repairs and bans on staff members carrying out electrical tasks. He accepted that the ETU exercised a high degree of control during this period and that productivity suffered as a result of these policies. Mr Henry understood that when he was retrenched and reemployed by Feyman, he was to provide the same services to Tooheys, but without the restrictive work practices. The point of this arrangement was to circumvent these practices. He could not recall the Australian Tax Office (ATO) ruling that there was no genuine redundancy in this arrangement. On being shown his signed contract of employment with Proden of November 1991, he agreed that he had received a redundancy payment in the amount of $57,723.19. This had been subject to ‘beneficial’ tax arrangements and to ensure that he was indemnified in the event of a tax liability being incurred should this arrangement not be found to be genuine by the ATO.

[45] In further evidence, Mr Henry said that he was given a contract of employment by FP in 2006. However, he no longer had a copy. Nevertheless, he remembered that the contract discussed his hours of work, pay rate and standards of behaviour. He agreed in cross examination by Tooheys, that he himself had hired contractors and subscontractors in the context of running his own business. He had understood that the advertisement he saw in 2006 was for a job with FP to supply labour to Tooheys. However, he was not aware that FP was related to Feyman until later.

[46] Mr Luke said that he had commenced working for FP in 1996 and that he had worked for PepsiCo and Colgate at FP’s direction. In or around August 2001, he was asked if he was available to work at Tooheys. After induction, he began working at Tooheys as a casual labourer in or around 1 September 2001. He also said that when he was asked if he would be available to work at Tooheys, there was no discussion of hours or pay. He was just happy to get work and thought it was a job at Tooheys for FP. He was moved around the factory every three months or so. In cross examination by Tooheys, Mr Luke agreed that he had received from FP a document marked ‘Statement of Earnings’ which referred to his casual employment with FP in August 1998. It was to be used for the purpose of getting a loan. In cross examination by FP, Mr Luke said that the Statement of Earnings was for the purpose of getting Centrelink benefits. Accordingly, he believed it was the amount of money shown on the Statement, rather than the identity of the employer, which was the important aspect of the document.

[47] Mr Hancock agreed that a FP branded document marked ‘New Employee Details (Private & Confidential)’ was filled out and signed by him immediately before he began working at Tooheys.

[48] It was Mr Robinson’s evidence that he had been referred to Ms Susan Budwee in her capacity as Labour Hire Organiser for FP by a friend who already worked at Tooheys for FP (Mr Brad Timmins). Mr Timmins had asked Mr Robinson to accompany him to the Tooheys site. On arrival, Mr Robinson reported to a Team Leader and was told to work in the repackaging hall. He gave his bank details to Ms Budwee a couple of days later. He never received a contract of employment, letter of offer or any document relating to his terms and conditions of employment from Tooheys or FP. At this time, he worked as a casual Production Worker. He expected to work at Tooheys on this basis for about three months or so. After a few days, he had asked other workers about getting work as a tradesperson. He subsequently spoke to Mr Noonan (FP Maintenance Coordinator at that time), who organised to have him start work as a Maintenance Fitter in the bottling hall. About six months after beginning work at Tooheys, Mr Sands asked him if he would be interested in a permanent role. As Mr Robinson perceived that taking up a permanent role would mean a significant cut in pay, he declined. However, after this time, he said that he asked Mr Sands if he could be made permanent approximately once every six months. He was told that this required Tooheys’ approval and this was not forthcoming.

[49] In cross examination by Tooheys, Mr Robinson said he had previously worked with Mr Noonan at an organisation called Alcan. He also said that when he provided his banking details to Ms Budwee, he presumed she was working for the labour hire company. When he had first worked the couple of days on production at Tooheys, he was not sure what company he was working for. He thought it was FP or Tooheys. He did not know that Proden existed. However, he had understood that FP was providing labour hire services to Tooheys. Mr Robinson said that at the time Mr Sands had offered him a permanent role, he had known that Mr Sands worked for FP. However, he was not clear as to whether the permanent role was with Tooheys or FP.

[50] Mr Blackley said that he had been briefly unemployed after working in Queensland, when his son, Andrew, suggested he could work ‘a few days’ at Tooheys. Andrew was a FP Line Cover Core Electrician. He contacted Mr Falster and an interview was arranged at the Tooheys site near the end of October 2002. Mr Blackley was told at the end of the interview to return to the site and speak to Paul Eason, FP Maintenance Coordinator. He understood that he had been successful in obtaining casual work. He did not remember filling out any paperwork at this time. Heowever, someone from FP must have asked for his banking details. In or around June 2003, Mr Falster had told him that he would have to become a permanent employee, as he was under pressure to make everybody permanent. In cross examination by Tooheys, Mr Blackley said that he knew that the job his son had told him of, was with FP to supply labour to Tooheys. He agreed he had signed a FP branded document marked ‘New Employee Details’.

[51] Mr Wilczewski had previously worked for Feyman at Tooheys between 1993 and 1995 as a casual electrician in the Packaging Department. Some time in 2004, he had contacted FP to see if they had any work available. He worked in a number of roles at FP’s direction before FP asked him to meet with Mr Sands as well as the Packaging Manager/Engineer (whose name he could not remember). Mr Sands subsequently contacted him to say that he had the job at Tooheys. He thought that he had received a letter from FP confirming his appointment at Tooheys, but did not have a copy. He initially worked as a casual Shift Electrician in packaging until his probationary period expired. Mr Sands offered him the opportunity to take up a job as a Core Shift Electrician. Mr Wilczewski agreed, on condition that he be made permanent. Mr Sands said he would need to speak to the Brewery Engineer. He later met with Mr Sands, Mr Fred Sadie (Brewery Engineer) and Mr Bob Kirkie (Maintenance Engineer) and was told by Mr Sands that he had the permanent job in the brewery.

[52] In cross examination by Tooheys, Mr Wilczewski reaffirmed that he had worked at the Tooheys site between 1993 and 1995 for Feyman. In 2004, he had contacted an Engineer from Omni to inquire about work. Before that, he was still completing a contract with the Merchant Navy. Mr Wilczewski understood that Mr Sands was a Site Manager for FP when he attended the interview with him. He also understood, on signing the FP branded ‘Employee Details’ form, that he was applying for work with FP. He had signed a contract of employment on 5 May 2005 which was expressed to confirm his employment with FP. He understood that FP was his employer at this time. In cross examination by FP, Mr Wilczewski agreed that the document he received marked ‘Employee Details’ was quite different to the Articles of Agreement that he received while working in the Merchant Navy. He noted that working in this sector in Poland, he looked for work through a Polish labour hire company, but then signed a contract with the owner of the ship. In that instance, the labour hire company would receive a one off payment for supplying the employee.

Issuing of directions and reporting lines

[53] Mr Sands worked from his own office in Tooheys Bottle Hall 2. Stationery and other resources were supplied by Tooheys. On commencement, he reported to Mr Paul Horn, Packaging Engineer and Mr Fred Sadie, Brewing Engineer. They would engage in a weekly ‘maintenance meeting’, during which they discussed site issues and planning for the week. The minutes of these meetings were stored on Tooheys’ servers. In cross examination by Tooheys, Mr Sands agreed that the 2002 Services Agreement set out at cl 12.1 that FP Site Supervisors were to liaise with Tooheys personnel in relation to day to day operations and that he acted in this capacity.

[54] Mr Sands described his duties as ‘mainly a Human Resources role’ and said that the elements of his role were threefold. First, he was responsible for the supply of trades at the Tooheys site in discrete areas, being production coverage, equipment maintenance and mechanical improvement. He stressed that FP workers were approved by Tooheys. Second, he delivered feedback from Tooheys’ Engineers and Team Leaders to FP workers. Third, he was responsible for the ‘upskilling’ of the FP workers in accordance with the wishes of Tooheys’ Management.

[55] Mr Sands emphasised that he did not issue instructions as to when or how work was to be performed. Non Core Trades workers received their instructions from Maintenance Coordinators, who received their instructions from the relevant Tooheys Engineer. Supervision was undertaken by the Maintenance Coordinator or the Team Leader. He added that he was not trades qualified. He denied an assertion that he was only at work ‘3-4 days per week.’ Rather, he was on site five days a week and, aside from when he was on annual leave, contactable 24 hours a day, 7 days a week, 365 days a year. He reported to Tooheys Engineers on a day to day basis and to Mr Smith in relation to issues relevant to FP.

[56] In cross examination by Tooheys, Mr Sands said that he was in regular contact with Mr Smith and he often copied him in on emails. He agreed that he kept him appraised of everything he did. This was appropriate as Mr Smith was the General Manager. They had weekly meetings when Mr Smith came out to the Tooheys site. Mr Sands agreed in cross examination by Tooheys that the 2002 Services Agreement also set out that the role of Maintenance Coordinators was to ‘supervise, instruct and work with the preventative maintenance people’, but that they were to be directed day to day by the Tooheys Engineer. He agreed that the description of the position of Maintenance Supervisor under the 2002 Services Agreement was largely accurate in describing his role, with the caveat that he did not have an engineering background. It read as follows:

[57] Mr Sands said that he regarded himself as part of Management of FP, although he reported to Mr Smith. He agreed that it was likely that the other applicants would have perceived him in that way. He said that if there were any issues with the 2002 Services Agreement, he would escalate the matter to Mr Smith for him to deal with.

[58] Mr Sands said that the Non Core Maintenance Coordinators reported to Tooheys Department/Line Engineers. He would conduct a weekly meeting with all of the Maintenance Coordinators. The Coordinators would also have ‘weekly and daily’ meetings with the Area Engineer so as to organise preventative and corrective maintenance and project works. They would liaise with the relevant Engineers in relation to area budgets, resourcing and workshop management. They would also sign off on various work permits with Tooheys and other labour hire groups (related to FP and otherwise) and other external contractors. They would also contact equipment manufacturers and suppliers for parts, materials and sometimes, labour. Mr Sands said that Maintenance Coordinators ‘had authority from Tooheys’ to create work and purchasing orders. He noted that on weekends, the Maintenance Coordinator would be the sole Supervisor on site and would be managing up to thirty Trades workers.

[59] Mr Sands stressed that he required authorisation from Tooheys for ‘everything’ and gave examples of pay increases, skill allowance payments, additional overtime and the hiring and termination of FP tradespersons.

[60] In cross examination by FP, Mr Sands agreed that he saw his role as Site Supervisor as ensuring that the personnel worked in accordance with Tooheys’ directions, pursuant to clauses 4.1(b) and 5.1 of the 2002 Services Agreement. Specific technical direction would come from the Tooheys’ Engineers. He agreed that he liaised with Tooheys’ Management in order to comply with clause 12 of the 2002 Services Agreement, which set out reporting requirements. He also agreed that the requirement for Tooheys to notify FP of its personnel requirements under cl 6.1(a) of the 2002 Services Agreement was usually complied with by Tooheys notifying its requirements to him. However, he also noted that Tooheys’ Management would sometimes liaise directly with FP workers without his involvement, especially in relation to overtime or weekend work. If the job was to be done in a particular way, it would be communicated directly to the worker. If a worker was sent off site early, he would not always be notified.

[61] Mr Coombes described his job as involving the overseeing of a number of machines on the AB2 line. He was ‘on call’ with a hand held radio, if any of these machines broke down. He was also told to ‘walk the line’ to observe that the machines were functioning correctly and to check if any of the operators required assistance. Mr Coombes denied that he was directed in his job by FP Maintenance Coordinators. He was either directed by his Team Leader, Line Manager or Maintenance Manager, all of whom were Tooheys’ employees.

[62] Mr Henry listed a number of Tooheys Team Leaders and Engineers to whom he reported at work. He was directed day to day by his Team Leader, Brewery Technicians or Engineers. Mr Barrowman would also bring maintenance issues to his attention. If he had difficulties, he would ask the Brewery Electrical Engineer what he should do or how he should do it. He did not feel that he could decline to do jobs that had been issued or allocated to him. He said that 75-80% of his work was directed by Tooheys employees.

[63] Mr Henry referred to an incident in 2009 when a number of Engine Room Drivers were retrenched. Tooheys required that the fitters and electricians in Brewing perform checks in the Engine Room. Mr Henry declined to do these checks, as he was not getting extra pay for the extra work. He was told by Mr Barrowman that if he did not complete those checks, he would not have a position at Tooheys. Eventually, Tooheys agreed to pay an extra allowance to perform these duties.

[64] Mr Henry denied that Mr Speck directed him in his work - he noted that Mr Speck was not qualified as an electrician and could not appropriately direct him in his work. Mr Speck may have directed him to do other things, such as cleaning walls in relation to MEX. In cross examination by FP, Mr Henry agreed that all directions on a day to day basis were given to him by his Team Leader or Mr Barrowman, rather than Mr Sands.

[65] In cross examination by Tooheys, Mr Henry said that if he was required to work on unscheduled repair, he would be directed to do so by a Team Leader or Engineer. He could not recall being directed to repair a breakdown by a FP Maintenance Coordinator. He acknowledged that none of the Team Leaders or Line Managers were electricians. Once he was appointed on a permanent basis, he was allocated to a particular team as a Core Electrician. These teams would consist of approximately ten members - a Team Leader, a Line Manager, Operators, a Fitter and a Core Electrician. He continued to take instructions in relation to preventative maintenance from Maintenance Coordinators via MLS. In the event that there was a breakdown, Mr Henry stressed that he would be requested, rather than directed to attend to particular tasks. In cross examination by FP, Mr Henry agreed that the Maintenance Coordinators who directed him in his Non-Core role did not have an electrical background and nor did the Tooheys Line Engineer. Accordingly, he relied on Tooheys Electrical Engineers as to direction. Mr Barrowman would direct him if something required specific attention and whether he would work overtime.

[66] Mr Hancock commented that on starting his role as a Non-Core Maintenance Fitter, he reported to three FP Maintenance Coordinators - Paul Eason, Gerard Noonan and David Donaldson. However, he was also occasionally directed by Tooheys Line Engineers and Team Leaders. If there was a safety issue, sometimes the Production Manager would take him off his usual work. Most of his work dealt with preventative maintenance and was allocated by way of work order. He never felt that he was in a position to refuse a direction by Tooheys.

[67] Mr Hancock had acted in the role of Maintenance Coordinator on about six occasions, during which time he was required to work directly with Tooheys Line Engineers, Engineering Managers, Can Line Engineers, Electrical Engineers and Production Managers. He met with Management to organise the weekly Maintenance Schedule at the direction of the above mentioned managers. When he encountered difficulties in doing so, he spoke to Mr Sands, who told him to liaise with the Tooheys Electrical Engineer. He also coordinated maintenance with external labour hire companies on behalf of Tooheys and referred to himself in these situations as ‘Bruce Hancock from Tooheys’. Mr Llagas had also acted in the role of Maintenance Coordinator and was responsible for maintenance. He organised contractors and parts for work under the supervision of Line Engineers. In cross-examination by Tooheys, Mr Hancock agreed he would cover for Core employees when they took leave. He agreed that none of the Tooheys Team Leaders had the same qualifications that he had in relation to mechanical fitting. In cross examination by FP, Mr Hancock said that he was often required to take instructions from a Tooheys Engineer on specialist machinery on which he was required to perform maintenance. He would often convey his instructions to other Non-Core tradespersons.

[68] Mr Coombes agreed in cross examination by Tooheys, that his ‘Employment Agreement’ with FP set out that he was to report to Jason Keetley, who was FP’s Maintenance Supervisor at the time. In cross examination by FP, Mr Coombes said he only saw Mr Keetley ‘on the odd occasion’. He complied with directions given by Tooheys Engineers and Managers. Mr Coombes said that his job also involved undertaking preventative maintenance on equipment while it was off line. This work would be allocated by Tooheys Line Engineers by way of a job sheet which he was required to complete, in a similar fashion to Tooheys employees. He did not feel that he was in a position to refuse work that was allocated to him in this way. He did not receive any direction from FP in relation to how he performed his job.

[69] Mr Luke said in his written statement that he received all of his instructions and directions from Tooheys Team Leaders, who would also monitor how he performed his work. He did not understand that he was in a position to ‘knock back’ their requests. As he was a casual, he thought that if he did this, he would not receive further shifts. FP never issued directions to him as to how he performed his work. If he wanted to swap a shift, he would approach Tooheys or FP colleagues and then confirm with his Team Leader. In cross examination by Tooheys, Mr Luke agreed that in the casual jobs he had had with PepsiCo and Colgate for FP, he was told to go to the site and do as he was told.

[70] Mr Robinson said that after starting work as a Maintenance Fitter, he spent about 60% of the time working as a Maintenance Fitter in the bottling hall, where he would be directed by Mr Noonan, his Team Leader, Engineers and Line Engineers. In the remaining 40%, he was ‘all over the place’ as a maintenance or breakdown fitter and would be directed by a Team Leader or Team Engineer. He estimated that 99% of the directions issued to him were from Tooheys employees. He did not believe he could decline to perform a job that had been allocated to him. Tooheys would change his shifts if there was additional work that needed to be undertaken. Mr Sands was his usual point of contact in this regard. In cross examination by Tooheys, Mr Robinson said that when he performed preventative maintenance work in his Non-Core trade role, that work was set out from Tooheys’ computer system by Mr Gerard Noonan, John Hayhow or Mark Jelley. He agreed that Mr Noonan was a FP Maintenance Coordinator and approximately 50% of his instructions came from him. He could not say how Mr Noonan received or developed rostering information. He said that his job reports were handed to him in hard copy or by way of a plastic sleeve marked with his name. Once the job had been completed, the outcomes would be updated on MLS. When breakdowns occurred, he would usually be approached by a Line Engineer, a Head Engineer or Mr Noonan. When he was directed to do this, there would not be someone ‘standing over his shoulder’ watching what he was doing because he was considered to be a proficient fitter. Mr Robinson agreed in cross examination by FP, that because some of the machinery and equipment was unfamiliar to him, he would seek advice and direction from Tooheys Engineers or co-workers, as well as FP employees.

[71] In cross examination by Tooheys, Mr Llagas agreed that when he had worked as a Non-Core Fitter, it had primarily been on preventative maintenance and line breakdowns. When he worked on maintenance, he worked under the supervision of FP Maintenance Coordinators, such as Mr Noonan or Mr Rodney Paulson. If he worked on a breakdown, he would be approached by somebody, who could have been a FP employee or a Tooheys employee. When he became a Core Fitter, he worked as part of a team of which he was the only fitter. There was nobody ‘standing over his shoulder’.

[72] Mr Llagas listed a number of Tooheys Team Leaders and Engineers under whom he was supervised. They and the FP Maintenance Coordinators directed him and allocated jobs to him. He recalled specifically that he was asked once or twice a month to perform work in relation to production issues, usually on the labellers. If there were problems, his first contact would be with a Team Leader and, if they were not available, a Line Engineer. He claimed that he was not directed by Mr Falster, Mr Sands or any other FP employee. The only time he would contact Mr Sands was for the purpose of requesting or notifying leave. He denied he was directed by Mr Noonan and said that he would only be issued with work by Mr Noonan in the event of a breakdown while the line was not running. He said that he was allocated jobs in the same manner as Tooheys employees and he continued to receive directions from Team Leaders after he became a Core Fitter.

[73] In cross examination by Tooheys, Mr Llagas said that while he worked under the supervision of FP Maintenance Coordinators like Mr Noonan and Mr Paulson, he understood that they coordinated with Tooheys as to what maintenance work needed to be performed. If there was a breakdown, he could be approached by a Tooheys or FP employee to attend to it. He still performed maintenance work after he became a Core Fitter. He said he was relied on for his proficiency and competency as a Fitter. He clarified that, by direction, he meant the allocation of work shift by shift, rather than direct supervision. Mr Llagas agreed he had sent an email to Mr Sands on 9 January 2012 indicating that he would be back in Australia shortly and asking if there was any work. However, he had never received a response. He had understood that Mr Sands was still his supervisor. In cross examination by FP, Mr Llagas said that when he was in the Non-Core casual role, he had reported to a FP Maintenance Coordinator, but when he had begun work in a Core role, he had reported to a Tooheys Team Leader. He agreed that he had received guidance and direction from Tooheys Engineers, Team Leaders and Operators when he began working at Tooheys, as he was unfamiliar with the machinery. They were not necessarily ‘looking over his shoulder’, but would provide direction when he needed it.

[74] Mr Hulbert said that while he worked as a casual Maintenance Fitter, he took direction from Mr Paulson in his capacity as FP Maintenance Coordinator. He understood that Mr Paulson had weekly meetings with Tooheys Management. When he began working as a Core Fitter, he worked on the AB 2 production line for two years, and received direction from Mr Phil Dutton of Tooheys or Mr Sawyer, the Factory Manager. He did not believe that he could refuse a direction while working at Tooheys. Mr Hulbert denied that he was directed by FP Maintenance Coordinators as to how to perform his work. He had not generally received much in the way of direction as he is a qualified tradesperson. Preventative maintenance tasks were issued from MLS.

[75] In cross examination by Tooheys, Mr Hulbert agreed that there was planned and unplanned work. The latter was generally fixing breakdowns, which would be notified by a Brewery Technician over the radios. In cross examination by FP, Mr Hulbert said that he was not fully familiar with the equipment and machinery at the brewery. However, he did not get much in the way of guidance and direction as to how to use, repair or maintain this equipment and was largely left to work it out himself. The best people to assist him were the Tooheys Operators as Tooheys Engineers rarely got involved in breakdowns.

[76] Mr Blackley estimated that he covered core positions once every couple of months. He could cover for between a day or two, up to three or four weeks. Otherwise he worked in a Non-Core Fitter role. He was directed by a Maintenance Supervisor, who was usually a FP employee, except for the Maintenance Supervisor on the keg line and racking, who was a Tooheys employee. He emphasised that work was allocated by way of job sheets printed from the MLS system. He believed these job sheets were Tooheys’ documents. When he worked on the keg line, he would also take direction from Mr Schaffer. He occasionally filled the role of Maintenance Supervisor himself. This would require him to review the maintenance schedule and allocate work accordingly. In this role, would report to Tooheys Line Engineers and would meet weekly with Line Engineers and Team Leaders. If he was needed to cover a shift for someone else, he would be asked by Mr Sands. There had been five or six times where a Line Engineer or Team Leader had asked him to stay back to fix a problem. He did not feel that he was in a position to refuse any of these requests. The only contact he had with FP was with Mr Sands, Mr Falster and Mr Smith.

[77] In cross examination by FP, Mr Blackley said that he had had no experience working at a Brewery prior to starting in 2002. He agreed that he required assistance in operating and maintaining unfamiliar equipment and that Tooheys Line Engineers and Team Leaders were the most experienced people to ask. When he was working in a covering Core position or as a Maintenance Supervisor, he reported to Tooheys Team Leaders and Line Engineers.

[78] Mr Wilczewski commented that in his position as Core Shift Electrician in the Brewery, he was responsible for attending to electrical repairs and breakdowns and for undertaking preventative maintenance. He would occasionally be directed by a Team Leader to work on other repairs and breakdowns elsewhere in the factory. He generally reported to Team Leaders, Engineering Team Leaders and Maintenance Coordinators. It was usually the Team Leader who allocated his work. Preventative maintenance jobs were allocated on a monthly basis and he was required to access MLS to get his work orders and to complete his report afterwards. These work orders became more detailed in the last two years he worked at Tooheys. He never felt that he was in a position to decline work that had been allocated to him. He stressed he did not take direction from Mr Sands or anyone at FP. If he had a complaint or concern as to safety, he would report to Mr Barrowman, Mr Sadie or his Team Leader. He gave an example of when he had complained about poor lighting and unsafe work practices. He noted that he did not generally receive direction on how to do the breakdown work, but would occasionally do so when it was something with which he was unfamiliar. He gave the example of seeking Mr Barrowman’s advice on emptying yeast from blocked pipes. He agreed that Mr Speck issued directions as to what to do, but not as to how to perform these tasks. Because Mr Speck was not an electrician, he could not see how he could effectively issue him with directions, in any event.

[79] In cross examination by Tooheys, Mr Wilczewski clarified that his job was divided into servicing breakdowns and preventative maintenance. There was also a ‘third type’ of job allocated by a Team Leader. They were required to look around to determine if there were any dangers which needed to be fixed. This occurred when Mr Falster was the Manager. He also agreed that his Tooheys Team Leader was not an Electrician, but was a Chemical Engineer.

[80] In cross examination by FP, Mr Wilzczewski said that if he was directed to attend to a particular machine, he would be shown to that machine by a Team Leader or a Fitter as he was not familiar with the layout of the large premises. This was also true if he was issued with a job order. Mr Wilczewski also agreed that he was unfamiliar with the brewing equipment when he started working at Tooheys. He was trained by a Tooheys employee named Todd Whiteside. Where he was unsure as to how to deal with a problem, he would approach Tooheys Electricians and Engineers, especially Mr Glenn Yeats and Mr Owen Maher. He agreed that if he was required to work overtime, he would be approached by a Tooheys employee, usually Mr Barrowman.

Hours of work and rostering

[81] Mr Coombes said that he had worked the day, afternoon and night shift at Tooheys. Tooheys operated an annual roster, which rotated across the team. Mr Hancock said that if he was required to work outside of his regular role or hours, he would be told by Mr Sands, his Maintenance Coordinator or a Line Engineer. This included production line coverage work, a ‘core role’, in instances where others were absent. Where he performed this work, he would be directed by a Tooheys Team Leader.

[82] Mr Luke said that he worked on a roster that was published every Thursday, although he would also be directed by Team Leaders to work at other machines or on other duties. In cross examination by Tooheys, he agreed that there was a FP office on site at Tooheys and that a roster was prepared by Ms Budwee in this office after having taken input from the Tooheys Team Leaders and FP employees as to their availability. On being shown an example of a roster placed on a Tooheys noticeboard, he agreed that it presented the Tooheys and FP employees separately and that this was a typical roster. After being shown a FP branded document marked ‘Tool Box talk’ in which Proden employees were advised to contact their Labour Hire Coordinator if they were running late, Mr Luke confirmed that he would probably just call his Tooheys Team Leader if he was running late. He agreed that Ms Budwee had made it clear in 2006 that he should contact her if he was running late.

[83] Mr Luke agreed in cross examination by FP, that he was required to complete time sheets setting out his starting and finishing times and that these were required to be signed off by the Team Leader. It was his Team Leader’s decision as to whether he would be required for overtime. The Team Leader would sign off on the additional overtime on his time sheet and this would be given to Ms Budwee by placing it in a box outside the FP office at the Tooheys’ site.

[84] In cross examination by Tooheys, Mr Robinson was shown an email from Mr Sands setting out the 2011 shift pattern. He agreed that he received his rosters in a similar manner from Mr Sands. The roster would identify the work he would perform to cover shifts in the event of other employees taking planned leave, but not unplanned leave, like sick leave.

[85] Mr Llagas said that his rosters were the same as for Tooheys employees. He was also subject to the arrangements in relation to pre-paid overtime, although this ceased when he became a Core Fitter. If he needed to swap shifts, he would do so with another fitter in his team and then notify Mr Sands and his Team Leader. In cross examination by FP, Mr Llagas said that despite the terms of his Employment Agreement, he did not report day to day to Mr Sands, but to the Team Leader. Additionally, while the Employment Agreement set out that FP may require him to work certain reasonable hours, such requests where, in a practical sense, made by Tooheys employees and Management.

[86] Mr Hulbert said that a copy of a 42 hour rotating weekly roster was placed in the lunch room. He thought the roster had a Tooheys logo on it. In his capacity of Racking Core Fitter, he would order parts from the Tooheys Store and coordinate weekly maintenance. These latter responsibilities were devolved to him over time by his Team Leader. He noted that his hours were different from other members of the team, so that he could perform maintenance duties on Fridays.

[87] Mr Sands said that he also published the rosters on noticeboards and by email, although because Core workers were attached to a team there was no real need for them to have a roster as they ‘rotated with the same production team week in, week out.’ Draft rosters for Non Core Trades workers were sent to Tooheys Engineers prior to being released. If he did not hear back from the Engineers, the roster would be released.

[88] Mr Henry said that when he started working permanently, he had worked full time on a rotating roster, with normal weekly working hours of forty hours per week. If he wanted to change shifts, he spoke to Mr Sands or Mr Speck. In cross examination, he agreed that his work on preventative maintenance, in his period as a casual, was run as a scheduled maintenance program organised by FP Maintenance Coordinators. The Maintenance Coordinators liaised with Tooheys to determine the schedule and would convey that schedule to the relevant workers. Jobs setting out the machine on which work was to be done, and when it was to be done for preventative maintenance, were generated from a computer.

Work performed for other FP clients

[89] Mr Sands said that he did not work for any other company while working at the Tooheys site between 2003 and January 2012. In cross examination by FP, Mr Sands said that a small minority of the workers who worked at the Tooheys site, would have been told of the possibility of getting work at other sites.

[90] Mr Coombes did not perform work for any other company at either his own initiative, or at the direction of FP. He had never been requested to work at another site. He had attended the FP site at Glendenning about twice in the twelve years he had worked at the Tooheys site. Mr Hancock said that he worked full time hours at Tooheys and had never performed work for another company and was never required to do so by FP. Mr Luke said that he had worked with FP since 1996 and had previously been placed with positions at PepsiCo and Colgate. However, once he started work at Tooheys, he did not work at any other site.

[91] While working for Tooheys, Mr Henry had no other employment, other than the work he performed at Tooheys. He did not perform work for other companies at the behest of FP. Throughout his time working for Tooheys, his only direct and regular contact with FP was with Mr Sands, although he occasionally saw Mr Smith on site. The only time he attended the FP office at Glendenning was for his initial competency test and on the Saturday after he stopped working at Tooheys. Mr Henry admitted in cross examination by Tooheys, that clauses 7.1 and 7.2 of his contract of employment operated as a restraint of trade in that he was obliged not to work for a company for which FP had supplied labour for three months after his contract came to an end. However, he said that this was ‘only in certain places. I could perform my trade elsewhere.’ Mr Henry said in cross examination by FP, that it was not his understanding that he was a labour hire employee who could be directed to work at different sites.

[92] Mr Llagas said he had never attended the FP site until after his work at Tooheys ended in October 2011. He did not work for any other company, either at his own initiative or at the direction of FP, while he worked at Tooheys. He did perform some work for Omni for about three weeks in the period between 15 October 2011 and late January 2012.

[93] Both Mr Blackley and Mr Hulbert gave evidence that they had worked at other companies for FP during the period between 14 October 2011 to late January 2012 (Mr Blackley) and 2 November 2011 to 28 January 2012 (Mr Hulbert). However, they had not worked anywhere else while performing work for Tooheys. Mr Blackley said that he worked four shifts at Greens Foods through FP. In cross examination by Tooheys, Mr Hulbert said he had worked for Greens as a Fitter and he understood he was doing so pursuant to a services agreement between Greens and FP Group. He also worked at GlaxoSmithKline up until Christmas and performed railing work supplied to Rheem. He had performed work for Omni up until mid January as a casual. He had been told by Mr Smith that his employment with FP had finished and that he would be transferred to Omni to complete their obligation to GlaxoSmithKline. While he understood that Omni was his employer at this time, he had not signed a contract with Omni. In cross examination by FP, Mr Hulbert claimed that he understood that while he worked at Tooheys, he was to work only at the Lidcombe site. In cross examination by Tooheys, Mr Blackley agreed that he was not given a new contract of employment when he began working at Greens for FP. He had performed these shifts in late January.

[94] Mr Wilczewski said that he had performed work for other companies for FP prior to starting work at Tooheys in 2004 but after that time, he did not have any outside employment, either at the direction of FP or otherwise.

Provision of tools

[95] Mr Sands said he understood that trades workers would provide their own basic tool kit, but larger tools were provided by Tooheys. He was aware that Core Trades workers in Packaging were provided with personalised ear plugs. In cross examination, Mr Sands was shown a FP policy, of which he was aware, but had not read. It set out that ‘Each tradesperson is required to maintain a minimum basic toolkit as outlined below’, and listed a number of small tools for a ‘Basic Fitter Tool Kit’ and a ‘Basic Electrician Tool Kit’. In cross examination by FP, Mr Sands agreed that clause 5.2(c) of the 2002 Services Agreement, which set out that FP was to ‘maintain and secure site specific tools and equipment provided by Tooheys’, referred to Tooheys’ equipment. FP did not provide such equipment. Clause 5.2(d) set out that FP would ‘provide Personnel having a trade classification with all necessary consumable items such as gloves, earmuffs and eye protection to perform the Work’. While FP provided a uniform and safety boots, personal protection equipment would be provided by Tooheys.

[96] Mr Coombes conceded in cross examination by Tooheys, that he was required to provide his own tools. He agreed that he had signed a Memo circulated by Jason Keetley, dated December 2000, which was expressed in the following terms:

Mr Coombes agreed that the purpose of this document was to remind him that he was obliged to maintain his own tool kit.

[97] In their statements, Messrs Hancock, Hulbert, Blackley, Henry and Llagas denied that Tooheys had supplied them with tools. While they had brought a generic tool kit or small tool bag of small tools or hand tools, Tooheys supplied larger tools. Mr Hulbert added that he thought that this was consistent with practice at most work sites. Mr Blackley said that Tooheys had supplied him with a welding helmet, grease guns, scrappers, files, replacement allen keys, drill and tap sets, easy outs and cleaning wires for the nordsen glue guns. Mr Coombes gave similar evidence in cross examination by FP. He also said that there were specialised tools for different machines. Tooheys also supplied tools like lathes, mills, benches, vices and welders.

[98] Mr Luke said that he supplied no tools at all and that everything he needed for work was provided by Tooheys. In cross examination by Tooheys, Mr Luke was shown a FP branded document marked ‘Tool Box Talk’ which stated that employees should contact their Labour Hire Coordinator (being Ms Budwee) should they require Personal Protective Equipment (PPE). Mr Luke claimed that he would approach his Tooheys Team Leader if he required PPE. In cross examination by FP, Mr Luke said that FP supplied safety footwear, but all other PPE was supplied by Tooheys.

[99] In cross examination by FP, Mr Robinson said he had been provided with safety glasses, a fitted hearing aid, a mask, gloves and wet weather gear by Tooheys. He would get this from the Tooheys store or from his Team Leader.

MEX, training and compliance with policies

[100] Mr Sands agreed that his Employment Agreement with FP set out that his employment was subject to compliance with policies of FP as published from time to time. Mr Sands was shown a bundle of policies, the first of which related to a standard format and approved and signed off by the General Manager. There were also policies relating, amongst other things, to mobile phone use, time sheet collection, work orders procedure, maintenance of tools by trades workers, motor vehicle use, procurement, internet browsing and email, discipline, environment, sick leave, uniform, personnel forms, equal opportunity and anti-discrimination, employee grievance and termination. Mr Sands was variously aware of these policies and said he had read some of them, but was not sure of others.

[101] Mr Sands had drafted the Brewing Core Trades Standard Operating Guidelines, a copy of which was annexed to his first statement. This set out protocols by which brewing teams were to communicate, deal with and escalate issues within the Team. He claimed that Mr Barrowman ‘fully endorsed’ his draft guidelines.

[102] In cross examination by FP, Mr Coombes said that he was given copies of policies and procedures to follow by Tooheys and that he understood that he was required to comply with Tooheys’ policies and procedures. These were what he worked under. FP policies may have been sent to him, but on a day to day basis, he interacted more with the Tooheys policies.. In his written statement, Mr Luke said that he was required to follow safety gear procedures, to follow the job procedure sheet setting out his work and the manner in which it was performed, to attend Team meetings and Team Toolbox talks. Mr Hulbert said that he understood that he was to comply with a certain standard of behaviour and safety in compliance with Tooheys policies whilst on site. In cross examination by FP, Mr Wilczewski agreed that he understood that he was required to abide by Tooheys policies and procedures. He was not aware of FP policies that applied to him. If he wanted to resolve an issue under the Fair Treatment Procedure, which referred to his supervisor, he would raise it with his Team Leader. The only procedures and policies he knew of that related to discrimination and harassment were those of Tooheys.

[103] Mr Henry agreed that clause 8 of his Contract of Employment with FP referred to FP’s policies, of which he was aware. He agreed that contractors and employees would be required to comply with Tooheys policies relating to harassment, safety and behaviour while they were on site. Mr Blackley agreed that he had signed a FP branded document in relation to standards of behaviour, harassment and intimidation. Mr Llagas said that he was required to comply with Tooheys policies in relation to OH&S, hygiene, behaviour and so on.

[104] All of the applicants referred to the Manufacturing Excellence or ‘MEX’ program, which was developed by a third party. They each gave evidence of attending training and meetings with core Tooheys employees. Mr Luke said that he attended some meetings in relation to MEX, but was not really involved. Mr Coombes said that pictures of people on MEX teams were displayed on notice boards which related to the program. A MEX team day was held at his house and Tooheys paid for the food and drink on that day. Mr Henry said that he had attended a MEX Team day in mid 2011. He had also attended MEX training in 2010. He had also attended the Malt Shovel Brewery as part of the MEX program. All brewery teams attended this event. Mr Blackley said that he attended five or six meetings in relation to MEX. He also attended three separate training programs; one of these ran for a week, the others ran for several days. MEX teams were a mixture of Tooheys and FP workers and entire teams were required to attend these training sessions.

[105] Mr Hancock agreed in cross examination by Tooheys, with the proposition that it would have made no sense for Tooheys to target only its core employees in relation to MEX. It was designed to increase efficiency and decrease wastage across the site.

[106] Mr Robinson said he was allocated to a MEX team dealing with making the labelling area easier in which to work and contributed to this over a period of about twelve months. There was a meeting conducted by a Tooheys employee every couple of months. Mr Robinson thought that he was asked to contribute to his specific MEX project because of his experience with the labelling machines. At all MEX sessions, there were exhortations for all present to make Tooheys a leading manufacturer. Mr Hulbert said that he estimated there were two or three MEX training days. He listed a number of ‘5S projects’ that he had been involved in as a result of MEX.

[107] Mr Sands noted that one of the aspects of MEX was to have Visual Performance Measures throughout the site. He annexed a copy of the first ‘Standard Work’ charts for the Maintenance Departments of Brewing and Packaging. He had drafted these at the request of Mr King and Mr Barrowman, but noted that Tooheys subsequently modified these documents as they saw fit. This chart would be filled in the relevant field with a green dot (meaning completed) or a red dot (meaning incomplete). He also noted that the updating of Workshop Design was a key element of MEX and stated that he had a ‘keen interest’ in the updating of the Brewing workshop. As a result, the National MEX Director was highly complimentary of his contribution. He had provided designs in relation to the Packaging workshops, which were saved on Mr Jelley’s personal drive and posted in workshops for feedback. In cross examination by Tooheys, he agreed that he had been aware early on that cl 2.2(a) of the 2002 Services Agreement set out that the services FP contracted to provided to Tooheys, included ‘maintenance, design and installation of mechanical and electrical plant and processes at the site’. However, this was not something he kept in mind and that his role ‘evolved’ over time.

Induction and other training

[108] Mr Sands deposed that he would discuss Individual Performance Plans (IDPs) with FP workers in individual one to one meetings. This would involve the assessment of the skill level of the relevant employee and planning for future training, taking into account the Tooheys business plan and the budget allocated to FP from Tooheys. Mr Sands claimed that he had limited discretion in how this money was used and that he spent it as directed by Mr Horn and Mr Sadie. He was told by Tooheys Engineers which Trades worker would be attending training and what training they would need to attend. If the training provider was one recognised by Tooheys, then they would invoice Tooheys directly. Otherwise, FP would pay for the training and invoice Tooheys. Mr Sands did recommend training to Tooheys Engineers on occasion and that most of his proposals were agreed to by them. The budget was ‘practically terminated’ under Mr Barrowman and Mr King and training was mostly undertaken to ensure regulatory compliance or for new equipment. Mr Sands said that the ‘personal goals’ of the relevant FP workers received inconsistent levels of support from Tooheys Management.

[109] Mr Sands said that he had completed a Tooheys Operations Induction on his first day on 10 November 2003. In cross examination by Tooheys, he said that Mr Gorman had conducted this induction. From the time he started working at Tooheys up until Security started to conduct the Tooheys Operation Inductions, he had inducted FP workers in his office on site. In cross examination by FP, Mr Sands was shown cl 5.1(e) of the 2002 Services Agreement, which set out that FP was to ‘provide, at its cost, any induction deemed necessary by Tooheys and two days of on the job training for the specific purposes of working at the Site.’ He agreed that there was a Tooheys induction and a discussion which he would have with the relevant employee by way of induction. The two days on the job training was only relevant to general labour, rather than the Trades workers. Training of Trades was at Tooheys cost. Mr Sands was also shown clause 5.1(h), which set out training and competency requirements for workers in satisfaction of the 2002 Services Agreement. He agreed that if an employee did not have a specific licence, Tooheys would pay for them to get it.

[110] Messrs Hancock, Henry, Llagas, Robinson and Luke all said that they had taken part in a Tooheys site induction. Mr Henry said that he attended two inductions when he first started working at Tooheys. The first of these was conducted by Mr Sands. They discussed ‘FP Group’s expectations of me at the Tooheys site.’ The second was conducted by Tooheys and related to safety policies, lock out procedures and behaviour expectations. He, Mr Coombes, Mr Robinson and Mr Hancock said that they also underwent a computer based induction training once a year. In cross examination by Tooheys, he agreed that visitors to the Tooheys site were also inducted.

[111] Mr Llagas said induction training took place once every two years and noted that one could not enter the Tooheys site without a valid induction card. Mr Robinson said that the computer based induction related to behaviour, safety and hygiene. In cross examination by Tooheys, Mr Robinson said that inductions were held by Tooheys, at its site using its equipment, and that Mr Sands had never conducted an induction with him. The induction included standards of behaviour. Mr Hulbert noted that he had taken a computer based induction test covering Tooheys policies every two years. These sorts of issues were also canvassed at Toolbox talks, which he had attended and had signed a document to show his attendance. In cross examination by Tooheys, he did not agree that a FP Maintenance Coordinator organised or conducted the induction training, but agreed that all employees and contractors undertook computer based induction.

[112] Mr Llagas said in cross examination by Tooheys, that Mr Falster of FP also conducted a FP induction at which standards of behaviour and occupational health and safety were discussed. He agreed that a document, which was said to show that he had received an employee induction handbook, a code of conduct and other documents from FP, was signed by him. In cross examination by FP, he said that he agreed that he had filled out this document incorrectly, in that he had named himself as the ‘Inducting person’ rather than the employee. He said it was probable that he had just signed this document amongst a number of other documents, without sufficiently examining it. He had only ever received documents during a Tooheys induction. These were the policies which he understood he was required to comply with. Mr Wilczewski said that he undertook a FP/Tooheys induction run by a FP employee named Susie. He also undertook a yearly Tooheys’ induction test in relation to safety. He understood that Tooheys required workers to pass these tests. Mr Sands would remind him to take the test, but would not direct him to do so. Tooheys employees were also required to take the test, but he thought that this was once every two years.

[113] Mr Blackley said that he was instructed to attend training sessions by Mr Sands. However, six or seven years after he began working at Tooheys, Tooheys began to put notices on the noticeboard with lists of people who were to attend training sessions. Mr Sands and Tooheys Line Engineers would also send him emails indicating that he was required to attend training.

[114] In order to act in the role of Maintenance Coordinator, Mr Hancock said that he was required to be trained in a Hot Work Permit Induction, run by Tooheys, so as to be able to perform such work that carried a risk of fire or explosion. He also undertook a variety of external and internal courses related to Tooheys machinery, tools and computer systems. He would be told by Mr Sands that Tooheys wanted him to attend a course. In cross examination by Tooheys, Mr Hancock acknowledged that he had never worked in a brewery before and that, despite his qualifications as a mechanical fitter, he was dealing with new types of plant and equipment. It did not surprise him that Tooheys would organise training in these circumstances. He was shown a document sent by FP which he had signed in 2007 and which referred to the ‘FP Group and Tooheys induction programs’ and agreed that safety and its issues were relevant to Tooheys employees and contractors alike.

[115] Mr Coombes recalled being required to attend training on a number of machines when they were introduced at the Lidcombe site and he understood that this training was organised by Tooheys. Mr Hancock listed a number of machines on which he was trained. He said that this training was all organised by Tooheys and he was directed to undertake it by his Team Leader. In cross examination by FP, Mr Luke said that the machinery and equipment at Tooheys was specialised brewing equipment which he had not come across before working at Tooheys. Accordingly, he had been trained in use of those machines by Tooheys. FP had never directed him as to how to use those machines. In cross examination by FP, Mr Henry agreed that the machinery and technology had changed during the period he had operated his own business and that he had been required to undertake training and direction from Tooheys Engineers and Team Leaders as to the operation of such equipment. Training had been organised for him when he returned by Tooheys in relation to the specific technical requirements of the Tooheys site. He understood the requirement to abide by policies in his employment contract with FP to include Tooheys policies. Mr Llagas also said that he would be trained when new machines were introduced to the site and listed a number of examples. In cross examination by Tooheys, Mr Llagas agreed that he had not worked at a brewery before and that a site induction had been performed by Tooheys.

[116] Mr Henry said that because he was required to undertake Engine Room checks, he was trained as part of the emergency response team on afternoon and night shifts. This consisted of a course on emergency response management and use of a full gas proof suit. All Fitters, Team Leaders, Electricians in the Brewing Room were required to attend this training. He also attended Siemens S7 training, paid for by Tooheys. Mr Hulbert said that he had asked for forklift training so that he could perform his job more efficiently. This was approved by his Team Leader, Mr Owen Mayor. In cross examination by FP, Mr Hulbert said that he was aware of Tooheys policies, but not really aware of FP policies.

[117] Mr Robinson said that he undertook courses in relation to Festo Pneumatics, Krones, KHS Innofil and MEX. He could not recall who organised any of these courses, but understood that it was required of all workers at the Tooheys site to undertake them. When Tooheys purchased three new labelling machines from a German company called Krones, he and Mr Andrew Singdheo were instructed by the Tooheys Bottling Hall Engineer to work with the Krones employees sent to install the machines and train Tooheys employees in their use so as to learn as much as possible about the machines’ operation and maintenance and to assist in the installation. This was said to be for Tooheys’ benefit. Mr Robinson was also told that he was representing Tooheys in this instance and that he should be on his ‘best behaviour’. At this time, Mr Robinson worked full time with the Krones employees. In cross examination by FP, Mr Robinson said that he took up training if it was offered to him by Mark Jelley, a Tooheys Team Leader. He thought this would give him a better chance at getting a full time position. About half of the training was on site at Tooheys and half was off site. He could not say who paid for or organised the training.

[118] Mr Wilczewski said that his duties changed from time to time. On one of these occasions, Tooheys required that he undergo safety training to safely undertake his new duties. He also understood that there were certain standards of behaviour by which he was to abide, especially in relation to risk assessment and safety. Mr Wilczewski said he also attended training days five or six times a year and attached examples of certificates he had received as a result of completing this training. He noted that these courses were all paid for by Tooheys. He thought he had attended about ten of these courses. FP’s only involvement was to arrange shift coverage - the direction to attend the course came from Tooheys.

[119] Mr Sands referred to an investigation conducted by WorkCover after an accident notification form sent to an insurer used the word ‘crushed’. This investigation was conducted through Tooheys rather than FP. Improvement notices were subsequently served on Tooheys, which provided three responses without seeking input from FP or from the injured worker. Mr Sands said he had assisted in the Plant and Equipment Hazard Identification which followed. Mr Sands noted that FP had adopted the Tooheys documentation and changed the letterheads to FP. Mr Sands agreed in cross-examination by Tooheys, that Tooheys was obliged to provide a safe place of work for everyone on site and that it was therefore unsurprising that Tooheys took responsibility throughout that investigation. Mr Sands was shown cl 11.1(f) in cross examination by FP, which set out that FP was to ‘unconditionally observe and comply with the provisions of any industrial and/or safety advice or direction that Tooheys may issue from time to time at the Site.’ He agreed that he saw Tooheys’ action in having carriage of the WorkCover investigation, as exercising its right under this clause.

[120] Mr Sands noted that he had been trained in First Aid and that this training was paid for by Tooheys. He had used this training once when a contractor collapsed on top of a tank and had a seizure.

Access to Tooheys computers

[121] Mr Sands said that he had access to the majority of Tooheys server folders, the Tooheys HR Folder and Sharepoint, He also had access to MLS, which included work order management, auditing reports, booking parts and purchasing, but did not use this last function himself. He noted that he did not have full administrator access. He said that all Maintenance Coordinators had a ‘high level’ of access to MLS, the Tooheys Server, the Tooheys personal drive, shared drives as well as internet access and SharePoint.

[122] Mr Coombes advised that he had access, through Tooheys computers to the internet and to an employee intranet known as ‘People Planet’. Messrs Coombes, Hulbert, Henry, Robinson, Llagas, Blackley, Wilczewski and Hancock all said they were provided with an email address ending in @lion-nathan.com.au. Mr Hancock said that he had been given access to Tooheys Maintenance Scheduling Software, Databases and ‘T-Drive’ documents when he was acting in the role of Maintenance Coordinator. Mr Henry said that he had access to Tooheys folders, Brewing SharePoint and the internal home page. In cross examination by Tooheys, Mr Henry said that this was partly to allow him access to the maintenance schedule determined by FP Maintenance Coordinators in concert with Tooheys Management, but also to allow him to arrange purchases for relevant jobs. Mr Luke said that he had access to the computer system which monitored machinery onsite and also had access to Tooheys’ HR page. In cross examination by Tooheys, he agreed he needed this access to do the work that he was performing.

[123] Messrs Coombes, Henry, Hancock, Robinson and Llagas said that they had access to MLS. Mr Coombes, Mr Henry and Mr Hancock all said they were required to file end of shift reports on Tooheys’ Maintenance Logistics System (MLS). Mr Henry also noted that all of the jobs in MLS had a labour description of TCT (Tooheys Core Trade). Mr Blackley that he had access to MLS in his capacity as acting Maintenance Supervisor so as to print off work orders to distribute to Fitters. Mr Wilczewski said that he had access to MLS for the purpose of writing shift reports and booking out parts. Mr Robinson said that each job allocated to him on MLS would be marked ‘TCT’ or ‘TNCT’ (Tooheys Non Core Trade). If he was covering a shift, his jobs would be marked ‘TCT’, if he was working on day shift maintenance, they would be marked ‘TNCT’. Mr Llagas said that all of his jobs were marked ‘TCT’. In cross examination by Tooheys, Mr Robinson agreed he had access to MLS for the purpose of performing preventative maintenance work. Mr Hulbert said that he had access to MLS, to the Tooheys folders on the server and the FP Sharepoint on the Tooheys server. Mr Hulbert agreed in cross-examination that he required access to MLS as an essential element to allow him to perform his duties. Mr Wilczewski said that he also had access to the Tooheys Folders, the internal home page and the Brewing SharePoint.

Remuneration and other benefits

[124] Mr Sands agreed that both Core and Non Core Trades workers were paid by FP. He said that for Core Trades, the base salary increase and annual bonus was matched to that of Brewery Technicians. He referred to internal correspondence from Tooheys Management that discussed the calculation of the bonuses in relation to performance in a number of financial years. Until 2010, Core Trades were also entitled to the benefit of an incentive program known as Pay for Performance (PFP). Core Trades workers would also receive the same pay increases as the Tooheys employees. These pay rises were set out in the Tooheys Enterprise Bargaining Agreement. In contrast, the rate of adjustment for pay rates for Non Core Trades was generally by the CPI, as directed by Tooheys. Non Core Trades would not receive the entitlements of Core Trades while covering their position.

