Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (for Fenech) v CHR Group Pty Ltd [2004] QIRC 222 (2005) 178 QGIG 64

[Extract from Queensland Government Industrial Gazette, dated 14 January, 2005, Vol. 178, No. 2, pages 64-73] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 117 – application for remedy under Chapter 4 Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (for Vincent Fenech) AND CHR Group Pty Ltd (Case No. B2110 of 2003) COMMISSIONER ASBURY 24 December 2004 Application under Chapter 4 Freedom of Association of Industrial Relations Act 1999 – Respondent labour hire company – Contract to provide labour to host company – Host company sought removal of employee of labour hire company from its worksite – Contention that removal of employee from host company’s worksite was conduct for prohibited reason – Industrial Relations Act 1999 s. 104 and s. 105 – Contention that employee dismissed and/or disadvantaged or injured because he was a member or representative of an industrial organisation – Onus of proof – Attribution of reasons of third party to employer – Commission entitled to consider entire factual matrix in which conduct occurred – Commission may consider conduct of parties other than those in the employment relationship including host company – Decision making by company – Fact that conduct engaged in by host company not fatal to finding that employer has breached freedom of association provisions – Employment contract creates rights and obligations at common law and under Industrial Relations Act 1999 – Employer cannot contract out of obligations arising from employment contract – Where employer gives right to manage and supervise employees to third party it may be held liable for unfair or unlawful conduct by that third party against employees – Employer cannot avoid liability for breach of obligations arising from employment contract by arguing that it was compelled to take action by third party – Duty of employer to ensure that third party exercises rights to supervise and manage employees of employer in a manner consistent with its obligations to employees – Actual knowledge by employer that conduct of third party was for prohibited reason not required for finding of breach of freedom of association provisions – Knowledge which would have been obtained had inquiries been made by a reasonable and honest person may be sufficient for finding that breach of freedom of association provisions has occurred – Finding that evidence led to a reasonable inference that disadvantage or injury to employee caused by conduct on the part of respondent – Finding that evidence led to a reasonable inference that conduct was for a prohibited reason – Finding that evidence led by respondent did not counter inference from applicant’s evidence – Finding on balance of probabilities that applicant had proved allegations – Application granted – Compensation awarded. DECISION Overview This is an application by the Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (AMEPKU) on behalf of Mr Vincent Fenech. The application is brought under Chapter 4 – Freedom of Association – of the Industrial Relations Act 1999 (the Act). Essentially the AMEPKU contended that the respondent engaged in prohibited conduct as described in s. 105 of the Act and that the conduct was engaged in for prohibited reasons as described under s. 104 of the Act. The respondent in this application is CHR Group Pty Ltd (the Respondent). The AMEPKU sought a penalty under s. 120(1)(a) and an order for compensation to be paid to Mr Fenech under s. 120(1)(c), together with any other orders the Commission deems appropriate. The respondent is a labour hire company. On or around February 2002, the respondent entered into a contract with a company known as Parafield Properties Pty Ltd trading as Mindrill Mining Services (Mindrill) for the supply of labour to undertake work at Mindrill’s worksite at Paget in Mackay. Mindrill had terminated the employment of a number of employees, including Mr Fenech, at this time. To perform the contract with Mindrill, the respondent employed persons formerly employed by Mindrill, including Mr Fenech, and placed those employees at Mindrill’s worksite. The pleadings in the application included significant detail about alleged conduct by both the respondent and Mindrill. There was also evidence from a number of witnesses for both parties about their dealings with Mindrill. The AMEPKU did not seek to make Mindrill a party to these proceedings. No witnesses from Mindrill were called by either the applicant or the respondent, but evidence was adduced both in chief and under cross-examination by the representatives of both parties, about the dealings of various witnesses with Mindrill. References were also made by the witnesses during evidence-in-chief and cross-examination to other proceedings in the Commission involving the respondent in this matter and the AMEPKU on behalf of Mr Fenech, and to proceedings involving Mindrill and the AMEPKU. Such references were also made in submissions by the representatives of both parties. Evidence for the AMEPKU was given by: Vincent Charles FENECH – on whose behalf the application was brought by the AMEPKU; Darren TRASK – State Organiser of the AMEPKU -- 1 of 14 -- 2 Evidence for the respondent was given by Neale MULLER – formerly employed by the respondent and now employed by IPA Pty Ltd, purchaser of business interests from the respondent. Evidence The evidence disclosed a sequence of relevant events which can be summarised as follows. The AMEPKU had been unsuccessfully attempting to negotiate a certified agreement with Mindrill since June 2001. Mr Fenech was employed by Mindrill Mining Services on a casual basis with effect from 7 November 2001. In November 2001 Mr Fenech and a number of other employees of Mindrill joined the AMEPKU. By a notification under s. 229 of the Act on 5 December 2001, the AMEPKU sought the assistance of the Commission in making a certified agreement with Mindrill. A number of conferences were conducted by Commissioner Brown in D380 of 2001. During conciliation proceedings, Commissioner Brown asked that a vote of Mindrill employees be taken to ascertain whether they wanted a certified agreement. According to the uncontested evidence of Mr Fenech, on 27 February 2002, Mr Todd Haines, the owner of Mindrill, advised the workforce that they were no longer working for Mindrill, and that if