Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Stratacrete Pty Ltd v Dunhill [2014] NSWCATAD 228 Hearing dates: On the papers Decision date: 24 December 2014 Jurisdiction: Administrative and Equal Opportunity Division Before: J Kelly, Senior Member Decision: 1. The requirement for consent referred to in s 39(3) of the Apprenticeship and Traineeship Act 2001 is waived. 2. The apprenticeship between the appellant and the respondent is cancelled with effect from 3 June 2014. 3. The appellant must pay the respondent all employee entitlements under the respective industrial instrument effective from 14 March 2014 to 3 June 2014. Catchwords: VOCATIONAL TRAINING - apprenticeship - cancellation Legislation Cited: Apprenticeship and Traineeship Act 2001 Civil and Administrative Tribunal Act 2013 No 2 Category: Principal judgment Parties: Stratacrete Pty Ltd (Applicant) Charles Dunhill (Respondent) File Number(s): 1410367 reasons for decision Background 1The appellant, Stratacrete Pty Ltd, seeks to have the Automotive Mechanical Technology (Heavy Vehicle Mobile Equipment) apprenticeship between it and Charles Dunhill, the respondent, cancelled, effective from 14 March 2014 rather than 3 June 2014. It also does not want to pay the respondent all employee entitlements under the respective industrial instrument effective from 14 March 2014 to 3 June 2014. 2That is why the appellant has appealed to this Tribunal against the decision of the Vocational Training Review Panel made at a hearing in Orange on 3 June 2014. The hearing was to determine two complaints. The respondent lodged a complaint against the appellant under s.39(1)(a) of the Apprenticeship and Traineeship Act 2001 (the Act) for failing to discharge its obligations under the apprenticeship. The appellant lodged a complaint against the respondent under s.39(3) of the Act for refusing to consent to the cancellation of the apprenticeship. 3The appeal lies to this Tribunal pursuant to s 54 of the Act and the Civil and Administrative Tribunal Act 2013 No. 2, Part 2. 4The cancellation of the apprenticeship being effective from 3 June 2014 and the requirement to pay the respondent all employee entitlements from 14 March 2014 until 3 June 2014, took effect because a possible transfer of the apprenticeship that had been raised before the Review Panel failed to eventuate within seven days of the Review Panel's decision. The appellant's case 5The appellant set out its case in its application, a four-page submission dated 25 August 2014 which was supported by 22 annexures, a letter dated 28 August 2014 attacking the current variation to its contract with the Cadia mine, and a letter dated 17 September 2014 responding to the respondent's statement. 6The appellant is primarily contracted to spray concrete as a ground support measure in mining and civil projects and operates around Australia. 7The appellant claimed that the downturn in the mining industry is the cause of the appellant's apprenticeship having to be terminated on 14 March 2013. The apprenticeship was terminated because of fair and reasonable turnover of labour which was due to "requested cutbacks in labour as directed" by the appellant's client on the contracted site, the Cadia mine, which is near Orange. It claimed that his was not the only position terminated as a consequence of the cutbacks, that the appellant did not have the supervision available that was required to continue the respondent's apprenticeship, and did not have the funds to cover his position on one of their contracted sites because the appellant's client, not the appellant, governed labour on the sites. 8The appellant criticised several aspects of the Review panel's decision. 9The appellant claimed that the Review Panel had made findings based on information gained from the appellant's web-site, which is a marketing tool to promote the business, "not a determination of how the company is performing". It had made that criticism to the Review Panel at the hearing on 3 June 2014. 10The Review Panel considered "information from the Registered Industry Training Organization indicating that the apprentice was very close to completing apprenticeship training". The appellant claimed that the respondent commenced a four-year apprenticeship on 12 January 2012, and was therefore two years and two months into his apprenticeship "which by a definition is not very close". The appellant would not have considered him competent as a mechanic (fitter) at that stage in his apprenticeship "to sign him off". 11The appellant asserted that the Review Panel's finding that the appellant maintained some local and Broken Hill operations that could potentially support the maintenance of apprenticeship employer obligations, was false, and that the appellant's representative had not said that. The appellant claimed that it had operations at Cadia and Broken Hill, but that neither can support the maintenance of apprenticeship employer obligations. It also operates in Kalgoorlie, Western Australia. In addition, the appellant "dry hires" surplus machinery at a site in Victoria and a site in Western Australia and tries to pick up short term contracts in civil and mining. As of 25 August 2014, the appellant was working on tunnels in Brisbane which was "due to finish shortly". 12The appellant claimed that both the Broken Hill and Cadia mines specify to the appellant how many employees are permitted on site and what their roles are. The appellant provided a copy of the 1 July 2014 contract variation for the Cadia East Project which supported that claim. It showed the categories of labour and the number of workers required in each category. It shows that the original contract was awarded in June 2012 and that there have been reductions in the numbers of workers required in eight out of nine categories, beginning in September 2013. 