Industrial Relations Commission of New South Wales CITATION: Uremovic -v- Staff Innovations [2006] NSWIRComm 1039 APPLICANT PARTIES: Antony Uremovic RESPONDENT Staff Innovations Pty Ltd FILE NUMBER(S): 1950 of 2005 CORAM: Cambridge C CATCHWORDS: Unfair dismissal - termination of employment - vicarious employment - alleged implied term to permit insistance on exclusive placement with a particular client of the employer - particular circumstances of vicarious employment analysed - no implied term established in this instance - applicant not a dismissed employee - claim dismissed. LEGISLATION CITED: Industrial Relations Act 1996 [NSW] HEARING DATES: 29/11/2005 DATE OF JUDGMENT: 03/01/2006 APPLICANT Mr J Clements, Australian Workers Union LEGAL REPRESENTATIVES: RESPONDENT Mr M Cleary, barrister Solicitors for Respondent Moray & Agnew DECISION: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 1 March 2006 Matter No IRC 1950 of 2005 Antony Uremovic -v- Staff Innovations Application by The Australian Workers' Union, New South Wales on behalf of its member Antony Uremovic re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996. DECISION [2006] NSWIRComm1039 1 This matter involves a claim for unfair dismissal taken pursuant to section 84 of the Industrial Relations Act 1996 [NSW], (the Act). The application was made by the Australian Workers' Union (the AWU), on behalf of Antony Uremovic (the applicant). The respondent employer has been identified as Staff Innovations Pty Ltd (the employer). 2 The claim was the subject of unsuccessful conciliation proceedings held on 16 June and 8 July 2005. Following the unsuccessful attempted conciliation the matter proceeded to Hearing on 29 November 2005. BACKGROUND 3 The applicant is a male who was some thirty one years of age at the time of his alleged unfair dismissal on 12 April 2005. The applicant was working as a labourer and had been employed with the employer since 8 March 2004. 4 The employer is a labour hire company that relevantly supplies employees to Railcorp New South Wales (Railcorp). 5 The applicant had a previous period of employment with the employer from 1999 to 2001. In 2001 another labour hire company, Drake International, engaged the applicant to perform work that he had been undertaking for Railcorp as an employee of the employer. In March of 2004, the employer regained the contract to supply labour to Railcorp and the applicant returned to employment with the employer. Throughout the entire period of employment with both the employer and Drake International the applicant performed general labouring and associated duties for Railcorp as the client of both the employer and Drake International. 6 On or about 20 January 2005, the applicant sustained a workplace injury that necessitated his absence from work for a period up until approximately 8 March 2005, at which time the applicant was cleared to return to suitable duties. Apparently Railcorp had a policy of not providing for any suitable (light) duties positions and by 27 March 2005, the applicant was cleared as fit for resumption of pre-injury duties. 7 In the weeks and months after 27 March, the employer offered the applicant various positions, none of which involved a return to duties undertaken for Railcorp. The applicant rejected all offers of employment and insisted that he be returned to work at Railcorp as opposed to any other employment of similar or better terms and conditions. 8 Railcorp had reduced the number of individuals that it sought to have supplied from the employer and although other staff of the employer were engaged at work with Railcorp, the employer did not offer the applicant a return to his duties at Railcorp. The employer offered and reiterated its offer of other employment for different clients and at different locations. The applicant refused all such offers and ultimately sought that the employer provide him with an Employment Separation Certificate. 9 The employer provided the applicant with an Employment Separation Certificate incorrectly dated as 8/4/2004, the correct date being 8/4/2005. The Employment Separation Certificate crossed out the words "Was employment terminated" and inserted in lieu the words "Employment has changed". 10 The applicant has asserted that he was entitled to be returned to work with Railcorp as opposed to any other work of similar nature involving commensurate or superior terms and conditions. Therefore the applicant has asserted that the employer's refusal to return him to work with Railcorp has represented his unfair dismissal. THE EVIDENCE 11 There were very few matters of factual contest that required resolution in this instance. Broadly, the chronology of relevant events was uncontested. 12 The applicant was the only witness called in support of the claim. The applicant presented as a strong willed, almost defiant personality. The applicant's evidence was characterised by his steadfast insistence that the employer was required to return him to employment with Railcorp as opposed to any other employment circumstances with other of the employer's clients. 13 Mr Murray Bamford was the only witness called to provide evidence on behalf of the employer. Mr Bamford provided evidence as the employer's General Manager. Mr Bamford presented his evidence in an open and uncomplicated manner. The general thrust of the evidence provided by Mr Bamford involved his conviction that he was entitled to offer employment to the applicant involving clients other than Railcorp. The evidence provided by Mr Bamford reiterated the employer's rejection that it was under an obligation to ensure that the applicant was returned to work for Railcorp as opposed to any of the other clients for which the employer provided labour. THE APPLICANT'S CASE 14 At the Hearing of this matter, the applicant was represented by Mr J Clements from the AWU. Mr Clements commenced his submissions by identification of a contest in respect to whether or not there had actually been a dismissal of the applicant. 