they wanted to continue at Mindrill they would be required to sign a contract with the respondent. This took place just before a vote of Mindrill employees was undertaken to ascertain whether a certified agreement should be made. Mr Trask said that on 27 February 2002 Mindrill “transferred” its casual workforce to the respondent. According to the evidence of Mr Trask this action on the part of Mindrill was taken to remove employees supportive of the making of a certified agreement. No evidence in relation to this matter was called by the respondent. Mr Muller said that he did not know Mindrill’s motives for the transfer. In cross-examination the following exchange occurred between Mr Trask, and Mr Joy the Advocate for the respondent: “MR JOY: Mr Trask, in your affidavit you talk about the situation where the employees were moved over from Mindrill to CHR. At point 7 you say, ‘This matter was raised in a Commission shortly afterwards. Mindrill said that this was because the Union had raised a number of concerns about award breaches and they thought CHR would be better able to meet the award requirements. I believe it was because Commissioner Brown had asked for a vote of employees to be taken and that this move would remove supportive employees from Mindrill to CHR.’ So what you’re saying there is that if Mindrill says the reason was based on an award concern, that’s completely false and its’s an ulterior motive and the ulterior motive is to rig the vote on the certified agreement. Is that it? [MR TRASK:] Well you were involved Craig. You saw what happened. That’s entirely correct. [MR JOY:] Well, that’s what you’re saying ? - - [MR TRASK:] Well that’s – ‘cause that’s what happened, yes.”. Mr Joy then put to Mr Trask that Mindrill had been faced with a significant claim for award entitlements by its employees, a proposition with which Mr Trask agreed (Transcript p. 20 lines 40-44). Mr Trask did not agree with the proposition put by Mr Joy that the quantum of the claim was $80,000 (Transcript p 21 lines 1-10). Mr Trask also did not agree with the proposition that the transfer of Mindrill’s employees to the respondent had been a response to the claims with respect to award breaches (Transcript p. 22 lines 1 – 20). Whatever the motive, and however it was described – “transfer” or employees being “moved” from Mindrill to the respondent – the result was that Mindrill terminated the employment of Mr Fenech and other casual employees on 27 February 2002 and Mr Fenech (and presumably other casual employees) were immediately thereafter employed by the respondent. It is also clear that pursuant to a contract with Mindrill, the respondent placed Mr Fenech (and presumably other employees terminated by Mindrill) at Mindrill’s worksite, to perform substantially the same work that they had previously performed for Mindrill. Mr Muller said that the respondent had not conducted interviews with the employees who had been employed by Mindrill and subsequently became employees of the respondent at Mindrill’s worksite as this was not the respondent’s practice in such circumstances. Mr Fenech’s evidence in this regard was that he signed a document headed “Conditions of Employment” on 27 February 2002, and was “placed” by the respondent at Mindrill’s worksite where he had previously been employed by that company with effect from 28 February 2002. Initially, Mr Fenech performed work including painting, grinding of bits and unloading drill rods from trucks. Mr Fenech said that these duties were the same as those he had previously been employed by Mindrill to perform but that he now completed timesheets for, and was paid by, the respondent. After about six months, Mr Fenech was moved to the sub-arc welding side of Mindrill’s operations, and his responsibilities then included loading of drill rods onto a bench with rollers; spraying drill rods; checking the measurements of drill rods; and welding threads onto drill rods. Mr Fenech said that this was a new task for him and he had found it challenging and difficult at first. However, Mr Fenech had become proficient at this task and had performed it for some three months without any issue being raised about his work. On 17 November 2002, Mr Fenech was elected as AMEPKU delegate for the respondent’s employees at Mindrill. Mr Trask said in his evidence that he had not advised the owner of Mindrill, Mr Todd Haines, of Mr Fenech’s election as delegate. Mr Trask also said that at this time he had changed focus and was attempting to negotiate a certified agreement with the respondent to cover its employees at Mindrill. -- 2 of 14 -- 3 On 18 November 2002 Mr Fenech said that he was approached by Mr Haines and asked whether he had heard from the respondent yet. When Mr Fenech responded in the negative, Mr Haines said that Mr Fenech would be hearing from the respondent soon. Mr Fenech said that he did not hear anything further until 25 November 2002 when Mr Muller; Mr Laurie Minnecon and Mr Peter Carney of the respondent arrived at Mindrill’s worksite to talk to him, with such discussion taking place in the presence of Mr Haines of Mindrill. Mr Fenech said that this meeting took him by surprise and he had no opportunity to arrange for Mr Trask of the AMEPKU to be present. At the meeting Mr Fenech was provided with a letter entitled “First Written Warning”. Mr Fenech said that the only criticism that was made of his performance was that it was below an 80% productivity rating. There was no criticism of what Mr Fenech was doing or not doing, but only reference to figures contained in a spread sheet which he understood had been provided to the respondent by Mindrill. Mr Fenech said that he did not understand the productivity rating and that it had only been introduced in October. Further, Mr Fenech maintained that he was the only employee doing the relevant task and he was not underperforming at this or any time during his employment. There was no evidence of any warning or counselling of Mr Fenech in relation to his conduct, capacity or work performance by either the respondent, or for that matter Mindrill, in the period from 28 February 2002 until 25 November 2002. Mr Fenech said that he told those present at the meeting that they were picking on him, and refused to sign the warning letter as he did not agree with its contents or think that he deserved a warning. Mr Fenech referred the matter of the warning letter to Mr Trask, and was told