[125] Mr Sands agreed in cross examination by Tooheys, that the 2002 Services Agreement set out that FP would advise of the appropriate rate of pay in relation to Maintenance Coordinators and Maintenance Supervisors, which was to be agreed with Tooheys. In relation to his own pay, Mr Sands said that Mr Porretta and Mr Smith would discuss it with Tooheys, sometimes in front of him. He understood that the 2002 Services Agreement provided that the service fee to be paid to FP contained a component for wages costs, annual leave, long service leave and so on, although he stressed that he could not say if the amounts invoiced and paid contained these components as he was not involved in generating invoices. He could not say why he had never asked Mr Smith why he was not paid his own entitlements.

[126] Mr Coombes believed that his remuneration had been equal to that of the Tooheys’ operators and that he was entitled to pay rises based on his performance. He had received pay increases in line with CPI. He understood from discussions with Tooheys workers that his pay structure was similar to that of Tooheys employees. He noted that, like Core Tooheys employees, he was guaranteed 24 hours overtime per quarter to cover work meetings and maintenance. He would not be paid extra for overtime unless he worked more than 24 hours per quarter. Mr Henry said that he had accrued and worked overtime on a similar basis. In cross examination by FP, Mr Coombes said that he had an entitlement to a bonus based on the performance of the Tooheys team. This was assessed by Tooheys Engineers and Team Leaders. Mr Luke that his pay increases were in line with Tooheys increases. He agreed in cross examination by Tooheys, that FP paid him, provided him with group certificates and paid his superannuation in relation to the work he performed at Tooheys. Because Mr Robinson was working on a casual basis, he was not entitled to any bonus or performance based payments.

[127] Mr Hulbert agreed in cross examination by Tooheys, that FP paid him by transferring his pay to his bank account. He had provided his banking details to FP earlier. When he had been overpaid in 2005, Ms Tania Kennedy, the FP Payroll Administrator, had sought his permission to withhold amounts from future pay, to compensate for the error. In cross examination by FP, Mr Hulbert said that that there were salary increases which were performance based and his success in getting this bonus was reported to him from Mr Sands, based on scores given to Mr Sands by the Team Leader. Annual bonuses were calculated with reference to the performance of his team as a whole. In cross examination by Tooheys, Mr Wilczewski agreed that FP paid his wages, provided him with group certificates that identified FP as the employer, paid superannuation on his behalf and accrued annual leave reflected on his pay slip.

[128] Mr Hancock understood that he was paid by FP for the work performed at Tooheys. However, if there were issues with his pay, he would contact Mr Sands. Mr Coombes agreed in cross examination by Tooheys, that he had provided his banking details to FP and that FP deposited money into his account, paid his superannuation and provided him with pay slips and group certificates. He had indicated on tax returns that FP was his employer. Mr Hancock agreed in cross examination by Tooheys that he was paid by FP, that FP paid tax and superannuation on his behalf and that FP provided him with group certificates. Mr Henry understood that he was paid by FP for the work he performed at Tooheys. Mr Robinson said that his wages from working at Tooheys, were paid by FP, though he considered this a formality. He agreed in cross examination by Tooheys that he received pay slips and group certificates from FP that marked FP as the employer. When he had filed a tax return, he had identified FP as his employer.

[129] Mr Llagas believed that he was paid by FP for the work that he performed at Tooheys. He was paid a performance bonus and a performance based pay rise after he became a Core Fitter. He understood that this was similar to the pay structure for Tooheys employees. In cross examination by Tooheys, Mr Llagas said that FP had contributed to his superannuation, provided group certificates, and kept records of accrued annual and sick leave. In cross examination by Tooheys, Mr Llagas agreed that his employment agreement with FP set out that FP was to pay him four weeks in lieu of notice in the event of his termination, but this was never paid.

[130] Mr Blackley said that he had received annual pay increases. Because he was not a Core employee he did not receive bonuses and was not covered by the pay structure in the Tooheys enterprise agreement that applied to Core employees. In cross examination by Tooheys, Mr Blackley said that he received group certificates from FP and that FP made superannuation contributions on his behalf. Mr Wilczewski agreed in cross examination by FP, that he had received payments under the pay for performance scheme, linked to his individual performance and his team’s performance. He also received an annual bonus based on how the Tooheys site performed overall. The Tooheys workers would have a one to one meeting with their Team Leader or Production Manager and FP workers would have a one to one with Mr Sands, who would contact Mr Speck , Mr Barrowman, Mr Sadie and Mr Maher for feedback.

[131] In cross examination by FP, Mr Henry pointed out that he had received the same pay, benefits and allowances when he entered into the arrangement with Proden in 1991 as he had received previously. The only difference was that Proden, not Tooheys paid his wages. When he worked at the Tooheys site after 2006, he had inquired as to the availability of a skills allowance by speaking to Mr Sands. He was shown two documents said to be his applications for a skills allowance in 2007 and 2008. While he said that the handwriting on these documents was not his, he agreed that it stated correctly that training he had undertaken at Tooheys between 1978 and 1994 and in 2006 had been undertaken. The latter was conducted by Siemens S7 offsite, but paid for and authorised by Tooheys for the primary purpose of enabling him to operate and repair Tooheys machinery. He recalled being told by Mr Sands that his allowance would need to be approved by Tooheys.

[132] Mr Henry said that in addition to performance pay increases, he also received annual pay increases which were in line with the Tooheys Enterprise Agreement. He understood that this was the same as what the Tooheys employees received. He received bonuses if his team reached their targets, as they were all ‘core’ workers in the team. Mr Henry said that he received performance based incentives that were similar to those received by Tooheys employees and were tied to getting good feedback. This entitlement was called ‘Pay for Performance’ or PFP. He was also entitled to a site wide Tooheys bonus which was assessed on the basis of the performance of the whole site. He understood that all Tooheys and FP Core tradespersons received this bonus if it accrued, although he noted that FP workers received it two weeks later than Tooheys workers. In cross examination by Tooheys, Mr Henry agreed that FP paid his wages, provided tax to the ATO on his behalf, issued group certificates and paid his workers’ compensation insurance.

[133] Mr Sands said that Core tradespersons were pre-paid overtime with the intention that production teams began one hour early on Sunday nights, attend weekly Team Meetings and stay back up to four hours on Friday to complete packaging filed product, if necessary. Any additional overtime would be paid in addition at the end of the financial quarter. This was later changed so that hours worked after the ‘banked’ overtime hours would be paid. Mr Sands managed this through a spreadsheet provided to him by Mr Horn.

[134] Mr Hulbert described a system of overtime accrual whereby he could accrue overtime which could be banked and used as time off in lieu or he could be paid for that work. This was the same system under which the Tooheys’ employees worked. He understood that his annual bonus was based on the structure in the Tooheys Enterprise Agreement.

[135] In cross examination by Tooheys, Mr Coombes initially said that he could not recall voting for an enterprise agreement with FP in 2000 but, on being shown a letter from Mr Gorman to himself in December 2000 discussing voting for an upcoming EBA and a bundle of documents relating to that Agreement, he remembered the documents. He agreed that the documents referred to FP as the employer. This came as no surprise to him in the context of voting for the FP Agreement.

[136] Mr Sands said in written evidence that Skills Allowances were paid to FP workers where the relevant skills acquired through post trade training were used in their work for Tooheys. In cross examination by FP, Mr Sands agreed that the practice was for a worker to make an application for a relevant skills allowance to a Tooheys Engineer. He had had a role in that process by way of the individual development plan and forms would need to be filled out, which were ultimately approved by a Tooheys Engineer.

[137] In cross examination by FP, Mr Llagas agreed that when he had applied for a skills allowance, he asked Mr Sands, who told him the allowance needed to be approved by Mr Chris King, in his capacity of Maintenance Manager for Tooheys. Mr Hulbert said in cross examination that Skills Allowances were approved by Tooheys Team Leaders and Line Engineers. In cross examination by FP, Mr Wilczewski agreed that he had said to Mr Sadie that he would not undertake engine checks without receiving more money. They had agreed to negotiate, but he had never come back to him. When he sought the Level 1 Skill Allowance, he had approached Tooheys Engineers, Mr Sadie or Mr Kirkie. He understood that the decision was made by them, but communicated to him by Mr Sands. When he had sought the Level 3 Skill Allowance, Mr Barrowman had recommended he should get it. He understood that he had received it as a reward because he had done a big job for Tooheys which saved it a lot of money.

Access to facilities and benefits

[138] Mr Sands said that up until 2004 he had organised the swipe cards for Trades workers through Mr Horn when they commenced on site. After that time, Mr Horn authorised him to contact Security directly to have the cards issued. Messrs Sands, Blackley, Hancock, Henry, Coombes, Llagas, and Luke all said that they had been given a Tooheys swipe card which gave them access to the staff car park, the canteen, the gym and the general store. Mr Hulbert mentioned access to the same facilities, but did not mention a swipe card. Mr Robinson was also given a swipe card with similar access, but without access to the gym. He noted that nothing on his swipe card indicated that he was a FP employee, rather than a Tooheys employee. Similarly, Mr Llagas noted that his swipe card did not say ‘Contractor’ on it like he had seen on those of other contractors attending the Tooheys site. Mr Coombes agreed in cross examination, that many contractors on the Tooheys site had access to the gym, but not all.

[139] In cross examination by Tooheys, Mr Coombes said that he had been given Christmas hampers and cartons of beer by Tooheys that were not provided to other maintenance people. He thought that this was because he was a Core Fitter. Mr Blackley, Mr Coombes and Mr Luke received subsidised food and drinks at the canteen and used the Tooheys Tap Room on Thursday and Friday for a free beer after work. Mr Luke agreed in cross examination by Tooheys, that all contractors on site received subsidised food and drinks at the canteen and could go to the Tap Room for a free beer after work. In cross examination by Tooheys, Mr Henry said that not all contractors had access to the carpark, as they did not have card access. Mr Hancock agreed in cross examination, that all employees and contractors had access to the benefits on site. Mr Wilczewski said that he was entitled to subsidised food and drinks at the canteen, and a free beer after work on Thursdays and Fridays at the Tap Room. He also had access to the employee car park, the gym and the General Store.

Applications for leave

[140] Mr Sands accepted that he was involved in the administration of leave for FP workers. The process involved the worker completing a leave request form and handing it to him. He would then bring up that request with the relevant Engineer in the weekly meeting, who would approve or decline the request. Mr Sands would advise the relevant worker of the outcome. He noted that Mr Hulbert organised his leave directly with his Team Leader and that he would receive a phone call from Mr Hulbert’s Team Leader to request a replacement for Mr Hulbert while he was on leave. He also said that if a Trades worker was unwell, he would usually be contacted, but sometimes contact was made to their Team Leader.

[141] Mr Sands agreed in cross examination by Tooheys, that he had created a small card that was distributed to FP trades workers which set out the contacts on site in relation to sick leave and injury. It set out that the workers were to contact the Site Manager by phone or text in the event of illness. Mr Sands would raise his own leave issues at the weekly meetings with Tooheys, so as to fit into their schedules. In latter years, he would get approval from Mr Smith. If he was unwell and needed to provide medical certificates, he would provide these to FP.

[142] Mr Coombes said that he had always called the office at the Bottling Hall if he was unwell and needed to take leave. In cross examination by Tooheys, he said he would occasionally call Tooheys Team Leaders if he was unwell and if Gerard Noonan, the FP Maintenance Site Coordinator, was unavailable. He agreed that FP would sometimes require a Doctor’s Certificate, which would be placed in his pay book and would eventually be brought to the attention of Mr Sands. In cross examination by FP, Mr Coombes said that he would advise of his absence to whoever picked up the phone. Mr Hancock said that he would usually call Mr Sands or his Maintenance Coordinator if he was unwell. Mr Hancock noted in cross examination by Tooheys, that he was a casual employee and therefore did not accrue annual leave or sick leave. He was still required to apply to take a day off or to take holidays. He acknowledged that a FP branded document marked ‘Application for leave’ corresponded to leave he had taken between 26 December 2011 and 6 January 2012, a time he was no longer rostered for work at Tooheys. He had continued to report to Mr Sands at this time.

[143] In cross examination by FP, Mr Luke deposed that his sick leave was approved by Ms Budwee and his Team Leader. He would usually call the Team Leader first to let them know he could not come in. He let Ms Budwee know by filing paperwork so that she knew he was sick for the day. He would only do this once his Team Leader had approved his leave and found someone else to cover for him. Mr Henry said that if he was unwell and unable to come into work, he would notify Mr Sands. He agreed in cross examination by Tooheys, that he accrued personal leave and annual leave through FP and that both were paid by FP. Mr Hancock said that he would let FP know if he was sick and would not be in for work. Mr Robinson said that who he notified in case of illness depended on the work he was rostered on to do. If it was day shift maintenance, he would notify his Maintenance Coordinator, or if he was on shift cover, he would contact the relevant Team Leader. Mr Llagas said that he would contact Mr Sands if he was sick or to apply for annual leave. In the event he was sick and could not attend a day shift, he would contact a FP Maintenance Coordinator.

[144] Mr Hulbert said that if he was unwell or needed to change his shifts, he would contact his Team Leader, who would verify the request by signing a sheet and notifying FP. He agreed in cross examination by Tooheys, that FP accrued leave on his behalf. If he had problems with leave accrual or calculation, he would have taken it up with FP. He said that when he was sick, his timesheet would have recorded that he was absent. Mr Hulbert said in cross examination by Tooheys, that sick leave forms with an attached doctor’s certificate would be signed by a Tooheys Team Leader and left with the FP office.

[145] Mr Wilczewski said that if he was leaving early due to illness or attending to family issues, he would contact his Team Leader or the Factory Supervisor. If he was sick for a day or two, he would contact Mr Sands. In cross examination by Tooheys, Mr Wilczewski was referred to a card that he had annexed to his statement that set out the procedure he was required to undertake to take leave. He understood from this that he was to contact Mr Sands if he was unwell, so that Mr Sands could arrange for someone to replace him. If Mr Sands was unavailable, he would contact Mr Barrowman or Mr Speck.

[146] In cross examination by Tooheys, Mr Sands was shown emails between himself and Mr Smith in relation to the provision by Mr Robinson of a Doctor’s Certificate in the context of illness and a worker’s compensation claim. He agreed that this was an unremarkable report advising Mr Smith of the progress of the employee’s injury.

[147] Mr Henry said that he was required to complete an online holiday request form if he wanted to take annual leave. He understood that the request form would be forwarded to Mr Sands and Mr Chris Speck (Maintenance Coordinator, FP). In cross examination by Tooheys, Mr Henry was shown a bundle of documents, which he agreed reflected periods for which he had claimed annual leave. He agreed that they were approved by Mr Sands. He conceded that he had sent an email to Mr Sands asking that a period of annual leave that he had applied for be cancelled. He agreed that Mr Sands was his point of contact in relation to leave. In cross examination by FP, Mr Henry was shown a form to authorise annual leave, which described Mr Barrowman as his supervisor.

[148] Mr Robinson said that he could not recall having taken annual leave during his time working at Tooheys. He was shown documents said to be applications for annual leave in cross examination. He agreed that they showed his supervisor as Mr Noonan, but could not confirm that the signature was that of Mr Sands as he could not recognise Mr Sands’ signature. However, he agreed that he would fill in these forms and provide them to Mr Sands. In cross examination by FP, Mr Coombes said that leave was granted after a Team Leader assessed that there was sufficient relief personnel available so as to cover any absence. This was discussed directly with Tooheys Team Leaders and Engineers. He would always have spoken to his Team Leader, unless the leave was just for one day.

[149] Mr Llagas agreed in cross examination by Tooheys, that the payslips were from FP and FP was accruing his annual leave. When he had gone on holidays in December 2011, he had asked FP to pay some of that leave out to him, but not all of it. He had made an application to Mr Sands to take this leave after he had finished working at FP, although he said that he had given Mr Sands verbal notice of his intention to take this leave months beforehand. He had not asked why he had not been paid his remaining annual leave entitlements, as he understood that this was being ‘sorted out’ between Tooheys and FP. He could not say why his leave application would say: ‘Doesn’t get paid by directors, has cashed in his entitlements.’ He also agreed that he had an application for Carer’s leave that nominated Mr Sands as his supervisor. In cross examination by FP, Mr Llagas said that he would first file his request form with Mr Sands, and then speak to his Team Leader, who would tell him that it was fine as long as his position was covered. He was not entirely sure as to who approved the leave, he only filled out the paperwork as told. A Team Leader had never told him that he could not take annual leave. He thought it was possible that Mr Sands obtained approval from the Team Leaders.

[150] Mr Hulbert disagreed in cross examination by Tooheys, that the practice for getting annual leave was that he would get a leave form signed by Mr Sands in his capacity as FP Maintenance Supervisor. He had never seen Mr Sands sign one of his annual leave forms, although he noted that Mr Sands would organise coverage while he was away on holiday. In cross examination by FP, Mr Hulbert said that his Team Leader never refused his requests for leave, but he made the request with him just to check that there was coverage. He would get his Team Leader to sign off on his leave requests, attach them to his time sheet and leave both in the box outside the FP office. He agreed that such documents shown to him were marked ‘approved by Owen Maher’ and ‘authorised by’ and signed by Mr Sands.

[151] Mr Blackley said that he began to accrue personal and annual leave after he had became a permanent employee. If he wanted to take leave, he needed to approach his Maintenance Supervisor, who he thought would consult with Tooheys staff. He believed this to be the case, because there was always a delay between his request for leave and it being approved. In the event that he was ill, he would contact his Maintenance Supervisor. In cross examination by Tooheys, Mr Blackley conceded that FP accrued his leave on his behalf.

[152] Mr Wilzcewski said he would advise Mr Sands if he was taking annual leave. He was required to submit a Doctor’s Certificate if he was away from work for more than one day. In cross examination by Tooheys, he said that for the last two years, annual leave was applied for by way of a form on MLS. Before that, a form was filled out by hand. He had been told by Mr Sands that the leave must be approved by Mr Barrowman before he filled it out. This was problematic in peak holiday periods. In cross examination by FP, he said that he understood that his leave was approved by Mr Barrowman or his team. He recalled one occasion when his holiday leave was rejected by Tooheys because a replacement could not be found.

Performance assessments

[153] Mr Sands said that Pay for Performance (PFP) was a tool used to manage and appraise the performance of both Core Trades (FP) and Brewery Technicians (Tooheys). Mr Sands managed PFP by receiving both planned and unplanned feedback from Team Leaders and Line Engineers. Mr Sands annexed a document to his statement setting out the names of the Tooheys Managers that he would approach in respect to individual FP workers. He maintained a spreadsheet for individual workers, with a score from 1 to 5 - 1 being ‘Below Target’ and 5 being ‘Outstanding’. The spreadsheet was designed by Mr Phil Dutton for the performance assessment of Tooheys employees. The relevant accountabilities were scored out of five under the following headings and weighted as follows:

[154] The total score after weighting was then recalculated to a score out of 20 and that score would be determinative as to whether a worker would receive a pay rise, as follows:

[155] Mr Sands deposed that the above accountabilities and descriptors underpinning those accountabilities were changed in line with Tooheys policy and usually approved by Mr Horn and Mr King from Packaging or Mr Sadie or Mr King from Brewing. Mr Sands said that he was directed by Mr King to review results in 2010 as his results showed that FP workers were to receive larger pay increases than Tooheys workers. He provided documents said to be the results prior to this review and a copy of modified results presented to Mr Toomey at a subsequent meeting. At this meeting, he was told that the PFP system was likely to be dropped in favour of a system called BXR (behaviour Vs results). Mr Toomey had told him to keep doing what he was doing, although Mr Toomey was apparently reluctant to use the results provided.

[156] Mr Sands said that he would create a spreadsheet every financial quarter which set out previous results, feedback and criticisms. Data was saved on the Tooheys server. This would be presented to Team Leaders and Engineers for their approval, but also to ‘calibrate’ results so as to create a ‘bell’ graph. Mr Sands organised and facilitated the meeting, but the approval of the scores was done by Mr Horn and Mr King or Mr Sadie and Mr Barrowman.

[157] Mr Sands claimed that early on in his role as Site Manager, he was required by Mr Sadie and Mr Horn to deliver appraisals for all the Core trades. Because he was new to the position, it was decided that the relevant Team Leaders would also be present. Mr Sands said he felt ‘like a bystander’ in the process. It was not until February 2004 that he was asked to start collating the feedback of Tooheys Team Leaders and Engineers. He recalled that, early on, he had conducted a meeting with Mr Jim Davies on the factory floor. Mr Davies had provided accountabilities scores of five for particular workers, stating that he wanted to ensure that that worker got a pay rise and added ‘don’t worry, Paul Horn will pull the scores down anyway.’ Mr Sands subsequently told Mr Horn of this conversation at a weekly maintenance meeting. Mr Horn re-emphasised that he was to use the identified accountabilities and report back to him if any Team Leader digressed from them.

[158] In cross examination by Tooheys, Mr Sands agreed that the performance management and appraisal systems he described were largely reflected in what was required under the 2002 Services Agreement. He also agreed that the accountabilities he described were largely ‘lifted’ from the 2002 Services Agreement. He also agreed that the 2002 Services Agreement provided that Tooheys was to have input into the calculation of the performance standards and that there was to be an agreement reached on how the performance numbers were assessed, although he described this as a ‘forced agreement’.

[159] Mr Coombes said in cross examination by Tooheys, that he attended one on one meetings with the Maintenance Supervisor, Mr Sands ‘every couple of months’. At these meetings, he was provided with written feedback that had been provided to FP. He annexed an example of this to his statement. He said that his Line Manager had also participated in these meetings many times.

[160] Mr Hulbert observed that he had six-monthly performance appraisals with Mr Falster of FP throughout his time as a Core Fitter at Tooheys. He understood from conversations with Mr Falster that this session was based on feedback provided to Mr Falster and, later, Mr Sands from his Tooheys Team Leader. The meetings with Mr Sands would occasionally include his Team Leader. Mr Henry said that he was required to attend monthly one on one meetings with Mr Sands, at which they would discuss feedback which Mr Sands had received from Mr Barrowman and/or Mr Henry’s Team Leader. At the last three of these meetings, Mr Miles Barraclough (Team Leader, Tooheys) also attended, at the suggestion of Mr Sands, so as to allow Mr Henry to get feedback from him directly.

[161] Mr Robinson remembered having attended only one on one meetings, which had been with Mr Sands. They discussed standards of behaviour. He could not recall if he received any feedback relating to his performance.

[162] Mr Llagas said that he had quarterly one on one meetings with Mr Sands. At about half of these meetings, a Tooheys Team Leader would also be present. In these meetings, Mr Sands would provide feedback on his performance and the relevant Team Leader would also contribute. He understood that Mr Sands would base his assessment on feedback provided to him by Team Leaders. These meetings continued after he became a Core Fitter.

[163] Mr Wilczewski said that approximately every three months, he attended one on one meetings with Mr Sands where they discussed scorecards that his Team Leaders had issued in relation to his performance. These scores were relevant to the issue of an annual bonus.

Disciplinary action

[164] Mr Sands said that he was often asked to conduct investigations by Tooheys, usually due to a problem for which the Trades workers were thought to be responsible. The process would usually involve the relevant Team Leader or Engineer informing him of the issue. Mr Sands would then speak to the relevant Trades worker for their response. That would then be discussed with the relevant Team Leader or Engineer. The Team Leader would determine what sanction the worker should be subject to, and this would be approved by the relevant Engineer.

[165] In cross examination by Tooheys, Mr Sands agreed that he had disciplined Mr Gopal Namakkal in relation to safety breaches reported to him by Maintenance Coordinator, Mr Speck. He agreed that he subsequently investigated the incident and took the action of putting Mr Namakkal on a 90 day performance plan, under which he held meetings with Mr Namakkal every two or three weeks by way of review. Mr Sands agreed in cross examination by FP, that the performance plan was a standard response that had been developed, over time, by FP and Lion Nathan. He agreed that Tooheys would set out ways in which Mr Namakkal could be assisted in achieving the relevant performance benchmarks. He would be evaluated by Tooheys Engineers and Team Leaders. He noted that Mr Namakkal resigned shortly afterwards, because he could not see himself meeting the relevant benchmarks.

[166] Mr Sands agreed in further cross examination by Tooheys, that he had sent a final written warning to Mr Adam Theoctistou in relation to the use of his @lion-nathan.com.au email account in emailing a third party. Mr Sands had been alerted to the incident by Tooheys Management. He had subsequently contacted Mr Theoctistou and investigated the incident. This investigation gave rise to three conclusions that he put to Mr Theoctistou in a final written warning, which set out that Mr Theoctistou would be subject to a 90 day performance management process. He agreed that this was the normal course of events in such a situation. He acknowledged that in every instance of discipline involving a Trades worker, FP would be involved and that he would always keep Mr Smith appraised of the issues and responses. He would conduct investigations and disciplinary outcomes were ultimately given by him, although he or Mr Smith would occasionally ask for input from Tooheys. Tooheys would sometimes give verbal directions to FP as to discipline.

[167] Mr Coombes said in cross examination by Tooheys, that he had been subject to disciplinary action relating to his incorrect claiming of hours while he was on a return to work plan after sustaining an injury. He agreed that he signed a document which was said to be a final written warning provided to him by Mr Sands. Mr Hancock said that he was never subject to formal disciplinary action, although he was once spoken to in 2010-2011 by Mr Sands in relation to a complaint from Mr Jim Davies that he had been arriving for his shifts a few minutes late.

[168] Mr Luke disclosed in cross examination by Tooheys, that he had once had an altercation with a security guard who was conducting bag searches at the site (13 October 2010). After the altercation, he rang Ms Budwee. Ms Budwee had interviewed him subsequently. He received a warning letter, which was expressed in part as follows:

[169] Mr Luke agreed in cross examination by FP, that the same letter stated that it was Tooheys that would not let him return to the site. A Tooheys Manager in charge of security (Mr Martin McClute) was present at some of the meetings with Ms Budwee. At those meetings, the Tooheys Manager asked the questions and took notes - Ms Budwee had just passively observed. He understood that Tooheys had instigated the investigation and the letter had been provided to him at Tooheys’ instigation. He understood that it was Tooheys who had made the final decision to issue him with a final warning, rather than terminate him.

[170] Mr Henry said that he had been counselled about three or four months before October 2011 in relation to a work permit. Mr Sands had told him that Tooheys had decided that he should be reprimanded for his conduct and that a reprimand would stay on his record for twelve months. It would be removed if his conduct was good during this time. Shortly after this incident, Tooheys organised training on the new centrifuges. Mr Henry understood that this training was implemented due to the incident in which he was involved. In cross examination, Mr Henry agreed that he had signed a memo in relation to this incident which referred to standards of behaviour expected by FP at any site at which FP employees worked. In cross examination by FP, Mr Henry remembered that he had been spoken to directly by Mr Barrowman in relation to his non-attendance on an ammonia shift walk-around in 2008. He had told Mr Barrowman that he would not perform the relevant requirement until he was told how to do it and how he was to be compensated. Mr Barrowman had said that his job was at risk if he did not perform the walk-around, as another electrician would need to be found to do it.

[171] Mr Llagas said that he had been subject to a verbal warning by Mr Sands after a conveyer had been left operative after he had left work early on a Friday. He said that the warning was given to him at the instruction of Mr Clint Andrews, a Tooheys Team Leader. He had denied responsibility to Mr Andrews as he had swapped shifts with his agreement, but Mr Andrews had said that he should still be subject to a warning. In cross examination by FP, Mr Llagas agreed that Mr Sands had given him a warning after Mr Andrews had said that he would request Mr Sands do so.

Removal from site

[172] Mr Sands said that most terminations were carried out in accordance with directions or requests of Tooheys Management. In these instances, the worker’s employment with FP would also be terminated and the person would not be redeployed to another site. He provided a number of examples of email communications from Mr Barrowman asking that a worker be ‘moved’, for various stated reasons, including ‘getting very little use for the dollars paid’, two fitters having incorrectly repaired a valve, poor attitude and a request for one worker (Mr Adam Theoctistou) to be put on an initial probationary period. There was also an email from Mr Barrowman to Mr Smith and Mr Sands setting out Mr Henry’s repeated failures to conduct the ‘Ammonia Shift walk-around’ - a WorkCover requirement that FP had agreed to provide through its Tradespersons. In it, Mr Barrowman said: ‘I have told Brian that if he will not do the walk around that we would need to find another electrician who would carry out the tasks and he was putting his role at risk.’

[173] In cross examination by Tooheys, Mr Henry agreed that Tooheys’ requests to remove persons from the site was consistent with their contractual rights under the 2002 Services Agreement. Tooheys Engineers would be aware that if certain people were removed from the site, they would effectively be terminated by FP. He accepted that Tooheys had asked him to remove persons from the site, rather than terminate them. FP would terminate them if FP had no work for them or had itself decided to terminate the worker. In cross examination by FP, Mr Sands said that he was aware that Tooheys had the right to direct FP to remove persons from the site under the 2002 Services Agreement by way of giving notice of the reasons and time period for removal (cl 11.1(b)). Mr Sands was shown cl 18 of the 2002 Services Agreement, which set out the notice requirements under the Agreement, which had to be in writing and left at specific service addresses, in FP’s case, to the address of the General Manager. However, Mr Sands could not recall FP having received a notice for removal of a worker by this method. He had personally received written requests to remove workers for performance issues.

[174] Mr Sands said that being directed in his recruitment and termination roles started from the first week of his work. In that week, he was directed by Mr Paul Horn to offer Mr Moston, at that time a Packaging Fitter, a Core Position as a fitter on a bottling line. Mr Horn also directed him to provide a written warning to a Packaging Electrician and terminate a Brewing Technician; both for poor performance. Mr Fred Sadie also directed Mr Sands to terminate a Brewing Technician for poor performance. He was also required to advertise for a Non Core Maintenance Supervisor when someone in that position resigned to take on an engineering role with Tooheys. In cross examination by FP, Mr Sands agreed that he construed a two line email from Mr Barrowman as constituting a direction from Mr Barrowman to remove the Fitter from the site. It read as follows:

Mr Sands agreed that this email did not suggest serious or wilful misconduct or incompetence, as required under cl 11.1(b) of the 2002 Services Agreement.

Attendance at meetings

[175] Mr Coombes said that he attended daily and weekly meetings run by a Team Leader employed by Tooheys. He attended handover meetings at the beginning of each shift. There was a weekly team meeting held every Wednesday or Thursday. Toolbox talks were conducted throughout this meeting. Mr Hancock said in his written statement, that he attended monthly engineering meetings (but only briefly), Tooheys Safety Meetings (approximately two per year, held irregularly), 5S/MEX Meetings, Daily Shift Handover Meetings, Weekly Team Brief when asked by the Team Leader, Weekly Planning Meetings (when acting in the role of Maintenance Coordinator, which he did on approximately six occasions) and Toolbox Talks whenever requested by Mr Sands. With the exception of the Toolbox Meetings, Mr Hancock said he was directed to attend all the meetings by Tooheys.

[176] Mr Hancock was questioned as to his participation in these meetings. He agreed that when he was providing Non-Core labour, it was necessary for the purposes of cohesion that a forum be held so that everybody knew what they were doing at particular times. In cross examination by FP, Mr Hancock said that the weekly Team Briefs were generally a Tooheys meeting run by the Team Leader or production staff. In contrast, Toolbox meetings, at which OH&S issues were discussed, were generally run by FP staff, such as Mr Sands. However, he understood that Mr Sands was communicating what had been told to him by Tooheys.

[177] Mr Luke noted that he was required to attend Team Meetings conducted by a Team Leader. These were initially held weekly, but from around 2010, they became daily. He also attended monthly Team Toolbox talks. Mr Henry said that he attended weekly Tooheys Team Briefs at which the Tooheys Team Leader would conduct Toolbox talks. Mr Henry said that he was required to attend daily morning meetings and weekly meetings with other staff. In cross examination by Tooheys, Mr Henry agreed that while there were Tooheys Toolbox meetings, there were a number conducted by Mr Sands for FP as well.

[178] Mr Robinson said that he was required to attend a meeting conducted by a Team Leader before each shift. He would attend the relevant weekly meeting if he was covering a shift position. He also attended Toolbox talks held every two to three months, which were conducted with all of the Trades workers. In cross examination by Tooheys, Mr Robinson was shown a bundle of documents marked with a FP logo and headed ‘Safety Alert’ and ‘Toolbox Talk’. Mr Robinson agreed that he had received similar documents at Toolbox talks conducted by Mr Sands. He also noted that a document headed ‘Tool Box Talks’ and referring to a product used in welding was marked with a Tooheys logo. He could not say who organised these presentations. He agreed that Tooheys had safety obligations for all persons on site and that he had obligations to all co-workers, regardless of whether they were employees or contractors. In cross examination by FP, Mr Robinson said he had seen ‘Toolbox talk’ documents marked with the Tooheys logo a number of times. The information at Toolbox talks related to compliance with Tooheys’ procedures in relation to safety.

[179] Mr Llagas said that he attended weekly Team Meetings which were conducted by a Team Leader. He was required to sign an attendance sheet. Production issues and the Toolbox Talk were addressed at this meeting. In cross examination by Tooheys, Mr Llagas agreed that he had attended Toolbox meetings conducted by Mr Sands for FP in addition to those convened by Tooheys. Employees and contractors would attend the latter. Safety, compliance and maintenance issues would also be discussed at these meetings.

[180] Mr Hulbert said that he attended weekly formal maintenance meetings with the Team Leader/Engineer and Core Electrician. Upcoming projects, weekly maintenance, line improvements and personnel levels would be discussed. He also generally attended weekly Team Meetings, although he noted that he and the Core Electrician would sometimes be excluded from the meetings. He could not recall the timing of specific incidents where this occurred. He estimated he attended 60% of Team Meetings. Toolbox talks, training and line operation would be discussed at these meetings. In cross examination by Tooheys, Mr Hulbert said that he was sometimes asked not to attend such meetings by Team Leaders, and sometimes the FP workers were excluded while the Tooheys employees met in relation to enterprise bargaining and associated issues.

[181] Mr Blackley said that he attended Toolbox talks, usually run by Mr Sands, but occasionally run by a Maintenance Supervisor or Line Engineer. He also attended a site-wide meeting where behaviour at work was discussed and all present were encouraged to drink Tooheys products at social functions.

[182] Mr Wilczewski said that he attended weekly team meetings, where work, work practices and Toolbox talks would be discussed. He also had daily team meetings held at the beginning of each shift over the last two years when he worked at Tooheys, along with shift handover. Shift handover took approximately fifteen minutes. He also attended one of the yearly plant meetings where the CEO would make a presentation to all workers.

[183] Mr Sands provided copies of Toolbox talks that he had drafted and which were subsequently adopted by Tooheys. Two of which were branded ‘The F.P. Group of Companies’ and one of which was branded with a Tooheys Logo. These Toolbox Talks were delivered to FP workers, but also to other contractors on site. Mr Sands annexed a copy of an attendance form which he said demonstrated this.

[184] Mr Sands deposed that he had attended monthly trades department Supplier Review Meetings with all Tooheys engineers on the second Wednesday of each month, the purpose of which was for Tooheys to review its relationship with FP. Mr Sands was ambivalent about the purpose of these sessions, describing them as ‘whipping sessions’ where positive outcomes were rarely acknowledged. FP would be given a score out of 20, with 17 being deemed acceptable. If the yearly score was 85 or more, bonuses would be paid to FP workers. He understood that the policy across Lion Nathan was for Supplier Review sessions to be held with each supplier quarterly, although in the case of FP, this dwindled to almost nothing in 2011. He thought that FP was treated differently in this respect. Mr Sands said his own bonus was tied to this process.

[185] Mr Sands said that he attended Weekly Management meetings in his capacity as Site Maintenance Manager with Packaging and Brewing Management together. Mr Sands annexed the minutes of a meeting held on 23 April 2009, at which discussions were held under the following headings:

[186] Mr Sands said that he also attended Quarterly Meetings with Tooheys Brewing. He provided the minutes of a meeting held on 26 September 2009, at which Mr Gary Faulkner (Brewing Manager), Mr Sadie, Mr Barrowman, Mr Smith and he attended. Discussions were held under the following headings:

Attendance at functions

[187] Mr Coombes said in his written statement, that he had attended a number of Team Days held offsite at which a Management representative would give a talk about the company and the business, after which they were provided with food and refreshments. He thought of these as social occasions and listed a number of locations at which these were held including Clubs, sports grounds and a boat. He also said that he had attended Tooheys Christmas parties on about seven occasions. Mr Hancock said he attended three Tooheys Christmas parties held off site. In cross examination by Tooheys, Mr Coombes said that only Core Fitters and Core Electricians could go to the Team Days or Christmas parties. FP Maintenance were not invited. Both Mr Coombes and Mr Hancock said that FP people had not attended the Tooheys’ Christmas party for the last two years and that they had never attended a FP Christmas party. Mr Luke said he attended four or five Team nights, at which Tooheys paid for food and drink and provided a cabcharge to get home. In cross examination by Tooheys, Mr Henry said that he understood that FP had Christmas parties, and that Tooheys employees were not invited.

[188] Mr Llagas said that he attended Tooheys Team Days at which Tooheys would pay for a meal at a restaurant and provided a cabcharge card to get home. He also attended Site Team Days and CEO Road Show events after he was made a Core Fitter. He received Tooheys Team Day merchandise such as bags, shirts and a beer cooler. In cross examination, he agreed that he attended FP functions as well and said that Tooheys employees would attend ‘every now and then’. Mr Hulbert said that he was required to attend Tooheys Team Days, the last of which was held at Sydney Olympic Park in 2009. In addition to workshops and presentations, there was a tour of ANZ stadium with food and drink supplied. Mr Hulbert estimated he attended six Team Days. There was also a Tooheys CEO Road Show, but he was not always required to attend. He had attended about two or three of these meetings. Mr Henry said that he had attended three Tooheys CEO Road Shows at ANZ Stadium (2009 and 2011) and the Sydney Cricket Ground (2010). All workers at the Lidcombe site attended.

[189] Mr Henry said that he had represented Tooheys at the Corporate Games playing golf in 2010 and 2011. Mr Luke alluded to similar participation in cross examination by FP. Both said they had worn a Tooheys shirt and Mr Luke said he wore a Tooheys cap. Mr Henry noted that he had participated with Mr Idris Jama, Team Leader - Tooheys and an unnamed Brewing Manager.

[190] Mr Robinson said that after the installation of the labelling machines, he attended a Tooheys function at an Italian restaurant in The Rocks, which was paid for by Tooheys. Ten or twelve people attended and, aside from himself and Andrew Singdheo, all of the group were Tooheys employees. He was invited to another function following the second installation, but could not attend due to illness.

[191] Mr Hancock noted that in August 2011, he was required to perform minor maintenance work with ‘the whole team’ at a nursing home for disabled people. Everyone who attended wore Tooheys shirts. Mr Blackley said that he attended a farewell at the Catholic Club for Mr Chris Fox, a Line Engineer. The function was paid for by Tooheys, but the guests were both Tooheys and FP employees. Mr Wilczewski said that he attended some team functions and social events and attributed the fact that he did not attend more to his wife’s serious illness and his own status as her primary carer.

[192] Mr Sands commented in written evidence that he had drafted a PowerPoint presentation for the first Brewing Team Day which he attended. Mr Sadie, Mr Whiteside and the Brewing Trades workers also attended. He annexed a copy of this presentation to his statement. One part of this presentation, which Mr Sands was directed to present by Tooheys, set out a restructure whereby Fitters would move shift teams. He was directed further by Mr Sadie to say that this restructure would affect Electricians as well. He felt that Tooheys was using him as a ‘puppet’ for the purposes of this announcement. Mr Sands also annexed a copy of the 2009 Brewing Maintenance Team Day. Both of these documents were branded with Tooheys and FP logos.

[193] In response to an assertion made by Mr Noonan, Mr Sands said that Tooheys paid for all barbecues. He was also aware that if Trades workers did not attend Tooheys functions they could be subject to an accusation of ‘not being part of the team’. He said that Mr Henry, Mr Wilczewski and Mr Llagas all reported this concern to him.

Wearing of uniforms

[194] Messrs Hulbert, Hancock, Luke, Blackley, Wilczewski, Coombes, Robinson and Henry all agreed that FP employees wore a FP uniform and that Tooheys employees wore a Tooheys uniform. Pants and boots were also supplied by FP. Mr Luke said that he would obtain his uniforms from Ms Budwee. He also said that FP employees would occasionally wear Tooheys uniforms, but the general position was that FP employees wore a FP uniform. In re-examination, Mr Luke agreed that there were uniforms that had both Tooheys and FP logos at some time around 2003. In cross examination by FP, Mr Henry said that he continued to wear his Tooheys uniform after signing with Proden in 1991.

[195] Mr Llagas said that he wore a FP uniform, but would wear a Tooheys one if his FP uniform became dirty or wet while he was on shift. He was given a Tooheys-branded jacket which he wore to work in winter from 2009 onwards. In cross examination by Tooheys, Mr Llagas said that he was supplied a shirt, pants and boots by FP. The shirt had a FP logo on it. In oral evidence, Mr Llagas was shown a jacket that was marked with Tooheys on one side and Lion Nathan on the other. In cross examination by Tooheys, Mr Llagas agreed that he wore this jacket from time to time during winter.

[196] Mr Sands said that he was given 24 t-shirts branded with ‘Hahn Super Dry’ (a beer made by Tooheys) by Tooheys after he responded to a call for volunteers from sporting or social groups. Pictures of teams were to be used by the Tooheys marketing department.

Representation to suppliers

[197] Mr Henry said that he had authority to purchase goods or materials on behalf of Tooheys, up to a value of $1000. To do so, he would raise a work order for the job, create a purchase request and order equipment through the Store. Once it arrived, he would collect it from the Store. Mr Robinson also had the ability to purchase through suppliers and collect from the Store. Mr Hulbert said that he was authorised to purchase contract supplies, parts and materials on Tooheys’ behalf, initially with a spending limit of $100, then $500, then an unlimited spending limit, subject to pre-approval by Miles Baraclough or Graeme Gibson from Tooheys. He would introduce himself as ‘Dave Hulbert from Tooheys’ when carrying out purchasing. He noted that he had an email address ending in @lion-nathan.com.

[198] Mr Wilczewski gave evidence that he would always introduce himself as ‘George from Tooheys’ when speaking with suppliers. He did this on one or two occasions, as he usually asked the Maintenance Coordinator to order for him. He believed that Tooheys was poorly rated by suppliers. Mr Sands said that Maintenance Coordinators would always deal with outside suppliers and contractors using their @lion-nathan.com.au email address.

The applicants’ view of the relationship

[199] Mr Sands believed that Tooheys was his employer because they had the full benefit of his work and most of his direction came from Tooheys. He said that many of his tasks were outside the scope of his FP duties in his capacity as Maintenance Manager. The work he performed for FP was largely in the realm of payroll. The Tooheys site was extensively marked with Tooheys signage. The only place marked with FP signage was his office on site, which had a small FP sign. That sign was removed in 2005.

[200] Mr Sands agreed in cross examination by Tooheys, that he understood that under the 2002 Services Agreement that FP personnel were to work in accordance with Tooheys’ direction (cl 4.1(b) and that FP was to ensure that ‘personnel act in Tooheys’ interest at all time and in accordance with Tooheys’ reasonable direction (cl 5.1). He did not see this as inconsistent with his role. He was aware that the charge-out rates under cl 7 of the Agreement were the subject of occasional dispute, but he could not say whether this was an unusual circumstance as he had never been in a position to negotiate the contract. However, it did not reflect his experience at Pepsi. He was aware that FP was obliged to be liable for the relevant workers’ pay and entitlements under clause 9.1 of the 2002 Services Agreement.

[201] Mr Coombes deposed that he felt proud to work at Tooheys and felt that he was part of a team. He considered himself a Tooheys employee after twelve years of service. On the basis of a number of discussions, he had formed the impression that FP was created by Tooheys to avoid Union involvement. In cross examination by Tooheys, Mr Coombes said that he was not sure what FP was when he first contacted them. He also agreed that he knew that there was a year to year contract between FP and Tooheys for the supply of labour and that his work was provided for under that contract. He understood that FP was a labour hire firm, but emphasised that he was a Tooheys Core Fitter. He said in evidence: ‘Being part of a team is part of a team, isn’t it?’

[202] Mr Luke said that he had also felt part of a Tooheys team. He had attended the same meetings and had the same responsibilities as the Tooheys employees working in his role. He had told people he worked at Tooheys if he was asked.

[203] Mr Hancock said he felt that over time, Tooheys gave him more responsibility in his work. In cross examination by FP, Mr Hancock said that prior to working at Tooheys, he worked permanently for Skilled Engineering at a number of sites, usually for six to eight months at a time. However, he understood that when he began working at Tooheys after going through the interview process with FP, that this was a different arrangement to that he had with Skilled in that he was working at one dedicated site. He thought he had taken a job with Tooheys or a position at Tooheys through FP, but he had been confused as to his true employer throughout his period on site.

[204] In cross-examination by FP, Mr Luke agreed that he understood that he was a Tooheys employee and that FP was a ‘middle-person’ dealing with pay and administrative issues. The real directions came from Tooheys. He had applied for a job with Skilled at the suggestion of Tooheys. He believed that Skilled had not picked him up in 2012 because Tooheys had not wanted him.

[205] Mr Henry said that he took direction from Tooheys and was merely paid by FP. He noted that FP was ‘better organised’ within Tooheys than it had been when he left in 1994. He was 55 years old when he began working at Tooheys and that he had intended to work there until he retired. He felt that he was part of the Tooheys team. In cross examination by Tooheys, Mr Henry said he was not aware that FP had provided labour to other companies, other than Tooheys.

[206] Mr Robinson made the comment that he felt like a valued member of the Tooheys team about 50% of the time he worked at Tooheys, especially when he worked on shift cover or on specific projects. He felt that Tooheys had acknowledged that he was capable of further responsibility when he was offered a position on the twenty four hour roster, meaning that he received a pay increase and had further time off. If anyone ever asked, he would tell them that he worked at Tooheys, although he understood he was working at Tooheys through a labour hire company. He said at one point in his evidence:

[207] Mr Llagas said that he felt like ‘one of the team’ while he worked at Tooheys, and noted that Team Leaders would refer to a single team at team meetings. As he became more experienced, he was involved in familiarising casuals with the workplace. He had worked for other labour hire companies throughout his career and felt that the arrangement at Tooheys was different. At other labour hire jobs, he would do his shift and leave, but at Tooheys, he was paid bonuses according to performance, attended events, provided with training and received a case of beer at Christmas. In cross examination by Tooheys, Mr Llagas understood that FP had a certified agreement or enterprise agreement which applied to it. He agreed that his ‘employment agreement’ with FP set out that he could not work for a client of FP for a certain time after finishing work with FP.

[208] Mr Hulbert said in cross-examination by Tooheys, that he considered that he was working ‘on behalf of FP for Tooheys.’ He agreed he considered himself to be an employee of FP. He had doubts later on because he was not sure where his entitlements were coming from. In cross examination by FP, he said: ‘Everything was for Tooheys, let’s put it that way.’ He understood that everything - his pay, training and other benefits - were ultimately paid for by Tooheys.

[209] Mr Blackley commented that things like MEX meetings and the Tooheys site wide meetings made him feel like part of the team. He noted an occasion where an Acting Team Leader had told him to pick out a case of beer as a reward for his efforts. Occasionally, Team Leaders and Line Engineers would ask him for advice and he felt valued.

[210] Mr Wilczewski described his time working at Tooheys as a ‘strange situation’. He thought that Tooheys and FP were each ‘fifty percent (50%) my employer’. He attributed this to the facts that he took all directions from Tooheys and they supplied his protective equipment, while FP had put him on the site in the first place and paid him. When he had worked for other labour hire companies, it had been at a number of different sites. Those sites did not exercise the type of control exercised by Tooheys here. In cross examination by FP, he emphasised that his experience with FP was different to labour hire companies in Poland and Cyprus, where the relationship with the labour hire company was complete once he signed on with the relevant company. He agreed that he had worked at a number of sites when working for Skilled Engineering, including for MM Cables, Kelloggs, Dairy Farmers and Frito-Lay, where he might be working at different companies at different times of the week. This was very different to working at Tooheys, where he only worked at one site.

The restructure of 2011/12

[211] In cross examination by FP, Mr Sands said that he was present at a discussion at some time around February 2006 between Tooheys and FP where it was said that the 2002 Services Agreement would be terminated and that the arrangement would proceed on a month to month basis. He had understood that Tooheys would be trialling a new contractor, Skilled Engineering. Nevertheless, in his view, the terms of the 2002 Services Agreement continued to apply as he would refer to it from time to time.

[212] Mr Sands deposed in cross examination by Tooheys, that he was aware that there was a tender process underway in 2011. However, he was not involved in the drafting of the FP tender documents presented to Tooheys in early 2011. It was likely that Mr Smith had asked him questions about what went on onsite for that purpose. He was not aware that FP was claiming ‘millions’ from Tooheys. However, he was aware that the restructure in September 2011 was driven by a shrinkage in the beer market.

[213] It was Mr Sands’ further evidence that he was told by Mr Markham on 23 September 2011 that there was to be a restructure in Maintenance and that this was to be communicated to the Trades workers. Mr Henry was told by Mr Sadie, at this time, that he would not be required in two weeks’ time. Mr Sands queried Mr Sadie about this who told him to speak to Mr Idris Jama. He received an apology for the manner in which Mr Henry had been told about the matter.

[214] Mr Sands had been aware that FP had provided a tender document to Tooheys earlier in 2011. Mr Sands said that he had no direct questions from Mr Smith as to what he wanted at the site in the future. However, he agreed that he was in very regular contact with Mr Smith and often copied him in on emails and kept him appraised of everything he did. He said that ‘the general numbers and requirements of Tooheys were pretty well known. It was discussed weekly.’

[215] Mr Sands said that Mr Markham had directed him, on 14 October 2011 in words to the effect of the following:

When Mr Sands organised a room on site, Mr Markham said words to the effect of:

Mr Sands agreed. Mr Markham had told him that the manner in which he was handling the situation was ‘absolutely admirable.’

[216] After this discussion with Mr Markham, Mr Sands contacted Mr Smith to inform him of the situation. He was aware that Mr Smith was involved in discussions with Tooheys. Because Mr Smith was concerned as to Mr Sands’ welfare, he had suggested that he extricate himself from the situation and go home. Mr Sands drove two streets and then called Mr Smith again. Mr Smith told him to turn his phone off and go home. Mr Sands said that he understood that Mr Markham had subsequently dismissed six Trades workers from packaging. He denied that he had met with Mr Toomey that day.

[217] On the following Sunday, Mr Sands attended the Tooheys Childrens’ Christmas Party with his family. Food and drinks were supplied by Tooheys. The following day, he attended the Tooheys site, but was met at the gate by Mr Toomey who asked what he was doing on site. He responded:

[218] Mr Sands was involved in discussions with Tooheys about the FP workers, including himself. He forwarded the Core Trades bonus table to Mr Markham and forwarded the Maintenance Coordinator tables to Mr Hayhow and Mr Barrowman. He was told that Skilled had won the contract on 24 October 2011. He attended the site on 28 December 2011 as he needed access to MLS. His access was restricted after the restructure. He had called Mr Jelley about this. Mr Sands emphasised that he was not told to leave the site during this period and that he worked for Tooheys until the end of January 2012. He also looked for opportunities for the affected workers outside of Tooheys. He finalised payroll and made arrangements for the affected workers to collect their personal effects from the site. His security pass was active until he finished working at the Tooheys site in January 2012.