13That document does not support the appellant's claims that in September 2013 it was forced to terminate 16 employees and another eight in December 2013 and another two in February 2014. According to the table on page 1 of the variation, there was a reduction of 26 employees in September 2013, a further eight employees in December 2013 and no change in February 2014. 14On 12 February 2014 administrators and receivers and managers were appointed to a debtor company which owed the appellant $222,457.18. 15The appellant had one fitter who was supervising the respondent at the workshop in Orange. Due to changes at the Cadia site and the reallocation of heavy plant to other sites around Australia, the appellant no longer had the workload at the Orange workshop. The supervising fitter was put into a role of mobile maintenance and is required, at short notice, to travel to sites around Australia to give advice and assistance to site fitters. He no longer spends the majority of his time at the Orange workshop and would not be available to provide the supervision required for an apprentice. The appellant considered it unsatisfactory and unsafe to have an unsupervised apprentice working there. 16The appellant was critical of the Review Panel's consideration about the circumstances of a former apprentice, X, whom it said cancelled his apprenticeship with the appellant on 1 February 2014 and continued to work as a contractor to Cadia mine. The appellant claimed that X remains an employee of the appellant, cancelled the apprenticeship himself, was a qualified fitter doing a second apprenticeship, and is employed at Cadia. 17The appellant claimed that its offer to ask another local employer to transfer the apprenticeship had been rejected by the respondent who said that if he could not finish his apprenticeship with the appellant, he did not want to work with other local employers. 18The appellant also criticised what it said was verbally mentioned by the Review Panel, that the appellant's apprenticeship history was not a good one. The appellant claimed that it had had just three apprentices, two of whom cancelled their apprenticeships for their own reasons. The third was the respondent. The Respondent' s case 19The respondent wrote to the Tribunal on 11 September 2014 in response to documents submitted by the appellant. He made the following points. 20He had not agreed to the cancellation of the apprenticeship. He had only about nine months of his apprenticeship to go. His objective was to complete it. He does not accept that the appellant has a legitimate reason for not honouring its obligations under the Training Contract which was binding on both parties until he completed his apprenticeship. He was willing to travel with his supervisor in order to continue his apprenticeship or to suspend his apprenticeship as there may have been the possibility of some work with the appellant outside his trade area and resume his apprenticeship when things picked up. 21He pointed out that the appellant suggested that he sign up for the apprenticeship and he gave up his position as a nozzleman with the appellant to do so, taking a significant pay cut, "with the promise that (he) would come out with a trade qualification and a future in the company". He claimed that he understood that he would be contracted for the duration of his training, up to 48 months if necessary, but in all probability, it would be for only 36 months, with an early "sign-off" because he was a mature age apprentice. 22The respondent claimed that if the appellant was not confident about its future, it should not have agreed to take on an apprentice. He believed that the appellant had taken him on because he would be more affordable and it would make a greater profit. He speculated that he had been terminated because the mine owner had stopped subsidising apprentice salaries at a higher rate. 23The respondent claimed that his position was terminated with no prior notice or warning of that possibility and without his agreement. He was called in at work on Friday 14 March 2014, and told that his employment was being terminated. He received a letter dated 17 March 2014 to that effect and was given three weeks pay in lieu of notice. The respondent set out his and his new wife's financial circumstances supporting his claim that the decision was a "disaster" for him. 24The respondent explained that he contacted the State Training Services who advised him that an apprenticeship can only be cancelled by agreement or, failing that, by the relevant authority. 25The respondent claimed that he did not know what efforts the appellant made to transfer his apprenticeship to another local employer, but if they did make such efforts, they were unsuccessful. He had been unsuccessful in finding another employer who was willing to take him on so he could complete his apprenticeship. 26The respondent claimed that he had lost income as a result of the appellant's decision and will suffer future financial loss because he has been delayed by at least six months in completing his apprenticeship and becoming qualified, when he would be able to earn a higher wage. 27The Orange workshop where he had worked on equipment was still open on 11 September 2014. The equipment came from various sites around Australia where the appellant was working, as well as from the Orange site. There was a constant flow or work and they were always busy. Shortly after his termination, the appellant flew a mechanic down from the Gold Coast to Orange for two weeks to work on equipment the appellant had been working on. The mechanic would have been on a higher hourly rate than the respondent which suggested that the appellant had work and the money to pay employees at a higher rate than they were paying the appellant, plus travelling expenses "and presumably accommodation expenses". 