by Mr Trask later in the week that he had spoken to Mr Muller and explained that the warning was because Mr Fenech was the AMEPKU delegate. Mr Trask also advised Mr Fenech that he did not have to worry about the warning because Mr Muller would not use it. In relation to the warning issued on 25 November 2002, Mr Muller said that during the course of Mr Fenech’s placement with Mindrill, there had been expressions of dissatisfaction with Mr Fenech’s performance on the part of Mindrill. Mr Muller had no direct knowledge of this dissatisfaction. At or around the time the warning was issued to Mr Fenech, Mindrill had advised the respondent that it had a system of monitoring in place which recorded the efficiency and productivity of each employee. The recording of the information for that system was done by employees themselves as they undertook their tasks. Mr Muller said that prior to issuing the warning to Mr Fenech he had visted Mindrill and looked at printouts for each employee. These had been posted on Mr Haines’ office wall and had been available for perusal by employees. Further, Mr Muller had been shown productivity reports for Mr Fenech which indicated that at times he had exceeded the required efficiency level of 80% but at other times his productivity had been half of that level. After a discussion with representatives of Mindrill Mr Muller decided to issue a warning letter to Mr Fenech. The letter was in the form of a first warning and detailed issues relating to Mr Fenech’s performance. The warning had been issued to Mr Fenech because the respondent’s client Mindrill had not been happy with him, and had the right to tell the respondent to remove Mr Fenech from its worksite. Mr Muller said that the warning letter gave Mr Fenech an opportunity to avoid being withdrawn from Mindrill’s site. The warning letter required that Mr Fenech monitor the work performance reports in Mr Haines’ office to enable him to be aware of how his performance was being assessed. Attached to the warning letter was an action plan stating that Mr Fenech’s average would be monitored daily and reviewed two weeks from the date of the letter: (refer Exhibit A1 VCF2). In relation to the review, Mr Muller said that the respondent had relied on Mindrill to advise as to how Mr Fenech was going. Mr Muller also said that there may have been some complaints about Mr Fenech made by Mr Haines after the warning letter had been issued, but that Mr Carney a salesperson with the respondent, had a greater involvement with Mindrill in day to day matters. Mr Muller said under cross-examination that Mr Carney was no longer employed by the respondent or the company which had purchased the respondent’s business, but that he was still living in Mackay. Mr Muller conceded that he had agreed with Mr Haines that Mr Fenech was to receive a warning, before he spoke to Mr Fenech (Transcript p. 37 lines 50 – 52); that the letter had been prepared prior to the meeting with Mr Fenech on the basis of advice from Mindrill (Transcript p. 37 lines 54 – 56); and that he was not aware whether any concerns about Mr Fenech’s performance had been raised with him prior to the warning being issued (Transcript p. 38 lines 21 – 30). Mr Trask said that upon becoming aware of the warning he had telephoned Mr Muller, and told Mr Muller that the warning had been issued because Mr Fenech was the AMEPKU delegate at Mindrill’s worksite. Mr Trask said that Mr Muller told him that he did not know that Mr Fenech was the AMEPKU delegate and had seemed surprised. Mr Trask had believed that Mr Muller was being truthful in this regard. Mr Trask said that he had told Mr Muller that he was being used to punish Mr Fenech for being the AMEPKU delegate. Mr Muller had responded by saying that he now understood what was going on. Further, Mr Muller had said that Mindrill was a difficult client and the respondent did not want to get involved in a difficult situation. Mr Trask said that he responded by telling Mr Muller that he had no choice but to get involved. Mr Muller had then advised that he would withdraw or suspend the warning and that the respondent would not act on it. At subsequent meetings with Mr Trask there had been no discussion of the warning by Mr Muller. -- 3 of 14 -- 4 Mr Muller agreed that Mr Trask had told him that Mr Fenech was being discriminated against by Mindrill on the basis that he was a Union representative. Mr Muller denied that he had agreed with Mr Trask that this was the case, but said that he had investigated this allegation by later asking Mr Haines whether it was true. Mr Haines had denied the allegation, and said that the action in relation to Mr Fenech was because of his performance. Mr Muller had not looked into the performance of Mr Fenech at that stage because the respondent had already gone through this exercise when the warning had been issued (Transcript p. 42 lines 18 – 24). Mr Muller said that he had advised Mr Trask that the respondent would not act on the warning to Mr Fenech and would not use the warning letter to dispense with Mr Fenech’s services. Mr Muller said that this did not mean that Mindrill could not require the respondent to remove Mr Fenech from its site or that the respondent could refuse such a request from Mindrill. Mr Muller said that the comment he made to Mr Trask meant that the respondent would continue its relationship with Mr Fenech, which required the respondent to place him with clients as positions became available. Mr Muller agreed under cross-examination that the warning had not been reinstated after it had been withdrawn (Transcript p. 45 lines 15 – 16). Mr Muller also agreed that he told Mr Trask that Mr Haines was a difficult client, but said that this reference was in relation to Mr Haines being late in paying his bills from the respondent and was not an acceptance that Mr Haines had engaged in the conduct alleged by Mr Trask. Mr Fenech said that he heard nothing about his work performance until January 2003. In the meantime, Mr Trask had commenced negotiations with the respondent for a certified agreement to cover its employees at Mindrill. Mr Trask had visited the Mindrill worksite and conducted a meeting to report to employees about the progress of the negotiations in January 2003. Mr Fenech said that shortly after Mr Trask had left the workplace, Mr Haines had come into the sub-arc welding bay where he was working, and had yelled at Mr Fenech saying