[219] In cross examination by Tooheys, Mr Sands said that he had not received one month’s notice from FP, in accordance with his Employment Agreement. He could not recall Mr Smith telling him in mid-December 2011 that he would no longer be required at the Tooheys site. He had not been aware that Mr Smith had been advised on 20 September 2011 that he and eight Fitters would no longer be required from 14 October 2011. He was aware on that day that there were discussions between Mr Smith and Tooheys about the tender and the outcome.

[220] Mr Sands said in cross examination by Tooheys, that he could not recall whether Tooheys’ offer of two weeks’ severance pay and one week per year of service with Tooheys was mentioned at the meeting of 15 October 2011. He thought that it was a commentary of Mr Smith that the relevant workers were entitled to a ‘Tooheys redundancy’. It was likely that Mr Smith had alluded to the offer and recommended that the workers reject it. He agreed that at the meeting, the possibility that Tooheys was the employer was raised, but he could not say if Mr Smith had said that he had received legal advice to this effect. He could not remember the words that Mr Smith used. He could not say who drafted the authority that was signed by himself and other workers on that day. Mr Sands knew Ms Pendlebury was subsequently retained, but could not say by whom. He could not remember when she had been retained, but thought that it must have been some time in October 2011. He remembered meeting with Ms Pendlebury because she had had trouble finding the FP office. He could not say who had paid her fees.

[221] Mr Sands was shown a bundle of email correspondence between himself and another person at Greens between late September 2011 and January 2012. He agreed that he was discussing improving the relationship between Omni and Greens with a representative of Greens in those emails. He had been asked to manage leave entitlements in relation to the Greens operation, while looking for new work for the workers who had been excluded from the Tooheys site. He agreed that he had represented Omni while working at the Tooheys site in late September and had prepared rosters for Greens from 6 October 2011. He had not received permission from Tooheys to use his email address for this purpose. He could not say if Greens was being charged by FP for his services. However, Mr Hulbert and Mr Henry had been placed at Greens during this time. Mr Sands was also shown email correspondence between himself and a contact at Nestle Group between 28 November 2011 and 6 December 2011, which set out the contact at Nestle for filling out FP Group’s new client form, and introducing Omni’s Engineer Manager, Mr Craig Higgins. He agreed that he was providing services for Omni Engineering during this period.

[222] Mr Sands was shown a further bundle of three emails from himself to Mr Smith. Mr Sands had attached a number of screenshots to these emails of Purchase Order Maintenance forms, the FP SharePoint site and the Tooheys Operations Drive Folder - FP Group. Mr Sands admitted that he had provided these to Mr Smith at his direction. He had understood that he was forwarding these to Mr Smith to support his contention that Tooheys was the true employer of the applicants. He conceded that it had ‘crossed his mind’ to ask Tooheys about providing this information, but he had decided not to.

[223] Mr Coombes said that he first became aware that Tooheys was to enter into an arrangement with Skilled in September 2011. He did not believe his position would be affected, but had heard ‘rumours’ that people might be dismissed at a meeting to be held on 13 October 2011. Mr Hancock had been aware of similar rumours for about two to three months prior to October 2011. Mr Llagas had been aware of rumours in September 2011 that Tooheys was going to ‘cut back’ on day shift maintenance workers. He claimed to have never been informed that he could apply to work for Skilled.

[224] Mr Luke was also aware of rumours that Tooheys and FP would be finishing their contract some time around November 2011 and he was told by his then Team Leader that he would need to sign up with Skilled, if he wanted to keep his job. He subsequently attended an interview with Skilled and undertook testing. He thought that he had signed up with Skilled. In mid January, he asked a Skilled staff member, Henry Vandermeel, why he had not been given a Skilled roster. He was told that Tooheys had made their choice of staff and that he was not one of them. In cross examination by Tooheys, Mr Luke agreed that he had undertaken a ‘full interview’ with Skilled. He understood that Skilled was a labour hire company, like FP.

[225] Mr Hulbert said that he had been approached by another contractor at Tooheys, Mr Jim Heuson, around 13 October 2011, who told him that he was ‘taking over your position as of Monday’, and that he had been told this by Mr John Hayhow. Mr Hulbert subsequently approached Mr Hayhow, introduced himself and asked if what Mr Heusen had said was true. Mr Hayhow said that it was, but that he could not say anymore. Mr Blackley said that he started to hear rumours in October 2011 that there were going to be ‘big changes’. He had approached his Maintenance Supervisor, Mr David Donaldson, who had told him that he thought that he would have no problems. On 13 October 2011, Mr Coombes left site early because his team had finished their work early. He spoke to Mr Sands who told him that he was not on the roster for the following week. He took this to mean that he had been terminated.

[226] Mr Hancock had flown to Queensland for a weekend away around this time. Mr Hancock received a number of calls from FP workers who told him that ten people had been told not to return to the site. He subsequently spoke to Mr Noonan and Mr Donaldson (both FP Maintenance Coordinators) and was told he should talk to Mr Hayhow or Mr Frank Markham. He spoke to Mr Markham, who was unwilling to discuss the restructure over the phone and said he would prefer to speak face to face. Over that weekend, Mr Hancock said that both Mr Noonan and Mr Blackley told him that he was one of the ten who had been ‘made redundant’. In cross examination by Tooheys, Mr Hancock acknowledged that he had received information from a supervisor (Mr Noonan) that his labour was no longer required at Tooheys.

[227] Mr Robinson said that he was called into the Bottling Hall production office with other fitters and electricians at about 1:55pm on 14 October 2011. The group of fifteen was split into two. His group of about eight people were spoken to by Mr Markham, who told them that they did not ‘fit the Tooheys shift pattern’. Mr Markham had also expressed his disappointment that Mr Sands had not been present to tell the group. Mr Llagas and Mr Hulbert also referred to a similar announcement by Mr Markham. Mr Robinson asked Mr Markham to confirm that the group was sacked, but Mr Markham did not respond. Mr Robinson claimed that he knew ‘deep down’ that he had been sacked by Tooheys on this day, but Mr Markham’s failure to be upfront had confused him. He was also upset because he thought he had been selected for termination due to a workplace injury he had received and for which he was still on restricted duties. He did not perform work for Tooheys or FP after this date.

[228] Mr Llagas said in written evidence, that he was hopeful that he had not been terminated and thought that he might have been able to start work again after Tooheys trialled the new shift pattern. He believed that FP was negotiating with Tooheys to this effect. In cross examination by Tooheys, he agreed he had been called into a meeting with Mr Markham, where he and others were told that they no longer ‘fit the restructure’. He agreed that Mr Markham had said that Mr Sands should have been there. Mr Hulbert was also called into the meeting with Mr Markham on the afternoon of 14 October 2011 and told he would not be needed on a new roster which was being trialled and that they would be paid ‘to stay at home for two weeks until there is a decision on how Tooheys is going to move forward permanently.’ Mr Blackley said that on Friday 14 October 2011, he attended a meeting with FP workers held by Mr Markham and Mr Hayhow. They were told that they would no longer be required due to the restructure, but that Tooheys would pay an extra week due to the late notice.

[229] Mr Coombes said he performed about 4-5 weeks work at FP’s factory after 14 October 2011. Both he and Mr Hancock were paid up until January 2012, and he understood that Tooheys had paid him for two weeks’ wages after 14 October 2011. This had contributed to his confusion as to who his employer was. Both Mr Coombes and Mr Hancock claimed they never received a letter from Tooheys indicating their services were no longer needed. Mr Hancock received a letter terminating his employment with FP in late January 2012. Mr Coombes said he received similar correspondence, but could not find it. Both of them claimed they had not been paid their entitlements. In answer to a question from me, Mr Coombes clarified that he had not been paid his long-service leave or his annual leave entitlements. Mr Hancock deposed that because he was paid by FP for some time after he had stopped working at Tooheys, he thought that FP was his employer at this time and would offer him more work at Tooheys or get him a new role somewhere else.

[230] Mr Wilczewski had broken his leg one day after taking leave which commenced on or around 5 September 2011. While he was recuperating, he had received phone calls from persons he worked with at Tooheys, suggesting that there was something happening and that there was a possibility that people would be losing their jobs. He could not recall the identities of the people who contacted him or the exact dates. However, he contacted Mr Barrowman about one or two weeks after his leave had started, but Mr Barrowman had said that there was a secret and he could not tell him what was happening. Some time around the end of September, he received a text message from Mr Sands in words to the effect of ‘You will be paid your normal wages from Tooheys for 4 weeks, after this FP will pay you.’ A matter of days later, he received another text message from Mr Sands, which said:

Mr Wilczewski described the effect this message as him feeling ‘like a thunderbolt from heaven in nice weather.’ While he had previously heard rumours, he had not expected he was going to lose his job. He attended Tooheys at some time in October 2011 to collect his tools, with his friends helping, as he was still on crutches. Mr Glen Yeats suggested to him that he apply for some of the new roles, but he did not think he could apply while he had a broken leg. He stopped receiving payments from FP on 14 December 2011. Mr Henry said he was informed at a meeting with Mr Sadie and Mr Barrowman in the workshop at the Lidcombe site on 14 October 2011 that he was no longer required at Tooheys because FP had lost the contract. He left the office and the premises immediately.

[231] Mr Luke said that he worked at Tooheys up until 28 January 2012. He had been contacted by Ms Budwee, who told him that this was the date when he would finish up. He had never received a letter of termination from Tooheys. He had later spoken to an employee at Tooheys who told him that he was basically doing the same things that he had been doing. In cross examination by Tooheys, Mr Luke agreed that he was still working for FP, being Omni Engineering, which was one of the FP Group of Companies.

Making of the unfair dismissal applications

[232] In cross examination by Tooheys, Mr Sands agreed that he had sent a text message or called all the affected workers to see if they would attend a meeting at the FP offices in Glendenning on 15 October 2011. He did this after Mr Smith had said that they needed to have a meeting. At the meeting, Mr Smith did most of the talking and he raised the possibility that FP was not the employer. Mr Sands agreed that Mr Smith had also suggested that FP was going to get the money for the workers’ entitlements out of Tooheys. He believed that the reason for the current proceedings was to exert commercial pressure on Tooheys to pay the workers’ entitlements.

[233] In written evidence, Mr Sands said that at the meeting, Mr Smith had outlined the discussions between FP and Tooheys. He told the workers who were no longer required at the Tooheys site, that they would continue to be paid for two weeks by FP while those discussions continued. Mr Smith told them Tooheys had told FP to pay the two weeks and provide one week per year of service to each of the affected workers in return for an indemnity protecting Tooheys from any further claims. The workers rejected this as they believed that Tooheys was liable to pay their redundancy entitlements. FP continued to pay the workers until late January 2012. Mr Sands alluded to ‘a couple of other meetings’ with the FP workers, where the filing of unfair dismissal applications was discussed and where FP management had suggested that Tooheys was the true employer. A consensus to file unfair dismissal claims was reached and Ms Brooke Pendlebury, Solicitor, filed the claims on their behalf, some time in early February 2012.

[234] In cross examination by Tooheys, Mr Sands agreed that he had prepared the resume annexed to his statement in or around January 2012 and that he had offered Mr Smith as a referee on that resume. He was currently employed by Omni Engineering and had been so since 25 January 2012 as a casual. The change to Omni had occurred overnight as he had been ‘wound up’ by FP on 24 or 25 January. He claimed Mr Smith said words to the effect of ‘We’re terminating your services this afternoon. We’re not paying your entitlements. You’ll have to go to Fair Work Australia to find your entitlements. We need to offer you a job as casual position at Rheem to facilitate some annual leave that’s being taken down there.’ Mr Sands confirmed that he believed he was employed by FP between November 2003 and January 2012. He had thought it was FP’s responsibility to pay his entitlements, but Mr Smith had told him that FP may not be the true employer on 15 October 2011.

[235] A number of the applicants identified correspondence, dated 31 January, sent to them by Mr Smith in the following terms:

[236] After the restructure, Mr Coombes claimed that there was much confusion on the part of the affected employees as to who their real employer was. Personally, he was not aware that he was able to file an unfair dismissal claim and was not aware of any time frames in relation to such an application. He said that he had instructed Ms Pendlebury to file a claim as soon as he was aware. In cross examination by Tooheys, Mr Coombes deposed that the employees were all contributing to legal fees for these applications and that Mr Sands had organised their legal representation by Ms Pendlebury. Mr Coombes disagreed that he had only decided to pursue an unfair dismissal application after FP had written to him suggesting that he get independent legal advice as FP was unable to pursue his personal entitlements at Fair Work Australia (as it then was). They had all received the letter and then decided between the ten of them, to file the applications. Mr Hancock said that there had been meetings between October 2011 to February 2012 where FP had told the applicants that they were not the true employer, but a ‘payroll agent’. Ms Pendlebury was present at some of these meetings. Mr Hancock had attended a meeting with Ms Pendlebury after receiving his termination letter. He was advised to file applications against FP and Tooheys in February 2012. In cross examination by Tooheys, Mr Hancock denied that he was aware that FP had been represented by McArdle Legal since September 2011.

[237] At the time of filing his written statement, Mr Hancock said that he was still confused as to who his employer was. He was also unsure as to when he had actually been dismissed. He had relied on FP at the time of the restructure for guidance as to what he should have been doing and was preoccupied with trying to find another job. He attended a meeting at the FP office about two weeks after his return from Queensland and understood at this point that he was no longer required to work at Tooheys. It was at this meeting that the applicants were told that Tooheys said they would be paid two weeks pay. In cross examination by Tooheys, Mr Hancock said that Mr Sands and Mr Smith attended the meeting held by FP two weeks after he returned from Queensland. Mr Porretta was not there and he could not recall whether Mr Gorman was there. When he asked why FP was proposing to continue to pay and employ him, he was told that FP was ‘going to sort out the situation’.

[238] In cross examination by Tooheys, Mr Hancock said that he attended two meetings between October 2011 and February 2012 at the FP offices. Ms Pendlebury attended one of these meetings. He had also met Ms Pendlebury at FP’s factory in Glendenning. He could not recall specifically if he had been issued with a costs agreement personally or if it had been presented to the group. He had never paid fees to her. He understood that her services were arranged by FP. It was possible that FP was going to cover the fees. He had received the benefit of legal advice from Ms Pendlebury by way of letters which advised him to make applications against both FP and Tooheys. He believed that he continued to be paid by FP because it was trying to ‘sort out’ things with Tooheys. He could not recall anyone from FP saying that they were trying to procure a settlement on his behalf with Tooheys and that keeping him on the books would assist as ‘leverage’.

[239] Mr Blackley went on a planned family trip to Orange on the weekend, but Mr Sands called him on his mobile and asked if he could attend a meeting at the FP office in Glendenning. Mr Sands said words to the effect of the following:

Mr Blackley said that he felt numb. He was confused as to why he was no longer required at Tooheys. He took Mr Sands at his word. FP had never told him why they continued to pay his wages up until late January. He had never asked why they would not pay his entitlements. However, he believed that negotiations between Tooheys and FP were ongoing and that something could come out of them. In cross examination by Tooheys, Mr Blackley agreed that until 14 or 15 October 2011, he had no reason to doubt that FP was his true employer. It was only after then that he started to have doubts. In cross examination by FP, Mr Blackley agreed that he had never really considered the question of who his employer was prior to 14 October 2011. After this date, he realised after speaking to others that things might not be so clear cut.

[240] In cross examination by Tooheys, Mr Blackley agreed that he had understood on or around 15 October 2011 that FP was organising legal advice, but he was not sure who was paying. He had not been charged or issued with a fee notice by a lawyer. He thought that it was unlikely that he would be allowed back on site. He believed that he was appointing FP to negotiate for a monetary settlement on his behalf. He had found out that Tooheys had terminated its contract with FP at some time at the end of October or beginning of November, effective at the end of January. He realised, at this stage, that there was no chance that he would return to the Tooheys site. He trusted FP to take appropriate legal action. He could not explain why his unfair dismissal application had been lodged prior to 27 January 2012 or 2 February 2012.

[241] Mr Blackley said that Mr Sands told him later in the afternoon of 15 October 2011 that FP was going to seek legal advice and asked him to sign a form allowing FP to seek advice on his behalf. He no longer had this document. He spoke to someone from FP about once a week in the period between then and late January 2012, although he thought that FP was negotiating with Tooheys to get his entitlements. He became more doubtful that he would start to work at Tooheys again as time progressed. He was not entirely sure as to who his employer was, as FP had been saying that Tooheys was responsible for the payment of his entitlements. FP continued to pay his full wages up until 28 January 2012, though he performed some work for Greens Foods during this time. Mr Blackley said that he attended a meeting at the FP office in Glendenning and a lawyer was present. The group was advised that Tooheys could be their real employer. Subsequently, he instructed Ms Pendlebury to file an unfair dismissal application, which was filed on 4 February 2012. He received correspondence from FP on 27 January 2012 stating that his employment was being terminated effective from 28 January 2012. Mr Blackley emphasised that he had been ignorant of his rights when he had finished working at Tooheys and had not known he could make an application for ‘unfair dismissal’. He was confused about who his employer was and the relationship between Tooheys and FP. He had also thought that FP were taking legal action on his behalf at this time. He had not thought to provide his own independent application.

[242] Mr Wilczewski claimed that he was ignorant of his right to make an application for an unfair dismissal remedy. After being told that he would no longer be working at Tooheys, he believed that FP was taking action on his behalf, against Tooheys. He had not attended any meetings at FP, due to his own injury and his wife’s ill health. However, he formed this impression from phone calls and text messages from his co-workers. Accordingly, he did not think he was required to make a separate application.

[243] In cross examination by Tooheys, Mr Wilczewski said that he was not sure whether the text message from Mr Sands had said that Tooheys would pay his wages for four weeks, or if it was two or three weeks. Nevertheless, he understood that FP would keep paying him after this time. He was not really concerned as to who was paying him; he was just happy to receive the money. He was on sick leave from 6-7 September. He had a doctor’s certificate at the time saying that he could not work for three months. When he received the text message saying that he was to collect his tools, he still was not sure whether Tooheys had decided that they no longer needed his services, as he had heard nothing official from Tooheys. FP continued to pay his annual leave and holiday payments until 14 December 2011.

[244] Mr Wilzcewski believed FP had commenced proceedings in relation to unfair dismissal on his behalf, but he was not told this by Mr Sands. He thought that FP and Tooheys were negotiating and that FP were acting on his behalf in these negotiations. He was not told about FP getting legal advice for all ten employees, because he was not present at the meetings. He could not recall receiving a message saying that FP was going to go to Court. Mr Wilzcewski was not paid by anyone between 14 December 2011 and 27 January 2012, although he did receive a bonus and some other amount (possibly to do with public holidays). He did not ask why it stopped paying him after 14 December because he had had an accident at home and he had exhausted his leave. He agreed that the certificate of service he had obtained from FP, identified FP as his employer. He had arranged the certificate with Mr Smith and Ms Tracy Higgins, the FP paymaster. In cross examination by FP, Mr Wilczewski said that he did not contact anyone at Tooheys to ask about his Statement of Service because he did not know anyone there.

[245] Mr Henry said that at the meeting at the FP office on 15 October 2011, Mr Sands, Mr Smith and three directors of FP were present, along with a number of FP workers. Mr Smith addressed the meeting and said that FP had had no prior knowledge of Tooheys’ intention to remove FP workers from the Lidcombe site. Mr Smith added that FP considered that Tooheys was the true employer of the FP workers and that FP itself was just a paymaster. In cross examination by Tooheys, Mr Henry conceded that this was the first time that he had heard this idea. Mr Smith had indicated that FP intended to have the answer to the question in court and would be taking legal advice. FP would not be terminating the employees at that time. Mr Henry understood from this meeting that he would continue to be paid at a reduced rate. He was paid until 23 December 2011, although did not perform any work. In cross examination by Tooheys, Mr Henry disagreed that Mr Sadie had told him on 23 September 2011 that there had been a restructure of the rosters, there was no work allocated to him on this roster and that his services would no longer be required two weeks hence.

[246] Mr Henry agreed in cross examination by Tooheys, that FP had terminated him on 23 December 2011, without notice or payment in lieu and without payment of accrued entitlements. However, he did not think to ask FP about these entitlements at the time. Mr Henry claimed that he was not aware that he could make an unfair dismissal application at the time that he stopped working at the Tooheys site. He did not hear much after being told that FP was going to take legal advice, until some time around 20 December 2011. He believed that FP would be investigating his legal options. He was confused as to the identity of his employee and the fact that FP continued to pay him served only to confuse him more, although he said in cross examination by Tooheys that he had never asked, but understood that they were going to continue paying him until things were ‘sorted out’. He could not explain why he did not ask about his entitlements at this time. In his written statement, Mr Henry claimed he was unaware of any time limit for unfair dismissal applications. On or around 20 December 2011, Mr Smith told him over the phone that FP had had legal advice to cease paying his wages and that he should file an unfair dismissal application naming Tooheys as first respondent and FP as second respondent. Mr Smith asked him to come into the FP office to further discuss the matter. He met Mr Smith at the office on 23 December 2011, who repeated that he should lodge an unfair dismissal application with FWA and added that he should do it as soon as possible. He did so on 23 December 2011.

[247] In cross examination by Tooheys, Mr Henry said that he could not remember signing a document at the meeting on 15 October 2011 allowing FP to pursue claims against Tooheys on his behalf. He agreed, however, that his signature appeared on such a document that was shown to him, along with the signatures of others. He could not recall an assurance by FP that they would pay Ms Pendlebury’s legal fees. He did not discuss the arrangements for legal advice with Mr Sands. However, he understood that Ms Pendlebury was to be their representative. He thought he may have been personally issued with a costs agreement or retainer. He had understood that Mr Sands would ‘take care’ of the provision of legal advice and that they would pay for it individually later. He said that he had filled in his unfair dismissal application form in Mr Smith’s office after he had been told that FP would no longer be paying him. In fact, Mr Smith had typed it up. He agreed that he identified 14 October 2011 as the date of dismissal on the form. He understood that FP were no longer paying him because Tooheys had stopped paying them, although he could not identify the date at which Tooheys had stopped paying FP. He had understood that FP was terminating him effective from 23 December 2011. He agreed that the form identified that he had not been paid his entitlements, but said that he did not query this with Mr Sands at the time. He did not believe he could make an application for unfair dismissal until this time. He noted that he did not speak to Ms Pendlebury until after making his application.

[248] Mr Luke agreed in cross-examination, that the advice by Ms Pendlebury, that he may be able to make an unfair dismissal claim, was the first time that he had understood that there might be a legal argument that he was employed by Tooheys. He agreed that nobody in authority at Tooheys had ever suggested that they were his employer and that FP had always said it was his employer. In cross examination by Tooheys, Mr Luke agreed that he had filed the unfair dismissal application when he realised that he did not have a job with Skilled Engineering. He said that he had met Ms Pendlebury at a meeting and that ‘somebody’, possibly Mr Sands, had engaged and paid her. He had never received a retainer or letter of advice from Ms Pendlebury.

[249] Mr Robinson also attended the meeting at FP’s office. They were told that they would be paid by FP until the contract with Tooheys expired. They were also told that FP was seeking advice as to the identity of the applicants’ employer. This confused Mr Robinson further. He understood that FP was getting legal advice on their behalf. Mr Robinson was paid until the end of January 2012. He was told by Mr Sands at around this time that if he wanted to pursue an unfair dismissal application, FP would need to terminate him. Neither FP or Tooheys had paid his accrued entitlements at the time of making his application. In cross examination by Tooheys, Mr Robinson said that at the time that he had attended the meeting, he had been hopeful that Tooheys and FP could come to an agreement and that he would be reinstated. He also said that he had attended another meeting approximately three months later and a lawyer had been present at the meeting, although he could not recall her name.

[250] Mr Robinson agreed in cross examination by Tooheys, that a document with the heading ‘I give permission for FP to act on my behalf and seek redress with respect to my removal from Tooheys Brewery’ and dated 15 October 2011 was signed by him. He understood that this was to determine the identity of his employer. Mr Robinson said that he had been confused about this before, but the meeting had left him more confused. He did not pay for any legal advice or receive a retainer or costs letter. He agreed that he had not asked FP for his entitlements as he thought he was still employed by it. He had not instructed Ms Pendlebury to file an application on his behalf.

[251] Mr Llagas remembered being told at the 15 October meeting that FP was trying to get its workers back on the Tooheys site. He still did not believe he had been terminated at this point and thought he would return to work after things had ‘settled down’. He continued to be paid by FP at a reduced rate. He recalled ‘uncertainty’ as to the identity of the employer. He also worked for Omni during this period and took a holiday to see family in the Philipines for 3-4 weeks, during which time he was out of contact with FP. He was informed by a letter from FP in late January 2012 that he had been terminated and would no longer be paid by them. This was the first time he understood that he had been terminated.

[252] Mr Llagas said in cross examination by Tooheys, that he never thought of Tooheys as his employer until after 14 October 2011. In cross examination by FP, Mr Llagas said that he had discussions with FP workers at Tooheys about their entitlement to be covered by the pay structure of the Tooheys ‘Operators’ enterprise agreement. They understood that they received pay increases at the same time. He agreed that certain doubts had ‘crystallised’ in his mind after 14 October 2011.

[253] Mr Llagas said that after he had received the letter terminating his employment with FP, Mr Sands invited him to a meeting in early February 2012 with FP and a lawyer. He subsequently instructed Ms Pendlebury to file unfair dismissal applications on his behalf. He agreed that he had signed a document on 15 October 2013 expressed as giving FP permission to act on his behalf to seek redress from Tooheys. He understood this as appointing FP to act on his behalf in any future unfair dismissal application. He could not remember whether Ms Pendlebury had ever issued him with a costs agreement or retainer. He had understood that Mr Sands would ‘look after it’. He conceded that he did not file an unfair dismissal application until after he was terminated by FP on 27 January 2012. He also agreed that it was odd that FP was keeping him on their books while trying to resolve the dispute with Tooheys, as he was not performing any work.

[254] Mr Hulbert said that he also attended the meeting at the FP office on 15 October 2011. He recalled that Mr Smith had said ‘We have a roster that includes all of you; we are going to fight to get you back in there on that roster.’ Mr Hulbert felt that he was ‘in limbo’. He received his last full pay from Tooheys on 2 November 2011 and was paid by FP at a rate of 30% less than his usual pay from Tooheys, although he worked through this period for other companies. At the time of the proceedings, Mr Hulbert said that he was still ‘on the books’ with Omni, but did not have regular work.

[255] Mr Hulbert further deposed that he had attended another meeting on 8 November 2011 at which Mr Smith said:

Mr Hulbert said that he was unwilling to sign, as he was concerned that if he took twelve weeks’ redundancy, he would forego his other outstanding entitlements. It was at this time that he believed that he had been terminated. Before this, he had taken the statement of Mr Markham that a ‘new roster’ was being trialled at face value. He was ‘baffled’ and said that he had not been given a reason or anything in writing. In cross examination by Tooheys, Mr Hulbert said that he was unaware until 8 November 2011 that FP had provided Tooheys with a draft roster, which Tooheys had rejected, and that this had occurred shortly after the meeting on 15 October 2011. He knew at this stage that it was unlikely that he would return to the Tooheys site. Mr Hulbert said that Mr Smith had alluded to the offer made by Tooheys on 8 November 2011 and had told the relevant workers not to accept it. Mr Smith had been saying that FP was not the employer and that Tooheys had not paid FP.

[256] Mr Hulbert said in further cross examination by Tooheys, that he had told Mr Smith that he was planning to go to the AMWU about the matter. Mr Smith said that he wanted to go along and tell the Union that FP was not really the employer. Mr Morrison, of the AMWU had said that there had been a breach of s 357 of the Act. Mr Smith had said that Mr Hulbert had been unfairly dismissed. It had taken the AMWU eight days to file the relevant application, which he did not find out until later, was not for an unfair dismissal application. The hearing was held at Fair Work Australia on 10 January 2012 and FP appeared with legal representation (Ms Deirdre McEvoy), as did Tooheys (Mr Morley). At this conference, both Tooheys and FP stated that they were not the employer, while Mr Hulbert had just wanted his outstanding entitlements. These were not even discussed at the conference. He had been unhappy with the manner in which the AMWU had handled his problem. After the conference was over, he took a train home with the AMWU official, but never heard from him again. He subsequently spoke to another Union official. He told him that he was going to continue the dispute privately. This was a reference to Ms Pendlebury’s representation. As Mr Henry was already pursuing an unfair dismissal remedy and was represented by Ms Pendlebury, he ‘went along with him’. He was later emailed a costs agreement by Ms Pendlebury, but had never paid her, and thought that Mr Sands may have done so.

For Tooheys

Mr Mark Toomey

[257] Since becoming the Operations Director in July 2010, Mr Toomey has administered the 2002 Services Agreement. Mr Toomey claimed that Tooheys made payments to FP of $8 million in the last financial year and the last payment was made on 26 March 2012. He said that a restructure of Tooheys’ operations was necessary in 2011 as a result of a reduction in volumes and restructured technical packing and brewing. Production was reduced by 10% and the demand for labour was similarly reduced by 27 roles.

[258] Mr Toomey undertook discussions with Mr Smith about the requirements for nine fewer tradespersons engaged by FP. At first, Mr Smith had asked him to nominate who was not required. This changed when Mr Smith advised that FP would prefer to retain all its people and have other roles held by other contracting agencies, be made redundant. Mr Toomey rejected this and told Mr Smith it was a matter for FP as to whether workers were retained by it and transferred to other clients.

[259] Mr Toomey became concerned that FP had not said anything to its workers for many weeks about the restructuring. Mr Smith had refused to communicate the restructure to FP’s tradespersons because he wanted a number of contract issues resolved and to know the outcome of the tender process. Ultimately, Tooheys Management informed some of the FP tradespersons on 14 October 2011. Mr Toomey decided to pay an ex gratia payment of two weeks pay to each of the affected FP tradespersons as he believed it was unfair that the workers had not been provided with any notice that their roles were no longer required. The payment was made on the condition that those payments would be made directly to the contractor affected.

[260] Separate to the restructure, Mr Toomey said that Lion Procurement had decided to seek tenders for the site contract work. Mr Toomey claimed he had personally told Mr Smith a year before, that this was what the Company intended. Mr Toomey said that an out-counselling meeting was held on 2 December 2011, involving Mr Smith, Mr Gorman and Mr Porretta. The purpose of the meeting was to provide feedback to FP on its tender.

[261] Mr Toomey said that Tooheys chose to give access to the facilities on site to all people, whether they were its own employees, cleaners, truck drivers, contractors and visitors. This included the canteen, gym access, the Tap Room, car parks and the general store.

[262] In a supplementary statement, Mr Toomey said that to his knowledge, there had been no departure from the written terms of the 2002 Services Agreement by either Tooheys or FP. He said that in his regular dealings with FP, Mr Smith had demonstrated his awareness of the 2002 Services Agreement and had used it as a reference for remuneration purposes and as the basis for negotiations to modify the Agreement in 2011.

[263] In respect to discipline, Mr Toomey claimed he only became involved in matters affecting a contractor where:

He was unaware of any matter regarding a FP employee that was not handled without the involvement of FP management or supervisors. Where he had been involved, he always requested the contracting company to investigate the matter. On some occasions, the contracting company would ask Tooheys for recommendations on the nature and level of discipline to be implemented. This was understandable, given the Tooheys policies, procedures and standards expected by all persons on site. Despite occasionally providing such recommendations, Mr Toomey believed the ultimate decision was always imposed by the contracting company.

[264] Mr Toomey was involved in the Ian Luke incident concerning the security guard. He and other Tooheys managers recommended to Ms Budwee that Mr Luke be suspended while FP investigated the matter. He also recommended FP speak to a range of people with any information, so that FP could form a holistic and balanced view of the incident. Mr Toomey did not believe he would have said ‘We’ll let him off with a final warning.’ He believed he would have agreed with Ms Budwee’s findings and supported her decision, which was the final one for FP to make.

[265] To his knowledge, Tooheys did not approve any absences from site of FP contractors, without FP’s knowledge. Mr Toomey recalled an incident involving Mr Chris Speck and a visit to Thailand. A Tooheys Team Leader, Mr John Barrowman’s actions were found to be inappropriate and he was disciplined.

[266] Mr Toomey disputed Mr Smith’s recollection of their meeting (or telephone conversation) on 20 September 2011. It was Mr Smith who had asked him to nominate the FP workers to go. Mr Toomey said he then met his leader, Mr George Bearzot and told him the meeting went very well, that Mr Smith was very receptive and had asked Tooheys to nominate the workers no longer required.

[267] When he met Mr Smith again on 22 September, Mr Smith changed his earlier request. He rejected Tooheys’ list of names and said Tooheys had no right to decide who would be required. Mr Toomey believed that FP’s selection would limit FP’s liability from entitlements and maximise their profit. Tooheys reviewed the FP list based on its operational requirements going forward. On 10 October 2011, Mr Toomey sent Mr Smith the names of the tradespersons no longer required. There was no constructive response and, thereafter the rosters were prepared without the names not of the persons Tooheys had nominated.

[268] In cross examination by Mr Seck, Mr Toomey accepted he had only direct knowledge of what had happened at Tooheys from the time of his appointment as Operations Director in July 2010. When he said he had responsibility for administrating the 2002 Services Agreement, he meant that he had to ensure compliance by both parties. He was the liaison in dealing with FP on behalf of Tooheys. He was familiar with the terms of the 2002 Services Agreement and had spoken to his predecessor, Mr Luke Sawyer about it. He said that after speaking to a number of people, including Mr Smith, he had understood the Agreement continued in force, despite it being said to expire on 31 March 2005. There had been nothing to replace the 2002 Services Agreement at that time.

[269] Mr Toomey claimed he was not aware of an email from Tooheys in 2006 indicating it wished to terminate the 2002 Services Agreement. Mr Toomey acknowledged that the Agreement referred to FP agreeing to provide services to Tooheys, as requested by Tooheys from time to time. The types of services are referred to in Appendix B as roles such as Core Maintenance Trades, Preventative Maintenance Trades, Maintenance Coordinators, Maintenance Supervisors and Brewery Technicians. In practical terms, there would be a discussion with FP as to the person best suited to the position with the right skills to do the job. He was unaware of anyone who was selected by FP being rejected by Tooheys. Occasionally, there were people who did not meet Tooheys expectations.

[270] Mr Toomey acknowledged that he did not know what occurred between a Tooheys Team Leader and a FP worker. In accordance with cl 12.1, Tooheys personnel would inform FP of what was required to be done and FP would then inform their personnel of what was required. On other occasions, there may be direct communication between Tooheys managers and FP workers. This was all normal labour hire practice.

[271] Mr Toomey was taken to Appendix D of the 2002 Services Agreement. He said there was a separate performance management system to the Tooheys Pay for Performance (PFP) system. He did not know if it was designed by Tooheys. The bonus payment depended on an overall site team performance of all workers. That system was designed by Tooheys and whether the outcome was achieved was a decision of Tooheys.

[272] Mr Toomey believed that an individual’s annual appraisal would be conducted by the FP Maintenance Supervisor, arising primarily from feedback from the Team Leaders and the team itself. He did not agree that the Team Leader was the best person to assess whether or not a FP worker met the accountabilities and objectives. The objective was to have equitable consistency between what Tooheys employees were receiving and what FP workers were receiving. Pay for Performance was separate to the annual bonus.

[273] In respect to discipline, Mr Toomey reiterated that Tooheys would be involved in the process and consulted, but FP would carry out any investigation and ultimately it was their decision as to what to do. Mr Toomey recalled meeting with Ms Budwee about the Ian Luke incident after he had been briefed by Ms McEwan and Ms Stevens. Tooheys had conducted their own investigation with the security company. Ms Budwee’s account of the incident was the same. Mr Toomey said because it had been a safety issue, Mr Luke had been suspended. He believed he may have advised Ms Budwee to give Mr Luke a final warning and that is exactly what she did, although it was probably her advice and recommendation which he listened to and accepted. This was consistent with the 2002 Services Agreement. Mr Toomey noted that Mr Luke finished at Tooheys on 28 January 2012, when the FP contract ended and he did not secure a job with the new contractor, Skilled Engineering.

[274] In respect to the 2011 restructure, Mr Toomey deposed that it involved individual assessment of all Tooheys and contractor employees. They first looked at the structure to deliver the volumes and then identified the numbers of workers to fit the structure. At first, Mr Smith asked Tooheys to identify its workers not required, then Tooheys undertook the task. Of 27 roles not required, 9 were from FP. He agreed if two or more people were identified as suitable for one role, an assessment of suitability was made. Mr Toomey was aware of the people involved, but not the detail of selection. He believed this was consistent with Tooheys’ rights under the 2002 Services Agreement. He agreed the workers were not removed for reasons of misconduct, incompetence or negligence. However, he had relied on cl 5.2(a), concerning FP providing personnel to meet Tooheys’ requirements, from time to time.

[275] Mr Toomey acknowledged that the process involved consideration of roles and individual workers through an assessment by Tooheys managers by means of a template document. This involved knowledge of an employee’s skills, experience and personal attributes. Mr Toomey said Mr Smith did not agree with the nine persons named by Tooheys and proposed nine others. There was then an extensive chain of emails about the persons selected. Mr Smith had provided him with a roster which included the applicants in it. This was rejected. Mr Smith supplied him with the names of contractors from other companies, who FP wanted removed, rather than their own workers. Mr Smith believed it was inconsistent with the Agreement and Mr Toomey believed FP was obstructing the restructure. Mr Toomey could not recall if the decision on names had been made before he spoke to Mr Smith on 20 September 2011.

[276] Mr Toomey deposed that when he made the offer of a two week payment to the nine FP workers, he was not certain that the effect of Tooheys’ decision was that they had no other job to go to as he knew from what others had told him, that FP had contracts at other sites. He believed it was unreasonable that the workers were given no notice of removal from site and that the two week payment gave time to move a contractor from one site to another. He was not sure that they would lose their job entirely. Mr Toomey suggested that he had no role in preparing or assessing the tenders in 2011. However, he did give feedback to the Purchasing department, which dealt with the tenders.

[277] Mr Toomey could not be sure if he had seen a copy of the Skilled Engineering contract. However, it was based on a Lion wide document and he knew the key elements of it. These were that Tooheys would communicate its requirements through a coordinator. Team Leaders were required to place their requirements with a coordinator on a weekly basis. On discipline, Tooheys would notify Skilled of issues that did not comply with policy or directions. He disagreed this was different to the arrangement with FP. Mr Toomey conceded that when Skilled took over the contract, Tooheys gave it a list of the workers it wanted kept on. However, there were workers who Tooheys wanted kept on, but Skilled did not pick them up. As to discipline, the same arrangements Tooheys had had with FP were to apply to Skilled.

[278] In respect to the Mr Luke incident, Mr Toomey gave further evidence that he had acted as the Responsible Officer under the Occupational Health and Safety Act 2000 (NSW) and took action independently of any power to do so under the 2002 Services Agreement. Mr Toomey said Tooheys can always direct a contractor in respect of safety. He was not sure if he had a similar contractual obligation with Skilled, as no one had raised it as an issue.

[279] Mr Toomey understood how the fees were costed under the 2002 Services Agreement. He believed the fee included all the employees’ legal entitlements. If there was a wage increase, there would be a corresponding adjustment to the fees. He agreed that ultimately Tooheys decided whether or not a FP worker received a pay increase. Mr Toomey said he had never reviewed the arrangements himself and agreed that Tooheys:

[280] Mr Toomey denied that there was no difference between the level of control exercised by Tooheys over its own workers and the control it exercised over FP workers. These differences included:

[281] In cross examination by Mr Phillips, Mr Toomey said he was aware of the history of the origins of the 2002 Services Agreement. When taken through the obligations on FP under cl 5 of the Agreement, Mr Toomey did not agree that these obligations represented a transfer of Tooheys’ obligations to another entity, being FP. Rather, this was a typical labour hire arrangement, notwithstanding the unusual origins of the arrangement. Mr Toomey was then taken to Tooheys’ obligations under the 2002 Services Agreement.

[282] Mr Toomey was referred to Mr Sands’ email of 12 October 2011. He said he did not necessarily agree with all of what Mr Sands had characterised in the email. Mr Toomey said he knew Mr Sands worked on other sites, but could not be sure if other of FP’s workers did so while engaged at Lidcombe.

[283] In re-examination, Mr Toomey said his experience with the labour hire companies had been over twenty five years and the labour hire arrangement with FP was consistent with his experience in that respect.

Mr Christopher King

[284] Mr King had been employed by Lion since 2008. In his current role, he is responsible for the specifications and performance of packaging materials. He was the Packaging Engineering Manager between March 2008 and May 2011. In this role, the Engineers, Maintenance Planner, Electrical Coordinator and Control Engineers (all Tooheys employees) reported to him. In Packaging, each Team Leader is responsible for a team of approximately ten production workers made up of a mix of Tooheys employees and contract labour. Each team is assisted by a contract Electrician or Fitter.

[285] Mr King said that FP was not the only company that supplied trades workers to the Lidcombe site. Others included Chainlink, Skilled and Leon K. Mr King said he was aware from conversations with Mr Sands and Mr Smith that FP supplied labour to other sites. Mr King said he was aware FP was supplying labour to Diageo at Huntingwood because he had actually worked there from 2000-2008. However, he did not know the terms of the contract FP had with Diageo.

[286] Mr King noted that FP Trades workers usually commenced placement in a Non Core role. If FP were required to source additional FP Trades workers, they would recruit the new trades worker. FP then vetted the applications, selected candidates for interview and conducted initial interviews. Recommendations were then made to Tooheys. If the position was for an electrician, Tooheys would be involved in a second interview. Mr King never attended any interviews. However, he understood that if Tooheys disagreed with FP’s recommendation, it was because the candidate did not possess the requisite skill set.

[287] Mr King accepted that Core FP Trades workers received direction from Tooheys Team Leaders and Shift Reliability Engineers on which task to perform, but not how to perform those tasks. They also reported to the Team Leader and on occasions, the SREs. Non Core Trades workers received instruction or directions from the FP Maintenance Coordinator.

[288] FP Trades workers were provided with a Lion user account by Tooheys in order to access the MLS so as to raise service requests, close completed work orders or to search for spare parts. The FP Maintenance Coordinator, or a FP Trades worker acting in that capacity, was required to use MLS to place orders with suppliers. These orders were always pre-approved by Tooheys. Mr King said Core FP Trades workers were paid by FP to attend Tier 1 meetings (short meetings held by the Team Leader during a production shift). Core FP Trades workers were also paid by FP to attend team meetings. Sometimes the Team Leaders hosted a team event attended by the FP Trades workers. He noted that FP workers were not invited to the Lion Christmas Party.

[289] Mr King said that Mr Sands would request that FP Trades workers be provided with specific training. However, Mr Sands was not authorised to organise training, without prior approval. The training was organised by Mr Sands and FP would invoice Tooheys for the cost. Mr King added that FP Trades workers were required to participate in MEX training, as it was crucial for them to be able to interact with the production teams and the Team Leaders. MEX training was also supplied to other Trades contractors.

[290] Mr King said there was one roster for production and one for contract maintenance. Mr Sands was responsible for maintaining the maintenance roster. Mr King would meet him each week in order to check that Tooheys had the right number of contractors and the appropriate skills for each shift. Mr Sands would send the roster to the Team Leaders and email the maintenance roster to the FP Maintenance Coordinator for coordinating the work of Non Core FP Trades workers.

[291] Mr King claimed that Tooheys had no role in approving leave or conducting performance appraisals for FP Trades workers. Mr Sands would occasionally ask for feedback from the Tooheys Engineers. Mr King said FP had its own criteria for assessing accountabilities which were reviewed and agreed by Tooheys. It was a different criteria that Tooheys used to assess its own employees. Occasionally, Line or Shift Engineers would sit in on one to one meetings at Mr Sands’ request. Mr Sands awarded the performance score and it would be reviewed by Tooheys as to accuracy.

[292] Mr King believed that no Tooheys Team Leader ever disciplined a FP Trades worker. If there was ever an issue, Mr Sands would be notified and it was up to FP to address the issue and determine what level of discipline was appropriate. Mr King could not recall ever requesting Mr Sands to remove a FP Trades worker from site for disciplinary reasons. If a FP Trades worker was removed, Mr King did not know if the worker was terminated or transferred to another site. In oral evidence, Mr King recalled three occasions where he had asked Mr Sands to remove FP personnel from site. On one occasion where a Tradesperson had falsified time sheets and two other occasions where performance was deemed unsatisfactory.

[293] Mr King claimed that there were regular Supplier Review Meetings (SRMs) to assess FP’s performance under the Agreement. An individual’s performance was not discussed. Prior to Supplier Review Meetings, Tooheys Management was required to assess FP’s performance. If there were issues of performance, FP was required to demonstrate how it planned to improve.

[294] In a supplementary statement, Mr King deposed that FP determined the hours FP Trades workers worked and the FP Supervisor was responsible for determining which FP Trades workers were placed on the roster. Mr King would review the draft roster to ensure coverage, not to assign specific contractors to the rosters. Mr King agreed that FP Trades workers did perform similar work to the Tooheys SREs. They did not supervise the work of other contractors. Mr King added that FP Trades workers:

[295] Mr King was not aware that FP workers:

[296] Mr King submitted that Tooheys never reassigned or changed the job function of a FP Trades worker, without FP’s approval. Mr King believed that FP had direct contact with its Trades workers through Mr Sands and the dedicated FP office on site. Mr King said that Mr Sands never delivered communications to non-FP Trades workers or purchased material on behalf of Tooheys. He was aware Mr Sands was often asked by Tooheys to speak to FP Trades workers about entering accurate data into MLS.

[297] In cross examination by Mr Seck, Mr King agreed he did not have any FP workers reporting directly to him. They would report to Mr Sands as the Maintenance Supervisor. He agreed the Tooheys Engineers had responsibility for the performance of the equipment. He accepted that if a FP worker did require guidance, they would get it from a Tooheys Engineer. Mr King said the teams had a mix of contract and Tooheys labour and that they worked interchangeably, subject to direction from the Team Leader.

[298] Mr King believed that other contractors on site also provided mechanical and electrical tradespersons, but unlike FP workers, they were not on a roster as they did not work full time hours. Mr King conceded he had not been involved in the selection and engagement of FP workers and was not aware of the roles played by FP and Tooheys in the process. He had not seen any of the applicants’ resumes or discussed them with FP. Mr King conceded that the ultimate decision as to whether a person could do the job, rested with Tooheys. If they could not, Tooheys did not tell FP not to engage them, just that there was no position for them on site. He had no idea if they were suitable to FP for employment at other sites.

[299] As to the purchase of services and materials, Tooheys would approve a requisition before the final order was made. Mr King agreed that specialist training was conducted on site and was ultimately for the benefit of Tooheys. Much of this training was useful outside of the brewing industry. Mr King agreed that training was an investment by Tooheys, which was expected to be used to deliver a tangible benefit to Tooheys.

[300] Mr King noted that it was a concern for Tooheys if Core persons were rostered off, as it was an additional cost to Tooheys. He expected there would be communication between FP and Tooheys in these circumstances. He was asked specifically about an email concerning why a certain electrician was scheduled to work in the workshop on day work and not on shift work, when he was a shift worker. Mr King had just wanted to understand why there was a change. Mr King could not recall Mr Sands’ email explaining the reason for the change.

[301] Mr King gave evidence of receiving feedback about the poor performance of a particular electrician and then directing Mr Sands to redeploy him to another position on site. This was because effectively Tooheys had the ultimate right to determine who remained on site. There was also another person who was performance managed after discussion with Mr Sands. Mr Sands was asked to manage this process. Mr King was asked about the escalation process that applied for performance managing FP workers which would include involvement of Tooheys Managers, if the matter became more serious. Mr King could not recall any personal involvement in this process.

[302] In respect to annual leave, Mr King agreed that Tooheys had a policy of encouraging employees to take annual leave and this also applied in respect of FP workers. This was designed to ensure the bank of accrued leave did not become too great. However, Mr King had no role in approving or rejecting an application for leave from a FP worker.

[303] Mr King acknowledged that Tooheys was involved in approving skills allowances for employees. However, he could not recall the details. Mr King did not believe Tooheys managers had input into the Pay for Performance process. This was left to Mr Sands and Mr Smith. However, there would be feedback from Tooheys managers. He agreed that Tooheys would ultimately approve the PFP increases. Mr King said the bonus was paid if the targets agreed at the beginning of the year were achieved. This was designed to ensure FP could invoice for the bonus. The bonus paid was not the same and there was a band applied. He agreed the intention was to ensure parity in base salary between FP and Tooheys workers. However, Non Core Trades employees only received CPI increases.

[304] In cross examination by Mr Phillips, Mr King said that if Tooheys had an increase under its enterprise agreement, advice would be given to FP to increase their wages. Mr King explained that Lion Nathan had overall Company policies in conjunction with site specific policies.

Mr Christopher Speck

[305] Prior to 27 February 2012, Mr Speck was engaged by FP as Maintenance Coordinator and Mechanical Shift Fitter in the Brewing Department. From 2003 to 2004, Mr Speck was a Mechanical Fitter for Omni Relocations and Omni Engineering. He believed these were sister companies. In this role, he was placed at various sites, including Speedibake Bakery, Luxer, Dana Spicer and Tooheys. From 2004 to 2007, Mr Speck had a permanent role as FP Core Rotating Shift Mechanical Fitter. He reported to the FP Maintenance Coordinator. In 2007, he was promoted to the FP Maintenance Coordinator role and signed a new employment contract with FP. Mr Speck said that in this later role, he was responsible for leadership and direction of the Core and Non Core Trades workers in the Brewing Department. He directed the Trades workers in relation to what to do, how to do it and where to do it. During the integration of the work, production maintenance issues were managed at a team level by a Team Leader.

[306] Mr Speck reported to Mr Sands. Mr Sands would often pull him aside if his management approach made FP look bad in front of Tooheys. He was coached on managing employees without drawing any weaknesses to the attention of Tooheys. He was told not to discuss problems in front of Tooheys employees. Mr Speck said that Mr Sands would distribute the FP shift roster. Changes of shift were controlled by FP and communicated through the rosters sent out by Mr Sands.

[307] Mr Speck said that the work of Core and Non Core Trades workers was of two types. Unplanned work was where Tooheys would put a call out for assistance and FP Trades workers would respond. Maintenance work was based on service requests or made verbally from Tooheys. Mr Speck set the planned work into a schedule. He would assign work to specific Trades workers. FP Trades workers worked alongside other contractors, including plumbers, fabricators and refrigeration contractors. Mr Speck said that he would never give work directions to Tooheys employees.

[308] Mr Speck was provided with a FP uniform and a mobile phone whose costs were paid for by FP. Mr Speck believed that all FP Trades workers had regular interaction with Mr Sands and various other FP leaders. Workers had to contact the FP office for leave requests and payroll inquiries. If a Trades worker was absent due to illness, Mr Sands was the required contact. Mr Sands would also organise barbecues for FP trades workers only.

[309] Mr Speck confirmed that Mr Smith would attend the site each week to check on any issues. Meetings would be held involving himself, Mr Sands and Tooheys Managers. Issues discussed involved safety, training and performance management. Mr Speck also attended a weekly Maintenance Coordinators meeting with FP and Tooheys Management to discuss issues relevant to each department, including putting the roster together.

[310] Mr Speck believed that he was always an employee of FP and he never felt like a Tooheys employee. He was never invited to a Tooheys Christmas party or Roadshow and did not get beer vouchers or Tooheys clothing. He claimed that training of FP Trades workers by Tooheys was limited.

[311] In oral evidence, Mr Speck deposed that when he left FP in 2012, he was owed 129 hours of annual leave and 256 hours of long service leave. He had asked FP to make good these payments, but apart from an amount of $1,000 paid while he was overseas, FP had claimed Tooheys had stopped paying them, so he was not getting anything. He was not sure exactly how much he was now owed.