15 Mr Clements submitted that the employer's failure to return the applicant to work with Railcorp constituted the dismissal from employment of the applicant. Mr Clements referred to a variety of decided cases relating to circumstances that gave rise to constructive dismissal. Mr Clements submitted that the applicant had been dismissed because the circumstances of this case conformed with the broad definition of dismissal whereby a dismissal was held to represent the termination of services by the employer without the employee's consent. 16 Mr Clements made further submissions which acknowledged that the particular employment arrangements that involved labour hire companies needed to be carefully analysed. Mr Clements said that labour hire arrangements can be different from case to case and that the circumstances of the labour hire arrangements for the applicant could be distinguished from circumstances in other cases. In this regard Mr Clements said that the entire period of the applicant's employment both with the employer, and with Drake International, involved work for Railcorp. Mr Clements said that the history of the actual engagement of the applicant for Railcorp and no other of the employer's clients, was an important factor relevant to the determination in this instance. 17 Mr Clements submitted that the applicant's contract of employment had established that the employer was obliged to engage the applicant in work specifically for Railcorp and for no other of the employer's clients. Mr Clements said that the unilateral decision to alter this particular component of the applicant's contract of employment amounted to his unfair dismissal. 18 Mr Clements further submitted that the particular provisions contained within a contract of employment document, and those that could otherwise be generally implied, did not provide for any term to allow for the applicant to be placed in any other duties or for any other client other than for work with Railcorp. Consequently according to the submissions of Mr Clements, the applicant was entitled to reject the offers of alternative employment and treat the employer's failure to return him to work with Railcorp as his dismissal. 19 Mr Clements then made submissions which urged the Commission to find that the applicant's dismissal was unfair. In this respect Mr Clements referred to section 88 of the Act. Mr Clements submitted that the Commission should provide support for the alleged unfairness of the applicant's dismissal noting the provisions of section 93 of the Act. Mr Clements then submitted that the applicant did not seek reinstatement as Relief and was instead desirous of monetary compensation. THE CASE FOR THE EMPLOYER 20 Mr M Cleary, barrister, appeared for the employer at Hearing. Mr Cleary commenced his submissions by stating that the applicant had not established that he had been dismissed. 21 Mr Cleary made submissions which stressed that the contract of employment between the applicant and the employer did not contain either an expressed or implied provision that required the employer to place the applicant with Railcorp. Mr Cleary stated that the rearrangements that applied to the applicant and to persons generally engaged via labour hire arrangements, would almost always include the prospect of there being potential for variation to the actual engagement to provide for placement with other of the employer's clients. Mr Cleary submitted that the applicant was well aware of these arrangements. 22 Consequently, according to the submissions made by Mr Cleary, the applicant was not dismissed but had refused engagement on terms which were clearly contemplated by the employment contract that existed between the applicant and the employer. According to Mr Cleary, the applicant had not been dismissed but instead by way of refusal of the alternative placements, he had brought the employment to an end through his own actions. 23 Mr Cleary made further submissions which related to the applicant's consistent and enduring failure to contemplate offers of alternative employment with other of the employer's clients, rather than Railcorp. In this respect Mr Cleary made particular mention of the approaches that the employer made following the initial proceedings in the Commission whereby alternative employment propositions were provided to the AWU official, Mr Warren Baker. Mr Cleary stressed that there was an absence of any response to these various propositions for employment of the applicant. Mr Cleary said that this failure to have any response to genuine offers of employment, was consistent with the actions of the applicant being the real and effective basis for the conclusion of the employment. 24 The submissions made by Mr Cleary then rebutted various propositions that had been made on behalf of the applicant. In particular Mr Cleary submitted that various other cases that had been referred to by Mr Clements needed to be distinguished, particularly as there were very important factual differences that could be identified. 