his work was not up to scratch. Mr Fenech said he responded by saying that Mr Haines was picking on him because Mr Trask had just been in the workplace. Mr Haines had denied this and told Mr Fenech that if he did not “pick up his game” he would not be working there any more. Mr Trask said that the meeting at Mindrill’s worksite for the purpose of reporting and discussing the progress of negotiations for an enterprise bargaining agreement between the respondent and the AMEPKU, had taken place on 8 January 2003. Mr Trask also said that shortly after that meeting he had received a telephone call from Mr Fenech advising that Mr Fenech had been threatened with dismissal in relation to a mistake with drill rods. Mr Fenech had told Mr Trask that he denied the allegation in relation to the drill rods. Mr Fenech said that on 15 January 2003 he had received a letter from the AMEPKU inviting him to attend a Union training course. On the Friday afternoon before starting his afternoon shift (I infer from the evidence that this was Friday 17 January 2003) Mr Fenech had taken the letter from the AMEPKU to Mr Haines and had requested time off for the purpose of attending the course. Mr Haines had told Mr Fenech to contact his employer (the respondent) as it had nothing to do with Mr Haines. Mr Fenech said that at the end of that afternoon shift, he had been told by the workshop foreman to ring Mr Haines in the morning. Due to difficulties in his personal life, Mr Fenech had forgotten to contact Mr Haines. When Mr Fenech arrived at work on the following Monday (I infer this was Monday 20 February 2003) for his normal day shift, he noticed that his name was not on the jobs listed for that day. On querying why this was the case, Mr Fenech was told by his supervisor to ring Mr Haines. Mr Fenech said that on telephoning Mr Haines, he was told that he was not needed anymore for work at Mindrill and should contact the respondent who would find him another job. Mr Fenech said that he telephoned the respondent and thought that he spoke to Mr Muller. He had been told by Mr Muller that he would not be working at Mindrill any more, and that the respondent would find him another engagement. Mr Muller said that the respondent had been contacted by a representative of Mindrill and told that as there was still not an acceptable level of performance on the part of Mr Fenech, that he was to be replaced. Under cross-examination Mr Muller said that the contract between the respondent and Mindrill meant that Mindrill could effectively, for any reason, advise the respondent that a particular employee was not required and request a replacement. However, Mr Muller conceded that the contract could not allow for Mindrill to make such a request for a discriminatory reason (Transcript p. 60 lines 34 – 51). Upon being advised of further issues with Mr Fenech’s performance, Mr Muller had considered that as Mr Fenech had already been given a warning in relation to productivity, a further warning would not be provided (Transcript p. 44 lines 18 – 25). In relation to the proposition that there was an obligation on the respondent to properly investigate allegations against Mr Fenech before removing him from site, Mr Muller said: “Well yes and no. I mean we have people go in an out of positions … on an almost daily basis. If we’d been advised by our client that they’re not happy and that they have – no longer require the person then that is all we can do and we can go and look for – to put them in other work and that is what we did.”. (Transcript p. 44 lines 48 – 55). In response to the proposition that CHR had the right to query the request of a client to remove a particular employee from site, Mr Muller said: “No. No, we don’t. Certainly not.”. (Transcript p. 45 line 1). -- 4 of 14 -- 5 In relation to the productivity reports, Mr Muller said that on his observation they appeared quite precise and accurate. Mr Muller also said that he had viewed reports which showed efficiency levels for every day worked by staff, and also weekly and overall averages. That information had shown that Mr Fenech had achieved as high as 96% efficiency when the required level was 80% but that overall, his level was around 50 – 60%. Mr Muller said that in those circumstances, where a client said that the performance of an employee was not acceptable, it did not leave any room to argue and the client was within its rights to request a replacement. Under cross-examination, Mr Muller said that he was not familiar with how Mindrill’s productivity measurement system worked although at one stage he had been shown how it worked (Transcript p. 34 lines 29 – 33). Mr Muller also said that he had asked whether other employees of the respondent were meeting the required standard and as far as he was aware this was the case. It was Mr Muller’s understanding that employees had utilised a computer to log on and off jobs, for the purposes of the productivity measurement system. The productivity report provided by Mindrill had been accepted at face value given the large number of clients the respondent had at the relevant time (Transcript p. 39 lines 6 – 10). In response to questions from the Commission, Mr Muller said that he was not aware whether other employees who were said by Mindrill to have been meeting targets were performing the same work as Mr Fenech. Mr Muller also agreed under cross-examination that it was a strange coincidence that Mr Fenech had been given a warning the week after he was elected as a Union delegate, and said that this was why he had a discussion with Mr Haines about this matter. Mr Muller further agreed that it was another coincidence that Mr Fenech had been removed from site after requesting leave to attend a training course to be conducted by the AMEPKU, but maintained that the reasons given by Mindrill for seeking the removal of Mr Fenech from its site were productivity issues. Mr Fenech’s evidence was that he had never used a computer during the time he worked at Mindrill’s worksite. Mr Fenech also said that a few weeks after ceasing work at the Mindrill site he was paid one weeks wages in lieu of notice by the respondent. After approximately three weeks the respondent had found him a position with another company which lasted for approximately three weeks. Time sheets relating to this engagement were appended to Mr Fenech’s witness statement. Mr Fenech has then been unemployed until 11 August 2003 