[312] In cross examination by Mr Seck, Mr Speck said that there were a few differences with his current role to when he was engaged by FP, but essentially the role was the same. He said that when he was with FP, he was supervising other external contractors.

[313] Mr Speck agreed that Mr Sands did not have mechanical training and so he did not direct him on technical issues, but coached him on managing the Trades workers. Moreover, most of the machinery or equipment on site was generic. If a technical issue arose, he agreed a Tooheys Engineer or Team Leader would give directions.

[314] Mr Speck observed that if a gap arose in coverage, he would be responsible for deploying the correct workers. He would not always discuss this with Tooheys personnel. He would tell Tooheys the numbers required. Mr Speck agreed Tooheys required, and paid for specific site training. Mr Speck denied that he attended a specific management course, although it had been mentioned in the minutes. However, he had wanted to improve his management skills, not necessarily for promotion within Tooheys. Mr Speck agreed that Tooheys made the decision as to his hours of work and when an issue of extra hours arose, he wrote to Mr Barrowman seeking his approval.

[315] Mr Speck acknowledged that his own performance management was conducted by Mr Sands and Mr Barrowman for Tooheys. He understood if his KPIs were achieved, a bonus would be paid and it was ultimately paid for by Tooheys.

[316] Mr Speck was shown an email concerning a grievance he had with another employee. He signed off as Tooheys Brewing Department, Brewing Maintenance Coordinator. He explained this was an automatic signature set up by Tooheys through the site phone book. The matter was sent to a Tooheys Team Leader and investigated by Tooheys. Mr Speck received an apology and the other employee from Tooheys was counselled.

[317] Mr Speck was questioned about the occasion he was invited on a work trip to Thailand. He later learned Mr Barrowman had suggested he attend. He was told that he would have to take leave to undertake the trip, as Tooheys would not pay his salary during this time. He agreed it was Tooheys who would ultimately authorise the trip. He had applied to Mr Sands for leave based on his accrued hours. He had not explained to Mr Sands the purpose of his application and FP did not know he was using accrued hours to go to Thailand; only Mr Barrowman knew. Mr Speck now understood that Mr Barrowman had been counselled for authorising the trip and he had been counselled by FP. Mr Speck was shown his time sheets for this period, which did not indicate he had taken accrued hours. However, he believed Mr Sands knew he was not on site, but not where he was. He denied he had wanted to give the impression that he was not on the trip to Thailand. In re-examination, Mr Speck confirmed that when he was reprimanded for the Thailand trip, it was by Mr Sands, who he believed had investigated the matter.

[318] Mr Speck said that when he became a Tooheys employee in February 2012, he had been unsure whether the Brewery Maintenance Coordinator role would be coming in-house. He had been told about this by two Tooheys Managers. He was not guaranteed the role and applied for it in the usual way through its advertisement on the internal intranet. The job had become available about one month after the October 2011 announcements. He was quite frightened and desperate about his job and could not believe he had to ‘jump through hoops’ (including an interview) to get a role he was currently doing. Mr Speck was offered the job a week after the interview and he negotiated with Tooheys about his pay. When shown his actual contract of employment, Mr Speck agreed it included a sign on bonus of $10,000. He had not asked for, or negotiated the $10,000 bonus. Otherwise, in a practical sense, it was the same position he previously had when he worked for FP. Mr Speck claimed he had never spoken to Tooheys about his accrued long service leave with FP, or about any recognition of his period of service prior to 2012.

[319] In cross examination by Mr Phillips, Mr Speck acknowledged that he had directed some of the applicants as to where, what and how to do their work. Mr Speck conceded the real key difference between working for Tooheys and FP was who paid his salary. He agreed that for the time he worked on the site between 2004 and 2012, he would tell his friends and family that he worked at Tooheys, Lidcombe.

[320] In re-examination, Mr Speck recalled that although his letter of offer was dated 29 December 2011, he was away for the early part of 2012 and at that time, he was still employed by FP. He said that at the time in December 2011, he had no reason to believe that FP would not pay his accrued annual leave entitlements. He was expecting to be paid in February 2012, but never was. He signed his contract with Tooheys on 18 January 2012.

[321] Mr Speck further explained some of the differences between his role for FP and his new role for Tooheys:

Mr Marcus Anderson

[322] Mr Anderson said in his written statement, that he was been employed at the Lidcombe site in the role of Bottle Hall Manager in January 2009, although he had acted in the role of Packaging Manager in Perth between June 2011 and January 2012 and has been acting in the role of Project Manager (Operations) since January 2012. His responsibilities as Bottle Hall Manager included production operations in Packaging Hall 2 in the Packaging Department and all Team Leaders in that Packaging Hall reported to him. He reports in this capacity to Mr Steve Levien, Tooheys Packaging Manager. Mr Anderson said that Tooheys Team Leaders oversee both production workers who are employees of Tooheys and the workers provided under labour hire arrangements.

[323] Mr Anderson deposed that FP Trades workers worked in the Brewing or Packaging Departments in maintenance roles. He distinguished between ‘Core’ and ‘Non Core’ Trades. The former worked in shifts alongside production teams and in the event of breakdown on the production line, provided maintenance support to those teams. Non Core Trades worked days only on preventative and breakdown maintenance work. All were managed by Mr Sands in his capacity as FP Site Maintenance Manager. In relation to maintenance work in the Packaging Department, Mr Sands would liaise with the Packaging Engineering Manager.

[324] Mr Anderson provided an example of a production roster which he said identified the Tooheys employees and contractors separately. It showed that FP would provide a Trades worker, but did not name them. He believed that Ms Budwee would determine which FP production workers were placed on the roster.

[325] Mr Anderson said further that FP production workers in the Packaging Department production lines were known as Packaging Technicians. Production workers were managed by Ms Budwee in her capacity as FP Labour Hire Coordinator, who he would liaise with in relation to these workers. He noted that Mr Luke was the only one of the applicants who had worked in production, rather than in a maintenance role.

[326] Mr Anderson put that while FP production workers worked alongside Tooheys production workers, they were easily distinguishable by their different uniforms. Tooheys uniforms were yellow and black with a Tooheys logo on the chest pocket, while the FP uniforms were yellow and blue with a FP logo on the chest pocket. The FP production workers’ uniform was made from a different material to that of the maintenance workers. He noted that Tooheys workers were provided with safety boots and safety eyewear by Tooheys, but FP workers were not. Tooheys workers were also provided with custom earplugs, but FP workers were required to provide their own or use the temporary plugs given to visitors on the site.

[327] Mr Anderson claimed that Tooheys had no involvement in the recruitment of FP workers and said that Tooheys staff did not conduct interviews with potential candidates. FP would determine the suitability of a candidate and then conduct aptitude testing and a site induction.

[328] Mr Anderson explained that FP production workers and Core FP Trades attended ‘Tier 1’ production meetings conducted by Tooheys Team Leaders at the beginning of each shift. Any issues that had arisen in the previous shift would be discussed, alongside safety issues. It was very important that all contractors and employees alike were aware of any safety, production or quality issues.

[329] Mr Anderson said that FP workers also attended the CEO Forum and Team Days, which were organised and paid for by a Team Leader on their corporate credit card. Cab charges were also provided to all workers on these occasions. The invitation of FP workers was described as a gesture of goodwill, but this did not extend to inviting FP workers to the Lion Christmas function, though some of them may have attended as the guest of a Tooheys employee.

[330] Mr Anderson said that Tooheys employees generally received higher levels of training than FP workers. FP was required to organise and pay for the training of FP workers, although he admitted that this was not always ‘strictly followed’. Mr Anderson gathered information from FP to demonstrate to Tooheys that all FP workers were licensed to drive forklifts, but FP was responsible for ensuring that they were licensed. Mr Anderson also alluded to the training that FP workers received in the MEX program. Because MEX involves the improvement of processes as a whole, he described it as imperative that FP Trades workers were appropriately trained in the MEX program.

[331] Mr Anderson explained that Tooheys employees were covered by a 2008 enterprise agreement and a 2011 enterprise agreement, the latter of which he annexed to his statement. He noted that FP workers were not covered by either of these instruments and that FP workers were remunerated by FP. Mr Anderson drew particular attention to cl 16.4 of the 2008 enterprise agreement and 30.4 of the 2011 enterprise agreement. The latter of these was expressed as follows:

[332] Mr Anderson said that Ms Budwee ‘was responsible for coordinating, managing and approving’ leave for FP workers. It was FP’s responsibility to provide a production worker to cover FP workers on leave. Ms Budwee would be made aware of labour requirements in advance, including in relation to peak periods.

[333] Mr Anderson claimed that FP workers were never subjected to discipline by Tooheys. Poor performance or misconduct would be notified to Ms Budwee, who would address the issue directly with the worker in question. Ms Budwee would ask for his expectation and he would respond in terms of how the person would be treated if they had been a Tooheys employee. If the issue involved serious misconduct or a safety breach, Ms Budwee would be told that Tooheys no longer wanted the worker on site. As FP supplied labour to other sites, he did not see this as inevitably resulting in the worker’s termination by FP.

[334] Mr Anderson echoed the evidence of the applicants in saying that contractors were provided with access to the gym and the Tap Room. However, he noted that FP workers and other contractors were not entitled to the beer allowance of four cases per month provided to Tooheys employees.

[335] Mr Anderson stated that anyone who was injured at work would be taken to a doctor by a third party company called Work Care. This would be paid for by FP if the person in question was a FP worker.

[336] Mr Anderson believed that Tooheys had never conducted individual performance assessments in relation to FP workers. He was not aware that Tooheys employees had ever been asked to provide feedback to FP on the performance of its workers. He said that Tooheys employees were subject to regular feedback and documented one on one sessions with Team Leaders at least six times year. This feedback and appraisal was relevant to bonuses and pay increases.

[337] In a supplementary statement, Mr Anderson added to his comments on the preparation of rosters, by saying that Team Leaders could only request that workers with certain skills be provided by FP, rather than individual named workers. Nevertheless, he was aware that some Team Leaders, against protocol, would request certain FP workers by name. While FP workers would occasionally be required to work outside rostered hours, this would still need to be approved by Ms Budwee prior to those hours being worked.

[338] Mr Anderson said that the draft roster was reviewed by Mr Steve Levien in or around 2011 to determine if Team Leaders were efficiently using casual labour and to determine whether the draft roster was going over the casual labour budget. It was not the purpose of this review to determine which individual FP workers would be placed on the roster.

[339] Mr Anderson denied assertions by Mr Smith that FP workers had participated in Corporate Games, acted as guides during Tooheys family days, made purchases on behalf of Tooheys, had Lion email addresses, signed work permits, chaired Tooheys team meetings, created or administered a share point or were members of a Tooheys safety committee. He said that he could not remember receiving an email from Ms Budwee in relation to discipline and that he could not remember reviewing a final written warning given to Mr Luke by FP.

[340] Mr Anderson denied that Tooheys interfered in communications between FP and its workers on site. He said that FP had constant contact with its production workers, through Ms Budwee. She had shared the onsite FP office with Mr Sands.

[341] Mr Anderson emphasised that Tooheys Team Leaders were not in a position to approve leave applications, although it was possible that they may have informed Ms Budwee that a FP worker had told them that they intended to take leave. There was no further input by Team Leaders to approval of leave.

[342] In cross examination by Mr Seck, Mr Anderson disagreed with the proposition that Ms Budwee was only on site two days a week; she was there daily. He agreed that Ms Budwee did not have the skills, experience or knowledge to give technical directions to the production workers who she oversaw. Technical directions came from Tooheys Team Leaders and Engineers. He agreed that Mr Sands fulfilled a similar role to that of Ms Budwee in relation to the maintenance employees and that, similarly, he was not in a position to issue technical directions to those workers.

[343] Mr Anderson agreed that when Tooheys and FP workers worked side by side on a production line, they would largely be doing the same job. He emphasised that FP workers worked on ‘equipment of lower skill than Tooheys. This was because there were Tooheys rules about who could operate certain equipment. However he conceded that FP workers who had worked at the site, over a long period of time, and had built up skills, would perform nearly exactly the same work as Tooheys workers.

[344] Mr Anderson agreed that, while the Tooheys and FP workers were identified separately on the production roster, they were both represented on the one roster. If there were upcoming gaps, due to annual leave or the absence of a Tooheys employee, then the relevant Team Leader would notify Ms Budwee of the skills that were required that week. Ms Budwee would populate those gaps with appropriately skilled FP workers. This would then be sent back to the Team Leader.

[345] Mr Anderson was shown a copy of an email sent from himself to Ms Budwee. He agreed that it showed him requesting a specific individual Brewery Technician to fill a particular gap on a roster. He explained that he had asked for this person because, having examined a list of available workers, she was the one who had the same skills as the person for whom she was to cover. He did not agree that this was an exception to his usual process. He believed that there was nobody else available at the time with the relevant technical skills.

[346] Mr Anderson agreed that he had breached regular protocols by requesting specific labour from FP in this instance and that there were multiple breaches by Team Leaders. However, he then said that he could not remember the discussion that had occurred between him and Ms Budwee prior to the email. He could not say whether this protocol had been reduced to writing. It had been passed down to him by his leader, being Mr Mark Thorpe, Packaging Manager.

[347] Mr Anderson said that training of FP workers was not necessarily undertaken at the direction of Tooheys and that he had been involved in a decision to authorise training of FP workers. This training was generally specific to equipment at the brewery. He could not say whether the training would have been of benefit outside the specific workplace. He explained that when he requested specific skills from Ms Budwee, she would occasionally mention that she did not have sufficiently skilled workers to fill requirements. After further discussions, a decision to train certain persons would be made by him. If the training was of less than two days, then it would be paid for by FP. Otherwise, Tooheys would pay for it. He was unaware whether FP invoiced these costs back to Tooheys. Mr Anderson agreed that the skill set required of a casual Brewery Technician would differ depending on their specific role in the production process, due to the differing types of machinery used.

[348] Mr Anderson confirmed that he was never involved in the discipline of FP workers. He agreed that he was aware of the incident between Mr Luke and the security guard. He could not recall how he had heard of it, although it had not occurred in the Bottling Hall, for which he was responsible. Incidents of serious misconduct were referred to Ms Budwee. He could recall this occurring on one occasion and a FP worker having been removed from site as a result of serious misconduct.

[349] In cross examination by Mr Phillips, Mr Anderson said that he did not think that he had ever been employed by Tooheys. He thought that he was employed by Lion. He could not say whether the Maintenance Leader for Packaging was employed by Tooheys or Lion, but thought that they were the same thing. He was surprised to hear that Mr Toomey was an employee of Tooheys.

[350] Mr Anderson said that it was only partly true that Team Leaders oversaw work of Maintenance Trades workers as they were contractors and directed by Mr Sands. He agreed that Mr Sands was not in charge of the Packaging area. Preventative and corrective maintenance work would be set out by MLS and given to the Team Leader, Mr Sands or the Trades worker to inform them of the work that needed to be done. He agreed that MLS was a Tooheys system. Mr Anderson agreed that when team meetings were held in the Bottling Hall, anybody who worked in that area had to attend. He said that it was purely a communication tool.

[351] Mr Anderson was shown the 2011 enterprise agreement. He agreed that there were no Trades classifications covered in this agreement. He conceded that Tooheys had never employed any Trades workers on a permanent basis. He believed the 2011 enterprise agreement referred to Tooheys permanent employees who were packaging operators. He agreed that cl 30.2 set out that Tooheys was to ensure that all contractors must observe site safety conditions and that cl 30.3 set a minimum which contractors on site needed to be paid. He agreed that Tooheys employees were given first opportunity for overtime in accordance with cl 30.5. He noted that a redundancy clause in the 2011 enterprise agreement was set out at cl 25.

[352] In re-examination, Mr Anderson explained that under Tooheys rules, contract workers could not run filling machines, due to the complexity of the equipment and the high risk associated with it. It was the most critical part of equipment, because it came into contact with the product that was presented to consumers. He also said that Tooheys had a skills matrix spreadsheet provided by Ms Budwee that set out the relevant equipment across the sites and the skill sets in which FP staff were trained. Ms Budwee used this spreadsheet to determine how she would fill skills gaps. It was possible he also had a copy and used it to identify appropriately skilled individual FP workers.

Mr John Barrowman

[353] Mr Barrowman has been a Tooheys Team Leader since October 2005. He manages the engineering maintenance works in the Brewing Department. Prior to 2005, Mr Barrowman was a Team Leader at Kent Brewery for 32 years. Mr Barrowman described the role of FP and other contractors in supplying tradespersons to the Lidcombe site. As it is evidence given elsewhere, I will not repeat it. Mr Barrowman had regular contact with Mr Sands, who organised the placement of FP contractors and was responsible for managing FP workers’ shift rosters, leave pay, performance appraisals and some training.

[354] Mr Barrowman said that FP workers wore a high visibility FP uniform which was marked with a FP Group badge on the chest pocket. He said FP was strict in ensuring their workers always wore their uniforms and he recalled a specific incident when Mr Speck was reprimanded by Mr Smith for wearing a corporate shirt. Mr Smith told him, ‘You don’t work for Tooheys, you work for FP.’ Historically, the FP uniform was clearly distinguishable from the Tooheys uniform. Mr Barrowman said on rare occasions, for hygiene reasons, FP workers would be supplied with emergency uniforms if their own became wet or extremely dirty.

[355] Mr Barrowman described the recruitment of FP workers, firstly to Non Core roles either from the existing employees or by advertising. FP would conduct the initial interview and someone from Tooheys might attend a second interview to check on a candidate’s skills. He recalled one candidate who did not hold a New South Wales electrical licence and was not suitable for the role. If a candidate possessed the necessary skills, FP would undertake further checks, such as aptitude testing. This was conducted by FP and Mr Sands would then inform him of the successful candidate.

[356] Mr Barrowman claimed that Core FP workers would take direction from a Tooheys Team Leader or Engineers as to what work needed to be done, but would be directed by the FP Maintenance Coordinator in how to perform their work. All Non Core FP workers received directions from, and reported to, the FP Maintenance Coordinator.

[357] Mr Barrowman described the requirement of FP workers to attend, and be paid for, production meetings. He recalled receiving ongoing complaints from Team Leaders that FP workers had failed to attend team meetings. Non Core FP workers were not required to attend team meetings, but were required to attend safety tool box talks with the FP Maintenance Coordinator or Tooheys Line Engineers. Team Leaders also held team days for specific training, briefings or team building, designed for Tooheys employees only. FP workers were not usually invited to attend. Mr Barrowman was aware that FP held its own Christmas Party. For other social events, FP workers were not directly involved.

[358] Mr Barrowman said all persons attending the site are required to undertake a fifteen minute computer based induction program. Refresher inductions occur every twelve months for contractors and three years for Tooheys employees.

[359] Mr Barrowman was aware that Mr Sands had maintained a spreadsheet showing the competencies of every FP worker and the training they had undertaken. Mr Barrowman met weekly with Mr Sands and would discuss whether additional training was required for FP workers. Sometimes, specific training would be requested and would be organised, either by Tooheys or Mr Sands. MEX training was rolled out for all workers, regardless of whether they were contractors or a Tooheys employee. Its aim was to achieve a whole workplace approach to implement best practice.

[360] As to FP performance appraisals, Mr Barrowman said that these were carried out by Mr Sands, who would ask for feedback from the Team Leaders. Mr Sands would have a one on one meeting and award a score based on performance. Mr Barrowman and other Team Leaders would often amend the scores to more accurately reflect an individual’s performance, as they were better placed to understand the tradespersons’s capabilities.

[361] Mr Barrowman said annual and personal leave was always approved by FP through notification to Mr Sands, who would then inform him about the leave and arrange a replacement.

[362] Mr Barrowman had never and to his knowledge, neither had any other Team Leader, disciplined or counselled a FP worker. If he was made aware of misconduct or poor performance, he would notify either Mr Sands or Mr Smith. They would speak to the person concerned and determine any disciplinary response. Mr Sands would then inform him of any action, which sometimes involved a ninety day performance plan. Mr Barrowman said if he became aware of serious misconduct or safety breach, he would inform Mr Sands or Mr Smith. Mr Barrowman had requested at least two persons be removed from site. He was then unaware of whether the person was dismissed or just moved to another site.

[363] Mr Barrowman gave evidence of the Supplier Review Meetings which had been previously held to assess the performance of a supplier and identify areas of improvement. Set questions would produce a score. Anything above 17 was considered positive and less than 17, negative. The scores counted towards assessing FP’s bonus for the year. Mr Barrowman believed this process demonstrated Tooheys’ view that FP was an independent supplier, responsible for meeting its obligations under the 2002 Services Agreement.

[364] In a reply statement, Mr Barrowman said that as Mr Sands was responsible for the roster, FP had determined the hours that FP tradespersons worked on site. While he agreed he did review the roster, he did not vet or approve any individual appearing on it.

[365] FP workers worked additional hours as accrued hours up to four hours a week. Payment was made if the hours were worked or not, and anything in excess of accrued hours was paid at overtime rates. Mr Barrowman recalled that the FP Maintenance Coordinator in Brewing worked regular additional hours and paid overtime up to six hours. No FP workers were granted time in lieu for overtime.

[366] In respect to the Thailand trip by Mr Speck, Mr Barrowman had suggested to the supplier that Mr Speck be directly invited by him. Mr Barrowman suggested Mr Speck apply to FP for leave. He did not purport to authorise Mr Speck’s attendance and he denied a conversation alleged by Mr Smith, in which he was said to have told him he had authorised the trip. After FP had complained to Tooheys, Tooheys counselled him for his involvement.

[367] Mr Barrowman said that FP tradespersons did not supervise the work of other contractors and he was unaware of any FP representative being a member of the Tooheys Safety Committee. If they had attended Safety Committee meetings, it would have been only as a guest. Mr Barrowman agreed that FP tradespersons would sometimes chair Team meetings because it was rotational and in accordance with the introduction of MEX. Mr Barrowman said to his knowledge, Tooheys never changed or reassigned job functions of FP personnel, with FP’s prior approval. He was aware FP provided and invoiced Tooheys for a small number of mobile phones.

[368] Mr Barrowman believed that FP had regular conduct with its tradespersons through the Site Maintenance Supervisor, Mr Sands. He was full time on site in a dedicated FP office, together with Ms Budwee. If he was off site, he was routinely contacted by mobile phone. Mr Barrowman was not aware that Tooheys ever controlled or directed communication between FP and its Tradespersons. There were numerous occasions when Tooheys requested Mr Sands speak to its Tradespersons about the accurate and timely entry of information into MLS. It had been an ongoing issue of concern.

[369] In cross examination, Mr Barrowman agreed that he had a role in part of the process of recruitment being the second interview when Mr Sands or Mr Smith would ask him to attend. Questions would be asked as to the suitability of the candidate for the role. He agreed that generally, FP employed persons who he had approved. He accepted he would have told FP, from time to time, that someone was not suitable for a position, even after they had started work on a trial basis. His decision would be based on feedback from FP Coordinators, the Team Leader and other Tradespersons. Mr Barrowman acknowledged that the placement of Cory Parker on site was not typical of the placement of FP workers at Lidcombe. Tooheys had already known of Mr Parker’s skill set and work performance.

[370] Mr Barrowman was aware of the attitudinal testing conducted by FP, but did not know if Tooheys had directed it to be conducted, as he certainly had not. Mr Barrowman accepted that specific Tooheys training was arranged and paid for by Tooheys in the expectation that the trained Tradesperson would remain on site in the long term.

[371] Mr Barrowman believed that Team Leaders would log their own scores and notes for a worker’s performance appraisal and he would consider them in light of his own one on one discussions with the worker. In fact, Mr Barrowman said he had difficulty getting the Team Leaders to provide feedback. Ultimately, he and the FP Maintenance Coordinator would validate the results. He was shown an email of 29 November 2008 concerning the performance appraisal of Mr Speck.

[372] Mr Barrowman confirmed that in applying for leave, FP workers would initially contact Mr Sands and then Mr Sands would seek his approval. In respect to overtime, sometimes the FP Maintenance Coordinator would approach the particular Tradesperson/s. Overtime would later be approved by Tooheys.

[373] Mr Barrowman did not have a role in approving pay increases, but did have in approving the skills allowance, through Mr Sands. As to pay increases, advice would be sought as to whether particular workers met the criteria. Generally, Tooheys increases would flow on to FP workers, but always subject to Tooheys’ approval. Mr Barrowman did not have a role in discussing what was paid to FP Tradespersons. However, he was involved in approving mobile phones for FP workers.

[374] As to the rosters prepared by Mr Sands, Mr Barrowman would query particular persons, on the roster from time to time, who he had no knowledge of. Emails would generally be exchanged and any issues resolved.

[375] Mr Barrowman was questioned about a disciplinary incident involving Mr Henry and Mr Lane not undertaking the Ammonia Shift walk around. He spoke to both of them directly and told them it was not negotiable. He told Mr Henry there was an agreement with WorkCover and FP that such checks would be carried out. Mr Barrowman conceded he had told him his job on site was at risk, if he did not comply. This was also conveyed to their Supervisors and discussed with Mr Sands and Mr Smith. Mr Barrowman could not recall if he discussed what action should be taken against them, but presumed he had. It may have included the option of removal from site.

[376] Mr Barrowman was asked about the removal from site of Mr Grant Pittman. He was finished up because there was no longer any Non Core role for him. FP was informed and Mr Pittman was identified as the least skilled person. Mr Barrowman had wanted someone better suited to the role and more qualified. There was an issue of doubling the cost for two FP workers, where only one was required. Mr Barrowman was upset that his direction was not followed and he blamed Mr Sands and Mr Smith for not communicating with each other.

[377] Mr Barrowman was obviously aware of the 2011 restructure and had been asked his opinion of the skills and suitabilities of the workers required to be kept on. He had given his views on the suitability of retaining Mr Wilczewski and Mr Henry for ongoing roles and decided they were the least suitable.

[378] In cross examination by Mr Phillips, Mr Barrowman agreed from his forty years’ experience that the nature of the brewing industry had changed to better organise itself. Save for improvements in technology, the roles of Team Maintenance Leader, Fitters and Electricians have generally remained the same, although there is a greater emphasis on safety.

[379] Mr Barrowman stressed that his role with respect to FP contractors was to ensure the work they did was carried out competently, promptly and safely. In this role, he had regular contact with Mr Sands. Mr Sands’ tasks included managing rosters, training, organising leave and replacements, performance and appraisals - largely administrative functions, as distinct to ensuring machinery and equipment is maintained efficiently, safely and promptly. Nevertheless, all workers were part of a team.

Mr Stephen Lewis

[380] In his statement, Mr Lewis said that he had been working for Lion Pty Ltd since 1994 and had been working in his current role as Operations Director since October 1999. At that time, his role was described as Logistics and Supply Director, but was now described as Group Procurement Director after the amalgamation of the dairy and beverage business in October 2009. His responsibilities include procurement of goods, services, property and capital. He oversees a team of thirty persons and named six individuals who reported directly to him. He reports to Mr Rob McKenzie, Group Supply Chain and Technical Director.

[381] In 1994, when Feyman Pty Limited was providing labour at the Lidcombe site, Mr Lewis had regular contact with the Managers of all relevant suppliers on site, including Mr Gorman. There were a number of other contractors providing labour, including Skilled Engineering and ABB. Mr Lewis put that the reason for this was the lack of predictability in relation to staffing requirements.

[382] Mr Lewis understood that FP also provided labour to entities not associated with Lion. In fact, he had encouraged Mr Gorman and the other directors of FP, to continue to widen its client base, as this would result in trades gaining wider experience, which would indirectly benefit Tooheys. He noted that FP provided labour to Pepsi in or around 2006. The Pepsi site at Huntingwood New South Wales was owned by Lion Pty Ltd.

[383] Mr Lewis disagreed with Mr Gorman’s claim that there had been total work stoppages on the production lines over five days in 1994. Rather, reduced production levels, coupled with industrial action taken by LTU members, meant that the shipping of finished product was delayed by five days. He said that many LTU members continued to work and that FP, Skilled Engineering and ABB provided additional labour during this time. He further denied that he had any discussion in which he said that it would be inappropriate for FP to invoice Tooheys for work performed by Mr Gaffney and Mr Moston at this time. Mr Lewis denied that this industrial action was a determinative factor in the decision to make FP the primary supplier of casual production labour. He said that FP was viewed as reliable in this regard while other labour suppliers had not demonstrated that they were sufficiently able to comply with their service agreement obligations. He also noted that it was simpler to deal with one supplier. From early 1995, Mr Lewis said that, casual production labour was primarily sourced from FP.

[384] In or around late 1994, Mr Lewis had two meetings with Mr Gorman during which they discussed FP reducing its rates. At the first of these meetings, he told Mr Gorman that FP rates were higher than those of other labour hire suppliers and it was not commercial for Tooheys to continue on the current basis. Therefore Tooheys wanted FP to cut its rates. Mr Lewis had said that Tooheys would have to consider terminating the current service agreement if this did not occur. Mr Gorman said he would think about it. Mr Lewis and Mr Gorman had a further meeting a few days later. Mr Gorman agreed FP would reduce their rates as they wanted the relationship with Tooheys to continue. Mr Lewis said he could not remember if Mr Porretta attended these meetings.

[385] Mr Lewis emphasised that he had never represented to FP or any of its directors, that Tooheys would meet redundancy payments in the event that the 2002 Services Agreement was terminated. This would not have been a commercial outcome for Tooheys, especially in view of the fact that Tooheys regarded its fee as ‘all-inclusive’. He could not recall receiving the 1994 letter alluded to by Mr Gorman (see para [477]) and said that he would have responded immediately to such a letter by indicating that he disagreed with it.

[386] Mr Lewis referred to the statements of Mr Gorman and Mr Porretta and a conversation that was said to have occurred at the Tooheys Annual Operational Planning Meeting in 1995. He noted that suppliers were not invited to attend such meetings. Rather, Mr Lewis had had a conversation with Mr Gorman at the Lidcombe site about FP engaging in professional management training. He specifically denied a conversation in which it was said that FP should engage professional management or offer Mr Porretta such a role. Mr Gorman had asked him if he would mind if they offered the Managing Director role to Mr Porretta. Mr Lewis responded that this was properly a matter for Mr Gorman and FP, but that Mr Porretta would need to give appropriate notice to Tooheys. He understood Mr Gorman’s approach was for the purposes of being courteous and in order to avoid damaging the relationship between FP and Tooheys.

[387] Mr Lewis deposed that at some time in or around 1995, Tooheys had been of the view that the capabilities of FP workers was too variable and that some form of standardised testing was required. However, he could not recall having a conversation on this topic with Mr Gorman and could not recall Tooheys HR assisting FP in choosing an appropriate test.

[388] Mr Lewis denied an incident in which it was said that he had asked Mr Gorman to ‘make’ allegations of a Tooheys employee sexually harassing a FP worker ‘go away’ and described this assertion by Mr Gorman as ‘offensive’. Rather, he had repeatedly asked Mr Gorman to get a statement from the relevant FP worker so that it could be properly investigated. He had not asked Mr Gorman to have the relevant FP employee provide a waiver (against Tooheys) and had never seen such a document. Mr Lewis had not acted on the complaint, as he had no evidence on which he could act.

[389] Mr Lewis alluded to the negotiations with FP for the 1997 Agreement. He noted that this Agreement differed from the 1991 Agreement in that it covered Electrical and Mechanical trades. He said that 1998 agreement set out the costs incurred by FP in the supply of labour to Tooheys and a percentage on top which Tooheys would pay. He again denied representing to FP or its directors that Tooheys would cover redundancy payments in the event that the existing services agreement was terminated.

[390] In cross examination by Mr Seck, Mr Lewis agreed that his current role meant that he had ultimate responsibility in relation to proposals for the supply of labour at the Tooheys site in 2011. Mr Warwick Shaw, the Strategy Procurement Director reported to him and Mr Rick Nelson, the person who had carriage of the Requests For Pricing (RFP) process, reported to Mr Shaw. Mr Lewis agreed that the labour supply contract was significant and that the RFP related to the provision of labour at all Lion sites, rather than just the Tooheys site at Lidcombe. However, he emphasised that he had approved the initial strategy and then left the appropriate responsible persons implement it. He and Mr Shaw had gone through the process of setting out a strategy that took into account what individual sites required, as well as the length of contract appropriate for the business. There would have been a number of standard terms and conditions that would need to apply. The RFP process was not advertised in a newspaper, rather Lion approached known and well-established suppliers. He disagreed with the proposition that he was the ultimate decision maker in this matter and noted that such a contract was required to go before the Board for approval. He agreed that he had made a recommendation to the Board and that he had had a role in the process which generated that recommendation. His review was one of the steps taken before the recommendation was presented to the Board for approval.

[391] Mr Lewis estimated that Lion had approximately twenty manufacturing sites in Australia and said that labour was supplied by contractors at many of those sites. He agreed that Tooheys used supplementary contract labour to manage peaks and troughs in demand, but also agreed that some Lion sites used long term contract labour. He did not see the use of Tradespersons for preventative and breakdown maintenance as a strategic issue - rather it was a local issue based on the needs of the specific plant in question.

[392] Mr Lewis referred to the recommendation in 2011 that Skilled Engineering should be awarded the labour supply contract at Lidcombe. The director responsible for evaluating the tender had been Mr Shaw, although he emphasised that the decision was not one that could be made by Mr Shaw or himself on their own. Internal customers and operational directors also had input. He said that he had not consulted with Mr Toomey, although assumed that his group had. Mr Lewis said he had not had in depth discussions with Mr Shaw as to the Skilled Engineering proposal. He emphasised the needs and wants of the specific internal customer were central in procurement. He could not say if Mr Toomey had expressed a preference to use Skilled Engineering, as he had not been privy to the conversations between Mr Shaw and Mr Toomey. However, he conceded that given his understanding of the process, Mr Toomey would have had to have supported Skilled Engineering’s proposal.

[393] Mr Lewis had not seen the RFP prior to its distribution to potential suppliers. He was not aware of an RFP solely for the supply of labour to the Tooheys site and had not seen an email from Mr Nelson to Mr Smith purporting to invite FP to submit an RFP for the supply of contract labour to Tooheys. He was not aware whether Mr Shaw and Mr Nelson were involved, as he generally did not get into that level of detail. He only reviewed a summary of five or six pages that related to the National RFP. Mr Lewis could not recall what had been in that summary, but it would have addressed the pros and cons of various solutions. He could not recall when the National RFP had been distributed. He would not have kept diary notes of discussions in relation to this subject with Mr Shaw, as Mr Shaw worked in the same office. In any event, any discussions on this topic were informal.

[394] Mr Lewis was shown a document headed ‘LION - AGREEMENT FOR SUPPLY OF PRODUCTS AND/OR SERVICES - STANDARD TERMS AND CONDITIONS’. While he could not recall seeing this specific document, he was ‘by and large’ familiar with the document. He would have had a discussion with Mr Shaw as to whether any of the standard terms and conditions were not included in the RFP and, if so, which ones. However, he could not recall the specifics of that discussion. He acknowledged that he would have had concerns, if there had been a significant departure from the standard terms and conditions. He would have discussed the evaluation criteria of the RFP with Mr Shaw in relation to whether it set out what was needed by the relevant internal customer and whether they had signed off on it. While Mr Shaw had said that this was the case, Mr Lewis had no specific recollection of this in relation to the Tooheys RFP.

[395] Mr Lewis agreed that the RFP for the Tooheys site, required those invited to submit proposals, to enter into the standard agreement. Any significant deviations would have been discussed between himself and Mr Shaw and then reviewed by the Legal team. He understood that Lion and Skilled Engineering had subsequently entered into such an agreement. He had not seen it himself and had not discussed it with Mr Shaw.

[396] Mr Lewis was shown a document marked ‘SKILLED GROUP LIMITED’ that identified LD&D Australia Pty Ltd. Mr Lewis said that LD&D referred to drinks (meaning non-alcoholic drinks) and dairy. He agreed that the document set out an agreement for Skilled to provide permanent contract labour to all LD&D owned and operated sites across Australia. He agreed that it identified a commencement date of 1 July 2011. He could not recall the exact time that Lion had entered into this agreement with Skilled. Mr Lewis agreed that a preferred supplier clause guaranteed Skilled 85% of the relevant work. He noted that LD&D did not apply at Tooheys.

[397] Mr Lewis could not recall if there had been any negotiations between Skilled and any Lion Group company in relation to liability for any employees transferring their employment from FP to Skilled. Nevertheless, Mr Shaw may have handled this issue. Mr Lewis agreed that such an arrangement would be unlikely to be covered by the standard terms and conditions. Mr Lewis was shown clause 21 of the agreement between Skilled and LD&D, which was headed ‘TRANSFERRED EMPLOYEES AND INDEMNITY. It read in part, as follows:

[398] Mr Lewis conceded that the definitions in the same clause referred to, inter alia, a LD&D site at Nyrang St, Lidcombe. However, there was no LD&D activity at that site and that the definition of ‘Employees’ in the same clause referred to a schedule setting out a list of people whose employer was identified as ‘Prodon’ [sic] and ‘FPGrp’, amongst others. While he was confused about the reference to LD&D at that site, he said that in light of the references to those workers, it had to be specific to Tooheys. He denied that this clause was a ‘deviation’ from the standard terms and conditions, but said that it was ‘unique’ to the case. He had not discussed the clause with Mr Shaw.

[399] Mr Lewis had known that Feyman Pty Ltd was formed in 1991, although he said he was vague on the details as he had not worked for Lion at the time. He knew that Project X had existed, but it had also predated him. He knew that FP had arisen from the merger of Feyman and Proden and he had inherited that relationship. He had known that Feyman and Proden were responsible for supplying Trades and casual labour to Tooheys.

[400] Mr Lewis agreed that when he was Operations Director at the Tooheys site between 1994 and 1997, he was the person in charge of the Brewery. Mr Porretta was working at the site at that time and reported to him in his capacity as Engineering Manager, although he had acted in the capacity of Operations Manager prior to Mr Lewis’ arrival. He said that there was a handover process between himself, Mr Porretta and three other people. Mr Lewis had been made broadly aware of the relationship between Feyman and Tooheys.

[401] At the time, Mr Lewis had not been given a copy of the 1991 Services Agreement and had not taken the opportunity to become familiar with it. He agreed that he had initiated discussions with FP to negotiate a new services agreement some time in 1996. He had wanted a fresh agreement based on the standard agreements and had consulted with relevant stakeholders, human resources and the Legal department to this end. He agreed that he had presented two agreements to FP, one dealing with Mechanical, the other dealing with Electrical. He was shown the Electrical Agreement and agreed that he had signed it and that Mr Gaffney had witnessed it.

[402] Mr Lewis was shown cl 4.6 of the 1997 Electrical Services Agreement. It was expressed as follows:

 

‘4.6

Direction of the Work

   

4.6.1

The Contractor will direct the way in which work is performed at the Site to procure the fulfilment of the Contractor’s obligations under this agreement.

   

4.6.2

The Personnel shall perform the Services at the Site under the direction of Tooheys.

   

4.6.3

The Contractor undertakes to ensure that the Personnel act at all times in the interests of Tooheys.’

He described this arrangement as ‘fairly normal’. Mr Lewis was also shown cl 12, which dealt with industrial relations matters. He agreed that cl 12.2 set out that Tooheys could direct FP to remove or have removed workers who had engaged in serious misconduct or for reasons of incompetence or negligence. A further provision under cl 12.3 that persons were not to redeployed at the site without Tooheys approval, was related to practicalities such as appropriate licensing.

[403] In response to a question as to whether Tooheys had control of industrial issues under cl 12.5 the 1997 Electrical Services Agreement, Mr Lewis responded that Tooheys had control of a number of issues, like safety, and that everybody was expected to comply with Tooheys’ directions in this regard. This came down to Tooheys’ duty of care, the enforcement of standards on site and uniformity as to how the whole site operated. He expected that if a FP worker failed to comply with a direction by Tooheys, Tooheys could direct a warning be given to that worker or the worker be counselled. When asked as to whether Tooheys could direct FP to enter into an enterprise agreement with its employees, Mr Lewis said that there was an expectation that matters such as this would already be in place. He did not agree that this clause was inserted as a result of feedback from stakeholders.

[404] Mr Lewis was shown a copy of the 1997 Mechanical Services Agreement, which referred to the ‘provision, design and installation of a mechanical and electrical plan’, rather than to ‘electrical services’. His attention was drawn to Appendix B of this document, which set out a performance management system at Tooheys which was expressed as applying to ‘all permanent core team members, calibration technician and engine room fitter [sic].’ He agreed that the purpose of this clause was to communicate to FP that Tooheys’ performance appraisal system, used for its own employees, was also to apply to FP Core workers. He agreed that the relevant accountabilities were related to site-wide and Team objectives and that bonuses would be awarded based on these assessments. This was about giving FP and Tooheys workers common output goals.

[405] Mr Lewis could not recall the negotiations for the 2002 Services Agreement, although he remembered Mr Gorman and Porretta being present for the negotiations of the 1997 Agreement. He could not recall if Mr Moston was involved. He said that the rates paid under the Agreement was one of the issues, as were the pay for performance requirements. FP did not object to pay for performance because the directors would also receive bonuses, if the targets were achieved.

[406] Mr Lewis agreed that the charge out rates were calculated as a percentage margin of the costs incurred by FP. This included wages, and statutory entitlements, but he could not remember the details. Mr Lewis claimed that Tooheys did not determine exactly how much FP workers were paid by FP. He suggested it would have been open to FP to pay its workers more and reduce its margin. He assumed that pay increases agreed to by Tooheys were passed on to FP workers.

[407] Mr Lewis said that contractual issues would generally be dealt with locally and would only be escalated to him if there was a significant effect on the Group. The Group’s procurement role generally ceased after the rates had been set and agreed to. It was handed over to the Business Units at this point. He agreed that Business Units would have given feedback to Mr Shaw to determine the parameters of the relevant services agreement.

[408] In relation to the Skilled Agreement tender proposal, Mr Lewis said that a comparison between the services provided under the existing contract labour hire agreement and the proposed one could have been one way in which a recommendation was framed, although he could not recall if that was the case in relation to Skilled’s proposal. The 2002 Services Agreement was not used as a template, because there had been lots of changes in the standard contracts during that time. Mr Lewis conceded that the contract proposed by Skilled did not look too different to a Standard Contract. He thought that it was based on the Lion template.

[409] Mr Lewis said that the decision to have a national RFP in relation to labour hire services would have been made by Mr Shaw’s team and based on the requirements of the business units and internal clients. He could not say if these internal clients had suggested that the preferred supplier arrangement in relation to labour hire set out in the proposed Skilled Agreement, was desirable, or if it had been proposed by the Procurement Group. He could not recall the origin of cl 10, which dealt with Tooheys’ health and safety obligations. He agreed that clause 14.2 of the proposed Skilled Agreement was very similar to cl 12.2 in the 1997 Agreement (both dealing with the supplier’s obligation to comply with directions by Tooheys to remove workers from site). When it was pointed out to him that the proposed Skilled Agreement did not contain a similar provision to cl 12.5, setting out Tooheys’ power to issue directions to FP as to industrial or safety issues, he believed the use of the word ‘industrial’ in these clauses was ambiguous and did not necessarily refer to industrial relations.

[410] Mr Lewis agreed that cl 4.2 of the proposed Skilled Agreement expressly set out that the personnel provided to the client were to be selected by Skilled. Mr Lewis denied that he had had a conversation with Mr Shaw in relation to the insertion or drafting of this clause. Nor had he discussed removing references to performance management from the proposed Skilled Agreement. Mr Lewis noted the provisions dealing with Tooheys’ obligations relating to the transfer of certain workers to the employment of Skilled.

[411] Mr Lewis claimed that he would need to approve a recommendation to the Board of Directors, but he would not know, from reading the recommendation, whether it was a site by site RFP or a national RFP. It could be there was a national RFP and a Tooheys one. He could not say why the date of the agreement appeared to be different from the timing of the RFP, but suggested that the document he was shown, might not be the final version. He agreed to examine his records and return the next day.

[412] On his return to the witness box the following day, Mr Lewis said that in relation to the national or Tooheys-specific contract for labour hire, there had been no recommendations made to the Board, although he had managed to identify the latest, yet still incomplete, iteration of the contract between Lion and Skilled. On its completion, it would be a national agreement. He explained that there had been a ‘legacy’ contract between Skilled and Lion’s Dairy business between 2009 and 2011. This contained an option to extend the contract to mid 2013. Because this was so, and this contract, including the option, had already been approved, it was extended. It was also used as the basis for the contract for Skilled at Tooheys, subject to the insertion of some site specific clauses. The one anomaly was that it referred to ‘LD&D’.

[413] Mr Lewis agreed that there was only one RFP that had taken place in relation to the provision of contract labour hire related to Tooheys. However, this RFP would have gone out nationally. The original intention was to have an RFP for the provision of contract labour on all of Lion’s sites, but this appeared to have been overtaken by the extension of the Skilled Agreement. Mr Lewis said that he had taken the opportunity to speak with Mr Nelson and Mr Shaw overnight and they had provided him with new information that confirmed his suspicion that the contract had rolled over. The ‘legacy’ agreement had expired on 30 June 2011 and this was why the date specified as the commencement date was 1 July 2011. Accordingly, the extension occurred before the end of the Tooheys contract with FP. However, specific issues that arose out of the Tooheys RFP had been incorporated into the new agreement.

[414] Mr Lewis was shown cl 21 of an agreement purported to be between Skilled and LD&D, which dealt with transferred employees and indemnity. He agreed that it set out that the client would indemnify Skilled for any payments which were due to a transferred employee’s entitlements accrued before 28 January 2012. These entitlements included long service leave, redundancy entitlements and superannuation entitlements. He believed that Skilled and Tooheys must have been of the opinion that there was a risk that needed to be addressed by such a clause. He disagreed that Mr Shaw had discussed this issue with him. This clause had to be agreed in order to get it over the line.

[415] Mr Lewis was again shown the 1997 Services Agreement. He described the clauses providing that Tooheys could direct FP in relation to a number of matters as necessary in order to request ‘reasonable things to be done around the place, to comply with safety ... in the normal course of work.’ He agreed that these clauses in the 1997 Services Agreement reflected existing rights which Tooheys already had in relation to FP workers, although he could not say if it was drafted to reflect the historical origins of FP. The question of control reflected the existing practice at the Brewery.

[416] Mr Lewis understood that there were a number of FP workers who worked full time at the Tooheys site, although he could not recall any discussions as to what would have happened to the FP workers if the contract was terminated at the time the 1997 Services Agreement was negotiated. At that time, Tooheys was happy with how things were progressing and was not considering terminating the Agreement. There had been no discussion of redundancy. He reaffirmed that he had never received a letter from Mr Gorman in relation to this issue.

[417] In cross examination by Mr Phillips, Mr Lewis agreed that the 1997 Agreement did not transparently set out the costs which would be imposed on FP in the event of redundancies. He agreed that the Skilled Agreement spelled out such liabilities for prior service. He agreed that the list of persons in Annexure F reflected the persons who continued to be ‘employed’ at the site and that that decision was made by Tooheys.

Mr Julian Scott

[418] Mr Scott has worked for Lion since 1984. His roles have included Packaging Manager for Tooheys between 2000 and 2002 and Operations Director between 2002 and 2005. Since January 2010, he has been the Manufacturing Excellence Director for Lion. During the time he worked as Tooheys Packaging Manager, his department was the largest user of FP labour. He was responsible for ordering and rostering FP workers through FP and was indirectly responsible for their direction through Tooheys Team Leaders and Engineers. As Operations Director, he was ultimately responsible for FP’s service provision.

[419] Mr Scott believed that FP had provided labour in relation to maintenance and electrical plant and processes at Tooheys for some time prior to his commencement with Tooheys. However, in his capacity as Packaging Manager, he was part of a Tooheys team that began negotiations with FP and three other service providers in relation to maintenance and supplementary labour at Tooheys. As Tooheys Operations Director, he finalised negotiations for the contract which made FP the primary supplier of maintenance and supplementary labour to Tooheys. In both roles, he dealt mainly with Mr Gorman, Mr Porretta, the FP Maintenance Supervisor and the FP administrative and payroll staff.

[420] Mr Scott deposed that negotiations for the 2002 Services Agreement began early in 2001, coinciding with the imminent expiry of the earlier agreement. He said that the typical process for such agreements was for negotiations to be led by Group Procurement, with support and advice from the relevant internal customers. The negotiations team in this case consisted of himself, a member of Group Procurement and support from the Legal and Finance departments. Tender requests were sent to four companies: FP, Skilled Engineering, Opal and Integrated Workforce. Most of the negotiations took place in the later part of the year and were largely focused on the rates. Mr Scott remembered that the tender offers were ‘very similar’ in relation to their rates and overall cost. Because of this, the decision was made in early 2002 to continue using FP.

[421] Mr Scott set out the distinction between Core Trades workers and Non Core Trades workers. He noted that the former was required to provide full time support to specific teams and were directed in their daily duties by the relevant Team Leader. FP managed these workers’ employment arrangements, performance appraisals and training. He noted that some production teams did not require Core Trades support and would be supported by Non Core trades engaged on a weekly basis. Most, but not all, Non Core Trades were provided by FP. Other suppliers included Leon K Engineering. Mr Scott set out the role of the Maintenance Supervisor as overseeing FP workers at the Tooheys site, with responsibility for performance management of FP Trades workers at Tooheys.

[422] Mr Scott said that all persons who performed work at the Tooheys site are required, for safety reasons to undergo a Tooheys induction. He claimed that the FP workers’ induction was limited to the site induction and they were not inducted on other Lion processes undertaken by Tooheys employees.

[423] Mr Scott noted that FP workers would wear a FP uniform while working on the Tooheys site. This work was performed subject to employment agreements to which Tooheys was not a party. He noted that FP workers were not represented by Unions seeking to represent Tooheys employees in any negotiations between Tooheys and its employees.

[424] Mr Scott said that the 2002 Services Agreement set out that FP was to inform their workers of the way in which work was to be performed at the site and that work would be performed under Tooheys direction. Core Trades workers would be directed day to day by the relevant Team leader. Where they worked on preventative maintenance, they would be directed by a Tooheys Engineer or a FP Maintenance Coordinator, as were tradespersons not supporting production. FP Maintenance Coordinators would be directed day to day by the relevant Tooheys Engineer.

[425] Mr Scott described the obligation under the 2002 Services Agreement for Tooheys to provide facilities to allow FP to perform its work on site, including a furnished onsite office with a computer. He noted that some FP workers needed access to MLS in order to perform their roles. Individual FP workers were given login details, email addresses and access to certain tools and the intranet, although he noted that for security reasons, they were excluded from, inter alia, such as payroll, leave and employee information services. FP workers were also given access to the staff car park, the gym, the general store, the canteen and the Tap room. However, such access was extended to all contractors on site. Tooheys saw this practice as consistent with its company values. Mr Scott claimed that all contractors, consultants, temporary workers and casual workers were expected to ‘represent’ Lion while carrying out services on its behalf.

[426] Mr Scott said that Tooheys was invoiced monthly by FP in advance for Core Trades and weekly in arrears for other labour. These invoices were based on rates for individual charge out rates, overheads (including superannuation, workers’ compensation and payroll tax), contract administration (office expenses, training, tools, protective clothing and accrual of redundancy entitlements) and the margin. This was consistent with the terms of the 2002 Services Agreement. The rates for Trades labour were reviewed annually, effective from 1 October. The pay structure of Core Trades workers was similar to the Tooheys pay structure, but had different elements, like overtime and shift allowances. Tooheys pay rates also included an annualised Christmas bonus, leave loading, service grants, laundry and meal allowances.