25 Mr Cleary made alternative further submissions in the event that the Commission did find that there had been a dismissal of the applicant. In these alternative submissions, Mr Cleary said that there was ample evidence to establish that the refusal of the applicant to accept suitable offers of alternative employment meant that there was an abject failure to mitigate his loss. Consequently according to Mr Cleary, the applicant would have been able to mitigate his loss almost completely had he been prepared to accept offers of suitable alternative employment, some of which would have provided for greater remuneration than that obtained by placement with Railcorp. Therefore Mr Cleary submitted that if the Commission was to find that there has been a dismissal, and that dismissal satisfied the statutory criteria, then the applicant's failure to mitigate his loss should mean that no compensation should be provided. CONSIDERATION 26 The determination of this matter must logically first address the issue as to whether or not the applicant had been dismissed. That question is made more difficult because of the employment relationship involving a labour hire company and placement with one particular client over an extended period. Regrettably the employment contract document (Exhibit 1 - Annexure "TU1") was not particularly helpful. 27 Although the applicant's employment contract document includes various provisions which are suggestive of the prospect that the applicant may be engaged by more than one of the employer's clients, there are various other points of detail in the contract document which appear to be specific to work for Railcorp. 28 In any event, both the applicant and the employer did not seek to rely solely upon the terms of the employment contract document. Instead both sides asserted that their respective positions were established from implied terms to the employment contract. 29 The applicant asserted that there was an implied term that he would be engaged on Railcorp work and not for other clients. In support of this proposition the applicant referred to the extended period during which the applicant performed only work for Railcorp and no work whatsoever for any other of the employer's clients. 30 If the Commission was to find that such an implied term existed, then the failure of the employer to return the applicant to duties specifically for Railcorp would constitute a dismissal. It would seem to follow that if the dismissal was established then it would be held to be unfair because the employer had no proper substantive basis upon which to act in a way that did not return the applicant to work at Railcorp. Interestingly, even if this proposition succeeded and the claim for unfair dismissal was therefore made out, the applicant's refusal to undertake any other suitable alternative employment might significantly impact upon the quantum of any compensation that he might be likely to obtain. 31 The employer's opposing assertion was that an implied, and to some extent expressed, term in the contract of employment involved the capacity for the employer to engage the applicant with clients other than Railcorp. If a term of the employment permitted alternative placement of the applicant with other of the employer's clients, then the applicant's refusals to accept any of the alternative placements would mean that it was this conduct of the applicant that severed the employment relationship, and he was therefore not dismissed. 32 In many respects it is unfortunate that the Commission has been required to make a Determination of this nature. As the applicant was apparently an injured worker, and he clearly wished to return to pre-injury duties specified as engagement with Railcorp as opposed to any alternative placement, it would have been a matter more appropriately pursued via those provisions of the Act that provide protection for injured employees. 33 In addition it was curious to observe the rigid resistance that the applicant had to employment in any place other than Railcorp at Circular Quay. The obdurate refusal of the applicant to contemplate any form of alternative employment meant that there was less likelihood of an amicable solution being achieved. As an obvious alternative, the applicant could have accepted employment in another placement albeit under clear and documented protest, while the AWU continued to make representations on his behalf. This approach and the ongoing representations of the AWU, may have ultimately secured his return to work at Railcorp without any significant loss of remuneration. In simple terms, this would have been a smarter way to proceed. 34 Regrettably these more sensible alternative pathways were not pursued. Instead, employment in any capacity or placement other than Railcorp was refused, then employment ceased, and a section 84 application was made, rather than any activation of sections 92 and 93 of the Act. It would appear that the alteration to the applicant's claim from initially seeking reinstatement to an alternative of monetary compensation, might now make the injured employee provisions less attractive. However, at an early stage when the applicant was insisting upon return to placement with Railcorp, the processes as provided for by sections 92 and 93 of the Act may have been more likely to have led to the outcome desired by the applicant. 35 Unfortunately this process was not invoked and the Commission must now analyse the circumstances of the applicant's employment so as to make a finding about whether or not there was an expressed and/or implied term that would oblige the employer to return the applicant to work at Railcorp as opposed to any other work of a suitable nature. 