and had received Centrelink benefits during this period. Documentation detailing those benefits was also appended to Mr Fenech’s witness statement. Since 11 August the Mr Fenech had been employed as a car detailer and receiving the amount of $12.00 per hour. Submissions for the AMEPKU Mr Moorhead for the AMEPKU submitted that the respondent had engaged in conduct for a prohibited reason or for reasons that included a prohibited reason. That conduct involved both dismissal of Mr Fenech and alteration of his position to his prejudice. It was submitted that Commissioner Fisher had already determined that there had been a dismissal, in proceedings brought by the AMEPKU alleging that Mr Fenech had been unfairly dismissed. In those proceedings Commissioner Fisher had accepted an argument from the respondent that the applicant was excluded from bringing an unfair dismissal application by virtue of the fact that he was a short term casual employee, as defined in s. 72(8) of the Act. By advancing this argument it was contended that the respondent had accepted that the applicant had been dismissed, and should be bound by its assertions in this regard. In any event, it was not necessary for the AMEPKU to establish that Mr Fenech had been dismissed, as his position had also been altered to his prejudice. It was contended that the respondent had held itself out as a company which had the capacity to meet employment obligations, with respect to its employees placed with client companies to perform work required by those companies. The respondent could not say on the one hand that it was the employer and then seek to shift responsibility for its actions to its client, by arguing that it had no choice but to remove Mr Fenech from that client’s worksite. Further, the respondent could not contract with its client in a way which required it to undertake conduct for a reason prohibited by the Act. The respondent was made aware by an official of the AMEPKU that its client was motivated by the fact of Mr Fenech’s Union membership. Given the scant evidence of the respondent’s witness in relation to its investigation of the issue raised by the AMEPKU the Commission should conclude that the respondent had been afraid of what it would find. Knowing of the allegation made by the AMEPKU, and given the inadequacy of the material upon which the respondent had relied in relation to Mr Fenech’s productivity, the respondent should have ensured that Mr Fenech was not prejudiced in his employment by the conduct of its client Mindrill. Further, when Mindrill required the respondent to remove Mr Fenech from its worksite, the respondent, knowing that Mindrill was motivated by the fact of Mr Fenech’s Union activities, complied with the direction. The respondent should have advised Mindrill that there was no valid reason for the replacement of Mr Fenech and that its contract did not allow Mindrill to direct that one of the respondent’s employees be disadvantaged in his employment by being removed from its site for a prohibited reason, namely his trade Union activities. In support of the contention that Mindrill’s conduct had been motivated by Mr Fenech’s trade union activity, Mr Moorhead pointed to the fact that there was no evidence of any issue being taken with Mr Fenech’s work performance until the time he was elected as the AMEPKU’s delegate at the Mindrill worksite. The warning issued to Mr Fenech was based on productivity measures which the respondent could not substantiate and which were not valid. Thereafter there had been no follow up on the warning, and no further action had been taken with respect to Mr Fenech’s work -- 5 of 14 -- 6 performance until he had been dismissed. The dismissal had coincided with a request by Mr Fenech for leave to attend an AMEPKU training course. These coincidences should be viewed in light of the attempts by the AMEPKU to negotiate a certified agreement with Mindrill and then with the respondent, and the knowledge on the part of the respondent of Mindrill’s antipathy towards the AMEPKU and the contention that action was being taken by Mindrill against Mr Fenech on the basis of his trade union activities. There was also the fact that the respondent had withdrawn the first warning given to Mr Fenech. Although circumstantial, this evidence led to a clear and logical inference that the respondent terminated Mr Fenech’s employment, or disadvantaged him in his employment for that reason. Further, being aware of Mindrill’s reasons for seeking to have Mr Fenech removed from its worksite, the respondent had wilfully shut its eyes to the obvious. This wilful failure was a form of actual knowledge on the part of the respondent. Mr Moorhead referred to a number of decisions of the Federal Court in relation to the issue of third party involvement in termination of employment. In the case of Australian Workers’ Union & Steven John McGee v John Holland Pty Ltd [2001] FCA 93 (20 February 2001) the Court had held that it was a matter of examining the state of mind of an employer to determine whether the termination of a particular employee was for the dominant reason of that employee’s trade union activities. This approach had also been taken in the case of Wood (on behalf of the Industrial Relations Bureau) v Lord Mayor, Councillors and Citizens of the City of Melbourne (1979) 41 FLR 1. Mr Moorhead argued that these cases could be distinguished on the grounds that the decisions of the employers in both cases to dismiss particular employees, were taken as a result of actions by trade unions against the interests of the employers, which were causing them loss and damage. Such an argument had been rejected by the Federal Court in Linehan v Northwest Exports Pty Ltd (1981-82) 57 FLR 49, and this was the approach which should be taken by the Commission in the present case. It is a question of fact in each case as to what was in the mind of the employer in deciding to dismiss or alter the position of an employee to the employee’s prejudice. All that was required in the present case was for the Commission to find that one of the reasons for the action the respondent took against Mr Fenech was a prohibited reason. Mr Moorhead also referred to the decision of the Federal Court in Shannon v Transfield Worley [2001] FCA 527 (4 May 2001). In that case the court had held that Transfield Worley, the first respondent, had no knowledge of the reasons for the second respondent, Woodside