[427] Mr Scott claimed that he had had discussions with FP in relation to the contract administration component in the negotiations leading up to the 2002 Services Agreement. He annexed a copy of a spreadsheet which had been created by Ms Huddy of FP. It set out that redundancy accrual was part of the contract administration component. In further written evidence, Mr Scott said that during the time that he administered the 2002 Services Agreement for Tooheys, he was not aware of an instance where there was a departure from its written terms. In answer to an assertion made by Mr Porretta, he said that he was not in a position to speculate as to how FP paid its workers.

[428] Mr Scott denied an assertion by Mr Smith that Tooheys exercised control over the communications it had with to its workers. He said that where FP needed to communicate to its workers about changes or news in relation to Tooheys, it was good communications practice, for reasons of consistency, for such information to come jointly from both parties.

[429] Mr Scott denied that he had had a conversation with Mr Gorman in relation to concerns that casual staff on site were getting close to ten years service and a possible long services liability. He denied that he exercised any control over FP’s management of their employees. Rather, he had encouraged FP to ‘actively take charge and manage’ their own employees. He referred to an email he sent to Mr Falster (FP Site Maintenance Manager) in response to a complaint by Mr Falster that Non Core workers did not feel that their pay structure sufficiently took into account their skills and experience. It was expressed, in part, as follows:

[430] Mr Scott acknowledged his involvement in disciplinary matters concerning FP workers at the site, but this involvement was generally limited to instances of serious misconduct or where the relevant conduct affected Tooheys. He drew attention to cl 5.1 of the 2002 Services Agreement, which set out that FP was obliged to ensure that its workers acted in Tooheys’ interests at all times. If he became involved, he would immediately contact Mr Gorman or Mr Porretta to inform them of the issue. FP would then deal with the matter. Mr Scott agreed that he would provide recommendations to ensure consistent standards of conduct. Where the conduct of a FP worker threatened the safety of others, Mr Scott said: ‘I would not hesitate to express my view to FP and my colleagues at Tooheys that the ‘offender’ is not welcome on Tooheys’ site.’ Mr Scott recalled two specific examples. In the first instance, a FP worker was involved in disseminating pornography using Lion Nathan email accounts. This had the potential to result in sexual harassment claims by other workers on site. This had been referred to him by a LHMU delegate. In the second instance, one FP worker threatened another with a gun. Tooheys immediately contacted the police after Mr Scott had been informed.

[431] In cross examination, Mr Scott said that he had not directed that the person involved in the dissemination of pornography using the Tooheys email system be removed from site, although he was aware that he had the power to remove FP workers for serious misconduct. He could not recall if he had directed that the FP worker, who had threatened another with a gun, be removed from the site. He understood that he could direct the removal of FP workers who engaged in serious misconduct or gross negligence pursuant to cl 11.1(b) of the 2002 Services Agreement. He was not involved in disciplining FP workers who had been involved in misconduct which was not serious misconduct. If he was aware of conduct that was unsatisfactory to Tooheys, he would raise it with FP. He would contact Mr Gorman or Mr Porretta and make recommendations that they address the issue in line with Tooheys standards. He would not specify what action to take. However, he could not recall exactly what he would have said in these circumstances.

[432] Mr Scott could not recall ever giving written notice, in accordance with the 2002 Service Agreement, that a FP worker be removed from the site. In order to be satisfied that misconduct had been engaged in, he would confirm the facts with FP. He would not investigate the matter himself, although he said he would speak to other Tooheys workers to receive their feedback. Mr Scott said that while he would have used words to the effect that a worker was ‘not welcome on the site’, he did not necessarily expect FP to comply with an implicit direction to remove the person. He did not see it as a direction to FP. He believed that FP could challenge his view. He could recall instances where persons had remained on site, notwithstanding he had expressed a contrary opinion.

[433] Mr Scott said that the ability for Core Trades workers to purchase parts or stores on behalf of Tooheys, was a necessary part of their role. He gave the example of ordering a part to permanently repair machinery in the event of breakdown. Given their specific trades skills, Core Trades workers were the ideal persons to identify what was needed.

[434] Mr Scott outlined a number of the responsibilities of FP’s Site Maintenance Supervisor, including the development of site procedures in relation to FP workers on site, and delivering communications to FP workers and other contractors in relation to projects where FP was ‘taking the lead’. Mr Scott emphasised that all contractors on site are required to abide by Tooheys’ health and safety policies, amongst others. It would have been a requirement for FP to integrate Tooheys’ health and safety policies into its own systems.

[435] Mr Scott denied that the workers’ annualised pay increases were as assessed and administered in the fashion claimed by Mr Smith in his statement. He emphasised that neither Non Core nor Core trades workers were party to any enterprise agreement with Tooheys. Tooheys was invoiced weekly for the hours of work provided by Non Core trades workers at the fees agreed. While the annual review of these fees was around the time of the increases apportioned to Tooheys workers under their relevant enterprise agreements, there was no connection between the two. The increases were as agreed between FP principals, the FP Maintenance Supervisor, Tooheys Engineers and Tooheys Managers.

[436] Mr Scott explained that increases in the fees paid for work provided by Core Trades workers were assessed in a different fashion. The FP Maintenance Supervisor would conduct a performance review on behalf of FP after meeting with the relevant FP workers in one on one meetings. The Pay for Performance (PFP) system was used to rank and asses each of the workers. FP would also seek information from Tooheys as to the increases it had applied to its own employees. While the Maintenance Supervisor would consult with Tooheys employees as to the performance of individual FP Core Trades workers, Mr Scott emphasised that the final assessment was FP’s and that FP would communicate with its workers as to their ranking and any increase to which they would be subject. While Tooheys had a bonus scheme rewarding all workers if certain benchmarks were met, this was separate, with different objectives, to the similar bonus scheme to which FP and other contractors on site were subject. This was in conformity with the provisions of the 2002 Services Agreement.

[437] In oral evidence, Mr Scott deposed that the process for reviewing the rates payable to FP was that FP would apply the increases payable to their employees, recalculate the charge out rates on that basis and submit those rates to Tooheys for approval. Ultimately, these would need to be mutually agreed between Tooheys and FP.

[438] In cross examination by Mr Seck, Mr Scott accepted that he did not have the chief responsibility for negotiating the 2002 Services Agreement. He had combined responsibility with Mr Wayne Boxshall, who was part of the Lion Procurement Team. It was not always the case that he and Mr Boxshall would attend negotiations with FP together. Sometimes, one or the other of them would meet with FP separately and they would discuss any issues later. In negotiating the 2002 Services Agreement, he dealt primarily with Mr Gorman, Mr Porretta and Ms Huddy.

[439] Mr Scott disagreed that he had familiarised himself with the 1997 Agreements, although he was aware of some elements of them. The prior Operations Director had administered these agreements. However, he agreed that the 2002 Services Agreement had been backdated to October 2001, but had not been finalised until some time after he had begun his role as Operations Director in February 2002. He agreed that Tooheys had presented the first draft of the 2002 Services Agreement to FP. He had not used the 1997 Agreements as a basis for drafting it. He could not say if it had been drafted from ‘scratch’. He had instructed the Lion Legal team in this regard. When shown the two 1997 Agreements, Mr Scott said that he recognised parts of them. He agreed that he would have identified what was working in these Agreements, in order to replicate them in the 2002 Services Agreement. He could not really recall what the process was. He believed that the primary issues between the parties were to do with rates and fees.

[440] When shown the 1997 Agreement and the 2002 Services Agreement, Mr Scott accepted that there was no equivalent to Appendix B of the 2002 Services Agreement, which set out the description of roles, in the 1997 Agreements. He could not say how or why that Appendix had been drafted, although he agreed that it appeared to reflect the day to day duties and responsibilities of FP workers.

[441] Mr Scott agreed that the description of Core Maintenance tradespeople in the 2002 Services Agreement set out that they were to be directed in their day to day work by the appropriate Team Leader and that this practice accorded with the reality on site. He agreed that a similar clause relating to Preventative Maintenance tradespeople included a provision which required that they were to be directed by Maintenance Coordinators or Tooheys Engineers. This merely reflected the reality of practice at the site.

[442] Mr Scott accepted that the 2002 Services Agreement followed the manner in which services fees had been historically calculated, in that it set out the costs involved, with a mark-up. He agreed that the tables in the 2002 Services Agreement setting out how workers were charged out referred to the same administration cost that FP incurred in performing the 2002 Services Agreement. These administration costs were subject to review. This would be done by way of discussion between Tooheys and FP. FP would simply advise if there had been any changes. They did not transparently set out the administration costs and Tooheys would not ask for them to do so. The administration costs remained static during the period he administered the contract. He could not recall if the flat administration margin of $2.75 had ever been reduced to $1.35 in accordance with provisions under the 2002 Services Agreement.

[443] In cross examination by Mr Phillips, Mr Scott was shown an email sent from himself to Ms Huddy and Mr Falster of FP, dated 24 March 2003. It was copied to Mr Sawyer and Mr Peter David of Tooheys. This email and its attachments set out changes in the Tooheys enterprise agreement. The body of the email was expressed as follows:

 

‘1.

Please find below a spreadsheet detailing the new contract labour pay rates for BT’s on the basis of our recently settled Enterprise Award. Hopefully the spreadsheet is relatively self-explanatory. Basically an 8.4% increase, as the reduction of one accrued hour does not effect casuals!

 

2.

Also in the spreadsheet there is an explanation of PfP rates as applied at Tooheys. As we have done in the past, we should apply these rates to the core trades pay increases. I would expect the gross increases to come out at somewhere around the 5% to 6% mark as a result of the reduction in accrued hours. I am presuming that the performance rating scores have been agreed with Tooheys for each individual trade??

 

3.

For the remainder of the Maintenance trades, I am relying on a mutually agreed review between Tooheys and FP to determine the rate. As a starting point, may I suggest that you nominate what you believe the general increase should be on the basis of your trade and general employment market reviews!’

Mr Scott accepted that Tooheys had wanted to know what FP was paying its Tradespersons, and that Tooheys wanted to agree with what FP was going to pay its Tradespersons. He qualified this by saying that this request was in the context of the invoiced rate by FP.

[444] Mr Scott was also shown a letter addressed to him from Ms Huddy, dated 24 March 2003. He agreed that this letter referred to a discussion he had had with her and that the letter set out that pay increases were to be ‘rolled out as per your instructions’.

[445] Mr Scott acknowledged that he was not aware of any other contracts of significance that FP had, other than with Tooheys. He agreed that it would have been unlikely that FP would have been able to find alternative work for FP workers should the contract with Tooheys come to an end. He also agreed that there was no reference to redundancy in the 2002 Services Agreement.

[446] In re-examination, Mr Scott was again shown the email sent from himself to Ms Huddy. He agreed that mutually agreed reviews such as that referred to in the third paragraph of the email, were a consistent part of the process. Tooheys was reliant on FP to nominate the rate on a sound basis.

Mr Luke Sawyer

[447] Mr Sawyer has worked for Lion in a variety of roles since 1985 and has been the Group Engineering Director since June 2010. He is responsible for the strategic overview of engineering and capital programs for Lion and is based at the Tooheys Lidcombe site. He reports to Mr Rob McKenzie, Group Supply Chain and his direct reports are the Technical Director, the Group Projects Director, the Dairy and Drinks Capital Development Director, the Group Automation and Systems Director and the Group Reliability Director.

[448] In his written statement, Mr Sawyer said that he had had daily contact with FP Tradespersons through the FP Site Supervisor and the FP Maintenance Coordinators in his roles as Packaging Engineering Manager between January 1999 to January 2001 and Bottle Hall Manager between February 2001 and September 2003. In his role as Packaging Manager, he dealt informally and regularly with FP Supervisors and Tradespersons in the Packaging Department. He oversaw the performance of obligations under all services agreements at the Lidcombe site in his capacity as Operations Director between January 2008 and June 2010. He had not had contact with FP tradespersons, Maintenance Coordinators or the Site Supervisor in his current role.

[449] Mr Sawyer denied that he had a conversation with Mr Gorman in or around 2002/2003 where he had expressed concern about FP workers who were coming up to ten years service. He noted that he was not the Packaging Manager at this time and, in any event, he expressed doubts that any conversation would have proceeded on the basis that FP was at liberty to remove their workers from site, subject to being able to replace them with workers with appropriate experience. If there had ever been any conversation along these lines, he would have reminded Mr Gorman of FP’s obligation under the relevant services agreements to cover the costs and entitlements of FP workers.

[450] Mr Sawyer confirmed that Tooheys had suggested to FP that it consider Mr Paulson for the role of Maintenance Coordinator. He was aware that FP had communicated to Tooheys that Mr Paulson required further benefits, over and above the standard salary package, if he was to accept that role. However, he denied that he had interviewed Mr Paulson in relation to the provision of further benefits, including salary packaging and the provision of a car. Decisions related to benefits and remuneration were made by FP.

[451] Mr Sawyer said that the requirements of the FP Site Supervisor role was set out at Appendix B of the 2002 Services Agreement. The purpose of the role was to ensure that ‘all the FP tradesmen and maintenance activities were coordinated and executed to a high standard.’

[452] Mr Sawyer explained that Tooheys had given notice to FP in or around early 2006 that it intended to seek tenders in relation to maintenance services provided to Tooheys. The process was delayed as a restructuring process, based around automation, occurred at around the same time. The decision was made that it would have been uncommercial to proceed with the tender process simultaneously. Both Tooheys and FP were well aware that after the expiry of the 2002 Services Agreement on 31 March 2005, the terms of that document would continue to govern the relationship between them, until a competitive tender process resulted in a new agreement between Tooheys and FP or Tooheys and another party.

[453] Mr Sawyer annexed email correspondence between himself and Mr Smith in May 2009. He noted that Mr Smith had referred to FP’s ‘continued observance of expired contract conditions’ in an email promoting the progression of a new agreement between FP and Tooheys. Mr Sawyer had responded that:

[454] In oral evidence, Mr Sawyer was shown an email to Mr Smith on 10 December 2009, in which he advised Mr Smith of the ‘contract operator wage increases that are prescribed in the Tooheys EA. I have also provided guidance on the Core trades wage increases which are not covered by the Tooheys EA.’ He explained that pay increases were triggered under the Tooheys enterprise agreement and that this instrument required that Tooheys were not to pay its contract Brewery Technicians, less than what was provided for its own employees. This was merely advice as to what Tooheys’ obligations under its enterprise agreement were. In relation to Core Trades workers, Tooheys would provide guidance on what was seen as reasonable increases, having taken into account market rates, CPI and increases payable to Tooheys employees. Subject to the teams meeting certain outcomes, a 4% bonus was applicable for the FP Maintenance Team as a whole, which included the Site Supervisor, the Maintenance Coordinators and the Core Trades workers.

[455] In cross examination by Mr Seck, Mr Sawyer affirmed that he had had responsibility for monitoring the performance of all service contracts at the site as Operations Director, although he was not the first liaison point for the providers. He had to ensure that the relevant providers met safety and workplace requirements and came in on budget. He agreed that he had carefully read the 2002 Services Agreement in his capacity as Operations Director.

[456] Mr Sawyer agreed that under the 2002 Services Agreement, Tooheys would be advised of the pay rates paid by FP, which would be agreed after some discussions. Mr Sawyer could not recall that Tooheys had agreed that the service fees be calculated on a costs-plus basis. His understanding was that Tooheys paid a generic rate to FP and whatever FP paid its workers was ‘invisible’ to Tooheys and FP had a ‘variety of arrangements’ with them. He agreed that this generic rate was calculated upon pay rates agreed, plus on costs and mark up, as prescribed in Appendix E of the 2002 Services Agreement. Therefore, an increase in rate of pay would affect this formula.

[457] Mr Sawyer was again shown the email of 10 December 2009. He conceded that in advising Mr Smith of the pay increases for Tooheys employees under its enterprise agreement, he was directing FP to pay its workers that amount as a minimum. However, he could not guarantee FP would pay above those rates. In relation to classifications of FP workers not covered under the Tooheys enterprise agreement, he merely provided ‘guidance’. He did not accept that in providing such ‘guidance’ he was setting out what Tooheys was prepared to accept as an appropriate pay increase.

[458] Mr Sawyer was shown another email between himself and Mr Smith of 5 November 2008. He agreed that it related to a discussion in which Mr Smith was trying to determine what amounts Tooheys were proposing to be paid. He denied that Mr Smith’s query was aimed at effecting a direction given by Tooheys. He said that this discussion would have largely occurred by email and that he usually would have dealt with FP’s administration and payroll persons. He denied that he was trying, in a further email, to link wage increases for Non Core FP workers to those under the enterprise agreement, nor was he trying to ‘benchmark’ them to that standard.

[459] Mr Sawyer was shown another email to him dated 24 November 2008 from Ms Janet McQueen, FP Administration Manager. He agreed that this email set out the contract Brewery Technician rates and that Ms McQueen had confirmed these rates with him. He noted that Brewery Technicians had a complex pay structure under the Tooheys enterprise agreement. In re-examination, Mr Sawyer affirmed that the email communication between himself and Ms McQueen on 24 November 2008 related only to Brewery Technicians. He noted that the Tooheys enterprise agreement set out that they were entitled to a different salary increase.

[460] In cross examination by Mr Phillips, Mr Sawyer denied that his use of the words ‘advice’ and ‘guidance’ in the above emails constituted a direction made by Tooheys to FP. Nevertheless, he emphasised that he considered there was a specific difference between the use of the word ‘advice’ and the word ‘guidance’. Mr Sawyer acknowledged that under the Tooheys enterprise agreement, Tooheys could not commit to contractors being paid any less than comparable staff who were Tooheys employees. He agreed that having set this out in the email to Mr Smith of 5 November 2008, he had instructed FP to pay the increases for the relevant contract workers. He did not agree that he had directed what the other tradespersons were to be paid and said that FP could have paid them less than those increases if they had wanted to. However, he could not offer an instance of where this had occurred.

[461] Mr Sawyer believed that Tooheys wanted to ensure that the contractors it was provided with, were of the ‘right calibre’ and that part of ensuring this condition, was that they were being paid properly and competitively. However, Tooheys would not have been aware of pay rates which individual FP workers received. He agreed that Tooheys wanted to ensure that these workers were appropriately paid, happy and well treated by Tooheys and FP. He said that the contractors were fundamental to ensuring that equipment worked properly and agreed that the business would fail without them. These matters were also relevant to the 2002 Services Agreement.

[462] Mr Sawyer was referred to cl 8 of the 2002 Services Agreement, which dealt with Review of Fees and Performance. He said that cl 8.1 set out that FP agreed to provide to Tooheys the hourly rates of each category of FP personnel, rather than that of individual workers. He agreed that cl 8.2 set out that where an instrument covering the FP workers changed, Tooheys had to be advised. He agreed that cl 8.4 set out that FP was to provide a monthly report in relation to its service provision in a format agreed with Tooheys. Although he could not say exactly what that format might have been, it was likely to have been similar to the normal supplier review format, which set out relevant KPIs for suppliers to meet. He also conceded that cl 8.5, which set out that FP workers were obliged to apply ‘corrective actions identified by Tooheys in the regular performance meetings’ within seven days, gave Tooheys ‘firm control’ over the site.

[463] Mr Sawyer was shown Schedule E of the 2002 Services Agreement. He agreed that it set out that Tooheys was paying a ‘charge out’ rate based upon costs that FP would incur in relation to complying with its contractual obligations and statutory requirements with its employees. He was reluctant to agree that it ‘transparently’ set out the costs incurred by FP. He could not say why the schedule did not make reference to redundancy pay, but believed that cl 11.1(c) referred to redundancy pay, albeit in an abbreviated reference to ‘statutory entitlements’. When the FP workers had ceased working at Tooheys, Tooheys had always interpreted that clause, as if it included an obligation on FP to pay redundancy pay.

[464] Mr Sawyer believed that Skilled Engineering had taken on some FP workers. However, he could not say which ones. He was not aware of an indemnity that Tooheys had provided to Skilled Engineering for transferred employees. In further cross examination by Mr Phillips, Mr Sawyer said that he could not name any employee of FP, who had worked at Tooheys, who was made redundant and paid redundancy pay.

[465] In re-examination, Mr Sawyer deposed that Tooheys had never paid outstanding entitlements to FP workers who had left FP. By this, he meant outstanding long service leave, annual leave, sick leave and redundancy entitlements. These were statutory or Award or Agreement entitlements. Mr Sawyer was referred to cl 11.1(e) of the 2002 Services Agreement. He said that ccl 11.1(c) and 11.1(e) were the provisions to which Tooheys made reference when determining FP’s responsibility for its workers’ entitlements.

Mr Nicholas Ogilvie

[466] Mr Nicholas Ogilvie, Solicitor for Tooheys provided a written statement, but was not required for cross examination. Mr Ogilvie annexed to his statement an email chain between himself and Ms Deirdre McEvoy, Solicitor for FP which related to orders each party was seeking against the other for the production of documents. Mr Ogilvie drew particular attention to where Ms McEvoy made what he described as two concessions. The first of these was sent on 22 May 2012 and was in the following terms:

[467] The second of these was in the following terms:

Ms Katharine Stevens

[468] Ms Stevens was the Operations Capability Leader at Tooheys from January 2009 to November 2010, at which time she was based at the Lidcombe site. She has worked for Lion since August 2006 in various roles related to People and Culture. She said that it was a requirement for FP workers to comply with all Tooheys policies. In her written statement, she said that in order for Tooheys to comply with its occupational health and safety commitments, it was necessary for all visitors to be made aware of, and comply with, various policies, including the Respect@Work policy and the Lion Safety and Wellbeing policy.

[469] Ms Stevens annexed to her statement a copy of the Tooheys Brewery Site Induction Procedure. She maintained that the policy applied to all Tooheys employees, contractors and visitors and quoted from the document as follows:

[470] Ms Stevens made a distinction between this policy and a raft of policies which she said applied only to Tooheys employees, including the Parental Leave Policy, the Long Service Leave Policy, the Education Assistance Policy, the Fair Treatment and Resolution Policies, the Service Recognition and Product Allowance Policies and the Redundancy and Reference Policies.

Mr James Morley

[471] Mr Morley has been the Workplace Relations Director for Lion since July 2010 and was previously the Lion Nathan Workplace Relations Leader from January 2009. In his written statement, Mr Morley described attending a conference on 10 January 2012 at Fair Work Australia (as it then was) in relation to a dispute brought by the AMWU on behalf of Mr Hulbert. At that time, Ms McEvoy, the Solicitor for FP, indicated that an application under s 120 of the Act had been listed for hearing. Mr Morley asked if Ms McEvoy could send the notice of listing to him by email. Ms McEvoy did so on the same day, and Mr Morley responded by asking that she forward the application, which she did, again on the same day. She also noted that an unfair dismissal application had been filed for Mr Henry prior to Christmas, but that she did not have a copy of that application.

[472] Mr Morley outlined his experience of the history of the other nine applications made against Tooheys. He said that Mr Alan Burton, Culture and Change Leader at Tooheys had received 13 applications lodged in the Chief Industrial Magistrates Court on 27 February 2012. A solicitor, Ms Brooke Pendlebury was listed as the applicants’ representative. Mr Morley said he subsequently spoke to Ms Pendlebury by phone. She confirmed that nine unfair dismissal applications had been filed. Mr Morley contacted my chambers on 28 February 2012 and was told that FWA would be forwarding the applications to Tooheys shortly.

[473] Mr Morley said that he received a further email from Mr Burton on 6 March 2012 in which Mr Burton forwarded an email from a Tribunal Services Officer at FWA setting out that the applications has been allocated to my Chambers and that I had granted a request made by McArdle Legal that the applications not being listed, until the application under s 120 of the Act had been determined.

[474] Mr Morley emailed my Chambers on 6 March 2012 confirming that McArdle Legal did not act for Tooheys and that he was the relevant contact for Tooheys. Mr Morley subsequently received an email from FWA attaching the ten applications and a blank copy of the Form F3 Employer’s Response form. On 7 March 2012, Freehills filed responses with FWA setting out Tooheys’ objections to the unfair dismissal applications.

For FP

Mr Trevor Gorman

[475] Mr Gorman has been a director of FP since its inception on 30 June 1994. He is a director of a related company, being Proden Pty Ltd (‘Proden’) and, until 2 July 2012, a director of Omni Engineering Pty Ltd (‘Omni’), formerly known as Feyman Pty Ltd. From 1978 to November 1991, Mr Gorman was employed by Tooheys as a Production Line Electrician. He was also the ETU Union delegate.

[476] In his written evidence, Mr Gorman outlined the history behind the establishment of the FP Group and events in the 1990s during the early relationship with Tooheys. This history is recorded later in this decision and I do not repeat it here.

[477] Mr Gorman claimed that when he and Mr Lewis were discussing a request by Tooheys in November 1994 to reduce the service fee by around $50,000, he had explained that the service fee was high to cover severance pay and other costs, if Tooheys decided not to extend the agreement past the initial five years. Mr Lewis had said that Tooheys would meet future redundancy pay if the need arose, but the important thing was for Tooheys to get a reduction in fees now. In a letter to Mr Lewis dated 14 November 1994, Mr Gorman set out his understanding of that discussion as follows:

[478] It was Mr Gorman’s impression that after Mr Porretta joined FP in January 1995, Tooheys began exercising greater control over the actions of FP. He referred to an incident in September 2005 in which he had wanted a particular FP employee sacked for misconduct. However, he had been overruled by Tooheys, who dealt with the matter through counselling the employee involved.

[479] Mr Gorman also recalled conversations with Tooheys Managers in late 2002/2003 in which he had wanted to take casual staff off site who were approaching the eligibility of ten years for long service leave payments. At the time, Mr Luke Sawyer, Tooheys Packaging Manager, told him that to do so would be to put FP’s contract at risk because Tooheys had invested in the training of the workers and so long as their Team Leaders wanted them to stay, they would be staying.

[480] In another conversation, Mr Sawyer had wanted to rehire a former employee, Rodney Paulson, as a Maintenance Coordinator. However, Mr Paulson wanted a car as part of his package. Mr Sawyer told Mr Gorman to invoice the car back to Tooheys. However, Mr Gorman was concerned that the Maintenance Coordinator reported to FP’s Site Supervisor, who did not have a car as part of his package. Mr Sawyer said it was too late as Mr Paulson had been interviewed and a car had been agreed to be supplied through FP. He did not care what the Site Supervisor thought about it, he simply wanted it done. Mr Gorman took Mr Paulson’s mobile number and he was subsequently engaged by FP.

[481] Mr Gorman said that in 2000, Tooheys had wanted to remove the restrictions of the LTU in respect to the use of casuals. He had suggested a Federal enterprise agreement to limit their influence as a state registered Union. Mr McKenzie, for Tooheys, had said that Tooheys had agreed with the LTU to register the old award conditions underpinning a new enterprise agreement which would require Proden to engage nine full time employees and the casual roster was maintained.

[482] In 2000, Mr Gorman had engaged Phillips Fox to prepare an EBA for FP. During the process, Tooheys had told him that it would need to include the Tooheys site allowance to ensure parity between casual and permanent employees. After supplying Tooheys with a draft enterprise agreement, Mr Gorman and Tooheys discussed which casuals would be appointed full time. Mr Fargera, for Tooheys, later told him that he should get a similar enterprise agreement for the trades. Annexed to his statement were enterprise agreements for Proden Pty Ltd certified by Rafaelli C on 20 October 2000 [P1914 Cass Doc T2350] and for FP Group Pty Ltd certified by Redmond C on 19 February 2001 [PR901191].

[483] In a reply statement, Mr Gorman gave three examples during 2000-2003 where he was instructed by Mr Scott (Packaging Manager) to remove FP workers from site because of:

[484] Mr Gorman said that when Mr Sands was appointed FP Maintenance Supervisor, two Tooheys managers had interviewed him and he (Mr Gorman) was not involved. Mr Gorman said the role of Site Maintenance Supervisor was to overlay all the Tooheys systems to FP workers and ensure compliance with Tooheys culture in the teams. He was not responsible for supervising or allocating any maintenance or breakdown work.

[485] In reference to the 2002 Services Agreement negotiations, Mr Gorman said that Mr Scott had told him the fee FP charged needed to change from a percentage to a fixed dollar amount. In order to achieve an image of commerciality, Mr Scott wanted a clause for FP to pay Tooheys a $30,000 fee on signing the contract, but the fee would not be paid and it was not paid. Mr Gorman claimed that he had not been aware that Tooheys had been seeking different tenders for the 2002 Services Agreement. At the time, he understood that FP was the only company Tooheys was talking to.

[486] In response to Mr Scott’s statement, Mr Gorman said that neither FP nor Proden ever invoiced Tooheys for redundancy accruals. Mr Gorman recalled a meeting with Mr Sawyer, Mr Smith and Mr Porretta at which he was asked about FP’s ability to pay accruals of long service leave and redundancy. Mr Gorman said he believed this was Tooheys’ obligation and FP would not be doing so. Mr Sawyer had replied ‘I don’t appreciate being threatened.’ In a further meeting with Mr Sawyer in April 2009, when Mr Sawyer told him that Tooheys had decided to put the contract to tender, Mr Gorman told him that Tooheys had the obligation for accruals of entitlements. He believed that Tooheys was deliberately trying to place FP in a bad financial position and he concluded that Tooheys wanted to exit the relationship. However, FP wanted to discuss compensation and how accruals would be met. Mr Sawyer said FP would be legally obliged to pay for accruals; but Mr Gorman denied it was FP’s responsibility and it had no money to do so anyway.

[487] Mr Gorman could not recall an Excel spreadsheet said to have been prepared by Ms Huddy for FP for use in the the negotiations for the 2002 Services Agreement, which referred to a component for redundancy. He questioned its ‘cut and paste’ format and suggested it was actually a document prepared by Tooheys, and not FP.

[488] In cross examination by Mr Parry, Mr Gorman conceded that for the past twenty years, he had derived a substantial part of his income as a director and/or shareholder of FP and its associated entities. Through ASIC documents, he agreed the previous shareholding in the FP Group was held by four companies, one of which, Te Ano Investments Pty Ltd, was owned by himself and his wife. It was later replaced by GTG Investments, although he could not recall when that occurred or why. Another company, Omni Engineering, was formerly known as Feyman, of which he was a former director. Mr Gorman was previously an executive officer of Feyman Electrical Automation and Industrial Control, which is now Proden Pty Ltd. Since 1995, Mr Gorman has been a director of that company, which was formally owned by the four companies earlier referred to, including Te Anor Investments. Further ASIC extracts disclosed that Omni Automation’s major shareholding is the FP Group of Companies. Mr Gorman is listed as a current shareholder of Omni Automation.

[489] Mr Gorman explained that GTG Investments owns FP Group Pty Ltd, Proden and other companies and GTG Investments owns Gandra Holdings. It was previously owned by the other companies, including Te Anor Investments. He agreed that Prontex was a company assocated with Mr Porretta, Gomo was associated with Mr Moston and Gaffney and Associates was associated with Mr Gaffney. Mr Gorman acknowledged that he was a director and Company Secretary of Gandra Holdings.

[490] Mr Gorman agreed that he and his wife were directors and sole shareholders of Te Anor Investments and his son and daughter were a different class of shareholders for the distribution of dividends. This company had had dividends distributed to it which were then forwarded on to members of his family. He said the dividends are about 50% of the income he derived from the FP Group of Companies. When shown ASIC records of directorships held by himself and his family, he was unsure if his son was involved in other companies.

[491] Mr Gorman agreed he was previously a shareholder of a company called SME EWG Pty Ltd, a company he had been involved with over the last twenty years, but which was not associated with the FP Group of Companies. He listed his directorships as:

[492] Mr Gorman had previously been a director of a number of other predecessor companies. He acknowledged that over the last twenty years, he had essentially been a businessman, involved in generating income through these companies. He did not consider the corporate structure to be particularly sophisticated, notwithstanding the interwoven web of companies owning other companies and his own company, Te Anor Investments, being three steps removed from the FP Group.

[493] Mr Gorman understood that he had a duty to ensure statements to various regulatory authorities were accurate and not deliberately misleading and deceptive. He said he would not want to enter into any kind of arrangement which was a ‘sham’ or a subterfuge.

[494] When shown the 2011 tender proposal submitted by FP to Tooheys, Mr Gorman claimed he had not seen it before, although he was aware that a tender had been provided and submitted. However, the documentation was largely prepared by Mr Smith with the assistance of others. He had no direct involvement in the tender. Mr Gorman accepted that the tender disclosed a history of FP Group of Companies’ involvement in providing labour to other companies. However, he believed Tooheys now had 95% of the total business. Nevertheless, Mr Gorman accepted that all of the information in the tender proposal and the FP website was true and correct. While he would like to think that the Company would not authorise false or misleading statements to the public, the information in the tender was designed to ‘sound good’.

[495] Mr Gorman was shown the financial reports for FP Group Pty Ltd for the year ended 30 June 2009, in which he had signed the required declaration that the information contained therein was true and correct. This report showed total sales of $6 million, cost of goods $791,000, less manufacturing costs of $3 million, consisting mainly of wages and employee benefits and gross profit for the year of $1.395 million. For 2008, the profit was $1.3 million. Mr Gorman believed this was only a snapshot of one of the entities and if all the other entities were included, the result was down to nil. Under a heading of employee benefits was recorded ‘From wages and salaries, annual leave and sick leave, which will be settled after one year.’

[496] For 2010, the financial reports disclose assets of $4.6 million, liabilities of $2.5 million, net assets $2.1 million and retained profit of $2.14 million. For 2011, sales were $4.5 million, cost of sales $3.3 million and profit of $1.5 million. Mr Gorman claimed that he was not aware that the profit and loss history of the Company was in the tender process. He had not taken notice of what was in the tender, because he did not believe that FP would be successful anyway.

[497] Mr Gorman was then taken to the financial records of Proden Pty Ltd for 2004 which nominated ‘contract labour supply services’ as the business the company was involved in. A dividend was paid in 2004 of $320,000. In 2006, the accounts disclose a franked dividend of $92,000 and a franking credit of $39,678.

[498] For the year ended June 2011, the FP Group directors had decided to declare dividends to themselves of upwards of $200,000. Meetings of directors would take place formally about twice a year, as well as other meetings every six to eight weeks. Mr Gorman understood he and his co-directors conducted a substantial business with genuine income and paid dividends over twenty years under differing guises. He agreed that he and his co-directors derived substantial income which was available to them to undertake other business activities.

[499] Mr Gorman claimed he had no knowledge of the Tooheys EBA 2008, but was aware that under its terms, any contractors engaged on site are to be paid no less than its own employees. Mr Gorman was asked about FP’s own enterprise agreement. He agreed he had sought independent legal advice (Phillips Fox) to prepare the draft agreement. Mr Gorman had prepared and signed a declaration submitted to the Australian Industrial Relations Commission (AIRC) when the application for approval was made. He had not told the AIRC what he now believes, that FP was the ‘notional’ employer and that Tooheys was the real employer.

[500] Mr Gorman had reviewed the application and agreed that the document had noted that FP employed production and trade staff to provide outsourcing services to industry and that FPG Pty Ltd was the employer. The Agreement provided for annual leave, long service leave and redundancy pay and Mr Gorman understood FP’s obligations at the time. He acknowledged the Agreement has never been terminated.

[501] Mr Gorman was asked about his letter to Mr Lewis in 1994 (see para [477]). He said he definitely sent the letter as it reflected an agreement he had with Tooheys. Despite nothing in the 1997 labour supply agreement or the 2002 Services Agreement mentioning Tooheys as being responsible for redundancy, Mr Gorman’s understanding was that this was not the case. Mr Gorman conceded he could produce no other documentation which recorded any obligation on Tooheys to pay redundancy pay to FP workers.

[502] Mr Gorman was shown Ms Huddy’s email and attachments to Tooheys concerning the negotiations for the 2002 Services Agreement, which included redundancy in the breakdown of costs to be met in the charges paid by Tooheys. Mr Gorman said he did not believe Ms Huddy would have created the document. He agreed Ms Huddy was in charge of the office and was on site every day. He acknowledged that the rates and calculations for other benefits and items, such as workers’ compensation and payroll tax were prepared by Ms Huddy using similar data to what became the actual figures in the 2002 Services Agreement. Mr Gorman believed that the document from Ms Huddy was false and if Ms Huddy had ever prepared such a document, she would have shown it to him. Mr Gorman strongly maintained that the rates agreed upon by FP and Tooheys did not contain a component for redundancy pay. However, he did not see that this proposition was entirely consistent with FP’s and Proden’s enterprise agreements obliging them to meet redundancy pay, in accordance with the NSW Employment Protection Act.

[503] When asked about receiving legal advice concerning these Agreements, Mr Gorman said he was ‘naive’ and he had trusted Tooheys. He agreed he received a ‘good income’ from the arrangements but his evidence was that ‘we’ve always known it was a sham.’ He was asked if that meant that information he had provided to the Australia Tax Office and other regulatory bodies, was not the true position. When asked if, as a director of the Companies, he had ever informed these authorities that FP was a party to a ‘sham’, Mr Gorman replied:

[504] Mr Gorman denied that he was trying to distance himself from the arrangements through the setting up of a network of inter-related companies. He believed he was doing the correct and appropriate thing. However, he conceded that he had never presented the arrangements with Tooheys as a ‘sham’ to the workers’ compensation insurers or the workers’ superannuation funds.

[505] Mr Gorman was shown minutes of a GTG Investments directors meeting of 15 September 2010 which he chaired and during which a dividend of $202,000 was declared. At another directors meeting on 8 December 2011, at which he, Mr Geoffrey, Mr Moston and Mr Porretta were in attendance, no dividends were declared, but it was confirmed for the purposes of s 245T of the Corporations Act 2001 that the Companies’ assets exceeded its liabilities.

[506] Mr Gorman was further questioned about a declaration made to the AIRC in 2000, which he had signed in the presence of his solicitor from KPMG. The document noted he had obtained legal advice from Mr Chris McArdle, who was then a partner at KPMG and who continues to represent FP in these proceedings. He was taken through the various steps taken to consult with employees, including through briefing sessions organised by supervisors from FP or Proden. He agreed that, at no time, had he told the employees to be covered by the agreement that he did not consider FP or Proden to be the true employer. He said he drew no distinction between ‘notional’ employer and real employer and he was acting ‘in a very foolish and naive way.’ Nevertheless, he conceded he had been acting under legal advice. He now accepted that throughout the declaration FP was identified as the only relevant employer. Nevertheless, Mr Gorman insisted he had not misled the employees or the Commission.

[507] Mr Gorman denied that he had seen a letter of demand from Mr Smith to Tooheys dated 2 September 2011. As he believed that FP was not going to win the tender, he took no real interest in it. He had never discussed in detail with Mr Smith what would be put to Tooheys. Nevertheless, Mr Gorman understood that in or about September 2011, FP was making multimillion dollar commercial demands on Tooheys. He agreed he was aware of the types of claims being made by Mr Smith on FP’s behalf. He had attended two meetings and believed Tooheys had taken advantage of, and manipulated their relationship, and had put FP in a very dire position. He believed Tooheys had controlled and dictated to FP when and what to do.

[508] In cross examination by Mr Phillips, Mr Gorman was taken back to when he was first approached by Mr Porretta to give up the Award and work as a company of subcontractors. He had not been engaged in other business activity prior to this time. Mr Gorman said he did not have the resources, knowledge or expertise to do what was being suggested, so Tooheys paid for everything - cars, offices and equipment and Mr Gaffney as his assistant. He respected Mr Gaffney’s knowledge and ability. Mr Gorman acknowledged that Tooheys paid him $200,000 in redundancy and other payments to go down this path and the others who joined him received similar amounts, based on a very generous Tooheys redundancy scheme. Mr Gorman said that in addition, the equipment given to Feyman at the time by Tooheys was valued at tens of thousands of dollars, as was the rent of the premises on site. Feyman sent a bill to Tooheys each month for the service fees agreed between Tooheys, Mr Gaffney and himself.

[509] Mr Gorman said he commenced supervising staff when Feyman was established. He said it was a requirement for Feyman workers to sit for, and achieve the fortieth percentile of the Tooheys entry tests, known as Saville and Holdsworth tests. This requirement continued right through the contract. Tooheys paid for these tests and Mr Gorman later became accredited to conduct them.

[510] Mr Gorman believed Tooheys had control to use FP workers to fill in for labour involved in industrial action in other States. However, FP soon became no more than an administrative arm of Tooheys. Tooheys had become very demanding and was making it very difficult to operate FP effectively. He claimed that Tooheys would delay regular payments due to FP by many months, causing cash flow problems.

[511] Mr Gorman noted that Mr Smith is no longer the General Manager of FP. He is in charge of, and effectively, owns Omni. FP still exists with some minor transactions to keep its administrative staff in place. He agreed FP retains its website, it offers its services to the world at large, but it does not actively do any more business. It has no employees and has directors only. It does not engage any person to work for someone else. Effectively, it is doing nothing at the moment. Mr Gorman said that FP’s present dispute with Tooheys involves claims of losses for the year 2011 of $2.5 million. However, no legal proceedings have yet been initiated to recover any, or all of that sum.

Mr Lodo Porretta

[512] Mr Porretta’s written statement dealt primarily with the history of the relationship between Tooheys and Feyman, then FP and Proden. I record this history later and do not repeat it here. Mr Porretta said that FP advertised the position of Site Maintenance Supervisor through a recruitment agency and shortlisted candidates were interviewed by Tooheys Packaging and Brewing Managers. There were only three Site Maintenance Supervisors over the relevant time: Anthony Brought, Stig Falster and Andrew Sands.

[513] Mr Porretta said he did not have any direct negotiations with Tooheys over the 2002 Services Agreement, although he understood the fee went from a percentage to a dollar figure. However, nothing changed as to how FP paid its workers and then invoiced Tooheys. He believed the 2002 Services Agreement was just a rollover of earlier agreements. In a reply statement, Mr Porretta said he could not recall being involved in negotiations for the 2002 Services Agreement, but remembered Tooheys saying ‘We want to continue with you’. He could not recall receiving a tender or tendering for the 2002 Services Agreement. Mr Porretta could not recall Ms Huddy’s document and did not recognise it as being prepared by FP (the Excel spreadsheet said to have been created by Ms Huddy for FP during the negotiations for the 2002 Services Agreement and which itemised a redundancy accrual component).

[514] In cross examination by Mr Parry, Mr Porretta described his role as running the day to day business of FP. He understood that since the loss of the Tooheys contract, Omni Engineering was doing ‘bits and pieces’ with Greens and Rheem. Mr Porretta was also a director of Gandra which he understood owned FP. He believed Gandra had some assets. He also thought he was a director of Proden. Nevertheless, Mr Porretta accepted that FP still produces accounts and runs a business.

[515] Mr Porretta reiterated that he was aware that FP tendered for the Tooheys contract in 2011, but he had not seen the final document which had been put together by Mr Smith who had been authorised to do so by the Directors. Mr Porretta noted that Mr Smith was on a salary package, including a 2% per year ownership in the business as a shareholder. However, when the position changed in early 2012, Mr Smith took a greater role at Omni, a company which has a viable clientele and a viable business.

[516] Mr Porretta was shown FP’s tender document, which he said reflected an accurate description of the services offered by FP, being ‘supplementing your labour requirement with a skilled, experienced and effective labour force capable of supporting your business 24 hours a day, 7 days a week.’ The document also referred to other clients, such as Stylus, Colgate Palmolive, Diageo and Pepsi. However, Mr Porretta believed these companies were no longer clients of FP.

[517] Mr Porretta acknowledged that from 2002 to 2011, Tooheys paid FP a substantial sum of money and it was involved in a substantial business. As a director, he had received dividends from the business after biannually held Board of Directors’ meetings. In addition to the dividends, Mr Porretta was paid a salary until about 2004/2005, when Mr Smith took over the day to day running of the business. Since then, his only source of income was through dividends.

[518] Mr Porretta was aware Mr Smith wrote to Tooheys in September 2011, making a series of demands arising from the souring of the relationship. Mr Porretta said the four directors had input into the letter and agreed with it (including Mr Gorman). The claims are still ‘live’ issues and litigation was likely. Mr Porretta said that ‘redundancies were still going to be worn by Tooheys’.

Mr Gordon Moston

[519] Mr Moston started work as a Fitter for Tooheys in mid 1971 and by 1991 was the Maintenance Supervisor. Mr Moston was approached by Mr Johnson in June 1992 with a view to him setting up a similar company to Feyman for the mechanical fitters on site. Although he tried to get the proposal accepted, it failed because of Union opposition.

[520] In early 1993, Mr Johnson approached him again and told him that Tooheys wanted to join forces with Bob Kirkbride (Brewhouse Foreman) and Jeff Stewart (Mechanical Engineer) in an effort to overcome the Union factions causing problems. In May 1993, KSM Engineering Pty Ltd was set up with the support and approval of Tooheys Management, but it also failed because of Union pressure.

[521] In or around August 1993, as part of Project X, all maintenance staff, including fitters, were removed and replaced by staff supplied by Skilled Engineering. Mr Moston was not affected because he was a supervisor. Around September, he was asked by Mr Porretta to contact some of the experienced LTU staff who had been made redundant and ask them to come back to supply their labour through ABB Labour Hire. Mr Moston did so.

[522] In November 1993, Mr Porretta asked Mr Moston to organise and run weekend production using only LTU redundant labour to further assist production shortfalls and to invoice for them through Proden. For around three months, Mr Moston ran Proden while still an employee of Tooheys. He supplied full crews for weekend production and casual needs. At this time, production labour was also supplied by Skilled and ABB, but within a short time, their involvement fell away and Proden became the sole supplier of Brewery Technicians. In 1994, Mr Moston resigned from Tooheys and joined Proden. He became a director of Proden in November 1996. Mr Moston is retired, but remains a director of FP after the merger of Feyman, Proden and GTG Investments.

[523] In cross examination by Tooheys, Mr Moston agreed he had derived income through dividends from FP to his own company, Gomo. This is a family company originally set up with the help of Tooheys. Mr Moston agreed that over the last 22 years, FP had a substantial turnover, but not significant returns. He accepted that through the inter web of companies, there were financial advantages for him and his wife. The arrangement involved an intermediary company between his own and FP; namely, GTG Investments.

[524] Early in the piece, Mr Moston had been receiving $1,000 from Proden as a salary while he was still working for Tooheys. Mr Moston knew that FP had identified itself as the employer of the applicants for superannuation and workers’ compensation purposes. He would occasionally sign off on tax returns as a Director. There were Directors’ meetings more than twice a year.

[525] While Mr Moston was aware of the dispute over the contract with Tooheys in 2011 and the tender for the work, he believed the tender was a ‘farcical event’. Earlier arrangements had not been so formal and maybe it was not taken seriously enough. Mr Moston identified and was aware of the letter of demand dated 2 September 2011, sent by Mr Smith to Tooheys in respect to claims over the 2002 Services Agreement. It related to matters that occurred over a number of years. He agreed it was possible FP might sue Tooheys over these matters.

[526] Mr Moston said that since the termination of the Tooheys contract, FP remains in existence, but was just ‘ticking over very slowly’. He agreed that Omni Engineering was ‘active’ with a number of small contracts and if work came to FP, it would be given to Omni Engineering.

Ms Susan Budwee

[527] Ms Budwee was employed by Proden from 24 May 2004 to 30 June 2012 as Labour Hire Co-ordinator responsible for the Casual Brewery Technicians who were provided by Proden to Tooheys. She worked two days a week - on Monday she worked on the timesheets and on Thursdays, the rosters.

[528] Ms Budwee said that every week, she received a draft roster from a Tooheys Team Leader. Where a worker was not identified by name, she would allocate a worker to that position. She would then input the final roster into a spreadsheet and place the rosters on the lunchroom noticeboard. From around February 2011, this procedure changed in that she was required to send the roster to the Packaging Manager, for his approval before placement on the noticeboard. She would then email the final roster to all Tooheys Team Leaders and telephone any casual who was not working, to let them know their roster for the following week. She also dealt with late changes to the roster.

[529] Ms Budwee said that at the end of every shift, casual employees would drop their timesheets into a box outside Mr Sands’ office. On Mondays, she cross-checked the timesheets with the rosters and checked with Team Leaders, if there were any discrepancies. She would then forward the information to the FP payroll department. Casuals were paid fortnightly and Tooheys was invoiced weekly by Ms Fittler, another employee of FP.

[530] Ms Budwee gave evidence of the incident involving Mr Luke and a Tooheys security guard on 13 October 2010. Ms Budwee received an incident report and kept it updated until she considered the matter resolved in November 2010. Ms Budwee had received an incident report from Ms Debbie McEwen, Tooheys Safety and Wellbeing Leader. On 13 October, she spoke to Ms McEwen and was told ‘Ian must be stepped [sic] down because further investigation needs to take place and I want you do it.’

[531] On 14 October, Ms Katherine Stevens (HR Tooheys) emailed Ms Budwee enquiring as to what action had been taken over the incident. On 18 October, Ms Stevens emailed Ms Budwee wanting confirmation ‘that an investigation needs to be completed by FP as Ian Luke is your employee.’ Nevertheless, Ms Stevens advised that Mr Luke should remain suspended until an investigation was completed and an outcome reported to Tooheys.

[532] Ms Budwee had meetings with Mr van Houten, Security Manager and Mr Laggas, Security Guard on 19 October. On 26 October, Ms Budwee met with Mr Toomey. Mr Toomey asked her to obtain feedback from the Team Leaders about Mr Luke. She met Mr Toomey again on 1 November and showed him the feedback. Mr Toomey said words to the effect that Mr Luke was a genuine guy who just had a bad day and should be let off with a final warning. He asked Ms Budwee to prepare the letter, which she did and forwarded it to Mr Marcus Anderson, Bottle Hall Manager for vetting before issuing it to Mr Luke.

[533] On 3 November 2011, Ms Budwee attended a meeting with Mr Luke, Mr Martin McCleave, Mr Laggas and Mr van Houten. Mr Luke apologised and received the warning letter. Ms Budwee believed that throughout this and other disciplinary issues, she just did what Tooheys wanted done. It was their decision as to outcome.

[534] Ms Budwee confirmed that from May 2004 - 30 June 2012, she had been employed by Proden Pty Ltd and since then for Omni Engineering. She said this was because Proden no longer had a role for her and she moved to a different role with Omni, which was offered to her by Mr Smith, who she now reports to.

[535] Ms Budwee said she now works full time and did so when the Tooheys contract was in place. She spent two days on site at Lidcombe and the other three days at FP’s Head Office working for Proden’s other clients, such as Stylus and Diageo. She and Mr Smith continue to work full time and Ms Fittler part time for Omni Engineering. She and Ms Fittler answer the phone at the Glendenning Office. Ms Budwee said she also looks after casuals at Rheem where Mr Sands is also working. Ms Budwee believed that since the loss of the Tooheys contract, all of the other work of FP and Proden was transferred to Omni.

[536] Ms Budwee said that between January and June 2012, she continued to be paid by Proden. When her employment ended and she went to Omni, she was not paid out any annual leave or redundancy. Mr Smith had not said anything about these matters and she had not asked. However, she had taken about four days leave over Christmas/New Year 2012/2013 and gave Mr Smith a leave form for his approval. When she moved over to Omni, Mr Smith told her all her entitlements would be ‘rolled over’. However, she had not received any new written contract of employment.

[537] Ms Budwee said that when she was on the Tooheys site, she and Mr Sands worked from the same office. He looked after FP and she looked after the Brewery Technicians through Proden. Their work was similar. Ms Budwee was unaware that Mr Sands now alleges he was an employee of Tooheys. She does not make that allegation about herself.