36 Having regard to the particular circumstances of the applicant's employment, there is one significant factor that supports his contention that he was entitled to insist upon placement at Railcorp. That factor is the length of time during which he was engaged by the employer to work exclusively for Railcorp. Balanced against this factor there are some expressed provisions in the employment contract document which strongly suggests that the employer would have the right to require the applicant to work for other of its clients rather than Railcorp. Regrettably these provisions are not as clear as one would have expected. There are two further factors which assist the employer's position regarding the existence of a right to place the applicant in work other than for Railcorp. 37 The general understanding of engagement via labour hire companies includes the prospect that employment would involve placement at various different locations, and under broad supervision and control of different of the employer's clients. In many respects this particular arrangement for vicarious employment represents the essence of labour hire employment generally. Although this is the generally understood structure of employment via a labour hire company, such general understanding could not universally overcome the prospect that, with regular engagement in one particular placement, there could be established, over time, an implied term that would create an obligation on the employer to continue that particular placement. 38 In this case however the applicant had been engaged at work with Railcorp for both the employer and a different labour hire company (Drake International) during a period totalling about six years. Importantly however the most recent employment with the employer which represented the second period of employment with the employer, commenced in March of 2004. Therefore the relevant period of employment was less than one year at the time at which the applicant was injured and when he last performed any actual work. 39 Consequently the alleged exclusive engagement in this circumstance was for a period of less than one year. The assessment as to whether the applicant could reasonably understand that, contrary to the usual arrangements that apply for labour hire, he had obtained an established capacity to insist upon ongoing placement with Railcorp is made somewhat tenuous by this limited period of the second period of engagement with the employer. The change of employers during the total period of working at Railcorp, introduces an element of instability or uncertainty with the employment that supports the likelihood of alterations such as would usually be anticipated with vicarious employment. 40 Additionally, there was evidence that the labour requirements upon the employer for placement at Railcorp were decreasing. The evidence provided by the employer's General Manager, Mr Bamford, and which I accept, was that if Railcorp had been maintaining crew numbers then the applicant would have likely been returned to placement with Railcorp. However as Railcorp were reducing crew numbers it became obvious to Mr Bamford that a more efficient alternative arrangement would be to place the applicant elsewhere in positions which he genuinely believed would be suitable for the applicant's requirements particularly involving commensurate or superior levels of remuneration. 41 Upon careful and balanced evaluation of the particular circumstances of the vicarious employment arrangements for the applicant, the Commission is persuaded to reject the proposition that the applicant had obtained an entitlement to insist upon placement with Railcorp. Consequently the applicant did not have an expressed or implied right to reject the offers of alternative placement as the basis upon which to continue employment. 42 Although purely speculative, it is conceivable that the applicant may have obtained the right to return to pre-injury duties involving placement with Railcorp had such a proposition been pursued via those provisions in the Act that provide for protection for injured employees. 43 The absence of any expressed or implied provision that would permit the applicant's actions in refusing the offers of alternative placement, by logical implication, establishes that it was these actions that brought the employment to an end. CONCLUSION 44 This matter has involved vicarious employment arrangements and an assertion that the applicant was dismissed unfairly when he sought to insist upon provision of work with a particular client of the employer. It is commonplace with employment of persons with labour hire companies, that placement with various clients of the labour hire company may occur. The particular vicarious employment arrangements have created complications and difficulties for the Parties in this instance. 45 Upon careful analysis of the competing claims as to whether the applicant obtained an entitlement to insist upon placement with Railcorp and no other of the employer's clients, the Commission must find that no such entitlement existed. Consequently the applicant's steadfast refusal to accept any alternative employment that involved placement other than with Railcorp, constituted an action that ultimately ended the employment. Therefore the actions of the employee and not the employer caused the employment to come to an end. 46 Therefore the applicant was not a dismissed employee for the purposes of Part 6 of Chapter 2 of the Act. Consequently as the applicant was not a dismissed employee, the claim in this instance must be dismissed and the proceedings are accordingly concluded. oooOOOooo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.