Energy Limited, instructing it not to employ Mr Shannon at any of its facilities or related entities, and accordingly any reasons of Woodside for issuing that instruction could not be attributed Transfield Worley. It was submitted by Mr Moorhead that the present case could be distinguished, on the basis that the respondent had knowledge of Mindrill’s reasons for seeking the removal of Mr Fenech from its site, by virtue of having been advised of those reasons by Mr Trask. Having been advised the respondent had turned a blind eye to the actions of Mindrill with the result that Mr Fenech’s employment had been terminated and/or he had suffered damage. As a result, Mr Fenech was entitled to compensation for the termination and/or the damage. That compensation should be calculated on the same basis as compensation for unfair dismissal except that the salary cap applicable to compensation for unfair dismissal did not apply. Although Mr Fenech had been a casual employee, it was submitted that he had been employed at the same location to perform the same work, for a period of thirteen months, and had an expectation that such employment would be ongoing. It was submitted that Mr Fenech should be compensated in the amount of $12,126 55 calculated on the basis of loss of employment for the period 17 January 2003 to 11 August 2003, being 29 weeks. At the point of his removal from Mindrill’s worksite Mr Fenech had been paid $15.26 per hour, amounting to $16,816.52 over the 29 week period up until Mr Fenech found alternative employment. Earnings during that period of $1,654.18 from Eton fluid power systems, and $3,035.79 from Centrelink benefits should be deducted leaving a total loss of $12,126.55. The AMEPKU also sought a penalty pursuant to s. 120(1)(a) of the Act at the discretion of the Commission. Submissions for the Respondent Mr Joy for the respondent submitted that there should be no adverse finding made by the Commission in relation to any failure to call Mr Carney. This was because the applicant had not raised at any point the involvement of anyone other than Mr Muller in the series of events it alleged. The respondent had provided evidence in response to those allegations, and any criticism that it had failed to call witnesses should not be given weight. It was further submitted that the application was not about unfair dismissal or performance management systems. Rather it was an application alleging that the respondent had unlawfully terminated the employment of Mr Fenech, based either on union membership or union activity, or had disadvantaged Mr Fenech because of those things. There had been no evidence that the respondent had committed any direct act against Mr Fenech nor that it was motivated to do so by a prohibited reason. The evidence that was led had sought to imply that the host employer Mindrill, had an ulterior motive in trying to get rid of Mr Fenech, and that the performance issues were a screen for that ulterior motive. The AMEPKU had then sought that an inference be drawn that the respondent was either a party to the subterfuge or at least should have been aware of the supposed true motivation of Mindrill. In relation to the three principal events which were contended by the AMEPKU to be relevant to the removal of Mr Fenech from Mindrill’s worksite, Mr Joy made the following submissions. The warning letter of 25 November 2002 had been issued at a time when the respondent was not aware that the applicant was the AMEPKU delegate at -- 6 of 14 -- 7 Mindrill’s worksite, and could not have been motivated by facts of which it was not aware. If Mindrill had some secret agenda with respect to the warning letter, it was not communicated to the respondent. In relation to the verbal warning given by the applicant after a visit to the workplace by Mr Trask, there was no evidence that the respondent was aware of any such action on the part of Mindrill, or what might have motivated it. In relation to the request by Mindrill for the respondent to remove Mr Fenech from its premises, coinciding with Mr Fenech’s request for leave to attend a trade union training course, it was submitted that the respondent was not aware of any such request, and that it was curious that the request was made to Mindrill and not to the respondent. Mr Joy also submitted that considerable time had been spent on debating the merits of the productivity system operated by Mindrill. In this regard, when the first warning had been given to Mr Fenech, Mr Trask had not examined the data about Mr Fenech or the alleged shortfall in his productivity as measured by the system, but had simply asserted to Mr Muller that it was a smokescreen. Mr Muller had been adamant in his evidence that he did not agree with this assertion. The course of action undertaken by Mindrill resulting in its employees being terminated and commencing employment with the respondent, was a legitimate operational decision on the part of Mindrill. Mindrill had believed that the respondent had a better understanding of matters which had lead to Mindrill’s exposure to a significant wages claim, and would be better equipped to avoid such a situation arising in the future. It was further submitted by Mr Joy that the respondent had no knowledge of any motive on the part of Mindrill for having Mr Fenech removed from its site, other than the issues which had been raised in relation to his productivity. The allegation made by Mr Trask to Mr Muller was not sufficient to establish knowledge on the part of the respondent that Mindrill’s motive for having Mr Fenech removed from its worksite was his trade union activity. The allegation was only an opinion held by Mr Trask, who was convinced that getting rid of Mr Fenech was the true intent of the warning letter, even though Mr Trask had failed to look into the matter before coming to that conclusion. The relationship between Mindrill and the respondent was a new type of relationship. In a normal working relationship the employer had control over the employee and the premises in which the employee worked. In the current case, the respondent was in a contractual position whereby if the host employer Mindrill required them to withdraw a staff member from its premises, the respondent had no choice but to comply with that requirement. The respondent had no right to insist that Mr Fenech be allowed to access Mindrill’s premises, where Mindrill had withdrawn its authority