28The respondent calculated the amount that the appellant would have had to pay him for another eight months until he "completed his apprenticeship", plus some minor travel expenses if the appellant wanted him to travel with his supervisor. The appellant accepted that there had been a downturn in the mining industry and that the appellant's work had dropped off "to some extent", but did not accept that the company could not afford to "honour its obligations" to him "under what is supposed to be a legally binding Training Contract". 29The respondent claimed that the decision of the Vocational Training Review Panel was extremely favourable to the appellant and leaves him significantly out of pocket in terms of wages and having had to pay to complete his TAFE obligations himself. It also leaves him unsure when he will be able to complete his apprenticeship. 30The appellant asked the Tribunal to dismiss the appellant's appeal and asked, if he can, to appeal against the decision and ask the Tribunal to order the appellant to pay him his full entitlements under the Training Contract "until now", which still does not "fully compensate him for what they have done to" him. Consideration and findings 31The apprenticeship began on 12 January 2012 and was expected to be completed on 11 January 2016. The respondent's claim that he would have finished his apprenticeship in nine months from the time his apprenticeship was terminated in March 2014 was based on his claim that that while the training was "up to 48 months if necessary", "in all probability" it would only be for 36 months, with an early sign off because he was a mature age apprentice. He expected to complete his TAFE course around November 2014. 32The respondent clearly feels that he has been badly let down by the appellant, which he believes has not honoured its obligations under the training contract. He retained a lawyer who corresponded with the appellant. He did not appeal. 33The employment contract in evidence between the appellant and the respondent is dated 15 August 2013 and commenced on 15 July 2013. The specified workplace was Orange Workshop "and other locations as reasonably required". The employment was "until the end of Stratacrete operations at the Orange Workshop", unless terminated in accordance with clause 15. Clause 15 dealt with termination of employment, including notice requirements and payment in lieu of notice. 34The appellant's letter to the respondent dated 17 March 2014 relied on that contract. 35On 20 March 2014, the appellant emailed a form entitled "Cancellation of Apprenticeship or Traineeship by Consent" to the Australian Business Apprenticeship Centre (Appendix 8). The covering email said: "I am unable to get Charles to sign the form as he has now left our employment". 36Following that communication, Western NSW State Training Services became involved, after the respondent contacted them. The officer tried to get agreement between the appellant and respondent but failed and referred the matter to the Vocational Training Review panel for arbitration. (Annexure 10). 37The registered apprenticeship contract could only be cancelled by mutual consent (s.22 of the Act) or referred to the Commissioner (s.40(2)). I find that the appellant did not appreciate that that was the legal position at the time it terminated the respondent employment contract on 14 March 2014. 38I accept the appellant's evidence that it has cut mining and administrative staff and closed down some business premises. I accept that there has been a decline in the mining industry that has adversely affected the appellant. I accept that a significant debtor was put into administration. I accept that work in the Orange workshop has decreased and that supervision would not be available for the respondent. 39I accept the sworn evidence of Mr Kevin Dickie (Annexure 18) that on 14 March 2014 he offered to the respondent to go and see two other employers and ask if they would take on the respondent to finish his apprenticeship. The respondent has not contradicted that evidence, only saying he is not aware of what efforts the appellant had made to transfer his apprenticeship. However, the respondent was not obliged to agree to his apprenticeship being transferred to another employee. He declared his clear desire to continue his apprenticeship with the appellant. He exercised his legal right to complain under the Act. 40I do not accept that the respondent would have completed his apprenticeship around the end of 2014. That may have been his hope but I find that was speculation. It would therefore not be appropriate to make a decision based on that speculation. I also find that the respondent's thoughts about why he was engaged and terminated were also speculative and I do not accept them. 41Clearly, the parties could not agree to settlement in this matter. No transfer of the apprenticeship was arranged. 42I accept that the appellant was justified in seeking to terminate the respondent's employment and seeking to cancel the apprenticeship for financial and supervision reasons, however it could not do so without the respondent's agreement. He did not agree. The appellant failed to discharge its obligations by purporting to end the apprenticeship on 14 March 2014. 43I direct that the requirement for consent referred to in s 39(3) of the Act be waived and cancel the apprenticeship with effect on 3 June 2014, when the process under the Act for terminating the apprenticeship when there is not agreement between the parties, was followed, and a decision made. That was not an unduly lengthy period of time. I am not satisfied that the appellant's financial circumstances or the respondent's conduct justified an earlier date for the cancellation of the apprenticeship, assuming I have power to nominate a date before the finalisation of the process under the Act. 44The appellant must pay the respondent all employee entitlements under the respective industrial instrument effective from 14 March 2014 to 3 June 2014. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 24 December 2014