[538] As to the Ian Luke incident, Ms Budwee agreed it was appropriate for him to have reported the incident to her as she was Proden’s Labour Hire Coordinator for the site. She considered it part of her duty to find out and investigate what had happened. She had contacted the security guard involved. Tooheys had not told her to do so. She had then conveyed what she had found out to Tooheys Occupational Health and Safety Leader, Ms McEwen. Ms Budwee agreed that it was not until much later that Ms Stevens from HR had told her it was Proden’s responsibility because Mr Luke was their employee. She agreed this was not unusual. Once she had investigated and worked out the facts, she reported back to Tooheys to get their input as to what action to take. She had agreed to a warning letter and had it approved by the Team Leader. However, Ms Budwee added that if Tooheys wanted a person terminated, Proden would have to terminate them.

Mr Byron Smith

[539] In his role as General Manager of FP and Proden, Mr Smith attended weekly meetings with Mr Sands and the Tooheys Brewing and Packaging Engineering Managers to discuss any relationship/personnel issues, planning (leave, projects, resource allocation) or to receive instructions on planned initiatives or processes Tooheys wanted to roll out. He also attended Monthly Supplier Review meetings, but these ceased to occur in about 2007/2008. Apart from Mr Sands, Mr Smith did not have any day to day contact with FP workers on site.

[540] Mr Smith deposed that due to the termination of the Tooheys contract, FP and Proden effectively ceased to trade and no longer have any source of income. Mr Smith said that up to 28 January 2012, FP and Proden provided a supply of workers to the Tooheys site fluctuating between 60 and 120. These were maintenance fitters, electricians and Brewing Technicians. Other services related to payroll, tax and workers’ compensation.

[541] Mr Smith said that FP supplied a Site Supervisor (Mr Sands) who was responsible for:

Mr Smith said that all rosters prepared by the Site Supervisor had to be approved by Tooheys. Therefore, Tooheys had ultimate control over the rosters.

[542] Mr Smith described the roles of each of the applicants as Core Trade and Non Core Trade; the latter was seen as an entry point to progression to Core Trades. Core Trades workers were eligible for performance pay increases and annualised bonuses assessed by Tooheys. Annualised pay increases comprised bonus, pay for performance and an EBA increase. It was Tooheys which set and advised FP of the annualised bonus for each year. Sometimes Tooheys required that a portion of the bonus be taken as a base rate increase. Tooheys personnel assessed each worker’s performance on a quarterly basis. The system was administered by the Site Supervisor. Tooheys representatives reviewed the individual’s scores and adjusted them to a comparator of other trades. At the end of the financial year, an overall rating was assigned. The value of the performance system was 4% and applied to the Site Supervisor as well.

[543] Mr Smith said an annualised pay increase for Core Trades was aligned to the Tooheys EBA. Non Core Trades received a CPI increase. All trades were eligible to receive a skills allowance based on post trade training. It was approved and set by Tooheys. Core Trades were paid for a 35 hour week, plus 7 hours overtime if working in Packaging (whether worked or not) or 9 hours if working in Brewing or Racking. Each Core Trade worker regularly worked a minimum of 40 hours a week to align them with Tooheys direct workers. Core Trades also received a shift allowance of 15% for night and afternoon shifts, annualised and averaged into the hourly rate.

[544] Mr Smith described how a worker was supplied by FP to Tooheys. In weekly meetings with Tooheys Engineers, FP was advised of any need to secure additional workers. FP would then advertise the position in newspapers and on online recruitment sites. At the next meeting, Mr Barrowman would identify a shortlist for interview. Mr Sands would coordinate interviews, which were usually held at the Lidcombe site.

[545] FP was required to conduct tests on the candidates, including the Saville Holdsworth test. These tests were conducted at FP’s Office in Glendenning. FP also conducted these tests for Tooheys own new employees. FP advised Tooheys of a pass or fail and if accepted, a trial/evaluation period would occur. FP would obtain all relevant personal information for input into FP’s systems. Mr Smith believed that FP do not have any further regular day to day contact with the workers, except when weekly time sheets were required to be provided to FP’s Site Supervisor.

[546] Mr Smith understood that FP did not tell the applicants how to do their job or what hours to work. While Mr Sands and Ms Budwee prepared rosters, these were ultimately approved by Tooheys. He understood that FP workers were integrated into and worked side by side with Tooheys employees. They took part in corporate games, purchased goods and materials for Tooheys, had Lion Nathan email addresses, supervised other contractors, assigned work permits, were members of Tooheys teams and had access to all sites and facilities. FP employees also attended the Tooheys Christmas party.

[547] Workers attended training organised and paid for by Tooheys. Requests for leave had to be made on a FP Form, approved by Tooheys and then returned to FP for processing and invoicing. Mr Smith said performance and disciplinary issues were handled by Tooheys and FP was required to do what Tooheys wanted done with the workers. In some cases, FP did not know about discipline until after it had occurred At other times, Mr Sands was used as a conduit to deliver warnings to workers. Mr Smith said that on occasions, FP was directed by Tooheys to buy equipment for FP workers, such as mobile phones.

[548] Mr Smith said that each year, FP would receive an email or spreadsheet setting out new rates of pay for Brewery Technicians. He could not negotiate these rates as they flowed from the Tooheys EBA. Each year, FP would receive advice from Tooheys as to the level of bonus to be paid and general pay increases applying to Core Tradespersons. CPI increases applied to Non Core Trades. All increases were backdated to September each year.

[549] Mr Smith believed the rates Tooheys allowed FP to pay new recruits were well below market rates. FP could not increase the rates as anomalies would be created in the system. This had caused problems for recruiting and retaining suitable labour. Mr Smith said the only time FP set its own rates was in 2009 after a year of heavy trades’ attrition from FP to Tooheys and other contractors. Mr Smith decided to increase new Non Core Trades to $28 an hour and since then, applied an annual CPI increase. Tooheys was billed for the new rates.

[550] Mr Smith deposed that he had previous experience dealing with labour hire companies and he was surprised how closely coupled and inflexible the relationship was between FP and Tooheys. When he joined FP it had no other significant clients and its revenue from Tooheys accounted for 95% of overall revenue for FP and Proden. After 28 January 2012, FP supplied about six workers to Greens General Foods.

[551] Mr Smith gave evidence of a desire by Tooheys in 2006 to terminate the 2002 Services Agreement. He had tried to renegotiate terms and was assured by certain Tooheys Managers that his proposals were being reviewed in the context of the business direction of Tooheys. In 2009, Mr Smith had unsuccessfully sought to renegotiate an increase to the fees charged by FP.

[552] Mr Smith believed that the 2011 tender request document appeared to be a ‘cut and paste’ from an existing template, with not a great deal of thought going into what actually was required for the Lidcombe site. Mr Smith said that shortly after responding to the tender request, Mr Toomey rang him on 20 September 2011 and told him that ten named workers were to be removed from site. Mr Smith enquired as to the selection process and was told an in house evaluation had come up with the ‘guys we want gone.’

[553] Mr Smith provided a comprehensive reply statement to the evidence advanced by Tooheys, including by reference to documentary material. He claimed that Tooheys had the last word on performance appraisals and historically, the inputs and final determinative figure for all appraisals was at Tooheys’ discretion.

[554] The cost of uniforms and mobile phones were invoiced back to Tooheys and they were included in the administrative margin. In 2003, both the FP and Tooheys logo was on the workers’ uniform. Mr Smith said that the separate identification of FP and Tooheys personnel in the roster had not always been the case. Nevertheless, Brewery Technicians were allocated to the roster at Tooheys’ direction. Mr Smith claimed that all directions to FP workers came from the Tooheys Team Leaders, SREs, Line Engineers or Managers.

[555] At the weekly meetings of FP and Tooheys Management, the draft rosters were discussed and requests for leave approved or rejected. Approval by Tooheys of any leave was necessary before FP processed the request. Mr Smith said that Tooheys paid for the skills and safety training and Tooheys determined which training qualified for a skills allowance and that which did not. Tooheys paid the skills allowance.

[556] Barbecues on site were generally organised by Mr Sands at the request of a Tooheys Manager or Team Leader for the purpose of rolling out toolbox talks, briefing on new Tooheys’ policies or procedures or any other communications. In 2007/2008, Mr Smith organised a separate FP Christmas party for its workers.

[557] Mr Smith claimed that Supplier Review meetings ceased to occur in 2007/2008. Their primary purpose was to assess whether FP would receive a bonus from Tooheys. However, no bonus had been received since 2006.

[558] Mr Smith said that initially invoices to Tooheys were paid in advance, but around 2005, the invoices were paid in arrears. He insisted that the invoices which FP/Proden issued to Tooheys did not include an amount for redundancy accruals. He believed the following costs were invoiced directly by FP and built back into the charge out rate to Tooheys:

[559] Costs for replacement of tools, office expenses and redundancy were not budgeted for by FP and not passed on to Tooheys. He believed Tooheys budgeted for these costs and would meet them directly. He said that if office expenses and redundancy were to have been borne by FP and incorporated in the rate charged back, the administrative margin would have been $4.04 per hour worked, and not $2.75, as charged. If these costs came out of the $2.75 margin, it would reduce the margin to less than half of one percent. Mr Smith also understood from Mr Gorman that Tooheys had agreed to meet all ‘exit costs’, being the costs of redundancy and accrued annual leave and long service leave should the relationship ever come to an end.

[560] Mr Smith challenged Mr Toomey’s statement that FP continued to receive fees from Tooheys until 26 March 2012. He said this was so because those fees related to services provided prior to 28 January 2012. While Mr Smith agreed that Tooheys made a payment of $8 million to FP during the period 10 October 2010 - 30 September 2011, it was misleading to suggest that this represented ‘vast earnings’. The margin of 4% represented around $320,000 which was compensation to FP for providing payroll services to Tooheys. He also noted that increasing workers’ compensation premiums also reduced the margin. Mr Smith claimed that FP’s earnings were insignificant compared to the tens of millions of dollars saved by Tooheys having reduced labour and restrictive practices and minimised industrial action.

[561] Mr Smith gave evidence that prior to 2006, the timing of Tooheys remitting monies to FP kept increasing incrementally from seven days. This required FP to extend its overdraft limits to meet the lag between invoicing and the receipt of funds from $400,000 to $1.4 million with interest charged of $37,000. Mr Smith believed that because of the size of the overdraft FP was forced to carry, its capacity to expand and reduce its dependency on Tooheys was limited. Mr Smith provided figures of the number of workers supplied to Tooheys and FP’s other clients which demonstrated the overwhelming preponderance of reliance on Tooheys for its revenue. Mr Smith said that related companies to FP are Proden, Omni Machinery Relations (factory relocations) and Omni Engineering Pty Ltd (electrical contracting services). Neither Omni entities are labour hire companies. Omni Engineering’s clients include Swisslog, Coca Cola Amatil and Woolworths projects. None of the related companies are significant businesses.

[562] Mr Smith said he was responsible for setting up the FP Group of Companies website. However, it had never been updated and the information related to work of the entire group over the previous fifteen years, including some joint venture arrangements. If a page had been included of current clients in 2007, Tooheys would have represented over 90% of the page.

[563] Mr Smith gave detailed evidence of the events in late 2011 concerning the Tooheys restructure and tender process. He said that on 20 September 2011, he received a call from Mr Toomey who identified proposed changes at Tooheys and where reductions would be made. Mr Smith noted that FP would be the most heavily impacted contractor. Mr Toomey agreed to provide further information and the last third of the conversation centred on ‘legacy’ issues including exit costs, which had been highlighted in a letter to Tooheys on 2 September 2011. Tooheys had not responded to the letter. Mr Smith denied having asked Mr Toomey to nominate the workers to go. However, Mr Toomey had followed up with a list of his own the next day.

[564] On 21 September, Mr Toomey advised Mr Smith of the names of persons to be removed from site and said the decisions were based on performance related assessments. On 22 September, Mr Smith met Mr Toomey and discussed the complication of not resolving the ‘legacy’ issues (exit costs) in light of the removal of FP personnel from site. Mr Toomey contended that these costs were to be borne by FP. Mr Smith strongly disagreed and said he would not communicate the restructure changes to FP personnel, until there was a common understanding on ‘legacy’ issues. Mr Smith responded in writing the next day.

[565] On 23 September, Mr Toomey phoned Mr Smith and advised that the fallout of the restructure would be delayed by two weeks. He ask whether he had heard from Mr Nelson about issues with the tender proposal. He told Mr Smith that FP’s document of 2 September had been escalated to his superiors and they would provide feedback later. Mr Toomey asked for an explanation as to how Core Tradespersons’ leave entitlements were to be met. Mr Smith received a call shortly thereafter from Mr Nelson. Mr Toomey was on leave from 26 September to 4 October. On 10 October, Mr Toomey indicated to FP that Tooheys intended to carry out the restructure, regardless of FP’s concerns. Tooheys did not address any of the key issues of the restructure or ‘legacy’ issues.

[566] Mr Smith met Mr Toomey on 14 October and was told the restructure would take effect that day and he should advise the affected personnel. Mr Smith said he would not do so, until the exit costs issue was resolved. Mr Toomey replied that Tooheys would notify the personnel directly. Mr Smith said all the applicants, bar Mr Henry and Mr Wilczewski, remained on FP’s payroll until 28 January 2012. Mr Henry ceased to be paid from 23 December 2011 and Mr Wilczewski from 14 December 2011. Mr Smith noted that the applicants’ wages were funded by Tooheys for two weeks after 14 October 2011.

[567] The reason Mr Smith gave for continuing to pay the applicants their base salary was because he was having ‘without prejudice’ discussions with Tooheys about either reinstating the applicants or confirming Tooheys would pay redundancy entitlements according to its enterprise agreement. When it became clear in mid December, neither was to occur, Mr Smith aligned the terminations of the applicants with the termination of the 2002 Services Agreement. FP was unable to finance their wages beyond this time. Mr Smith annexed various exchanges he had with Tooheys Managers from 25 October 2011 to 12 December 2011. He said the issues surrounding the ten applicants were complicated by contractual issues FP still had with Tooheys. Mr Smith said he had tried to find other work for the applicants after 28 January 2012. Mr Luke commenced work for Omni Engineering on or about 30 January 2012.

[568] Mr Smith said he arranged for the meeting of 15 October 2011 at which about 30 workers attended. Its purpose was to address the concerns of the workers supplied to the Lidcombe site. After the meeting, he and Messrs Gaffney, Moston and Porretta met separately with the persons directly affected by the restructure. Mr Smith deposed as follows:

Mr Smith believed a number of the applicants signed a document which stated:

[569] Mr Smith attended a meeting with Mr Hulbert and Mr Ian Morrison of the AMWU on 17 November 2011. He told Mr Morrison that he believed Tooheys was the true employer and Mr Hulbert should be reinstated. Mr Morrison appeared sympathetic to that position.

[570] Mr Smith said that after Skilled Engineering won the tender, he was advised to remit all the entitlements of employees who were reengaged by it, to Skilled. Mr Smith understood that Skilled would not recognise prior service with FP, except where workers have ten years service for the purposes of long service leave.

[571] In cross examination by Mr Parry, Mr Smith corrected his current position. He believed he still had a valid employment contract with GTG Investments and, as at 1 July 2012, he became self employed through a company called Seventy Two Pty Ltd, which he had set up around August/September 2011. He did this to expand his income generation outside the FP Group of Companies. However, he still derived income through Omni Engineering, SME and ABD Trading and has several clients outside the FP Group (SME is owned by Mr Gorman). These services include engineering services and some ‘fit out’ type work. Mr Smith said from August 2005 to August 2011, he was an employee of GTG Investments and filed tax returns identifying this to be the position. In turn, GTG Investments was providing services to Omni Engineering, Bowden and Omni Automation Solutions. He was appointed Secretary/Director of Omni Engineering on 2 July 2012. Mr Smith agreed that up to 7 July 2012, his interests were very much aligned with those of the directors of the FP Group of Companies. He agreed Omni Engineering was his business. From July 2012, Omni Engineering was no longer part of the Group. He had an arrangement to acquire 2% of the entirety of the business per year, after the cessation of the Tooheys contract. It was believed that over 6-7 years, his ownership would equate to the residual value of the business. He agreed he had always had an interest in the value of the businesses of FP.

[572] Mr Smith accepted that when he was General Manager of FP, he would attend weekly meetings with Tooheys. He left much of the day to day activities to Mr Sands and did not have day to day contact with FP workers. He spent some of his time in developing the other businesses of the Group, primarily Omni Engineering. He agreed he had no knowledge of the arrangements Tooheys had with FP, prior to August 2005.

[573] Mr Smith said that he had been involved in trying to renegotiate terms with Tooheys in 2006, but FP was left with very little option; if it terminated the contract it would have no business. However, there were some variations conceded from both sides.

[574] Mr Smith gave evidence of his involvement in preparing the 2011 tender proposal. While he had authority of the Directors to do so, he did not keep them fully informed. The calculations he made were correct and he discharged his responsibilities as best he could. The document was headed ‘The FP Group of Companies’ and the material had been gleaned from marketing material over the years. Mr Smith described this material as painting the best possible light on all the Group. It was not misleading. The intention was to demonstrate FP was an independent entity, supplying various services. Mr Smith said FP also had labour supply contracts with Greens General Foods from 2007 and that contract continues with Omni Engineering providing the labour under a verbal arrangement with FP Directors and himself.

[575] Mr Smith was asked about the provision of uniforms and mobile phones. He said uniforms were in the administrative charge, but mobiles were not. They were invoiced separately to Tooheys. Mr Smith conceded that the 2002 Services Agreement referred to FP being solely responsible for all employees’ entitlements. He was also aware that FP had its own enterprise agreement in which redundancy was identified as being payable under the terms of the Employment Protection Act 1982 (NSW). Mr Smith acknowledged that he had no basis for his belief that Tooheys was responsible for redundancy. However,he had no doubt about it after ‘running the numbers’ on Mr Scott’s evidence. He agreed, however, that FP was responsible for annual and long service leave as billed back to Tooheys through the wage costs.

[576] Mr Smith was questioned on the profit and loss statements of FP, in particular the accounts for the year ending June 2011. He agreed that after all costs and expenses, there was an operating profit of $316,000. Mr Smith said Omni Engineering was not a labour hire company until it took over the Greens work. There was no contract or transaction in respect to this change.

[577] As to the 2 September 2011 letter of demand to Tooheys, Mr Smith agreed:

[578] Mr Smith said that during the period September 2011 and January/February 2012, there were numerous meetings and lawyers’ letters backwards and forwards. On one particular matter - FP’s complaint that Tooheys had been offering FP employees roles at Tooheys and issuing employment contracts without consultation - Mr Smith asserted that this was not an allegation of interfering in the relationship between FP and its employees, but was referable to the arrangement Tooheys had with FP. He acknowledged that there were employment contracts between FP and its employees. What was contended for in the letter of was that Tooheys had breached their contract with the resultant loss to FP of around $1.5 million. Mr Smith acknowledged that the letter of demand had not been retracted and litigation remained an option for FP. Mr Smith strongly denied that it was his understanding that FP was responsible for redundancy and exit costs associated with terminating the 2002 Services Agreement. He believed it was Tooheys’ responsibility.

[579] In the phone call he took from Mr Toomey on 20 September 2011, Mr Smith had told him that it was not uncommon to request people be removed from site. Mr Smith said he understood Mr Toomey took that on board and gave him a list of names. Mr Smith agreed that by 22 September, it was clear that Tooheys was intending to proceed with the restructure and that it believed FP was responsible for the exit costs. He told him he would not be telling the employees of the restructure until there was some understanding of the ‘legacy’ issues. He believed the two issues were related.

[580] Mr Smith tried to put various options before Mr Toomey before he went on leave. He denied he was using the employees as ‘bargaining chips’ in FP’s commercial dispute with Tooheys. FP wanted Tooheys to continue their roles as there was no reason to remove them from the site. While delaying the restructure for two weeks, Mr Toomey said on 10 October 2011 that nothing was going to change. Mr Smith did not tell the employees because he was trying to salvage their roles. He believed it made no sense why these ten persons had been selected. He refused to tell the employees while there was an active tender happening. However, by this time about half of the employees had been told Mr Sands to leave the site because he was under pressure from Tooheys to inform the employees. At the time, Mr Sands had appeared quite flustered and was under pressure.

[581] Mr Smith agreed he had directed Mr Sands to arrange the meeting of 15 October 2011. At the meeting, he outlined the situation and told the workers he was maintaining a dialogue with Tooheys. They discussed various options. He said a significant number of the employees believed they were entitled to some form of redundancy from Tooheys as they were employees of Tooheys. He denied that none of the employees raised this issue until he suggested it. It was certainly discussed, but he did not raise it. He also denied floating the idea that FP was not going to pay the employees’ entitlements. He had said that FP believed Tooheys was responsible for redundancy and he and the other directors. had been of this view since 1994/1995. However, Mr Smith could not produce any document to corroborate this belief. He believed it had been ‘verbalised’ by Mr Sands to Tooheys Management on many occasions. However, nowhere in his statement was this alleged. Mr Smith denied ‘dreaming up’ the idea in September or October 2011 that Tooheys was the employer in order to minimise FP’s obligations. Mr Smith had also advised the employees that FP was engaging its legal advisors to see what could be done. He had not personally engaged the lawyers, but conceded Mr Sands may have. Mr Smith believed that FP had nothing to do with arranging or paying for legal representation of the applicants.

[582] Mr Smith claimed that it was not clear the employees would not be going back to Tooheys, despite knowing FP’s tender had been unsuccessful. He believed Tooheys could not ‘fill the hole’ left by ten employees being removed. Mr Smith denied it was an option to pay out all entitlements in October 2011, because it was Tooheys’ obligation as part of their commercial arrangements.

[583] Mr Smith conceded that he had helped Mr Henry fill in his unfair dismissal applications. He accepted that this was inconsistent with his role as General Manager of FP. Mr Smith insisted that the notion Tooheys was the true employer had been made known to Tooheys many times before September/October 2011. He agreed this reference did not appear in either of his statements. He said the notion was often ‘verbalised’ by Mr Sands when there were requests for additional labour. He accepted Mr Sands had said nothing about this in his own evidence. Mr Smith believed there would be something in writing and while his lawyer had been provided with all the relevant documents, he did not believe there was anything significant about this issue. He undertook to provide documentary evidence the next day of when, and how often, Tooheys had been made aware it was the true employer of the employees.

[584] When asked about what was told to the Tax Office, Mr Smith said that FP had always acted as the ‘notional’ employer. He agreed the word ‘notional’ appears nowhere in any of the documents in these proceedings. Mr Smith agreed that there were employment contracts between some of the FP workers and FP which had the intent of creating contractual relations with them. They were not ‘sham’ arrangements. Mr Smith accepted that FP was responsible for identifying itself as the employer for tax, superannuation, workers’ compensation and payroll purposes.

[585] In respect to the labour supply contract with Greens, Mr Smith deposed that:

[586] Mr Smith said that once it was clear there was no future with Tooheys, he redirected Mr Sands to other clients or to pursuing new clients. Mr Smith said that he told Mr Sands to collect material to assist with FP’s claims against Tooheys. Documents had been taken off the Tooheys system, without its knowledge or permission. However, he believed it was mostly correspondence between FP and Tooheys. Nevertheless, Mr Smith conceded he was directing Mr Sands to do something which was in the interests of FP and against the interests of Tooheys.

[587] In cross examination by Mr Phillips, Mr Smith alleged that FP had no freedom as to what to pay their contract employees. It was dictated by Tooheys, according to its own EBA and with a 4% margin on top. Mr Smith said that no employees could be swapped between the Tooheys site and other of FP’s clients. Mr Smith believed that Tooheys wanted to refer to the contract when it suited, but if FP strayed from the contract, they would be admonished for it. FP had desperately wanted to increase the rate, but it never could. They were a captive, with little option.

SUBMISSIONS

For the applicants

[588] Mr Phillips, of Senior Counsel in written submissions, contended that at all relevant times, Tooheys was in ‘truth and law’ the employer of the applicants or, in the alternative, FP was their employer. The determination as to which respondent was the true employer must be based upon an objective assessment of the ‘practical realities of the relationship between the parties’; See: Gothard v Davey (2010) 80 ACSR 56. The principles to be considered in determining the true employer are also set out in Neil and Chin, Modern Contract of Employment (Thomson Reuters 2012).

[589] Mr Phillips noted that Tooheys claims that the arrangement in place since 1991 was an arm’s length labour hire arrangement between it and FP to provide its employees to work at the Lidcombe site. That being so, Mr Phillips relied on a decision of Watson VP in Jacinta Arcadia v Accenture Australia (2008) 170 IR 288 (‘Arcadia’) as the summary of the law in relation to labour hire. A true labour hire relationship would generally create an employment relationship between the client and the worker; See: Wilton v Coal & Allied Operations Pty Ltd (2007) 161 FCR 300 (‘Wilton’). However, the Federal Court observed that it was necessary to look ‘beyond and beneath the documents’, to such matters as the circumstances surrounding the arrangement, the conduct of the parties and the way in which the parties operated and understood the situation. A contract could be implied to exist (where no express contract existed) based on the conduct of the parties; See: Damevski v Giudice and others [2003] 133 FCR 438 (‘Damevski’).

[590] Senior Counsel summarised the following factors discussed by the Full Court in Damevski:

[591] Mr Phillips then dealt with recent developments in the law concerning the notions of ‘a contract of service’ and ‘a contract for service’. In Ace Insurance Limited v Trifunovski [2013] FCAFC 3 (‘Trifunovski’) Buchanan J, after undertaking a careful analysis of the history of the law in this regard, said the ultimate question is:

Answering this question inevitably involves consideration of the ‘control’ test, although later the High Court qualified the ‘control’ test as being but one of a number of indicia of employment; See: Federal Commission of Taxation v Barrett [1973] HCA 49.

[592] Mr Phillips said in recent years, there has emerged a new tool known as the ‘integration’ test; See: Commissioner of Pay-Roll Tax (Vic) v Mary Kay Cosmetics Pty Ltd [1982] VR 871 . This test was described as:

[593] Mr Phillips then cited Buchanan J’s discussion of Stevens v Brodribb Sawmilling Company Pty Limited [1986] HCA 1 (‘Stevens v Brodribb’) and Hollis v Vabu Pty Limited [2001] HCA 44 (‘Hollis v Vabu’). His Honour’s summation of the present state of the law is as follows:

[594] His Honour then looked at the increasing use of labour hire companies in Australia and concluded:

His Honour then posed the basic question: ‘In whose business was the putative employee toiling.’

[595] In oral submissions, Mr Phillips put that ultimately all the relevant cases come down to one question. The task is to look at the substance; the essence; the true nature of the relationship. In doing so, he said it was significant to look at the origin of the relationship between FP and Tooheys which was, in effect, an industrial relations strategy. One would also look at the way in which work was performed, the ultimate control of the work and how the FP workers integrated into, and were ultimately accountable to Tooheys. He noted that no party in this case suggests that no entity was the employer, just that the respondents pointed to each other. Mr Phillips said that in reviewing all of the extensive evidence, there seems to have been a uniform acceptance as to how the work was done.

[596] In noting the importance of the Damevski case, Mr Phillips submitted that here the FP workers only ever worked at the Tooheys site and for some considerable time. They and their friends believed they worked for Tooheys. He argued that this was not a classic labour hire arrangement where workers criss-crossed industries and moved from one host employer to another (contract cleaning, for example). The evidence of Mr Sands was to the effect that all he was doing was supplying a human resources role for FP workers on behalf of Tooheys. This was ancillary to the major task of their trade and production duties at Tooheys.

[597] Mr Phillips reaffirmed the authorities in his written submissions, which disclosed that there was no ‘magic touchstone’. Documents or actions, such as tax deductions might misstate the true nature of the relationship. It was also not decisive as to how the parties themselves described their relationship, because it may be designed for another purpose. Again in relying on Damevski, the fact of who paid the workers, was not as important as the nature of the work performed. Other minor factors were the work clothing logo and whether workers were invited to the Tooheys Christmas party.

[598] Senior Counsel developed his written submissions concerning Trifunovski and said that the tests in matters such as this have developed over time. There is no longer one ‘killer point’. For example, the ‘control’ test was once the decisive factor, but today it is but one of weighing up all the relevant factors, and looking at the true character of the arrangement underpinning the relationship. It is not a case of simply looking at the documents, per se.

[599] As to the ‘control’ test, Mr Phillips referred to the evidence which he maintained supported the proposition that the FP workers were very much under the control of Tooheys Management. They were part of Tooheys teams, who were led by Tooheys Team Leaders or Engineers. The workers did not have an independent existence in the way they went about their work. At its origins in 1991, nothing changed about the work from a Friday when they were a Tooheys employee to the following Monday when they worked under the FP banner. The work was organised in the same integrated way as it had always been done. In addition, these were specialised employees, using specialised tools according to their skills and experience gained on the site.

[600] As to the organisation test, Mr Phillips noted that the initial idea to establish FP was ultimately a decision of Tooheys. It had ‘bankrolled’ the entire project and had wanted it to work through massive investment. FP’s contract became the single largest contract it had on site. FP’s other smaller contracts were no more than ‘icing on the cake’. FP really just became a part of Tooheys. Tooheys had the ultimate say as to who of FP’s workers stayed on site. Now, many years after the relationship commenced, these applicants find themselves in a very difficult position, not of their own making. They had expectations of ongoing employment with Tooheys and, if not, access to Tooheys’ redundancy scheme. When Tooheys no longer wanted the FP workers, there was nowhere else for them to go. Mr Phillips said that FP had no goodwill and so was not an independent business of value.

[601] Mr Phillips highlighted various aspects of the evidence adduced from Tooheys’ witnesses. Mr Julian Scott, Tooheys Packaging Manager said his department was the largest user of FP personnel. It provided Core and Non Core Trades people. Mr Scott deposed that:

[602] Mr Scott had said that all persons on site were required to be inducted. FP would inform their employees of the way in which work was performed under Tooheys direction. Core trades were directed by their Tooheys Team Leader. Skills and knowledge were supported and developed by FP. Other trades and preventative maintenance tasks would be directed by either the Maintenance Coordinator or a Supervisor from FP or a Tooheys Engineer. Maintenance Coordinators from FP took direction from a Tooheys Engineer and were responsible for supervising, instructing and working with other Tradespersons.

[603] Mr Scott had said that Tooheys’ obligation to FP involved providing all premises and facilities on site, including a site office for the FP Site Maintenance Supervisor. All FP contractors needed access to Tooheys’ computerised management system and all persons on site had to comply with Tooheys’ policies and had access to Tooheys facilities, such as car park, gym, store canteen and beer after work. He said that all persons engaged by Lion are expected to represent Lion while carrying out their duties and services.

[604] Mr Phillips referred to the circumstances surrounding the decision of Tooheys in September/October 2011 that the applicants were no longer required at the site. I referred to this at the outset of this decision and will not repeat it here.

[605] Senior Counsel highlighted the following evidence of Tooheys’ other witnesses. Tooheys Team Leader, Mr Barrowman, and Brewing Maintenance Coordinator, Mr Speck were responsible for overseeing all maintenance work. In doing so, they had contact with FP contractors on a daily basis. However, Mr Sands, FP’s Site Maintenance Manager was responsible for managing shift rosters, leave, pay, performance appraisals and some training.

[606] Mr Barrowman had said that recruitment was undertaken by FP. A Tooheys manager might attend a second interview. Core FP contractors would take directions from the Tooheys Team Leader, but were directed by the FP Maintenance Coordinator on how to perform the work. Sometimes FP contractors would also take directions from Tooheys Operators or Engineers.

[607] All FP contractors were required to attend Tooheys inductions, production team meetings and safety tool box meetings and refresher training. Tooheys and FP would liaise about any worker requiring additional training. Tooheys could request the removal of a person from site for misconduct or safety reasons. Other disciplinary action was referred to FP for investigation and appropriate action.

[608] Mr King had described the makeup of teams of approximately ten production workers, who were a mix of Tooheys and FP labour. Each team was assisted by contract Tradespersons (a fitter and an electrician). FP would recruit new Tradespersons through advertisement on online websites and newspapers. FP would conduct the first interview and recommended candidates were assessed by Tooheys as to their requisite skills and competencies.

[609] Core FP Tradespersons received instructions from Tooheys Team Leaders or Engineers on what tasks to perform, but not how to perform them. FP Tradespersons were required to have access to MLS (Maintenance Logistics Service) in order to raise service requests, complete work orders or search for spare parts in the store. The FP Maintenance Coordinator was required to use MLS to place orders with suppliers. Orders were always preapproved by Tooheys. Training was supplied by Tooheys and had to be approved by Tooheys before delivery.

[610] Mr Sands was responsible for the maintenance roster, but Tooheys Management would meet him each week to ensure the correct mix and needs. Leave was organised by Mr Sands, but Tooheys Team Leaders were advised of leave taken and replacement workers. Performance appraisals were conducted by Mr Sands. He would ask for feedback from Tooheys Team Leaders and Engineers. Appraisals were based on criteria reviewed periodically and agreed between FP and Tooheys. Tooheys Engineers would sit in on these meetings.

[611] Disciplinary issues would be addressed directly by FP. If an employee was removed from site, Tooheys would not know if their employment was terminated by FP. Supply Review meetings were held with FP on a regular basis (once a month) to assess FP’s performance against its contractual terms. If scores were below performance expectation, FP would be given an opportunity to demonstrate to Tooheys how performance would be improved.

[612] Mr Speck had previously been engaged as a FP contractor before taking up a permanent Maintenance Fitter Coordinator role with Tooheys in 2004/2005. When he was the FP Maintenance Coordinator, he directed FP fitters in what to do, how to do it and where. He said weekly meeting were held with Tooheys and FP management to discuss any issues concerning FP Tradespersons.

[613] Mr Marcus Anderson had said that Core FP Tradespersons performed shiftwork alongside production teams and provided maintenance support. FP production workers worked alongside Tooheys production workers, but were separately identified in the roster. Tooheys employees appeared in the top half of the roster and FP tradespersons in the lower half. All production workers and Core FP Tradespersons were required to attend production meetings run by a Tooheys Team Leader. This was critical to ensure all workers were aware of any relevant safety, production or quality issues.

[614] Tooheys’ ‘annual team day’ was attended by FP workers. Some training was provided by FP and some was provided by Tooheys, such as MEX Training (Manufacturing Excellence). Mr Anderson had said that the Tooheys Enterprise Agreement provided that no contract employee was to be paid less than a Tooheys Brewing Technician.

[615] Leave and replacement workers were organised by FP. Tooheys would advise FP of peak labour demand in advance, so that FP could provide the necessary labour. FP was responsible for disciplining its workers. However, if Tooheys determined a worker be removed from site, FP was informed and required to provide a replacement worker.

[616] Mr Phillips commented on the evidence of the FP Directors, Mr Moston, Mr Gorman and Mr Porretta. In so far as their evidence dealt with the historical background of the Company, I refer to it in more detail elsewhere in the decision. That history is largely uncontroversial.

[617] Senior Counsel highlighted other aspects of the evidence of FP’s witnesses which he said supported the following propositions:

[618] Mr Phillips then identified the common features of his clients’ evidence which he submitted demonstrated that:

[619] Senior Counsel then exampled supporting comments from Tooheys’ witnesses in reply:

[620] The Maintenance Supervisor, Mr Sands, had said his role was:

And further

[621] In summary, Mr Phillips submitted that from all of the evidence, it was clear that Tooheys not only had control, but the ultimate control over the FP workers. It approved those who started and those who were to go. Tooheys had created the relationship and had ended it. At all points in between Tooheys ‘held the whip hand.’ On all of the tests in the relevant authorities, by looking at it from above, sideways, going beneath and behind the documents, there could be no doubt Tooheys was the true employer, at law, of the applicants.

For Tooheys

[622] Mr F Parry SC and Mr Y Shariff (hereinafter referred to jointly as Counsel for Tooheys) provided an outline of contentions which firstly argued that all of the applications were ‘out of time’ and the question as to the true employer does not arise if the Commission does not exercise its discretion to accept the applications pursuant to s 394(3) of the Act.

[623] After noting the background to FP’s arrangements with Tooheys and the 2002 Services Agreement, Counsel claimed that FP is an independent business with substantial operations and resources. While deriving significant income and profits from Tooheys, the evidence shows that FP has many other clients in different industries around Australia. It employs over 70 permanent employees and over 80 casual employees. FP Group’s website discloses the extent and breadth of its operations and should be accepted as a true and correct characterisation of its business. It was clear that FP is not without means. It supplies labour to a number of companies, through several different operating divisions and branches, including Proden and Omni. In the last financial year, Tooheys provided a fee of $8 million to FP which included a significant margin for profit.

[624] Counsel submitted that when Tooheys decided to restructure its operations in October 2011, and reduce its employees and contractors, FP refused to communicate the restructure to the applicants. Therefore around 14 October 2011, Tooheys informed the applicants (except Mr Luke) that their services on site were not required from that date. Separately to the restructure, Lion Procurement decided to place FP’s contract work to tender. Four companies tendered for the work. Based on commercial and qualitative criteria, Skilled Group was rated as having the most competitive tender. On 24 October 2011, FP was notified that its Labour Supply Agreement (the 2002 Services Agreement) would be terminated on 28 January 2012. Mr Luke was affected at that time. Counsel noted that while Tooheys continued to pay fees to FP Group until 26 March 2012, FP had failed to pay the applicants their full wages and entitlements. FP continued to employ and pay the applicants after the 14 October 2011. It was only after FP terminated their employment that these proceedings were commenced.

[625] Counsel identified the relevant sections of the Act dealing with the Commission’s discretion to extend the time for filing the applications (s 394) and referred to the earlier tests under the Workplace Relations Act 1996; See: Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298 and the later legislative requirement for ‘exceptional circumstances’ to be established before the Commission’s power to exercise its discretion was enlivened; See: Cheval Properties Pty Ltd t/as Penrith Hotel Motel v Smithers [2010] FWAFB 7251. An important consideration in this case is the requirement for the Commission to take account of ‘prejudice’ to the ‘respondent’ as distinct to the ‘employer’. As Tooheys is named as a respondent, the fact it is not the true employer raises real prejudice to it, if the applications were to be accepted ‘out of time’.

[626] Counsel contended (correctly) that the onus of establishing the precondition to the Commission’s discretion rests with the applicants. Not only had they failed to discharge this onus, (that is, establishing ‘exceptional circumstances’), there was a deliberate choice made not to lead evidence in this respect. An adverse inference should be drawn by the failure to advance such evidence; See: Jones v Dunkel, 1959 101 CLR 298.

[627] It was noted that all of the applicants (except Mr Luke) allege that their employment with Tooheys was terminated on 14 October 2011. They were told so at that time. They further allege that their employment with FP was terminated sometime after their terminations by Tooheys. Despite this, their applications were not made until some 3 months after they allege they were terminated by Tooheys.

[628] Further the applicants admit they were continued to be paid after 14 October 2011 by FP, but for 30% less than what they were previously paid. Some of the applicants were provided with work by FP at other sites where FP supplied labour and, at least one of the applicants, continues to be employed by FP.

[629] Counsel contended that there was no adequate explanation for the delay in commencing these proceedings against Tooheys between 14 October 2011 to February 2012. It was only when FP terminated their employment and stopped paying their wages that the applicants commenced these proceedings. This is consistent with FP having continued to employ the applicants as their true employer. The proceedings against Tooheys were a deliberate afterthought.

[630] Counsel observed that it was evident the applicants had legal representation from an early point in time which was either arranged by FP or someone else. There is a compelling inference that the applicants collaborated with FP in respect of the actions against Tooheys. No evidence had been filed by the applicants or their legal representatives to explain the reasons for the delay. There was no evidence of representative error. It was open to draw an inference that nothing FP or their legal representatives could say would be of assistance to the applicants. In any event, ignorance of the law is not an adequate explanation; See: Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975 (‘Nulty’). Tooheys maintained that the Commission was not given a full, frank and candid explanation for the events between 14 October 2011 and February 2012. The applicants gave evidence that they were aware of when they stopped supplying their labour at Tooheys. No action was taken by them until well after the 14 days time limit and only after FP terminated their employment.

[631] Counsel submitted there would be considerable prejudice to Tooheys as a respondent to these proceedings (s 394(3)(d)). This is because it is not the true employer of the applicants. It had entered into contractual arrangements with FP to provide services and personnel at the Lidcombe site under an agreement. FP was not a partner, joint venturer or agent of Tooheys and was liable for compliance with all applicable awards, agreements and orders.

[632] The evidence disclosed that FP has raised significant amounts that were sufficient to discharge its obligations to the applicants. The fees paid by Tooheys were to cover the following:

[633] Counsel submitted that FP has deliberately failed to discharge its obligations, notwithstanding the receipt of a very significant income. This is a telling factor against its conduct. On the other hand, Tooheys has honoured and discharged all its contractual obligations.

[634] Counsel said that from October 2011, Tooheys had made clear that it was going to open tender. Some of FP’s employees were invited to apply for employment with the new contractor and were successful. Tooheys proceeded to operate its business in an orderly manner, without any knowledge or prospect of litigation from the applicants until late February 2012, when these applications were provided to Tooheys on an informal basis. Litigation was not commenced immediately, as the applications were not filed until February 2012. Counsel suggested that FP had continued to effectively ‘underwrite’ the employment of the applicants until such time as it suited their interests to commence proceedings against Tooheys.

[635] In addition it was noted that that a ‘without prejudice’ settlement with Tooheys and all applicants was announced by their then Counsel after a conciliation in the Commission on 3 April 2012. Thus, the matters were fully and finally settled some time ago. This was a further issue relevant to the prejudice to Tooheys.

[636] As to the merits of the claims (s 394(3)(e)), Counsel submitted that the applications were problematic. Firstly, on either version of events, if they were terminated by FP for operational reasons related to the loss of the Tooheys contract, or, alternatively, they were terminated due to Tooheys restructure, the terminations were for genuine operational reasons. Accordingly, they were not unfairly dismissed.

[637] Secondly, most if not all the applicants continued to be employed (and paid) by FP until 28 January 2012. They could not have suffered any significant loss. In any event, if there was a financial loss, FP was responsible for that loss, given the vast amount of fees it received from Tooheys for that express purpose. FP took the benefit of the fees and has now deliberately elected to resile from its legal obligations.

[638] In summary, Counsel concluded that the merits of the applications are weak or without any reasonable prospect of success. It was acknowledged that fairness as to between applicants and other persons does not arise in this case (s 394(3)(f)).

[639] As to the main jurisdictional issue, Counsel for Tooheys submitted that the authorities dealing with the distinction between employees and independent contractors are not particularly helpful in determining the arrangement between a labour hire company and the host employer; See: Fair Work Ombudsman v Ramsey Foods Processing Pty Ltd (2011) 198 FCR 174 (‘Ramsey’). In the present case the applicants were not employed within an ‘intra-group’ arrangement; See: Textile Footwear & Clothing Union of Australia v Bellechic Pty Ltd [1998] FCA 1465 (‘TFCUA v Bellechic’); Gothard v Davey (2010) 80 ACSR 56 (‘Gothard’); and Ramsey.

[640] Counsel for Tooheys submitted that it would be wrong to view FP as an entity commercially dependent or beholden to Tooheys. It has separate directors and shareholders. It is a stand alone and viable undertaking. Its own website describes it as follows:

The FP Group currently consists of over 70 permanent and 80 casual staff covering:

[641] Counsel put that the evidence discloses that FP Group operates its business through several related bodies corporate, trading divisions and/or brands, including:

Each of these distinct entities provides specialist services. For example Proden supplies labour to:

[642] FP Groups’ website describes the relationship with Tooheys as:

[643] FP Feyman Proden describes its work history as follows:

[644] Counsel submitted that FP derived a substantial level of income from Tooheys. Notwithstanding this it had failed to meet its obligations to the applicants and despite being paid fees up till 26 March 2012, had not paid wages or outstanding entitlements to the applicants after 28 January 2012.

[645] Counsel concluded that when one looks at all the objective evidence, the present case represents an unremarkable and ordinary labour hire arrangement; See: Ramsey where Buchanan J observed:

[646] His Honour further noted:

and

[647] Counsel put that in the present case, the labour supply arrangement was one whereby FP operated a separate business for significant reward. The evidence disclosed that FP:

 

(a)

entered into an arrangement with Tooheys whereby it was contractually bound to:

   

(i)

provide to Tooheys services of maintenance, design and installation of mechanical and electrical plant and processes;

   

(ii)

provide personnel necessary to perform such services;

   

(iii)

provide personnel with work clothes and safety footwear and the necessary tools;

   

(iv)

ensure that the personnel attend any required induction and training;

   

(v)

comply and ensure that the personnel comply with all relevant statutes, by-laws, ordinances and statutory requirements;

   

(vi)

use all reasonable efforts to ensure that personnel have appropriate qualifications, licenses or permits where necessary and are competent and responsible; and

   

(vii)

provide a supervisor at the Tooheys site to supervise the personnel;

 

(b)

entered into contracts of employment with the applicants. The evidence disclosed that there are some written contracts of employment in place with some, but not all of the applicants;

 

(c)

paid wages to the relevant employees and also paid their statutory leave entitlements;

 

(d)

had in place relevant workers’ compensation policies, and remitted taxation and superannuation as required by law;

 

(e)

issued payslips and group certificates to the employees;

 

(f)

made decisions about hiring, disciplining and firing employees;

 

(g)

made decisions about time off from work such as sick or annual leave;

 

(h)

had their own supervisors and managers who directed and supervised work on a day to day basis and conducted performance appraisals;

 

(i)

had their own uniforms which the relevant employees were required to wear;

 

(j)

supplied their own PPE; and

 

(k)

provided skills-based training to the relevant employees.

[648] Counsel for Tooheys rebutted the applicants’ contentions by submitting as follows:

 

(a)

The evidence disclosed that Tooheys (in the ordinary course of a labour hire arrangement) told FP of the types of employees whose services it required and checked their qualifications. Tooheys did not make any decision about who should be offered employment.

 

(b)

The applicants did not take instructions from Tooheys employees as to their work. In relation to Core labour, these workers were engaged to provide scheduled and rostered maintenance services on specified items of plant and machinery. Again in the ordinary course of a labour hire arrangement, Tooheys did give instructions as to when and where the work was performed and what needed to be done, but the technical aspects of how to perform the work was an area which Tooheys did not have the expertise. In relation to Non Core labour, these workers provided all work under the supervision and instruction of FP’s site representatives.

 

(c)

It was alleged that the applicants worked to a roster. This was necessary to ensure scheduled work was performed efficiently and effectively.

 

(d)

There was nothing remarkable about the applicants being required to comply with Tooheys policies as were all employees, contractors and visitors to the site. Some of these involved compliance with legislative provisions (Occupational Health and Safety and Anti Discrimination, for example) and inductions were necessary for anyone attending or visiting the site.

 

(e)

It was necessary to discharge their duties that the applicants had access to Tooheys computer systems.

 

(f)

The applicants alleged that they were paid the same rates of pay as Tooheys employees and the rates were set by Tooheys. This was incorrect. Tooheys’ industrial instruments did not apply to the applicants. Instead, FP had its own enterprise agreement. The fees paid to FP were negotiated at ‘an arm’s length’ basis. FP determined and then administered the wages to be paid to its employees. FP negotiated its fees to extract further income to be paid to its employees. This is unsurprising in a labour hire contract.

 

(g)

Tooheys did not approve applications for leave. The evidence was that FP had its own payroll officer and other administrative staff who administered wages, superannuation and processed leave entitlements and applications for leave. All leave was approved by Mr Sands. Of course Tooheys was informed when FP workers were not available and replacements were required. This was not unusual given the client relationship.

 

(h)

Tooheys did not assess the applicants’ performances. Mr Sands performed all performance assessments. He may have sought input from Tooheys supervisors in this regard. This made practical sense.

 

(i)

Similarly, Tooheys did not have the power to discipline FP employees. As would be expected, if Tooheys became aware of complaints about an employees’ performance or conduct it would advise FP who would then have the responsibility to discipline the employee.

 

(j)

There was nothing remarkable about FP personnel attending toolbox meetings to discuss how the work was to be performed or to carry out safety related tasks. Otherwise, the applicants were only required to attend meetings on a needs basis.

 

(k)

Of course the applicants were invited to, and often attended Tooheys social functions. They were not obliged to and the objective was purely social.

Further submissions of Tooheys

[649] Firstly, Counsel submitted, that this was not a case about identifying whether a group of workers were employees or contractors. None of the applicants had entered into a formal or informal contract with Tooheys, so there was never any contractual relationship between them and Tooheys.

[650] Secondly, this is not a case where the applicants were once employed by Tooheys and then subsequently forced to supply their labour through FP after an internal restructure or some other transfer of services. The longest serving applicant commenced employment with FP on 25 October 1999, long after the events in the early 1990’s leading to the establishment of Feyman Pty Ltd. Three of the applicants (Mr Henry, Mr Wilczewski and Mr Luke) had earlier worked for Feyman or FP, but left voluntarily in the 1990s and returned in 2001. When they returned Mr Henry and Mr Wilczewski agreed that FP’s operations were more substantial and different to their earlier experience. Accordingly, none of the events of 1991-1993 are relevant to them in this case.

[651] Counsel highlighted the applicants’ evidence as to their attendance at two or three meetings with a legal representative, Ms Pendlebury in October 2011. While it was unclear, it appears Ms Pendlebury’s services were retained by Mr Sands and/or Mr Smith and the applicants made no payments at all for her services. The evidence was that most of the applicants knew by 15 October 2011 that their services were no longer required by Tooheys. Yet, no action was taken at that time, or in the months which followed, to commence these proceedings. It can be inferred that the applications were not lodged until FP ceased paying the applicants and/or because they continued to be employed by FP up to that time (except for Mr Henry and Mr Luke). There was no explanation from the applicants’ then legal advisor as to why their applications against Tooheys were not filed within time. Even so, the reasons were never properly explained or justified by the applicants, notwithstanding they had legal advice. It appeared their only arguments had to do with them having little education, although all were tradespersons who had undergone training and study to perform their jobs.

[652] Counsel submitted that the real reason for not commencing earlier legal proceedings was because FP used their alleged unfair dismissals as a lever to bring commercial and other pressure on Tooheys in order to extract an overall monetary settlement to all its claims, including commercial demands arising from the non renewal of its labour hire arrangement. Indeed, Mr Moston said that FP was still considering taking other action against Tooheys in this respect.

[653] In further submissions as to the tests of the true employer, Counsel for Tooheys submitted that the principles, to be applied in the identification of the true employer where there are two or more possible employers, are well settled; See: In re C&T Grinter Transport Services Pty Ltd (in liq) & Grinter Transport Pty Ltd (in liq) (controller appointed) [2004] FCA 1148 (‘C&T Grinter Transport’). These principles are as follows:

[654] It was said that an important starting point here is the contractual relationship between the parties; See: Wilton. Cases in which contracts have been implied are rare. It was further submitted that to the extent there was a relationship between the applicants through FP and Tooheys, it does not follow that there was an employment relationship between them; See: Advanced Australian Workplace Solutions Pty Ltd v Kangan Batman TAFE [Print S0253].

[655] Counsel relied on Wilton to demonstrate that, in a labour hire context, if there is no contractual relationship between the client and the relevant workers, there cannot be an employment relationship between them, even though their conduct may exhibit features of employment, including exercising day to day control over the workers. This was not definitive.