for him to do so. The respondent could certainly object to such action on the part of Mindrill or could offer to withdraw its services, but could not force Mindrill to allow a particular person on to its premises. While it was conceded that the contract between the respondent and Mindrill could not provide for the removal of an employee from Mindrill’s premises for a discriminatory reason such as pregnancy, here there was no evidence that any such discrimination had occurred. Mindrill had provided the respondent with performance figures which demonstrated that Mr Fenech had initially attained the required level of productivity, but that this level had declined. In essence, the respondent, a labour hire company, had been confronted by its client with a set of performance figures, which demonstrated that an employee of the labour hire company placed at the client’s premises, had at one point attained a required productivity standard, but had slipped and continued to slip. The respondent had what it considered to be a legitimate issue from the client upon which it was required to take action, and had taken that action for no other reason than that the request had seemed reasonable and within the client company’s rights. Even if the Commission accepted that Mindrill was culpable, the respondent was not implicated in the scheme. In this regard, no evidence had been advanced by the AMEPKU to suggest that the respondent was a willing or knowing partner to any such unlawful conduct. The only evidence in this regard was that Mr Trask had expressed an opinion about Mindrill’s conduct which was not accepted by Mr Muller. The situation was therefore analogous to that in Shannon v Transfield Worley [2001] FCA 527 (4 May 2001) which was authority for the proposition that culpability could not be transferred from one respondent to another. While in this case there was only one respondent, it was contended that culpability could not be transferred from a third party, namely Mindrill, to the respondent. The circumstances described in the AMEPKU submissions as being beyond mere coincidence, were in fact, nothing more than mere coincidence. There was insufficient evidence for the Commission to be satisfied that Mindrill had an ulterior motive for having Mr Fenech removed from its worksite. It was submitted that the Commission must make this finding in order for it to find that the respondent was in any way culpable. There was no evidence to suggest that the respondent had been party to or knowingly involved in any such action. For the respondent to be found to have undertaken a particular course of action the motivation for that action had to lie with the respondent. It was not sufficient for the motive to be transposed from the other party to the respondent. Mr Joy submitted that if the Commission was of the view that the respondent was guilty of engaging in conduct for a prohibited reason, then the remedy of reinstatement was not possible, due to the fact that the respondent no longer operated the business which had employed Mr Fenech. This had been conceded by the AMEPKU. As to the loss suffered by Mr Fenech, it was evident that he was out of work for three weeks prior to being placed in another position by the respondent, and during that period had received one weeks pay in lieu of notice. Any compensation should be limited to two weeks pay. The Commission should also bear in mind that any compensation or penalty awarded against the respondent would effectively come out of the pockets of two retired people, and to exercise restraint in this regard. Mr Joy said that it was his understanding that the directors of the respondent had sold contracts it had held, but had -- 7 of 14 -- 8 retained the corporate entity. Mr Joy did not know who the directors of the respondent were, but only that there were two directors who were now effectively a retired couple. Legislative Provisions The main purposes of Chapter 4 – Freedom of Association are stated in s. 101 as ensuring that: (a) a person who is eligible to become a member of an industrial association may become or remain a member of the association without fear of discrimination; and (b) a person who does not wish to become or remain a member of an industrial association may refrain from doing so without fear of discrimination. Relevantly, the term “ ‘representative’ of an industrial association” is defined in s. 102 of the Act to mean inter alia, a delegate of the association. By virtue of s. 104(1) of the Act, a person engages in conduct for a prohibited reason if the person engages in, or threatens to engage in, the conduct because another person has done or proposes to do any of the things listed in that section. In this case, the AMEPKU contended that s. 104(1)(a) was relevant. That section provides as follows: “104.(1) For this chapter, a person engages in conduct for a prohibited reason if the person engages in or threatens to engage in, the conduct because another person – (a) is, has been, proposes to cease being or become, or has proposed to cease being or become a member or representative of an industrial association; …”. Section 104(2) provides that a person engages in conduct for a prohibited reason if the conduct is engaged in for a reason that includes a prohibited reason. Section 104(3) provides that a reference to a person engaging in conduct includes a reference to the person being directly or indirectly, a party to, or concerned in the conduct. Section 105 of the Act deals with prohibited conduct for employers and principals, and provides as follows: “105.