[656] As to an implied contract, this concept requires a mutuality of contractual obligations, the absence of which means an employment contract cannot be implied; See: Construction, Forestry, Mining and Energy Union of Workers v BHP Billiton Iron Ore Pty Ltd and Integrated Group Ltd t/as Integrated Workforce [2005] WAIRComm 1797 and BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2006) 151 IR 361. In addition, mutuality of obligations requires an obligation on the one side to perform work (or provide service) and on the other side to pay for the service; See: Forstaff Pty Ltd v Chief Commissioner of State Revenue (NSW) (2004) 144 IR 1 and Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104. In this case there is no obligation on Tooheys to pay the workers and so no contractual relationship exists. The applicants invite the Commission to disregard all the extant contractual and related documents and to find that a contract between them and Tooheys exists, where none exists. None of the usual elements relevant to the formation of a contract have been satisfied. These include:

 

(a)

there was no offer of employment made by Tooheys to the applicants. All of the evidence shows that offers of employment were made by FP or Proden;

 

(b)

naturally, by reason of subparagraph (a), there was no acceptance of an offer of employment made by Tooheys to the applicants;

 

(c)

there was no evidence of a consensual intention by the parties to enter into a legal relationship with each other;

 

(d)

there was no evidence of an agreement between the parties as to their contractual terms;

 

(e)

there was no evidence of any consideration passing between the parties; and

 

(f)

there is a complete absence of any mutual assent between the parties.

[657] However, it is clear FP, Proden or GTG Investments recruited, employed and paid the applicants, became responsible for all employment obligations and then generated substantial revenue and profit from the arrangement. In this respect, Tooheys submitted that there are three aspects of the evidence which warrants closer examination:

 

1.

The contractual relationship between the applicants and FP;

 

2.

The industrial instruments applicable to the applicant; and

 

3.

The contractual relationship between FP and Tooheys.

[658] Tooheys submitted that on the applicants’ own evidence, all of them, with the exception of Mr Sands:

 

(a)

applied for employment with FP or Proden;

 

(b)

attended interviews with FP or Proden Management;

 

(c)

entered into contracts of employment with FP or Proden;

 

(d)

knew they were employed by FP; and

 

(e)

received group certificates, superannuation and all other employment related forms identifying FP as their employer.

[659] It was also evident that some of the applicants:

 

(a)

were promoted to positions within the FP Group of Companies;

 

(b)

such as Non Core employees, reported to FP Maintenance Coordinators;

 

(c)

worked at other of FP’s clients (Pepsi Co and Colgate Palmolive; and

 

(d)

obtained statements of earnings for the purposes of loan applications, disclosing FP as the employer.

[660] Further, Counsel said that the written contracts of employment recorded that the applicants:

 

(a)

were employed by FP;

 

(b)

would report to employees engaged by FP, including Mr Keetley, Mr Falster or Mr Sands;

 

(c)

were obliged to serve FP;

 

(d)

were entitled to annual, long service, sick, bereavement and parental leave from FP;

 

(e)

were required to observe confidentiality of FP’s confidential information;

 

(f)

were required to comply with FP policies, including as to fair treatment, safety, discrimination and harassment;

 

(g)

were entitled to one month’s written notice of termination; and

 

(h)

in the case of Messrs Henry and Llagas, also had restraint of trade obligations seeking to protect FP’s asserted interests.

What this evidence demonstrated was that the objective documents were consistent with the subjective understandings held by the applicants as to the identity of their true employer.

[661] Counsel observed that Mr Sands was in a different category to the other applicants. He was the supervisor of the applicants and was required to report to Mr Gorman. All the objective documents identify GTG or FP as his employer. The evidence discloses that at all relevant times, Mr Sands’ interests were aligned to those of the FP Group of Companies. He performed work for other of FP clients and sent confidential Tooheys material to Mr Smith to assist FP in relation to a dispute at the site. He knew he had no authority to do so, but had responded to a request from Mr Smith.

[662] Counsel noted that FP and its employees were covered by certified agreements approved by the Australian Industrial Relations Commission (AIRC). I shall come back to the details later. However, in short, the agreements identified FP as the employer and Mr Gorman had made the applications, with legal advice. In cross-examination Mr Gorman claimed that FP was the ‘notional employer’ and that he was ‘naive’ and ‘foolish’, notwithstanding he had legal advice at the time. Counsel submitted that Mr Gorman’s evidence was inconsistent, evasive and defensive. He had no explanation for the contents of his statutory declaration accompanying the applications for the agreements’ approval. His intention was to convey that he was beholden to Tooheys, yet he operated a substantial business, generated considerable income through sophisticated corporate structures and then represented these entities as genuine operations to the ATO and other regulatory bodies.

[663] Counsel referred to the 2002 Services Agreement and noted numerous clauses which related to the supply of labour by FP to Tooheys and Tooheys’ obligation to pay service fees (Clause 7 and Appendices C-E). It was submitted that the service fees included all statutory entitlements, including leave entitlements, workers’ compensation payments, payroll tax, plus a margin and mark-up for FP. Pursuant to Clause 11.1(c)-(e), FP acknowledged and agreed:

 

‘(c)

that it is solely responsible and liable for compliance with all applicable industrial awards, agreements and orders and it must ensure that all of the Personnel working at the Site are paid wages and conditions as provided for by the applicable industrial award, agreement or order;

 

(d)

to ensure that the total annual salaries are not less than and comply with all applicable industrial awards, agreements and orders;

 

(e)

that it is solely responsible and liable for all of the Personnel’s employee entitlements including without limitation, salary, annual leave, sick leave and other employee entitlements ...’

[664] It was Tooheys’ case that the 2002 Services Agreement reflected an arm’s length arrangement between the parties. Following ‘arm’s length’ negotiations between them, commencing in 2001. Requests for tender work were submitted by FP, Skilled, Opal and Integrated Workforce. Mr Scott from Tooheys negotiated with Mr Gorman, Mr Porretta and Ms Huddy from FP. The negotiations focussed on rates and FP put forward proposals for rates, fees and administration margins (including a component for redundancy). The 2002 Services Agreement was proceeded by two earlier agreements in 1997 and 1998. While Mr Gorman was involved, the 1997 and 1998 Agreements did not use as their base, the earlier arrangements between Tooheys and Feyman. There were other attempts to renegotiate the terms of the 2002 Services Agreement, but nothing eventuated. It continued to operate and was acknowledged by both parties, as continuing in force until 28 January 2012.

[665] Counsel put that the reality of these arrangements was never in doubt and that FP was the true employer of the applicants, until a dispute arose in September/October 2011. Doubt was then created and actively propagated by FP, causing the applicants to believe that Tooheys was their employer. There were meetings where Mr Smith and other FP representatives told the applicants Tooheys was their real employer. Counsel suggested that their subjective understanding was entirely influenced by what they had been mistakenly told. Indeed, up to this time, several of the applicants had always understood FP was their employer. Little weight should be afforded by this post facto evidence. Moreover, most of the applicants continued to have a contractual relationship with FP after their alleged employment with Tooheys came to an end in October 2011. The evidence demonstrated that the applicants:

[666] After referring again to the principles of a true labour hire arrangement, Counsel submitted that the business of FP was conducted through a sophisticated and interconnected group of corporate vehicles and trust companies that were ultimately owned either directly, or beneficially, by four primary directors and shareholders: Mr Porretta, Mr Gorman , Mr Gaffney and Mr Moston. Shareholding in the FP Group was held by GTG Investments, in which the above named were all directors. In turn, each director had an independent trust company all ultimately owned by Gandra Holdings, the shareholder of GTG Investments. The evidence also disclosed that FP operated other businesses through related bodies corporate, trading divisions and/or brands. These were:

Counsel stressed that as various ASIC extracts demonstrated, the corporate structure was brought about by careful and considered planning.

[667] Counsel noted that FP generated substantial amounts of income and profits for its shareholders and directors. Mr Gorman and Mr Porretta admitted to being involved in a substantial business operation for which they, and other directors, derived substantial and genuine income. For example:

In 2008/9 GTG had income of $13,820,811 and paid $511,000 as dividends with declared taxable income of $617,596.

In 2010/11 GTG’s income was $12,587,107, paid dividends of $202,000 and had taxable income of $270,752.

[668] Counsel submitted it was untenable to suggest that the labour hire arrangements with FP were, insubstantial, uncommercial or a ‘sham’. Counsel identified the following factors as demonstrating that FP was an independent, stand alone and viable operation:

 

(a)

FP owned or leased a Head Office at Glendenning consisting of a reception, 3 offices and a workshop. Meetings were held and files and business records kept at the Head Office;

 

(b)

FP had a team of administrative and Head Office employees:

    • Mr Smith, General Manager;

    • Ms Huddy, Administration;

    • Ms Budwee, Administration Assistant/Reception;

    • Ms Fittler, Administration Assistant; and

    • Mr Sands, Site Manager;

 

(c)

FP and Proden provided labour to other clients; namely; Actron Air, Colgate Palmolive, Stylus Bathrooms and Kitchens, Speedibake, Greens, Diageo and Rheem. Greens and Rheem remain clients of FP and a number of the applicants were supplied to them, including Mr Sands;

 

(d)

the FP Group of Companies operates its own website, whose contents stated by Mr Gorman were not intended to mislead;

 

(e)

FP had its own policies and procedures which were communicated to workers during inductions conducted by Mr Sands and referred to in relevant contracts of employment; and

 

(f)

Regular Director and Shareholder meetings of FP were held at which various decision were made, including the payments of dividends.

[669] Counsel put that it was a significant concession that FP had conceded it was the applicants’ employer for the purposes of payroll tax, superannuation and workers’ compensation. By adopting this concession FP admitted the contractual relationship with the applicants was one of employer/employee. While now denying it was the true employer, the reality is that until September/October 2011 it had consistently represented itself as the employer to all relevant regulatory bodies, including industrial tribunals.

[670] Counsel submitted that on the question of direction and control, the supplied labour included a FP Site Supervisor, FP Maintenance Coordinator and FP Maintenance Supervisors. Core and Non Core Tradespersons were required to perform planned and unplanned work. Planned work was determined in advance by Tooheys and FP Maintenance Coordinators would schedule and assign the work. A roster would be proposed and circulated by Mr Sands. Requested unplanned work would be assigned depending on worker availability. Counsel put that it was understandable that Tooheys directed when, where and what work was required, but not how the work was to be performed. It was natural for FP workers to be part of the integrated Tooheys teams. All of applicants gave evidence of reporting to and/or being directed by FP Maintenance Coordinators and Tooheys Team Leaders or Engineers. Some said that Tooheys supervisors did not direct how the work was to be performed. The following evidence of Mr Speck, the previous FP Group Maintenance Coordinator, was quoted:

[671] Counsel submitted that there was nothing unusual or remarkable with Tooheys having an input into the roster where issues arose about the adequacy of an individual’s skills. However, the FP roster was prepared by Mr Sands and given to Tooheys. Any issues were raised with Mr Sands.

[672] It was also said that it was unremarkable that FP workers were required to comply with Tooheys’ policies, as did all contractors and visitors. This was necessary to ensure adherence to various State and Federal laws, such as occupational health and safety and discrimination. Tooheys could not delegate its responsibilities in this respect. It was noted FP also had its own policies and procedures.

[673] Counsel submitted it was incorrect to suggest that Tooheys was required to approve leave applications. FP employed its own payroll and other administrative personnel to administer wages, superannuation and process leave requests and entitlements. All leave forms were submitted to Mr Sands. There was nothing unusual in Tooheys ensuring it had overall skilled coverage in light of the absence of relevant personnel.

[674] Counsel said that FP made decisions as to methods of recruitment and selection and who was offered employment. On most occasions, interviews were conducted by FP supervisors. Sometimes Tooheys Management would attend an interview. This was unremarkable as it was necessary to ensure the skills required matched the candidates. It was submitted that Tooheys did not conduct FP employee assessments. These were conducted by Mr Sands who obviously sought input from Tooheys Team Leaders as appropriate. FP service fees and bonuses were dependent on FP and its workers meeting performance standards.

[675] Counsel highlighted cl 16 of Tooheys’ own enterprise agreement, which provided as follows:

Given this guarantee, it was not unusual that FP sought to keep parity of rates; See: Secure Employment Test Case [2006] NSWIRComm 38. However, the fees paid to FP included margins and mark-ups for itself. This was also not unusual.

[676] Counsel submitted that FP retained the power to discipline its employees and did so. Of course, Tooheys would, from time to time, raise issues of conduct or performance, but FP ultimately had responsibility to discipline the workers. Various examples of disciplinary actions taken were cited. It was not unusual for Tooheys to participate in an investigation or offer its views as to any outcome.

[677] Counsel noted that a requirement to attend meetings and training was also unremarkable. Toolbox meetings were necessary to discuss work and safety issues. Training was necessary because Tooheys had a non delegable duty to ensure workers performing work on its equipment, did so safely. Counsel added that nothing turns on the applicants being provided with car park access and access to other facilities, such as the gym and canteen. Similarly, it was necessary for FP workers to have access to Tooheys’ computer and systems, particularly the MLS, in order to perform their duties. Lastly, it was noted that the applicants all wore FP uniforms.

[678] Tooheys’ Counsel vigorously denied the serious allegation (now raised for the first time) that the labour hire arrangements were a ‘sham’. Reliance was had on Snook v London and West Riding Investments Ltd [1967] 2 QB 786 and Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449. Counsel put that for the following reasons, there was no evidentiary basis for any conclusion that the 2002 Services Agreement was a ‘sham’:

 

(a)

The 2002 Services Agreement was the product of an independent, ‘arm’s length’ negotiation. It emanated from a request through a tender process in which FP was selected as the successful bidder.

 

(b)

The 2002 Services Agreement reflected a commercial transaction between the parties, which neither party ever suggested at the time, did not reflect the true bargain between the parties.

 

(c)

Until late 2011, no party to the 2002 Services Agreement ever suggested that the arrangement was a ‘sham’. Even then, it has only been FP that has made this allegation. Tooheys has never accepted that this arrangement was a ‘sham’ and an allegation of such a serious nature was never put to any of its witnesses in cross-examination. It is not open to the applicants and FP to now put such an allegation when it was never put to the relevant witnesses.

 

(d)

Despite now alleging that the arrangement is a ‘sham’, FP happily operated under the arrangement, representing it to be a genuine arrangement to regulators and other third parties, including the ATO and the AIRC. That the arrangement was bona fide is reflected in payslips, group certificates, superannuation statements, workers’ compensation insurance certificates, tax returns, business activity statements, financial reports, statutory declarations and Certified Agreements approved by the AIRC.

 

(e)

The directors and the shareholders of FP obtained substantial financial benefits from the alleged ‘sham’, which they did not object to so long as it suited them.

[679] In respect of the alternate argument of FP as to joint employment, Tooheys submitted that there has been no decision of a superior Court of record in Australia that has accepted that the concept of joint employment is part of the common law. Learned academic discussion has cautioned the acceptance of joint employment in Australia due to the absence of a contractual relationship between the host client and the relevant workers. What is suggested is that the concept is more likely to develop as a result of legislative reform.

[680] Counsels’ submissions noted that there was no contractual relationship between Tooheys and the applicants and therefore joint employment could not apply. Even if there was a contractual relationship, it leaves unanswered the apportion of liabilities in circumstances where FP received fees to compensate for all labour related costs, together with profits and margins. To accept joint employment would be a serious incursion into the contractual rights of the parties which would unjustly enrich the directors and shareholders of FP at Tooheys’ expense.

[681] In oral submissions, Mr Parry emphasised that this was not a case where an entity has sought to convert its employees into independent contractors. All of the applicants had commenced working for FP long after the establishment of Feyman in 1991 and those who did recall the earlier times, agreed that FP was a much different entity to that of the early 1990’s. Thus, the historical events from 1991 to 1993 have limited relevance in this case.

[682] Mr Parry submitted that there appeared to be not much enthusiasm by the applicants’ representatives, to address the ‘out of time’ issue. Perhaps this is understandable, given that all of the applicants had continued to work for, and be paid by FP, after they left the Tooheys site. Three months later they ‘decided’ Tooheys was their employer and it had dismissed them on 14 October 2011. Mr Parry said the evidence was uneven and unclear, yet the best evidence of the reasons for the delay in filing the applications, rested with their legal representative at the time, who was not called to give evidence. This issue was very much ‘alive’ on the 15 October 2011 and there was no explanation why circumstances changed thereafter, or became ‘complex’. Mr Parry referred to the applicants’ own evidence that they could not answer, why no unfair dismissal applications were filed between 14 October 2011 and 2 February 2012. As nothing else had been said then the application for an extension of time to file their applications could not possibly succeed.

[683] Senior Counsel referred to various authorities on the true employer question, in particular he relied on C&T Grinter Transport, Ramsey and Wilton. Mr Parry observed that it seemed the case advanced here was dependent on an ‘implied’ contract. This could not be the case in the present circumstances. He noted that the mere existence of a relationship, did not necessarily infer a contract; See Fox v Kangan Batman TAFE [Print S0253]. Mr Parry repudiated the proposition that just because Tooheys was paying money to FP and FP was paying wages to the workers, that this constituted a payment for services. He also denied that there was some form of agency arrangement in place.

[684] Senior Counsel further submitted that the case for the applicants seemed to disregard the extant contract and related documentation. While the Commission should have regard for the documents, there is no documentation to support the applicants’ claim of an employment relationship between them and Tooheys. Mr Parry said that the applicants’ case rested on selected extracts from the transcript, without any reference to the documents and no attempt to explain or rationalise inconsistencies between the two. Mr Parry believed that over a long period of time, documents relating to the applicants, disclosed the apparent inconsistencies with what they said in oral testimony. All of them had accepted that they had been employed by FP, had understood at all times that FP was their employer and it was not until after 14 October 2011, that they questioned this belief after it having been put in their heads in the meeting with FP and their manager.

[685] Mr Parry also noted that the later employed applicants, Mr Henry and Mr Llagas, had restraint of trade obligations in their contracts with FP - hardly demonstrating an entity resiling from an employment relationship.

[686] Senior Counsel made particular reference to Mr Sands. His employment contract as Maintenance Manager for FP required him to act diligently and to faithfully serve the interests of the FP Group. He has diligently sought to serve his masters and his primary obligations were to them. In addition, he worked for Greens and Nestlé, as had Mr Hulbert and Mr Henry.

[687] Mr Parry highlighted Mr Gorman’s cross examination on the FP enterprise agreement. He noted that this was the first time anyone had suggested FP was the ‘notional employer’. Mr Parry said that Mr Gorman was neither ‘foolish’ nor ‘naive’. He was an astute, cunning businessman, seeking to maximise his financial position at the expense of his employees. His statutory declaration at the time, seeking approval for the enterprise agreement, reflected the true legal position.

[688] Senior Counsel then referred to the contractual arrangements between FP and Tooheys. It was a normal labour hire arrangement providing for FP to supply labour; it defines personnel; it has performance obligations; FP and Tooheys obligations, service fees; and various industrial relations matters about the parties’ respective rights and obligations. It is a perfectly unremarkable labour hire arrangement. Mr Parry said that to now suggest that whole thing was a ‘sham’ demonstrates the absolute barrenness of the argument. Indeed, until the dispute in September/October 2011 there was never any doubt that FP was the true employer.

[689] Mr Parry referred to the letter of demand from FP of 2 September 2011 making various allegations of unconscionable conduct, of not acting with goodwill or good faith, including an allegation involving the solicitation of employees. FP claimed losses of around $2.5 million from Tooheys. So by the beginning of September 2011 the parties were at loggerheads. Mr Parry said that it was remarkable that FP could come to the Commission ‘with a straight face’ and run the arguments they have.

[690] Mr Parry said that when the restructure occurred in 2011, FP was uncooperative and would not inform its employees who were no longer required. Unfortunately, it was left to Tooheys to tell the employees what was going on. Subsequent to 14 October 2011, FP’s conduct was entirely consistent with it being the employer of the applicants.

[691] Senior Counsel cited various authorities which dealt with entities which did not look like a business. He said that in this case, the opposite was the reality. The FP Group of Companies was a highly sophisticated network involving trusts, corporations and shareholders. Mr Gorman had admitted as much and that the directors derived substantial and genuine income from these arrangements.

[692] Mr Parry stressed the concession of FP in respect of PAYG, superannuation and workers’ compensation. This was an admission of a contractual relationship. Finally, Mr Parry summarised the matters of direction, control, instruction, training, access to computers, recruitment, performance assessments, discipline and uniforms.

For FP

[693] Firstly, Mr Seck put that far from this arrangement being a typical labour hire triangular arrangement between the labour hire agency, the host client and the workers, this arrangement became so tightly integrated, that Tooheys exercised real and effective control over FP’s business and the applicants’ work. This involved such matters as:

 

(a)

the recruitment of workers;

 

(b)

the supervision of the performance of work;

 

(c)

the allocation of tasks;

 

(d)

the discipline and management of work;

 

(e)

the rostering of work, the allocation of time and hours and the performance of overtime;

 

(f)

undertaking induction and training regarding work tasks;

 

(g)

the approval of annual leave, personal/carer’s leave and other time off;

 

(h)

compliance with Tooheys’ policies and procedures;

 

(i)

attending Tooheys team meetings and Toolbox talks; and

 

(j)

the termination of the employment of the workers.

[694] Mr Seck noted the confusion and uncertainty which arises where the terms of written documents and which entity pays the wages, does not neatly fit within the orthodox contractual model. Here, the practical reality of control over the workers and the work performed, resided with the host employer. In the evolving change in the nature of work relationships, the Courts look to the substance of the relationship, not the form. See: Damevski; Autoclenz Ltd v Belcher & Ors [2011] UKSC 41. Mr Seck relied on a number of other authorities in relation to the principles to be applied in this case.

[695] The reality of the relationship is to ascertain the true intention of the parties in the triangular relationship; See: Pitcher v Langford (1991) 23 NSWLR 142 (‘Pitcher’) and Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125. This inquiry is not limited to written documentation; See: Dalgety Farmers Ltd v Bruce [1994] NSWCA 113 (‘Dalgety’). The totality of the circumstances is relevant to the assessment; See: Romero v Auty (2001) 19 AGLC 206 (‘Romero v Auty’) and Damevski. No single factor is determinative; See: Pitcher and Gothard.

[696] Each document or practice must be examined in its proper context; See: Pitcher. It was said that payroll records such as group certificates, payslip or superannuation documents are not conclusive of the true identity of the employer; See: Australian Insurance Employees Union v WP Insurance Services Pty Ltd (1982) 42 ALR 598 at 606 and TFCUA v Bellechic.

[697] Counsel submitted that documentation or an arrangement may have been brought into existence for other purposes as a means of disguising re-employment, so as to enable the removal of restrictive work practices or instruments; See: Patricks Stevedores Operations (No 2) Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1. In addition the practical reality of whether an employment relationship exists is to consider the commercial practicality of the arrangement. For example, whether there is a separation of business interests or an identifiable market reward for conducting an independent business at an ‘arm’s length’ relationship. Mr Seck put that none of these characteristics apply to this case.

[698] Mr Seck suggested that FP was not an independent labour hire business, but had been set up to evade or overcome perceived union restrictive work practices. Feyman and Proden were used as convenient vehicles to supply the same group of workers who had been removed on the disingenuous grounds of redundancy. Mr Seck put that at all times, FP’s commercial viability had been almost exclusively dependant on, and inextricably intertwined, with Tooheys.

[699] It was accepted that the fee charged to Tooheys contained a small profit margin, but it did not represent a commercial market rate. It was said that Tooheys had agreed to meet the ‘exit costs’ if it terminated its relationship with FP. Mr Seck noted that unlike most labour hire arrangements, the applicants were not engaged on the Lidcombe site on a temporary basis to fulfil short term needs or deployed, from time to time, to other work sites. They were long term employees who acquired seniority and status as a team member within their work group. In any event, it was Tooheys that determined who remained on site or not.

[700] Counsel offered many examples of the integration of the applicants within the business of Tooheys. These included

[701] Mr Seck added that FP workers would deal with commercial third parties, such as ordering materials on Tooheys behalf. Their pay, bonuses and conditions of employment were aligned with the Tooheys employees.

[702] Mr Seck further submitted that FP did not display any of the true characteristics of an independent, commercial labour hire business, but operated effectively as an agent for Tooheys in which it:

 

1.

acted as an agent on behalf of Tooheys in the recruitment and management of workers;

 

2.

performed human resources and payroll services on behalf of FP; and

 

3.

operated as a front on behalf of Tooheys for industrial relations purposes.

[703] Counsel highlighted that Tooheys had the rights and privileges normally associated with an employer; such as the right to hire and fire, and determine what work was to be performed by whom and when. These rights could not be displaced by the inter-positioning of FP.

[704] Mr Seck submitted that the relationship between Tooheys and FP constituted a ‘sham’ intended to disguise the true legal status or effect of the arrangement; See: Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449. He said the sole objective of the original arrangement was to circumvent union imposed restrictive work practices. It hid the illegitimacy of the workers’ redundancy, avoided existing industrial arrangements and practices with a view to diminishing the influence of unions and concealed the true characterisation of the worker’s status as employees of Tooheys. Counsel said that the later labour hire arrangements were infected by the same illicit raison d’ętre and combined to perpetuate the façade.

[705] In an alternative submission, Mr Seck put that the nature of the relationship was such as to constitute a joint employment arrangement. This finding would address the fragmentation of the indicia of employment across two or more entities. Mr Seck outlined the American origins of the doctrine of joint employment in Rutherford Food Corporation v McComb 331 USC 722 (1947) where the US Courts looked to the economic reality of the situation; See: Bonnette v California Health and Welfare Agency 704 F 2nd 1465 (9th Cir, 1983); Wirtz v Lone Star Steel Co. 405 F 2d 668 (5th Cir, 1983) and Zheng v Liberty Apparel Co Inc 355 F 3d 61 (2nd Cir, 2003) (‘Zheng v Liberty Apparel’). In Zheng v Liberty Apparel, the relevant factors were identified as:

Mr Seck said each of these factors would support a finding of joint employment in this case.

[706] Mr Seck argued that the definition of employer in the Act does not preclude a finding of joint employment. Words expressed in the singular are taken to mean its plural; See: Acts Interpretation Act 1901. He said that so long as the common law recognises the notion of joint employment there is no barrier to finding that two or more employers jointly employ an employee.

[707] While acknowledging the limited number of authorities on joint employment in Australia, the concept has nevertheless received consideration and support; See: Morgan v Kittochside Nominees Pty Ltd (2002) 117 IR 152 (‘Morgan v Kittochside’); Nguyen v A-N-T Contract Packers Pty Ltd (2003) 128 IR 241; Staff Aid Services v Bianchi (2004) 133 IR 29; Mathews v Cool or Cosy (2003) 84 WAIG 199; The Construction, Forestry, Mining and Energy Union of Workers v BHP Billiton Iron Ore Pty Ltd and Integrated Group Ltd [2005] WAIRComm 1797; Joyce v Hendricks Pty Ltd [2007] NSWIRComm 1068; Orilkowskiv v IPA Personnel Pty Ltd (2009) 185 IR 127 and Fair Work Ombudsman v Eastern Colour Pty Ltd (2011) 209 IR 263.

[708] Mr Seck put that as a matter of legal principle there is no controversy that an express contract can be made between an employee and two employers in respect of the same work; See: The State of Queensland v Whiteman [2006] QSC 325. This position is coherent with the common law’s imposition of joint responsibility on parties in a triangular relationship where control is exercised.

[709] Mr Seck noted the comments of the Full Bench of AIRC in Morgan v Kittochside where the Commission said it:

[710] Counsel claimed the US courts have considered the following six factors when determining joint employment:

 

(a)

whether the client’s premises and equipment were used for the worker’s work;

 

(b)

whether the agency had a business that could, or did shift as a unit, from one client to another;

 

(c)

the extent to which the worker performed a job that was integral to the client’s operation;

 

(d)

whether responsibility under the labour hire arrangements could pass from one agency to another without material changes;

 

(e)

the degree to which the client supervised the worker’s work; and

 

(f)

whether the worker worked exclusively or predominantly for the client.

Mr Seck submitted that while none of these factors are of themselves determinative, they must be weighed up in making the overall assessment of whether a finding of joint employment was justified.

[711] In opening his oral submissions, Mr Seck emphasised that contrary to Tooheys’ contentions, the relationship between Tooheys and FP was not an ordinary labour hire arrangement. He put that the characteristics of this case are very different to any other case to come before this Tribunal or any other Court, in that FP was a creature of Tooheys, bankrolled by Tooheys and Tooheys ultimately exercised a degree of control over the applicants and others who were nominally engaged by FP, unlike any other arrangement in a labour hire context. Mr Seck drew on a number of authorities which applied the ‘duck test’ in a legal context. The parties cannot create something which has every feature of a rooster but call it a duck and insist that everybody else recognise it as a duck; See: Re Porter; Re Transport Workers’ Union of Australia (1989) 34 IR 179 per Gray J and On Call Interpreters & Translators Agency Pty Ltd (ACN 006 272 760) v Commission of Taxation (No 3) (2011) 279 ALR 341. Mr Seck said it would be necessary for the Commission to assess the following matters:

[712] Mr Seck said the applicants could be identified in four categories:

Mr Sands’ situation should be looked at separately from the others.

[713] Mr Seck outlined the genesis of FP and its predecessors through the uncontradicted evidence of FP’s witnesses. Mr Henry, one of the applicants who was employed in 1991 and who accepted redundancy, ran his own business for twelve years and returned to work under FP’s banner. (I deal with the uncontested evidence in this regard later, so I do not repeat it here). The point Mr Seck sought to make was that when the employees were paid redundancy on a Friday and returned to work under the guise of FP on the following Monday, nothing had changed. They performed the same work, under the same supervisors, were paid the same wages and worked under the same arrangements as before. The only difference was that they had a significant financial incentive to not work under the previous restrictive work practices observed under an agreement registered in the Industrial Relations Commission of New South Wales.

[714] Counsel noted the victimisation provisions under the Industrial Relations Act 1991 (NSW) and said that what Tooheys had done in 1991 highlighted the illegitimacy of the arrangement and that it was done for an improper reason; being an offence under the State Act to dismiss an employee because they were Union members or had an entitlement to an industrial instrument. Mr Seck drew an analogy to these circumstances and the ‘Patricks’ dispute’ in 1998 and the associated legal proceedings which also went to freedom of association issues. He noted that despite the applicants warmly embracing the arrangement, it does not alter the illicit purpose and invalidity of the arrangement and why it ‘infected’ the entirety of the relationship. This would be a relevant factor in establishing whether or not FP  or its predecessors were the true employer.

[715] Mr Seck then dealt with the question of the legal right to ‘control’. He cited an extract from the headnote of Mason & Cox Pty Ltd v McCann [1999] SASC 544 (‘Mason & Cox’), as follows:

[716] Mr Seck also drew my attention to the reference to Mason & Cox in Damevski, in which Marshall J says at para [68]:

[717] Counsel also relied on Marshall J’s citation of Swift Placements Pty Ltd v Work Cover Authority (NSW) (2003) 96 IR 68 (‘Swift’)at para [69] and noted that His Honour went on to say at para [70]:

[718] Mr Seck put that the starting point in looking at ‘control’ is the 2002 Services Agreement. He agreed this was the relevant contractual document, but contested the proper characterisation of the relationship by reference to it terms. He noted that the 2002 Services Agreement was in relatively similar terms to its predecessor agreements.

[719] Mr Seck submitted that unlike most labour hire arrangements where labour is supplied on a temporary basis, here part of the services provided by FP were to core labour positions. Clause 4.1(a) explicitly and unqualifiedly recognises that Tooheys had control and direction of the employees, thus establishing the ultimate legal control exercised by Tooheys, not FP. Clause 5.1 requires the employees to always act in Tooheys’ best interests and not FP’s. This conflicts with the ordinary implied duties on employees in respect of good faith, fidelity and trust, if FP was the employer. However, its interests were subordinated by Tooheys.

[720] Mr Seck referred to clause 6.2(b) which he submitted required FP to act as the ‘middleman’. Mr Seck identified other aspects of the 2002 Services Agreement which conferred on Tooheys the power to control other incidents of the working relationship. These included:

[721] Mr Seck said the control over industrial matters was not limited and applied to every aspect of work, including:

[722] Counsel relied on the evidence of Mr Toomey as demonstrating the level of practical control Tooheys had over the workers and the work they performed. As Operations Manager, Mr Toomey was responsible for ensuring compliance with these policies.

[723] Mr Seck presented a comparison to the recently won Skilled Engineering contract, which demonstrated much less control by Tooheys than the 2002 Services Agreement. In this respect, he referred to the evidence of Mr Lewis, which disclosed that Skilled Engineering was only providing supplementary labour to assist the client at the direction of the client, whereas FP was providing Core employees by reference to very detailed job descriptions. In the Skilled Engineering Agreement there is reference to ‘assisting the client at the direction of the client’. FP’s agreement required it to ensure compliance of its workers and that the workers were required to act in the interests of Tooheys ahead of FP’s interests. In clause 4.2 of the Skilled Engineering Agreement it is Skilled who selects the employees, not Tooheys having control over who is sent to its site. The Skilled Engineering Agreement (unlike FP’s) contains a non solicitation clause preventing poaching of Skilled employees. If Tooheys poached a Skilled employee, it will be charged a placement fee. Mr Seck also noted that under the Skilled Engineering Agreement, Tooheys had no power to set rates of pay or bonus or control performance management. Another important distinction was that Skilled Engineering was not required to comply with any industrial safety advice or direction of Tooheys.

[724] Counsel submitted that the Skilled Engineering Agreement was truly the standard labour hire arrangement, whereas the differences with the 2002 Services Agreement fundamentally stood it apart from the conventional labour hire arrangement. To find in favour of FP’s submissions would not undermine the standard labour hire provisions, but merely recognise the exceptional obligations under the 2002 Services Agreement which set it apart from the norm. Mr Seck noted one curious provision of the Skilled Engineering Agreement regarding indemnity and transferred employees.

[725] Mr Seck then dealt with Tooheys’ submission that there was no express contract between Tooheys and the applicants. The issue here is - was there an implied contract by reference to all the facts and circumstances, including the conduct of the parties?; See: Damevski, in particular the judgement of Marshall J. He said that one does not simply look at the documentary evidence, but a contract could be implied by reference to the conduct of the parties and what they really intended; See also: Brook St Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217 (‘Brook St’), where it was said at para [17]:

[726] Mr Seck submitted that this should be the approach the Commission would adopt in this matter, particularly given the fact that not all the applicants had written contracts of employment and even then, the contracts were entered into by Core Tradespersons after a period of work as a Non Core Tradesperson. In this respect, Mr Seck referred to Mr Henry’s contract dated 21 July 2008. Mr Henry had worked at the site for some time. The contract identifies the reporting relationship to a Tooheys supervisor and a requirement to carry out and comply with all lawful and reasonable directions given by his Manager, who could have been Mr Sands or the Tooheys Supervisor. Thus, the contract confers upon Tooheys, legal control to actually make a lawful reasonable direction to employees.

[727] Mr Seck observed that the contract also dictates the location of employment as Tooheys, 29 Nyrang Street, Lidcombe. In contrast, the conventional labour hire arrangement would not have the employee assigned to one location. Mr Seck referred to the cross-examination of the applicants to demonstrate they knew they were, and had always been working at Tooheys. In addition, Tooheys approved their annual and sick leave. They were required to comply with Tooheys’ policies and if they raised a grievance, it was with a Tooheys person. The reality was that Tooheys was controlling each and every aspect of the applicants’ employment.

[728] Mr Seck accepted that in cross-examination of the applicants, Counsel for Tooheys secured some very good concessions out of each of the them that they recognised FP as their employer. However, they claimed the opposite when he had cross-examined them. As this was contradictory evidence, the Commission would ultimately look at the objective working arrangements. Mr Seck highlighted the most relevant evidence on each of the aspects of Tooheys’ control over the applicants. He said the evidence was overwhelming that Core employees received instructions and directions from Tooheys Engineers or Tooheys Team Leaders. Non Core employees received instructions or directions, either from the Maintenance Coordinator or the Tooheys Engineers or Supervisors. He said the FP Maintenance Coordinator and Supervisors were merely middle persons who communicated Tooheys’ directions and instructions.

[729] As to recruitment, Mr Seck said the applicants’ evidence was that they had applied for a job, not with a labour hire company, but with a position at a brewery. Tooheys had a key role in the interviews and the ultimate say as to who was engaged on the site and who would remain engaged on the site. The same applied to discipline and removal from the site. Mr Henry, Mr Luke and Mr Llagas had each received warnings from Tooheys and not FP. Directions about discipline were conveyed to FP with FP being required to comply with Tooheys directions. Mr Llagas, for example, understood Mr Sands was merely conveying a warning issued by Tooheys. This same understanding applied to other employees removed from site for disciplinary or performance issues.

[730] Counsel said that the process for removing the applicants from the site involved an assessment process undertaken by Mr Toomey and other Tooheys Managers to identify which persons they wished removed from the site. Those were the ones nominated for removal. Mr Seck said the power of removal under the 2002 Services Agreement only relates to incompetence or serious misconduct. Clause 11.1(f) was broad enough to embrace anything pertaining to the employment relationship. While it was accepted that FP had nominated other people for removal, Tooheys made the final call and FP’s nominees were not all accepted. Tooheys also had a say over who Skilled Engineering would take up offers of employment with. Mr Seck noted that the payment of two weeks’ pay to the applicants by Tooheys was an inherent inconsistency with its primary position of not being the true employer.

[731] As to wages and conditions, Mr Seck put that the evidence was all one way. Salaries increments, skills allowances, bonuses and performance assessments were all determined by Tooheys. He noted the link between Tooheys’ own enterprise agreement, requiring contractors to be paid the same as Tooheys employees. Individual performance assessments were based on skills assigned by Tooheys Team Leaders and Engineers. Mr Seck added that additional benefits to FP workers were approved and paid for by Tooheys.

[732] Mr Seck said the performance management process was driven by Tooheys, when final decisions were made about a person’s positioning in the process. Each of the four steps in the process involved Tooheys Managers, with no involvement from FP. Failure to meet milestones in the process could lead to termination; a conclusion ultimately reached by Tooheys’ Management. Mr Seck referred to the evidence concerning Mr Namakkal who had been placed on a 90 day performance improvement plan.

[733] As to training and career progression, Counsel relied on the evidence of Mr Barrowman, who said that individual development plans were based on training specifically for Tooheys and its equipment, paid for by Tooheys and at Tooheys’ initiative and direction. It might be expected that if Tooheys expended considerable time and money on training for its own purposes, then it would expect a return on its investment. This was inconsistent with temporary labour hire and meant that Tooheys had an interest, as the employer, in keeping its specifically trained employees engaged with it.

[734] Mr Seck submitted that Tooheys determined who was and who was not rostered on according to its needs. If FP proposed roster changes and replacement of absent personnel, Tooheys had the ultimate say as to whether it agreed with the proposal. There were occasions where Mr Barrowman and Mr King had expressed dissatisfaction with FP’s proposals.

[735] As to approvals for annual and long service leave, Mr Seck said some of the evidence disclosed the employees contacted their Team Leader first - other evidence suggested it was Mr Sands. In any event, Tooheys ultimately gave the final approval. At one point, in accordance with Lion Nathan policy, Tooheys had encouraged or directed FP workers to reduce their accruals of annual leave. Mr King gave evidence that this was because Tooheys had the liability for annual leave built into the fee it paid to FP. As to sick leave, the most important contact was with the Tooheys Team Leader, not to FP’s office at Glendenning. Mr Seck cited the following as demonstrating that FP workers were treated as part of the Tooheys teams:

These examples demonstrated that the ‘integration test’ was met and FP was merely interposed in the middle. In combining the legal and practical ‘control’ tests, the evidence satisfies the characteristics of Tooheys being the true employer and not FP.

[736] Mr Seck relied on two significant cases in support of his primary submissions. Firstly, the decision of Buchanan J in Ramsey demonstrated that the interpositioning of a labour hire company was legally irrelevant to the identity of the true employer. The arrangements there were intended to avoid the employer (Ramsey) from responsibility for the wages and entitlements of its employees. Mr Seck referred to the quote of his Honour ‘bare formalities would never be enough to obscure the real substance of the arrangement.’ The ‘real substance’ will obviously differ from case to case. However, one needs to ask the question - for whom were the individuals performing their service - for FP or Tooheys? If they were deployed from site to site in the traditional labour hire way and simply ‘on the books’, for a period at one site, then others, then it would be said that they were working for the business of FP. However, the evidence here reveals the opposite. As in Ramsey, the pertinent question was who exercised every right and privilege normally associated with the employer. Like in Ramsey it was the host employer, Tooheys.

[737] Mr Seck addressed the difference here, whereas in Ramsey the labour hire provider, Tempus, had no business of its own and earnt no money. However, the important factor in Ramsey was that Tempus did not exercise any form of control over the engagement and performance of work, payment or ultimate termination of any of the employees. Counsel said this was the case here where it was Tooheys, and not FP which had such control.

[738] Mr Seck then relied on the following comments of Buchanan J in Ramsey at para [120] to put an alternative submission that FP had acted as agent:

See also: Damevski and South Sydney District Rugby League Football Club Ltd v News Ltd and others (2000) 177 ALR 611.

[739] Mr Seck put that the test is whether the degree of control infers an entity is acting on its own behalf, or simply acting on behalf of someone else. Based on these cases, the overwhelming evidence was that Tooheys controlled every relevant aspect of the relationship, such as to amount to FP being nothing more than an agent. What is more compelling is the clause in the 2002 Services Agreement, that FP must ensure that it will act in Tooheys’ interests and not its own. This was a classic fiduciary obligation.

[740] Counsel commented that this raises the question of what services were FP supplying to Tooheys. These were:

 

(a)

services as a HR personnel administrator, such as recruiting and providing HR support;

 

(b)

acting as a conduit for the payment of salary and other benefits to FP workers and communicating some directions and instructions of Tooheys to those workers; and

 

(c)

acting as a ‘front’ for industrial relations purposes.

This goes back to the original purpose of Tooheys in avoiding existing industrial arrangements. Mr Seck maintained that these are not the purposes of a true labour hire arrangement.

[741] Mr Seck then dealt with the notion of ‘mutuality of obligation’. He said the true intention of the parties was to create an inferred or implied contract between Tooheys and the applicants. The service fee was intended to cover every aspect of the wages costs and the on-costs of the individuals. The payments were made in arrears, paid into FP’s bank account and then passed onto the employees as wages and other benefits. In consideration of the fees, services were provided for the benefit of Tooheys. This creates ‘mutuality’ in a direct sense between Tooheys and the applicants. Another way of looking at it is through the prism of agency, which Merkel J described as a question of privity of contract. If FP was truly an agent, then there are ‘back to back’ contracts; one between Tooheys and FP as an Agency agreement and one with FP as agent for Tooheys, employing the applicants. In either case, according to the relevant authorities, one arrives at the same answer.

[742] In answering the issue as to FP operating it own business, Mr Seck submitted that FP owed its creation, existence and continuation on Tooheys. It had been Tooheys’ idea and Tooheys bankrolled it from the beginning. The evidence was that Tooheys accounted for 95% of FP’s business. Without Tooheys, FP would almost cease to exist. The sheer dominance of Tooheys was stunning and powerful. Mr Seck also noted the absence of any real detail of the nature of FP’s arrangements with its other clients to determine whether they were really labour hire arrangements. He added that FP was part of a broader corporate group as it web page indicated and the Commission should not be concerned here as to what the other businesses were engaged in. In any event, these other enterprises were legitimate commercial businesses that have nothing to do with the arrangement between Tooheys and FP and are not related to labour hire.

[743] Mr Seck submitted that the Commission would be cautious in accepting the significance of the various tax returns put in evidence, which are based on consolidated results and make no distinction between FP and the other companies in the Group. This also concerns dividend distributions to directors and shareholders which related to GTG Investments. Mr Seck submitted that there was no denying FP made money out of the relationship, but what was the margin in the fees for? This is answered by looking at the true nature of the relationship. In any event, the fact some money was earnt, does not defeat the assertion that the 2002 Services Agreement was not a labour hire arrangement. In Damevski, an administration charge similar to a margin was a feature of that relationship. What is necessary to examine is the true situation and purpose of the relationship.

[744] Mr Seck returned to the apparent concession revealed in summarised documents, as to FP being the employer for tax, superannuation and workers’ compensation purposes. He traced the recent history of how that apparent concession emerged as to the documents that went back and forth between the parties. He claimed that the documents were produced to avoid the need to engage in significant time and costs for the production of documents. This was not a concession as to a legal issue, but one which was obviously an uncontested factual issue. There was no dispute FP nominated itself for those purposes, but if this was a fatal concession, one must wonder why the case had run for two and a half weeks. In any event, as noted in C&T Grinter Transport, the documents themselves can never be conclusive as to who the true employer is as a matter of law; See also: Pitcher; Romero v Auty and TFCUA v Bellechic.

[745] As to FP continuing to pay the applicants after their removal from site, Mr Seck submitted that at the time, there was a real dispute over what had occurred. The applicants were in disarray and FP simply made a decision to keep paying them, so they were not disadvantaged. The true inquiry should be the entirety of their time on the site and not just what happened afterwards.

[746] Mr Seck then summarised his written submissions on ‘sham’ arrangements and joint employment, the later being a fallback position to FP’s primary submission that it was not the employer of the applicants.

[747] In concluding, Mr Seck summarised his submissions as follows:

For the applicants in reply

[748] Mr Phillips generally supported and adopted the submissions of FP. On the question of whether the unfair dismissal applications should be accepted ‘out of time’, Mr Phillips focused on the words in s 394(2) of the Act ‘within 14 days after the dismissal took effect.’ He said the applicants continued to be employed by Tooheys after the 14 October 2011, because FP was doing no more than paying the workers as if they remained ‘on the books’ of Tooheys. They remained employees of Tooheys until their wages stopped being paid on 28 January 2012. If corrective action was necessary, Mr Phillips proposed amending the dates in the applications. He recognised that there was a slight distinction with Mr Henry and Mr Luke’s applications. Therefore, if the Commission accepts the dismissals took affect for most of the applicants in late January 2012, then the applications were well within time. If that date was not accepted, then the Commission would find ‘exceptional circumstances’ existed for the Commission’s discretion to be exercised so as to extend the time for filing of the applications; See: Nulty v Blue Star. Mr Phillips submitted that given the factors and circumstances evident in this case, the Commission would be satisfied that ‘exceptional circumstances’ were established. In addition, the applicants’ statements reveal that from the time they were no longer required by Tooheys until their wages actually ceased, negotiations had been continuing between the parties in an effort to resolve all outstanding issues between them, including a possible return to the site. When it became clear that was not going to happen, the applications were filed shortly thereafter. There was also an unresolved doubt as to the true identity of the employer.

[749] On the wider question as to the identity of the employer, Mr Phillips submitted that Mr Parry’s submissions failed to appreciate the development of the law away from relying on the bare formalities of the documents and there was no ‘magic touchstone’. Indeed, the documents may say something which is at odds with the reality of the substance of the relationship. He emphasised that this was not a case of contract for services. Tooheys was contracting with FP to secure people who Tooheys ultimately approved of, trained and directed how, when and where they performed the work. Whether by relying on an implied contract or that FP was the agent for Tooheys, the answer is the same. Tooheys was the true employer of the applicants.

For Tooheys in reply

[750] Mr Parry responded to a number of matters raised by Counsel for FP. He said that Tooheys totally rejected any suggestion that the 2002 Services Agreement was predicated on the illegality or illegitimacy of its predecessor agreements. It must be accepted that FP acknowledged there was a contract containing obligations on both parties.

[751] Mr Parry responded to the ‘control’ question by submitting that it was unremarkable in a labour hire arrangement, that there is direction and control from the host employer and employees worked as crews; See: Wilton. In addition, there was nothing unusual about the host entity being advised of leave applications from the workers or that it has the power to order the removal of any person from its site. Mr Parry said that the decision in Wilton particularly did not adopt the reasoning in Dacas and Damevski. Mr Parry said that Conti J was correct in observing that Damevski had to be seen within the context of its own factual framework.

[752] As to the contradictory evidence of the applicants on their understanding of their employer, Mr Parry put that Mr Seck did not deal directly with the evidence, but simply said it was contradictory. The transcript references were not contradictory, but reflected the real views of the employees over the relevant period - when they were actually working for FP at Tooheys. Their confusion only arose when they left the site. It was confusion created by FP and should not be allowed to now assist their case. Mr Parry said that Mr Sands, like all the applicants, was under no illusion when he was asked about his resumé as follows:

Mr Parry observed that his evidence was hardly contradictory.

[753] Mr Sands also gave evidence about the recruitment process as follows:

[754] Mr Parry said it was wrong to submit the advertising for positions mentioned being employed by Tooheys. The evidence was that the jobs were for specific tradespersons at the beverage company, or in the Auburn area. Relevantly, FP was always named as the contact.

[755] As to discipline Senior Counsel put that there was no objective evidence to support any directions came from Tooheys. It was unremarkable that the ‘host’ would want to be aware of disciplinary outcomes and be consulted about them. Mr Parry put that ultimately, argument about ‘control’ and ‘integration’ have particular relevance to cases involving whether a person is a contractor or employee. Here that question is not in issue. In any event, the fact that there may have been direction and supervision by Tooheys Supervisors or Team Leaders does not create an employment contract.

[756] Senior Counsel submitted that there was no real evidence of any indicia pointing to an agency agreement. There were no parallels with the facts in Ramsey and Damevski. It was clear, FP was acting in its own interests and was seeking to preserve its own commercial interests. There was nothing to suggest the creation of an agency relationship.

[757] Mr Parry said that the cross-examination of Mr Gorman was instructive as to the concessions he made and the acceptance of the corporate network and incomes which were structured to benefit the Group and FP, in particular. One cannot ignore the other companies in the Group, particularly Omni, for which Mr Sands said some employees were actually recruited for.

[758] Mr Parry sumtitted that an admission by a lawyer, is admitted for a purpose. It cannot be ‘watered down’ or retracted in order to change its character. Ms McEvoy was not called to give evidence about the admission and there it stands. Mr Parry said that the Commission should not discount or give little or no weight to the concession made. Rather, from the relevant authorities, such admissions are not only admissible, but are ‘entitled to considerable weight’; See: Pitcher at p 12. The concession was made presumably on authority by a legal adviser. It was one which was an admission as to the true state of the law.

[759] Mr Parry observed that Mr Seck had not addressed, at all, the reasons why the applicants were kept on by FP after 14 October 2011.

[760] Finally, Mr Parry said in respect of Mr Phillips’ suggestion to merely amend the application documents to correct the dates of dismissal was not permissible. It flies in the face of the facts that all the applicants (except Mr Luke) alleged they were terminated by Tooheys on 14 October 2011. On that day they had been told they were no longer required on site. Soon thereafter Tooheys stopped making payments to FP in respect to them. After 14 October 2011 they performed no services for Tooheys; they were not required, they were not ‘in waiting’, they were not in service. On any view, if Tooheys was their employer, then the employment relationship must have terminated on 14 October 2011. Moreover, Mr Sands acknowledged that the real purpose of the applications was to put commercial pressure on Tooheys in respect of its dealings with FP and the termination of the 2002 Services Agreement.

CONSIDERATION

Relevant principles

[761] It is helpful, I think, to indicate at the outset, what this case is not about; that is, the question to be determined by the Commission is not whether the applicants were employees or independent contractors. Neither Tooheys, nor FP advance any submissions contrary to the proposition that all of the applicants were employees, within the ordinary, English meaning of that term and as defined in s 13 of the Act.

[762] On the other side of the ledger, there was no dispute that both Tooheys and FP were, and remain, national system employers for all relevant purposes under the Act and as defined in s 14 of the Act. The question to be determined by the Commission in this case is straightforward and succinct - which one of them was the true employer of the applicants?

[763] With the question having been framed in that way, it appears to me that the authorities referred to me, concerning the principles to be applied when determining whether a person is an employee or independent contractor (notably Stevens v Brodribb and Hollis v Vabu) are not directly pertinent to the present matter. That said, I note of course, that the characteristics of the employment relationships identified in those cases, will necessarily overlap in a case such as this, where many of the issues concern the nature of the relationship between the applicants, as employees, and both of the competing corporate entities.

[764] Counsel for Tooheys frequently and consistently insisted that its contractual relationship with FP was an entirely unremarkable labour hire arrangement of host and client. On the other hand, Counsel for FP argued that the relationship was not really one of host and client, but some other permutation, including one of it being a ‘notional employer’ or, more amazingly, that the arrangement was, and always had been, a ‘sham’ arrangement. I shall return to these propositions later; suffice to observe for the purposes of the submissions advanced by the parties, that I consider the more useful authorities in the present case, are those which deal with the nature and characteristics of labour hire arrangements. While relatively few in number, particularly in an industrial context, I consider the following authorities as helpful to my determination of the central issue in this case.

[765] It may be accepted that the principles to be applied in the identification of the employer of an employee, where there is two or more contenders, were conveniently set out in the decision of Finn J in C&T Grinter Transport. While His Honour was there dealing with the liquidation of two companies under the Corporations Act 2001 (Cth), I consider the following principles therein recited are applicable in this case. These are:

[766] In Arcadia v Accenture Australia [2008] AIRC 108, Watson VP determined a jurisdictional challenge to a termination of employment application of an employee of a labour hire contractor under the Workplace Relations Act 1996 (Cth). At paras [6]-[11], His Honour dealt with the law in relation to labour hire as follows:

[767] In deciding that no employment relationship had existed between the applicant and the client company, His Honour said at para [18]:

[768] All parties referred me to Ramsey, and it is appropriate that I cite extensive extracts from Buchanan J’s judgement is so for as it relates to labour hire arrangements. At paras [46]-[47], His Honour said:

[769] After citing various comments of their Lordships in Mersey Docks, His Honour said:

[770] Later, His Honour described some of the characterisations of the alleged labour hire company, Tempus, as follows:

[771] In that case, His Honour found the arrangements to be a ‘sham’. However, it might be observed that some of the characteristics of an employer which His Honour could not find in Tempus are demonstrably evident in this case. I shall come back to these matters later. Two other preliminary questions may be readily disposed of at this point of my decision.

Was the 2002 Services Agreement a ‘sham’?

[772] Counsel for FP submitted that all of the agreements between FP and Tooheys from 1991 and perpetuated by the 2002 Services Agreement, were a sham. This was a particularly serious and spectacular allegation. Thankfully, it was not pursued with any serious sense of verve or enthusiasm. In any event, there was not a skerrick of evidence to support a conclusion that the 2002 Services Agreement was a ‘sham’. There was much force to Mr Parry’s submission that the allegation should be soundly rejected by the Commission, given that at no time was it put to any of Tooheys’ witnesses that this was the reality.

[773] Curiously, this allegation was only first raised during these proceedings. Moreover, it sits rather uncomfortably with the facts that:

 

1.

The 2002 Services Agreement had been in place for over ten years without anyone ever suggesting, let alone seriously claiming, the arrangement was a ‘sham’;

 

2.

The FP Directors and/or shareholders were quite happily deriving substantial financial benefits from the arrangement;

 

3.

Mr Gorman had lodged tax returns for his various companies over many years which, if he is to be believed, were transactions involving himself, which he now says were a ‘sham’ from the very beginning;

 

4.

The 2002 Services Agreement came into being after an open and transparent tender process and which ultimately reflected a commercial transaction which had benefits for both parties; and

 

5.

At all relevant times, FP had the benefit of legal advice and assistance. If this arrangement was truly a ‘sham’, then it either ‘slipped under the noses’ of less than diligent legal advisors, or was condoned by them.

[774] In my view, the claim that the 2002 Services Agreement and all its predecessor Agreements were a ‘sham’, is ludicrous. It is completely rejected. It reflects poorly on its proponent/s. To put the best possible light on the submission, it was little more than a ‘clutching at straws’ and an attempt to deflect attention from the reality of the relationship, which I will soon come to.

Joint employment

[775] Counsel for FP put as an alternative submission, in the event its primary submission was not accepted, that the Commission might determine that both Tooheys and FP were the joint employers of the applicants. Unsurprisingly, Tooheys opposed this outcome.

[776] It must firstly be observed that the notion of joint employment is a relatively novel and untested concept in the Australian employment context. This is evident from the observation of Wilcox J in Damevski at para [76]:

See also: Arcadia at para [7].

[777] There are no authoritative decisions or judgements of the superior courts in Australia on the subject and those few decisions and academic dissertations which have dealt with the matter, have identified a number of problems with applying the concept of joint employment within the current legislative framework of industrial, corporations and contract law. As I understand, there are no decisions at all in Australia, which have found in favour of joint employment.

[778] It seems to me that two major difficulties with the notion of joint employment readily spring to mind. There may well be others. Firstly, in the absence of any contractual relationship, whether actual or implied, between the worker and the host employer in the context of the state of the law of contract in Australia, a finding of joint employment would seemingly be impermissible.

[779] Secondly, if two employers are held to be the joint employers of the employees, how would one determine the apportionment of liabilities relative to each of them? Presumably, in the absence of any clear statutory or judicial guidance, the task of apportioning liabilities would still require a complex and weighted analysis of all of the relevant indicia, including the terms of the contract, the surrounding circumstances, the history of the contractual arrangements and the intentions of the parties.

[780] Of course, there are considerable practical attractions to assigning a characterisation of joint employment to circumstances where the various indicia of an employment relationship can be attributed to both of the competing employers, but where it is difficult to establish on which side the predominance of employment indicia falls. In many ways, that would be the easy way out. However, as I have just mentioned, the notion of joint employment raises other more difficult and complex questions. That said, I am of the same view as other members of the Commission, that until there is clear statutory or judicial guidance on the principles of joint employment in the Australian context, it would be prudent for the Commission to proceed with extreme caution before adopting the concept to a particular set of circumstances.

[781] In any event, for the reasons which will become evident later, I do not see the facts and circumstances of this case as fitting within a prima facie case of joint employment. This is so, because I consider in balancing the facts and circumstances of this case, a firm positive conclusion can be made, in the conventional way, as to which one of the two respondents was the true employer of the applicants.

The 2002 Services Agreement

[782] To better understand the relationship between the parties to the 2002 Services Agreement, it is necessary to rewind the clock 20 years. None of Tooheys’ witnesses were employed by Tooheys at the time, or if they were, they were not directly involved in Management at Lidcombe (e.g. Mr Scott was at South Australia Brewery between 1984 and 1996). On the other hand, three of FP’s witnesses, Mr Moston, Mr Gorman and Mr Porretta gave detailed evidence of what occurred at the site during the 1990s to dramatically reduce the numbers of employees and change the profile of workers engaged at the site.

[783] Mr Moston, Mr Porretta and Mr Gorman are all directors of FP Group Pty Ltd and/or Proden Pty Ltd. However, they were previously all senior and long time direct employees of Tooheys. Mr Moston commenced as a Fitter with Tooheys in 1971 and became a Maintenance Supervisor; Mr Porretta commenced as an Electrical Engineer in mid 1988 and became Production Manager and Mr Gorman commenced as a line electrician in 1978 and was the ETU delegate in 1991.

[784] In early 1991 the Lidcombe site was taken over by Lion Nathan from Bond Brewing. Mr Peter Johnson became the Operations Director. Sometime in early 1991, Mr Johnson approached Mr Porretta with the following proposition:

[785] Over the next several months, Mr Porretta had many meetings with Mr Johnson and Mr Kevin MacKenzie, Human Resources. What emerged from these discussions was a proposal to set up a new company which would employ Tooheys’ electrical trades personnel and provide their services back to Tooheys.

[786] In mid 1991, Mr Porretta approached Mr Gorman as the ETU delegate and told him of the proposal and that Toohey’s would like him to establish the new company. Mr Gorman expressed interest in the idea and received legal advice, paid for by Tooheys, as to how to set up and structure the company. It was indicated by Tooheys that all of the new company’s set up costs would be met by it. Negotiations continued with Mr Johnson, Mr MacKenzie, Mr Monk, Finance Director, Mr Porretta, Mr Gorman and Mr Denis Gaffney, an Electrical Foreman. The new company was named Feyman Pty Ltd and Mr Porretta, Mr Gorman ad Mr Gaffney were the directors. The Agreement with Tooheys was for a 5 year contract. Tooheys met all establishment costs, including leasing offsite premises and motor vehicles. All Tooheys’ workshop, equipment and tools were given to Feyman and Feyman took over the electrical apprentices on site. Tooheys paid Mr Gaffney’s salary for 12 months while he worked for Feyman.

[787] All electrical tradespersons who agreed to join Feyman were paid redundancy entitlements according to a reasonably generous Tooheys’ scheme. Some 19 to 21 electrical tradespersons left Tooheys on Friday afternoon 19 November 1991 and returned to the site the following Monday as Feyman employees. There was some doubt that the Tax Office would regard these arrangements as bona fide redundancies and when a ruling was sought from the ATO and confirmed they were not, Tooheys agreed to pay the differential tax treatment in addition.

[788] The arrangement with Feyman was so successful, Tooheys soon decided to achieve the same outcome with the mechanical trades (fitters) through approaches to Mr Moston, Tooheys Maintenance Supervisor. After an initial unsuccessful attempt (due to Union pressure), Mr Johnson approached Mr Moston and asked him to set up a company with a Mr Bob Kirkbride (Brewhouse Foreman) and a Mr Jeff Stewart (Mechanical Engineer) and in May, KSM was set up and draft proposals were prepared. However, this venture also failed due to Union opposition.

[789] In early 1993, planning commenced in earnest for a proposal, ominously titled, ‘Project X’. The objectives of the Project were:

[790] Management identified three key members of the Liquor, Hospitality and Miscellaneous Workers’ Union (LTU) employees who were viewed as likely obstacles to the implementation of ‘Project X’. Mr Porretta was tasked to remove one of these persons and ‘do whatever it would take to do so’. It appeared he achieved this result by offering a significant financial incentive for this person to leave the site. In May or June 1993, Mr Porretta was appointed Acting Operations Director after Peter Johnson resigned.

[791] As part of ‘Project X’ all existing Tooheys mechanical trades were terminated in August 1993. Skilled Engineering provided a new mechanical trades workforce and ABB provided casual operators. In September 1993, Tooheys successfully negotiated an outcome with the LTU which reduced manning from 400 to 80 and introduced annualised salaries. This allowed the majority of LTU operators to take a redundancy package with those who remained receiving a $10K bonus for working under the new arrangements. However, this decision resulted in a shortfall of labour so a major recruitment drive was initiated to employ new brewery technicians.

[792] In the lead up to the summer peak and with the inexperience of a new workforce, brewery production was low. In a dramatic turnaround, experienced ex-employees were recruited back to the site to train the new employees and ex redundant LTU operators were called back to work weekend shifts. Mr Moston was asked to organise the weekend production teams through Proden, a company controlled by him, and with Mr Gorman and Mr Gaffney as Directors. It was intended to keep this arrangement as discrete as possible considering the use of ex redundant LTU members and the earlier agreements with the LTU.

[793] In April/May 1994 Proden began supplying casual labour to the brewery and eventually ABB and Skilled Engineering ceased supplying production labour to the site. Proden then had the exclusive right to supply brewery technicians to the site.

[794] FP Group was incorporated in June 1994 (FP stands for (F)eyman and (P)roden) with Mr Gorman, Mr Gaffney and Mr Moston as the initial directors. Following an industrial dispute in October 1994, FP had continued to supply labour and kept production going. At the end of the dispute, FP became the only provider of casual labour. It was said that, at this time, 95% of FP’s revenue came from the arrangements at the Tooheys site. Mr Porretta had stepped down as Acting Operations Director and Mr Stephen Lewis was appointed. A reduction in the service fee paid to FP was renegotiated in mid 1994.

[795] By around mid 1995, it appears Tooheys had some concerns with the management expertise and presentation of the FP Group and Mr Porretta was proposed to join the Company. He did so in January 1996. Additional management training was organised and paid for by Tooheys.

[796] In late 1996 discussions occurred about expanding the relationship to include the maintenance trades. This required aligning the annualised salaries and bonus schemes which resulted in a 4% profit reduction and a 4% at risk component based on bonus and supplier reviews.

[797] Various agreements were entered into between the parties, including the 1997 Agreement negotiated a year in advance. The 2002 Services Agreement was executed on 1 October 2001 and was to continue in force until 31 March 2005. It remained in force until terminated by Tooheys on 28 January 2012.

[798] Mr Seck sought to rely on the twenty year history of FP’s (or its predecessor entities) involvement at the Tooheys site to demonstrate the arrangement was illegitimate and designed for an illicit purpose. It was not disputed that Tooheys motivation for engaging contractors to perform the same functions as its own employees, was to have a more productive workforce, without numerous historic work restrictions and practices. It achieved this objective by encouraging some of its existing employees (all its Electrical Tradespersons and Assistants) to set up an independent company, Feyman, and sub-contract its services back to Tooheys.

[799] Whether the motivation of Tooheys was honourable, rational or reasonable is not open for debate here. Views will no doubt differ on the subject. However, it could not be seriously suggested that there was anything illegal happening at the time. There is no doubt that a substantial ‘carrot’ of redundancy payments (indemnified by Tooheys when it suspected these were not genuine redundancies) was offered and willingly accepted by a number of the Tooheys employees. After all, this was a windfall of very significant proportions, in circumstances where the employees ceased to be employed by Tooheys one day and returned to work the next day to perform exactly the same duties, with the same pay and benefits; albeit without the work restrictions Tooheys had craved to eliminate. Given this factual matrix, it is utterly unsurprising that the employees probably fell over one another to sign up to the new company.

[800] In my view, it is little wonder that the ATO took a rather dim view of this arrangement as constituting a genuine redundancy. For my own part, so do I. They had not lost their jobs; their jobs did not disappear or were no longer required to be performed; there was a seamless transition of employment; in short, they were not redundant. Of course, there was probably little thought given by the employees, at the time, as to the vagaries and uncertainty of winning and losing contractual work. Fast forward twenty years and the arrangements all unravelled, in what was said to be the ordinary and customary turnover of labour hire contracts.

[801] Both respondents directed my attention to the various provisions of the 2002 Services Agreement to support their contentions. There is no dispute that the terms of the written agreement between the parties is a relevant matter going to the true nature of the relationship between them. The principles to be applied to the construction of written contracts were recently restated in Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184, where Bathurst CJ (with whom Macfarlan and Meagher JJ agreed) said at para [52]:

[802] The difficulty with the terms of the 2002 Services Agreement, as to which entity was the true employer, is that some clauses point in one direction, while other clauses point in the opposite direction. Ultimately, it must be said that there is a danger of ‘cherry picking’ the Agreement to find provisions which support one parties’ argument over the other. In my opinion, it is the aggregate of the contractual provisions which will give the real flavour to the nature of the whole relationship. In this respect, I refer to what Kirby ACJ (as he then was) said in Dalgety at 9:

[803] Nevertheless, it seems to me that the following clauses in the 2002 Services Agreement are particularly pertinent. They are as follows:

[804] ‘Personnel’ is defined under the Agreement’s interpretation clause (cl 1) as meaning:

[805] Clause 4 describes the Performance of Services as:

[806] Clause 5 details the obligations on FP under the Agreement:

[807] Clause 6 details Tooheys’ obligations as:

[808] In exchange for the provision of services, Tooheys agreed to pay fees as follows:

[809] Appendix E identifies each of the components of the fee structure (charge out rate). It includes:

[810] Clause 9 describes the nature of the relationship between Tooheys and FP:

[811] Clauses 11 and 12 are acknowledgments by FP as to industrial relations matters and reporting:

[812] Appendix A deals with a list of competency requirements and states:

[813] Appendix B describes the roles of employees, including that of Maintenance Coordinators and Maintenance Supervisors.

[814] Appendix C details the rates of pay of employees and notes:

Rates of pay for core maintenance trades people will be adjusted:

FP will advise Tooheys and Tooheys must agree to the rates of pay for Maintenance Coordinators and Maintenance Supervisors.

[815] Appendix D deals with the Performance and Bonus Objectives as designed by Tooheys and applying to all permanent core team members.

[816] Mr Seck sought to undermine the true labour hire characterisation of the 2002 Services Agreement by comparison to the Agreement subsequently entered into with Skilled Engineering. This comparison, he submitted, demonstrated that Skilled Engineering’s agreement had all the hallmarks of a true labour hire arrangement, whereas the 2002 Services Agreement did not. Presumably, this was to demonstrate that the 2002 Services Agreement was not, as Tooheys submitted, an unremarkable labour hire arrangement, but rather an arrangement in which Tooheys had sought to retain every aspect of control over the employees of FP and how they performed their work.

[817] I would make a number of observations about this comparison:

[818] In any event, I consider the fact that the successor Agreement to the 2002 Services Agreement is in different terms, reflects no more than the negotiating expectations and outcomes of the different parties, arising from a particular set of prevailing circumstances. It is irrelevant to the principles which must be considered in respect to the true nature of the employment relationship between Tooheys and FP in this case. Of course, the documentary evidence is a relevant factor, but what is not relevant is the terms of an agreement going to the nature of the relationship between Tooheys and another completely separate entity, particularly in the absence of evidence as to the wider intent of both parties to that relationship.

The enterprise agreements

[819] A very telling issue in this case is how FP viewed its relationship with the applicants. This can be answered by the actual facts and circumstances which existed prior to October 2011, compared to its complete about face, post October 2011. In my view, what reinforces FP’s own longheld view as to its corporate identity up to around October 2011 is the fact that it entered into an enterprise agreement with its employees which was subsequently registered and certified by Redmond C on 19 February 2001 under s 170LT of the Workplace Relations Act 1996 (Cth). There is no dispute that this agreement (the FP Group Pty Limited Certified Agreement [2001] (the ‘FP Agreement’)) was an industrial instrument covering FP and 27 of its employees who voted to approve the agreement on 5 January 2001. In addition, just prior to this Agreement, Mr Gorman had prepared an agreement for Proden Pty Ltd. It was certified by Rafaelli C on 20 October 2000.

[820] Both Agreements have the same preamble (described as the ‘Intention of this Agreement’). It is expressed as follows:

[821] There are other notable aspects of the FP Agreement which demonstrate that FP’s understanding of the nature of the relationship with its employees was plainly one of employer/employee. Some examples include:

[822] In going to the terms of the Agreement itself, I have already quoted the Intention (see para [785]). The parties are:

[823] The hours of work and the rostering clause is as follows:

[824] The Wage Rates clause (cl 5) refers to classifications of Fitters and Electricians (Production core, non-production core and casual) Brewery Technicians (Permanent and casual) and Apprentices. A specific provision refers to salary reviews as follows:

[825] The Agreement also provides that all new employees are on three months’ probation. All Annual Leave, Long Service Leave and Parental Leave is to be paid in accordance with the New South Wales statutory requirements. Interestingly, redundancy pay is to be paid according to the Employment Protection Act 1982 (NSW).

[826] Given the express terms of the enterprise agreements between FP and Proden as the named employer and their employees engaged on the Tooheys site, and noting that FP had at all times the benefit of legal advice and assistance, it is difficult to accept FP’s contention that it had not considered itself to be the true employer. Mr Gorman sought to explain the implausibility of FP’s position by portraying himself as being ‘foolish’ and ‘naive’. Moreover, he now believed the relationship was, and always had been, a ‘sham’. It was during his evidence, that he had first described FP as just the ‘notional’ employer.

[827] However, Mr Gorman’s self-confession of being ‘foolish’ and ‘naive’ does not sit easily at all with the facts that:

 

(a)

he was at all relevant times legally represented;

 

(b)

he and FP had been critically involved in negotiating and administering these arrangements for many years;

 

(c)

FP was no shelf company or corner store operation. It generated millions of dollars turnover which provided Mr Gorman and his co-directors with significant personal income; and

 

(d)

he set up and co-managed a sophisticated network of corporate entities and trusts as a director and major shareholder. Annexed to this decision and marked ‘Annexure A’ is an attempt to diagrammatically represent this network.

[828] Regrettably, I consider Mr Gorman’s evidence was little more than self serving, disingenuous nonsense. Strange it was that, for twenty years he was involved in a ‘sham’ for which he received, through his company shareholdings and ownership, significant financial returns. During this period, he authorised and filed tax returns based on his belief that his companies’ returns were, in all respects, compliant with Australian tax laws. The only conclusion I can draw is that Mr Gorman’s ‘conversion on the road to Damascus’ only came about when the relationship with Tooheys was terminated and his lucrative income stream dried up. He mounted a counter-attack by claiming that Tooheys was always the true employer of the applicants. In my view, Mr Gorman knew and always believed that FP workers were employees of FP and FP was their true employer. That does not, of course, resolve the correct legal analysis of the relationship.

[829] Fortifying my doubts as to Mr Gorman’s credit was another important aspect of his evidence which I found to be most unconvincing. He claimed that he had never been involved in the 2011 tender proposal for the ongoing contract with Tooheys and had never seen the tender document. He said Mr Smith had the full responsibility for preparing and submitting the document. I find it utterly incredible that, with the prospect of his lucrative income stream being turned off, Mr Gorman took not a jot of interest in saving a business which had preoccupied a better part of twenty years of his life. I do not believe his evidence in this respect, although, on one view, little turns on it, in any event. Overall, Mr Gorman’s demeanour in the witness box was smug, almost flippant. I gained the distinct impression that he was not treating the proceedings with the seriousness they deserved.

[830] Mr Seck sought to downplay the significance and relevance of the tax returns tendered in the proceedings and Mr Gorman’s evidence as to the complex interrelationship between the companies which made up the total FP Group. Mr Seck submitted that whatever income or dividends were received from companies, other than FP Group Pty Ltd, was irrelevant and the only financial circumstances which were relevant pertained to the fact that Tooheys amounted to 98.7% of FP’s business. While I understand why Mr Seck would want to divert attention from this evidence, I do not agree with his characterisation of this evidence as irrelevant.

[831] Firstly, there can be no doubt that the complex web of shared directorships and shareholdings was designed to maximise the benefits and the returns from Tooheys as being the primary source of the Group’s income, from which Mr Gorman and his co-directors received significant financial returns.

[832] Secondly, Mr Gorman’s cross-examination was very relevant to the question of the true employer and what had been the intention of the parties when entering into the 2002 Services Agreement. He had, and continues to have, a prominent role in the FP Group of Companies.

[833] Thirdly, Mr Seck took no objection (as to relevance) in respect to the tender of the financial material or Mr Gorman’s questioning going to the various companies associated or connected with FP. Nor did he object to the tender of the website downloads describing the nature of the various business entities.

[834] Fourthly, I do not understand how it could possibly be said to be irrelevant that some of the applicants in these proceedings, who challenge FP as their employer, were also engaged by other companies within the FP Group or transferred to these companies after 14 October 2011. As I will refer to later, this is a very relevant consideration in this case.

[835] Finally, all parties strongly pressed that the central principles in this case as established by the authorities, require the Commission to take into account the whole of the relationship when determining the true employer; See: Ramsey.

[836] Curious then, that Mr Seck’s otherwise meticulously detailed submissions on the whole of the relationship, would seemingly wish me to ignore what I consider to be the fundamental motivation of FP in continuing the relationship with the 2002 Services Agreement; that is, its own self interests. In my opinion, it would be wrong and unrealistic to set aside the facts and circumstances surrounding the FP Group of Companies from the whole of the relationship between Tooheys and FP.

Findings on the evidence

[837] Naturally, in a case such as this, where an examination of the whole of the relationship is essential, the element of ‘control’ is an important ingredient in that equation. Associated with ‘control’ are subsets such as supervision, training, discipline and other on site, practical realities. I will deal with these matters first, then the more obvious textual elements such as which entity controlled the administration of the workers’ wages, entitlements and work arrangements, and lastly, consider the matters which I consider tip the balance in favour of one entity being the true employer and not the other.

Issuing of directions and reporting lines

[838] The evidence disclosed that FP workers were part of a Tooheys work team and were expected to work together and cooperate as a team. Each team was supervised by a Tooheys Team Leader, either a Supervisor or Tooheys Engineer. Tooheys Supervisors and managers would direct what work was to be performed, where it was to be performed and when. In achieving this, they coordinated the labour supply arrangements with FP Maintenance Coordinators and Maintenance Supervisors. This would routinely occur on a daily and weekly basis.

[839] There is, of course, a real distinction between a Tooheys Team Leader or Engineer directing the applicants of what was required to be done and directing them as how to perform their work. This is consistent with the evidence that directions were sometimes given by a Tooheys Team Leader or Engineer to FP tradespersons having a different trades background. This distinction is not mere semantics. It represents a usual, sensible and practical arrangement between the host and the client. It certainly does not amount to ‘control’ in any relevant sense according to the authorities. In any event, giving directions is not the same as having control of the applicants’ work. In my view, ‘control’ was exercised in the relevant sense by FP Managers and Supervisors. This is particularly so in respect to Non Core Trades. The arrangements seem entirely consistent with cl 4 of the 2002 Services Agreement, which states ‘personnel will perform the work at the site under Tooheys’ direction.’

Training/Induction

[840] The evidence disclosed that all FP Core Trades workers were required to undertake Tooheys’ induction training and attend regular team production meeting, tool box meetings and refresher training. Additional training would involve liaison between Tooheys and FP as to what was required. Non Core Tradespersons would not attend team meetings. Refresher inductions were every twelve months for contractors and three years for Tooheys’ own employees; a clear point of distinction. In my view, there is nothing unusual about the requirements on FP workers undertaking Tooheys training. Indeed, in circumstances where the workforce focus was on teamwork and team outcomes, it is difficult to imagine how this would work effectively if the training across the workforce was not uniform and consistent. In my judgement, it reflects a typical labour hire arrangement.

Recruitment and selection

[841] The evidence was that Tooheys had no initial involvement in the recruitment of FP’s workers. FP placed the advertisements, culled the applications, conducted the interviews and testing, obviously conscious of the skills and competencies required by Tooheys. The successful candidates were required to sign employment contracts with FP (about which I will say more later). Employment contracts were not signed by any of the applicants and Tooheys.

[842] The evidence was also that a Tooheys Manager or Supervisor might sit in on a second interview to assess whether the applicant possessed the skills Tooheys considered necessary for the position. However, there was no evidence that Tooheys had or could veto a successful applicant for employment with FP, even if Tooheys did not consider the person suitable for its purposes. As FP had other actual and potential clients, it could plainly direct its new employees to other locations or retain employees on its books until suitable positions arose. Again, this is an unremarkable feature of a labour hire arrangement.

Discipline/Counselling/Dismissal

[843] As the frontline interface with the workers, it is obvious that from time to time, Tooheys Team Leaders, Supervisors and Managers would raise issues of a worker’s performance or conduct with FP. It was up to FP to investigate complaints, counsel, warn or otherwise discipline its workers. Obviously, it was appropriate to make inquiries with Tooheys personnel who had the requisite knowledge of the worker and the issues involved. FP was required to advise Tooheys of what action had been taken. The point is that Tooheys could not initiate unilateral action against a FP worker, except in one particular circumstance. That is, it could direct FP to remove one of its workers from site. Even this direction was not always strictly followed. There was a classic incident in 2008 in which Mr Barrowman’s direction to remove Mr Pittman from site was not acted upon by FP. Mr Barrowman was clearly annoyed when he discovered Mr Pittman still on roster after he had plainly said that (Tooheys) wanted ‘someone better suited to Tooheys’ needs.’

[844] Invariably, however, such directions were complied with by FP and FP was first appraised of the reasons why Tooheys had made that decision. Tooheys managers had no way of knowing, nor did they ask, if a direction to remove a worker from site resulted in the person actually being dismissed, or relocated to another of FP’s clients. There is nothing particularly remarkable about a host company requiring a labour hire company to remove an individual labour hire employee from its work site. This occurs on a routine basis for a variety of reasons. Usually, the outcome is for the labour hire company to transfer their employee to another workplace - which is exactly what happened after the applicants were told not to attend the Tooheys site after 14 October 2011. This was also consistent with the 2002 Services Agreement. Tooheys never asked that employees be terminated, merely to be removed from site, according to the express terms of the 2002 Services Agreement. This is a difference of some significance.

Compliance with policies

[845] There was nothing unusual about the requirement of all persons who attended the Tooheys site to be familiar with, and comply with Tooheys’ policies. Tooheys could not ignore its obligations for compliance with all its statutory and regulatory obligations; in particular in respect to occupational health and safety. Indeed, all persons, including short stay visitors and contractors, were required to be inducted before setting foot onto the site. This is a requirement for all work sites where dangerous machinery exist and hazards are self evident. It was also clear that FP had its own policies and procedures which its contracted workers were required to be familiar with and observe. Thus, the applicants were bound to, and obliged to comply with, two sets of different policies.

Wages/Performance Appraisals

[846] The evidence was that the Tooheys’ Enterprise Agreement stipulated that Core Tradespersons on site were to be paid no less than Tooheys own Brewing Technicians. Accordingly, the wages of employees were adjusted from time to time, although there did not appear to be strict compliance in this respect. There was evidence that there was nothing to prevent FP paying its workers as it saw fit and not according to the amount attributed to wages in the 2002 Services Agreement. Of course, the impact would affect the overall profit margin for FP. It seems that FP would often complain that its workers were being poached by Tooheys, because its own rates were not comparably attractive. Mr Smith gave evidence that he unilaterally increased the Non Core Trades rates to $28 an hour in 2009 and then billed Tooheys accordingly. Mr Lewis gave evidence that FP was at liberty to reduce the wages of its employees to increase its own profit margin from the fixed fees paid by Tooheys. This evidence hardly demonstrates utter compliance with what Tooheys directed as to wage outcomes. Significantly, of course, FP had its own enterprise agreements, which I referred to earlier. In any event, it made perfect sense to, as far as possible, keep parity of wages between contractors and Tooheys own employees.

[847] Some emphasis was placed on the fact that bonus payments were linked to Tooheys accountabilities, assessments and the Team’s performance. It seems to me that to do otherwise would be impractical and unfair to individual employees if the bonus was not based, inter alia, on the aggregate of each team member’s overall contribution to its achievement.

[848] Performance appraisals of FP personnel were conducted by FP Supervisors or Managers. Scores would be attributed to each employee and cross checked by the relevant Tooheys Managers to ensure accuracy and consistency. Given each employee worked in a team under the supervision of a Tooheys Supervisor or Engineer, it was entirely appropriate for FP to seek input on an individual’s performance from Tooheys management. Indeed, it is difficult to imagine how it could be fairly done otherwise.

Rosters and replacement of absent staff

[849] The rosters for FP workers were prepared by FP administrative staff, on instructions from Tooheys, as to its skill and competency needs from time to time. Plainly, this would vary during peak demand periods and FP would adjust the rosters accordingly. The evidence was that Tooheys had no involvement in the selection of actual person/s placed on the roster, but could express a view if it was felt a particular person did not meet its competency or skills standards. Rosters were displayed in the canteen and identified FP workers and Tooheys employees separately.

[850] FP was responsible for replacing absent workers and would advise Tooheys accordingly. This arrangement seems understandable given that leave requests and approvals were made directly to FP managers and records were kept by FP as to each worker’s leave entitlements and accruals. Leave applications and replacement workers would be acknowledged by Tooheys Supervisors or Engineers, who could object if they felt the replacement worker did not possess the competencies or skills that Tooheys required, and ask for someone else.

Access to Tooheys facilities

[851] FP workers had access to the Tooheys canteen, gym, car park, Tap room (bar) and store. FP workers were sometimes invited to the Tooheys Christmas party and other Tooheys sponsored social events. Team members were required to attend the annual team day. I do not apportion any great weight to these matters as they amount to sound industrial relations practices and enhance a cooperative team based workplace. Moreover, the Tooheys facilities were not limited to its own employees and FP workers, but were available to all contractors on site.

Access to Tooheys computers

[852] It makes obvious practical sense that FP workers were able to access the Tooheys computer systems, in particular MLS, in order to be able to perform their functions in accordance with Tooheys’ requirements. Indeed, they would not have been able to perform their functions if they were unable to access the Tooheys computer systems.

Protective clothing

[853] FP workers wore jackets and shirts emblazoned with the FP logo so as to differentiate them from Tooheys employees. Protective boots were supplied by FP, but all other protective clothing was supplied by Tooheys.

Summary

[854] It seems to me that if Tooheys had an overwhelming, almost veto power over every aspect of the FP workers’ employment (as FP contended), there would have been little need for a FP Site Supervisor or FP Maintenance Supervisors. Nor would there be a need for joint meetings on production, scheduling, safety, training, replacement of absent workers and additional labour for peak demands. All of the evidence points to a practical arrangement on site, which involved joint collaboration and cooperation, a scenario which, in my judgement, was an unremarkable example of a typical labour hire arrangement.

[855] True it is, as FP submitted that, unlike most labour hire arrangements, the applicants were not engaged in the performance of their work on a temporary basis to fulfil a client’s short term needs or deployed from time to time to other work sites. Plainly, they were all engaged at the site for substantial, unbroken periods of time. In my view, the length of time of engagement at a particular site is not an indicia of the nature of the employment relationship. The reality was that they were available to work at other of FP’s clients, as demonstrated by a number of them actually doing so, before they commenced at Tooheys and after they were removed from the Tooheys site.

[856] In any event, it made good business sense to have the same persons working at the site over a considerable period of time to ensure continuity of knowledge and experience. It was of a great benefit to both FP and Tooheys to have longstanding workers on the site; thereby not incurring new recruitment and training costs. In any event, given that Tooheys accounted for some 95-97% of FP’s client base, it was hardly surprising that the same workers remained on the Tooheys site for lengthy periods of time.

[857] At this point, I would make some additional observations on Mr Seck’s reliance on Ramsey and his submission that Buchanan J’s findings in that case that ‘Tempus bore none of the characteristics of an employer’ could similarly apply to FP. In my view, there are real substantive differences between Tempus and FP, which actually work against Mr Seck’s submissions. These differences include:

 

1.

Unlike Tempus, FP operated a business of its own, independent of Tooheys and involving other client companies.

 

2.

Obviously, Mr Seck could not deny that FP made money for its directors and shareholders. However, he downplayed the amount of fees paid by describing them as a small margin relevant to the total fee paid paid by Tooheys. Given Mr Gorman’s evidence as to what he and other Directors earnt, that was a brave submission to put. In any event, FP made money over a considerable period of time, not only from Tooheys, but also from its other clients.

 

3.

FP advertised for and recruited staff for engagement according to a particular classification, without naming Tooheys as the workers’ ultimate designated site.

 

4.

FP was not obliged to terminate a worker’s employment merely because Tooheys decided a particular person was no longer required on the site. Indeed, that is precisely the situation which occurred when the applicants remained on the books of FP and were paid by FP after they were no longer required on site after 14 October 2011.

 

5.

Buchanan J found that Tempus was set up as a ‘sham’ in order for Ramsey to avoid its legal employment obligations to its employees. As I have earlier said, I do not accept, nor could it be supported by any objective evidence, that the relationship between FP and Tooheys was a ‘sham’.

Administration of entitlements and work arrangements

[858] There is no dispute that FP was responsible for all the applicants’ entitlements and the administration and record keeping related thereto. FP had an onsite office, Site Supervisor and on site administration staff for that purpose. In particular, FP was responsible for:

Responsibility for redundancy

[859] It seems to me that the ‘elephant in the room’ in this case is whether the applicants were genuinely redundant at some point and which entity is responsible for any redundancy benefits that might now be payable. The fact that FP launched s 120 proceedings last year demonstrated that the prospect of paying the applicants’ redundancy pay was an issue which FP was very much ‘alive’ to. Of course, if Tooheys is found to be the true employer, the redundancy benefits are very significant. It is not entirely clear whether FP had its own discrete redundancy scheme, although its enterprise agreement refers to the provisions of the Employment Protection Act 1982 (NSW) as being applicable. Nevertheless, at the very least, the applicants may be entitled to the minimum NES scale of redundancy benefits; See: s 119 of the Act.

[860] As will be seen shortly, while the terms of the 2002 Services Agreement (and Appendix E) are clear as to certain of the statutory entitlements being included in the rolled up fee paid by Tooheys to FP, there is no specific mention of redundancy anywhere in the Agreement (including as to its non-inclusion). However, cl 11(e) states:

In my opinion, these words are unambiguous, clear and beyond argument. FP is solely responsible for all the workers’ entitlements, whether specified or not. It must include both superannuation and redundancy.

[861] But more importantly, the plain intention of the parties that redundancy was a component of the 2002 Services Agreement’s fee structure can be evident from an email dated 30 October 2001 and attachments from Ms Huddy, on behalf of FP, sent to Tooheys during the negotiations for the 2002 Services Agreement. Ms Huddy says:

[862] Under the heading ‘Administration - total Tooheys costs (of $556,570.52), is a component for Redundancy of $81,309.31. This figure is then extrapolated as follows:

   

Wkly pays

No Wks

  

Yrs est

Per annum

             
 

4 @45/7day

$5,506.36

10

$55,063.60

3.5

$15,732.46

 

4 @45/7day

$5314.04

10

$53,140.40

3.5

$15,182.97

             
 

6 @ 43/5

$6,416.52

10

$64,165.20

3.5

$18,332.91

 

6 @ 43/5

$6,192.60

10

$61,926.00

3.5

$17,693.14

             
 

1 @ 45/5

$1,143.27

10

$11,432.70

3.5

$3,266.49

 

1 @ 45/5

$1,103.37

10

$11,033.70

  

$3,152.49

             
 

1 @ 43/5

$1,032.10

10

$10,321.00

3.5

$2,948.86

             
 

1 @ 40/5

$1,750.00

10

$17,500.00

3.5

$5,000.00

             
           

$81,309.31’

[863] In oral evidence, neither Mr Gorman nor Mr Porretta could recall seeing this document. Indeed, Mr Gorman went further. He believes it was a document prepared by Tooheys and not FP at all. Mr Porretta’s lack of recollection is explicable in that he had little involvement in the 2002 Services Agreement negotiations. However, given my earlier adverse credit findings as to Mr Gorman’s evidence and the paucity of any other evidence supporting Mr Gorman’s view, I am satisfied that this matrix was prepared by Ms Huddy under instructions from FP, for the purposes of the 2002 Services Agreement negotiations. Moreover, the document is also consistent with Tooheys’ unwavering insistence that it was not responsible for redundancy accruals and would not agree to the inclusion of such accruals in the 2002 Services Agreement. FP had been told as much on many occasions, including prior to the 2002 Services Agreement.

[864] In addition, Mr Gorman’s view is discordant with the inclusion in FP’s own enterprise agreement of redundancy benefits based on the provisions of the Employment Protection Act 1982 (NSW). I note that Mr Sands believed from conversations with Mr Gorman, that Tooheys had agreed to meet all ‘exit’ costs, such as redundancy, accrued annual and long service leave, should the relationship between Tooheys and FP ever come to an end. Not only was such a suggestion in clear contradiction with the terms of the 2002 Services Agreement (See above: Cl 11 and App E), but there is not a scrap of supporting evidence that this was the position. If Mr Gorman did convey such a view to Mr Sands, he was either grossly mistaken or deliberately intended to mislead him.

[865] There is no evidence to suggest that Ms Huddy did not send the email and the attached matrix of charges. If FP strongly believed that the document was anything other than what it purported to be, then it was open for FP to call its own employee, Ms Huddy, to deny the document was her creation on FP’s behalf. The failure to do so invites a clear Jones v Dunkel inference that Ms Huddy’s evidence would not have assisted FP’s case.

[866] Accordingly, it seems to me that FP always held itself out as providing a contingency for the applicants’ redundancy, through the fees paid by Tooheys. To the extent that this component and other of the applicants’ statutory entitlements have not been paid to them, the question arises as to where the contingency for the entitlements has ended up? It seems to me that, at the very least, FP’s management has some explaining to do.

Ongoing employment

[867] For me, however, the fateful issue in this case is the fact that the applicants continued to be paid by FP for some considerable time after the alleged date of termination by Tooheys, being 14 October 2011. Indeed, Messrs Henry, Llagas, Hulbert, Blackley and Sands were transferred to other of FP’s clients during and after this period. Applications for leave by them continued to be approved by FP during this period (Mr Llagas and Mr Hancock).

[868] From this evidence, another legitimate question arises, which requires answering. If some of the applicants were transferred to other of FP’s clients between 14 October 2011 and 28 January 2012 and FP was presumably being reimbursed by these clients while the Tooheys’ contract remained on foot, then was FP was being paid twice for the same services? Surely, this raises serious questions as to FP’s bona fides and where the fees attributable to the applicants’ accrued entitlements, ended up. I note that Mr Toomey deposed that Tooheys continued to pay fees to FP until 26 March 2012. Mr Smith said that this was for services rendered prior to 28 January 2012. Assuming Mr Smith was correct, it begs the question as to where these monies were going when the applicants’ entitlements remained unpaid.

[869] Mr Seck, wisely, had little to say on this point. I do not criticise him in that respect, as I suspect he appreciated these facts represented a significant hurdle for his client to overcome. FP’s defence was that it continued to pay the applicants merely as a charitable act to ensure they were not disadvantaged. It is unclear where the evidentiary foundation for this submission comes from. Nevertheless, I must observe that it sits rather uncomfortably with:

 

a)

FP organising and probably paying for the applicants’ legal advice in an attempt to create doubt in their minds as to their true employer;

 

b)

    Mr Sands’ evidence that the purpose of the applicants’ unfair dismissal applications was to put commercial pressure on Tooheys in its contractual dispute with FP. In other words, FP had little interest in the legality or merits of the applicants’ claims of being unfairly dismissed; and

 

c)

FP’s withholding of the applicants’ statutory entitlements when it may be safely assumed it had already received a fee containing a component for such entitlements. One notes from the terms of the new employment offer from Skilled, that all accrued entitlements under FP’s contract had not been remitted to it for the purposes of any ongoing continuity of service.

[870] I gained an overwhelming sense that, rather than some genuine, heartfelt concern at the applicants’ circumstances, the uppermost and all-consuming motivation of FP was purely one of self interest. There is nothing particularly heinous about pursuing self interest. As former Prime Minister, Paul Keating, once said, ‘in the horse race of life, always back self interest - at least you know that’s the horse which will always be trying’ (paraphrased). On the other hand, when self interest comes at a cost to others or where the object of one’s self-interested conduct is to confuse or deceive, it takes on a somewhat different complexion.

[871] After considering all of the evidence and the whole of the relationship, the only logical conclusion is that there was no contract of employment between the applicants and Tooheys which had been extinguished by the actions of Tooheys on 14 October 2011. It follows that the real and effective employer of the applicants, both prior to, and after their removal from the site was one and the same entity - FP Group Pty Ltd.

[872] I am fortified to this conclusion by the actions of the applicants themselves post 14 October 2011. Even with the benefit of legal advice, they took no action to dispute their alleged terminations by Tooheys until some months later. Given these circumstances and in the absence of any explanation from Ms Pendlebury, the inference posed by Tooheys - that the timing of the applications was deliberately designed for some other collateral purpose - is highly persuasive. After all, if the applicants and/or their legal advisors were so confident that Tooheys was the real employer, why wait months to file unfair dismissal claims knowing, as any competent industrial practitioner would, that a delayed application jeopardised its acceptance by the Commission because it would be well ‘out of time’? It is manifestly illogical. But what happened is very suspicious.

[873] When the applicants attend a meeting with Ms Pendlebury on 15 October 2011, organised by Mr Sands, under Mr Smith’s direction, and presumably paid for by FP, they are all completely disavowed of their long held view that FP was their employer, or at the very least, confused. Suddenly, they were and always had been employees of Tooheys. Perhaps this conversion was encouraged by the prospect of a very lucrative Tooheys redundancy scheme being dangled in front of them.

[874] What they really believed was elicited from the cross examination by Counsel for Tooheys. A few extracts from transcript serve to illustrate the point:

 

Mr Coombes:

I suggest to you, you knew around this time you were going to be employed by the FP Group?---Yes.

 

Mr Hancock:

You understood you’d be offered employment and you’d come be employed by the FP Group. Correct?---That’s correct.

:...

Up until the time you had this meeting, you’d always operated on the basis and never raised a complaint against it, that you were an employee of FP Group? That’s true?---Correct.

...

You took no issue with that because that was your understanding of the position throughout this 10-year period?---Yes.

 

Mr Luke:

No, and indeed all throughout your time at Tooheys, the FP Group had always said that they were your employer?---Yes.

 

Mr Henry:

You didn’t approach Tooheys because you knew you had no direct contractual relationship of employment with Tooheys. That’s right isn’t it?---That’s correct, yes.

...

As at July 2008, that’s what you understood to be the true contractual relationship between you and FP Group?--- Yes, that’s correct.

And that position never changed, did it?---No.

 

Mr Llagas:

There was no confusion in your mind as to who your true employer was at that point in time?---No.

...

So you never understood Tooheys to be your employer for any purpose until well after 14 October, did you?---That’s right.

 

Mr Blackley:

You understood at that time your employer was the FP Group - - -?---Yes.

...

It was only after the 15th or so of October you started to have doubts as to who your true employer was?---Yes.

[875] Mr Seck submitted that the evidence of the applicants as to their true employer was contradictory. I disagree. He highlighted the concessions Mr Parry obtained from the applicants in cross examination as to who they believed to be their employer (FP) and then his cross-examination which drew the very opposite response (Tooheys). The reality of the relationship as they understood it at the time they entered into the relationship with FP and how they had always viewed that relationship for many years, was tainted when FP, and possibly Ms Pendlebury, convinced them of the complete opposite.

[876] Nevertheless, Mr Seck was correct to add that I would look to other of the objective evidence to establish the facts of the relationship. That objective evidence, untainted by FP’s intervention until October 2011, was that all of the applicants knew and understood they were employees of FP. Until October 2011, there is no evidence that FP or anyone else had sought to put the seed of doubt into any of the applicants’ minds. The fact the seed was sown in October 2011, without any demur for years from FP or its directors must surely call into question its bona fides.

[877] Perhaps, the views of the applicants are no better illustrated than by the evidence of Mr Henry. Mr Henry’s understanding of the employment relationship was clearer than the others. Given Mr Henry had previously owned his own business for 12 years, during which he had engaged labour hire companies, this was perfectly understandable. I found his evidence to be persuasive. Mr Henry accepted that he knew FP issued his pay, group certificates, uniforms, payslips and managed his workers’ compensation insurance, superannuation and leave applications.

[878] Mr Henry had signed an employment agreement with FP. He said it was not a misrepresentation or a ‘sham’. He was absolutely clear about his understanding that he was, and continued to be employed by FP. He acknowledged that he had signed a confidentiality and restraint provision in his employment agreement which was designed to protect FP’s interests. He believed the policies he was required to comply with were FP’s policies. He said that he did not have to go to anyone, other than Mr Sands, to seek approval for leave.

[879] Mr Henry’s evidence as to Ms Pendlebury’s role was helpful, but not conclusive. He believed that he had signed a retainer agreement with Ms Pendlebury around 15 October 2011. However, he had never received an invoice from Ms Pendlebury and believed Mr Sands (on behalf of FP) was paying the legal bills. There is no doubt that a number of the applicants had signed an authority for FP to act on their behalf.

[880] Mr Henry’s evidence was, and Mr Smith agreed, that he had prepared his unfair dismissal application with help from Mr Smith, who prompted answers to the questions set out in the application. Mr Smith’s admission was extraordinary. What on earth was the General Manager of a respondent to an unfair dismissal application, doing in helping an applicant to file claims against it? One might speculate that Mr Smith’s intentions were far from altruistic.

[881] In addition, it was Mr Smith’s oral evidence that Tooheys had been told before September/October 2011 that FP regarded Tooheys as the true employer. He believed it was Mr Sands who would generally ‘verbalise’ this view when there were requests by Tooheys for additional labour on the site. Nowhere in his written evidence was this claim mentioned and, importantly, neither was it mentioned in any of the evidence of Mr Sands himself. Mr Smith believed there was documentation to corroborate his view. However, when asked if his lawyers had provided to the Commission everything which was relevant, he answered: ‘Well, I didn’t think something like that was particularly significant.’ He claimed he could bring proof to Court the next day. Needless to say, nothing was produced.

[882] I quote this particular part of Mr Smith’s evidence to demonstrate my wider concerns that I found him to be a generally uncooperative witness. His evidence was self-serving. He gave answers to self evident propositions unfavourable to his case, which were unresponsive, vague or confusing. I consider his evidence to be generally unhelpful and designed to preserve the facade of a concern for the applicants’ interests, rights and entitlements. I make no other findings as to the credit or otherwise of any of the witnesses in this case.

CONCLUSION

[883] This matter has been principally concerned with the reconciliation of firmly held and well argued positions of the two respondents, Tooheys and FP, as to which one of them is the true employer of the applicants. As an alternative, FP has raised the concept of joint employment, should the Commission find against its claim that Tooheys was the true employer. I have earlier determined that I do not consider this to be a case where the characterisation of joint employment can be applied.

[884] Notwithstanding that it should be of little consequence to the applicants as to which entity was their true employer, there was no subtlety as to which camp the applicants’ case was directed to supporting. Maybe this is a reflection of what they perceive to be the relative financial strength of the two entities and their respective capacity to pay outstanding entitlements, including redundancy pay. However, that is not the point. What matters is that a determination by the Commission of the true employer of the applicants, will have the practical effect of determining which entity is ultimately the respondent to any further unfair dismissal proceedings.

[885] For all the aforementioned reasons, and after carefully weighing up the various indicia comprising the whole of the relationship between Tooheys and FP, the purpose and intent of that relationship and the terms of the 2002 Services Agreement, I am satisfied, and so find, that FP Group Pty Ltd was the true employer of the applicants, at all relevant times, and relevantly, at the time of the their dismissals.

[886] While it is unnecessary for me to make any findings or further comment on whether ‘exceptional circumstances’ were found to exist if Tooheys had been identified to be the true employer, I would wish to briefly highlight the evidence of Mr Sands that the applications were filed against Tooheys for the sole purpose of applying pressure to Tooheys in respect to the commercial dispute FP had with it. I consider, these circumstances would have made it highly unlikely that the Commission would find in favour of extending the time for filing of the applications, had that been necessary. This is so because, in my view, if the sole or primary purpose of filing an unfair dismissal application is for some other collateral and ulterior purpose, it would be inconsistent with the objects of Part 3-2 of the Act and unlikely to survive any merit review. I need say no more on the subject.

[887] For completeness, I propose to dismiss the following unfair dismissal applications pursuant to s 587(1)(a) of the Act, as not having been made in accordance with the Act:

[888] In view of my adverse comments on the evidence of two of FP’s witnesses, it is probably inappropriate for me to deal with any future substantive proceedings involving the applicants and FP. Accordingly, matters U2012/4341, U2012/4631, U2012/185, U2012/183, U2012/182, U2012/184, U2012/204, U2012/187, U2012/200, U2012/186 will be remitted to the Unfair Dismissal Unit for further programming.

[889] I wish to stress that notwithstanding my conclusions on the preliminary jurisdictional issue, the relevant parties should now be encouraged to engage in further discussions in an effort to resolve the applicants’ claims of unfair dismissal and any claims of outstanding entitlements due to them.

DEPUTY PRESIDENT

Appearances:

Mr J Phillips, Senior Counsel, with Ms E Magill, Solicitor for the applicants

Mr M Seck, Counsel with Ms D McEvoy, Solicitor for FP Group Pty Ltd

Mr F Parry, Senior Counsel with Mr Y Shariff, Counsel for Tooheys Pty Ltd

Hearing details:

2012.

Sydney:

2 October, 3 October, 4 October, 5 October, 8 October

2013.

Sydney

21 January, 22 January, 23 January, 24 January, 25 January

11 April, 12 April

Printed by authority of the Commonwealth Government Printer

<Price code AD, PR536357>