(1) This section applies to a person who is or proposes to become, an employer or who has engaged, or proposes to engage, someone else as an employee or independent contractor. (2) the person must not, for a prohibited reason, engage in the following conduct: … (b) terminate a person’s contract of employment or contract for services; (c) disadvantage or injure a person who is, or proposes to become, an employee or independent contractor; …”. The corresponding provisions of the Workplace Relations Act 1996 (Cth) which were considered in Shannon v Transfield Worley (supra) are as follows: “298K Dismissal etc. of members of industrial associations etc. (1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: (a) dismiss an employee; (b) injure an employee in his or her employment; (c) alter the position of an employee to the employee’s prejudice; … 298L Prohibited reasons (1) Conduct referred to in subsection 298K(1)…is for a prohibited reason if it is carried out for because the employee …: (a) is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; …”. There is no provision in the Commonwealth Workplace Relations Act 1996 equivalent to s. 104(3) of the Queensland Act. In Allied Express Transport Pty Ltd v Bruce Humphrey (2002) 169 QGIG 569 at 571 President Hall observed that: “…the provisions of the current Act…, separate the prohibition of the conduct from the definition of the reasons for the conduct which caused the conduct to attract sanction…Section 105(2)(b) is an unusual provision. It does not render conduct unlawful. It renders conduct unlawful only if the conduct possesses one or more of the prohibited -- 8 of 14 -- 9 characteristics particularised at s. 104(1). It is, however, common ground that s. 105(2)(b) does not strike at the motive or intellectual cause of the employer’s conduct. It is for the applicant for civil relief to establish the existence in fact of the circumstance to which the employer’s conduct is said to be attributable, i.e. in a case such as this, it is for the applicant to establish that he was dissatisfied and that circumstance was substantial and an operative factor in the employer’s decision to dismiss.”. The President went on to hold (at 572) that there must be a temporal as well as causal connection between the relevant prohibited reason in s. 104 and the conduct in s. 105. The President also held that the correct test in Chapter 4 proceedings which are civil but where a pecuniary penalty is sought, is that set out in “the classic passage” in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362: “The truth is that, when the law requires proof of any fact, the Tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as the result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by law for the various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the Tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of the allegation, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flying from a particular finding, are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the Tribunal. In such matters ‘reasonable satisfaction’ should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”. In Kinsela v Sunferries Magnetic Island Pty Ltd (2004) 177 QGIG 597, Commissioner Blades, dealing with a dismissal alleged to have been for an invalid reason, noted that there is an onus on the applicant in such proceedings to prove allegations on the balance of probabilities. In relation to the degree of cogency to discharge a burden of proof in a civil case, Commissioner Blades cited the judgement of Denning J in Miller v Minister of Pensions (1947) 2 All ER 372 where his Honour said: “That degree is well settled. It must carry a reasonable degree of probability, but no so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not’, the burden is discharged, but, if the probabilities are equal, it is not.” In Kinsela Commissioner Blades found that the evidence led to a reasonable inference that the termination of employment directly related to Union involvement. He went on to consider evidence from the respondent to counter that inference and concluded that this was not a case where the probabilities were equal, but rather, that on the balance of probabilities, the applicant had been dismissed for an invalid reason. As President Hall said in The Electrical Trades Union of Employees of Australia, Queensland Branch v Allstate Electrical Services Pty Ltd (2004) 177 QGIG 142 there is no provision in the Act reversing the onus of proof on the question of whether the reason for conduct was a prohibited reason, such as the provision considered by the High Court in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 or as contained in s. 298V of the Workplace Relations Act 1996 (Cth). It is, therefore, the case that an applicant alleging a breach of a provision of Chapter 4 of the Act at all times bears the onus of proving that allegation. The respondent in such an application may simply deny the allegation on the basis that an essential element of the alleged breach is not established by the evidence. The respondent in such an application may also put forward an alternative explanation or basis for the conduct and by doing so, establish that conduct such as the dismissal of an employee, was for some other reason, not being a prohibited reason under s. 105 of the Act. Where the respondent adopts the latter course, it is incumbent on the respondent to put evidence before the Commission to negative the inference which the applicant contends should be drawn from the facts established by its evidence. The Commission in such a case is required to weigh the facts and the competing evidence, and to determine whether it is more probable than not that the applicant (or the person the applicant is representing) has been subjected to conduct of the type described in s. 105 for reasons which include a prohibited reason within the terms of s. 104 of the Act. The Commission may rely on circumstantial evidence to make a finding in this regard, and it is difficult to imagine a case where the evidence to be considered will not be wholly or at least significantly, circumstantial. It is also the case that the provisions contained in Chapter 4 of the Act refer variously to a “person”, “an employer” and “an employee”. Given the context in which these terms are used in the Chapter, it is clear that the term “person” is not restricted to a natural person and may include corporations and persons acting as officers of corporations. Further, s. 122(1)( c) read in conjunction with s. 122(2) and (3) provides that evidence that conduct was engaged in by a director, other officer, employee or agent of a corporation, is evidence that it was engaged in by the corporation and evidence that a director, other officer employee or agent engaged in the conduct for a prohibited reason, is evidence that the corporation engaged in the conduct for the prohibited reason. -- 9 of 14 -- 10 Involvement of third parties in prohibited conduct The parties in these proceedings have referred to a number of cases where the role of third parties – that is parties outside the employment relationship – in conduct which is contended to have constituted a breach of the provisions of s. 298K and s. 298L of the Workplace Relations Act 1996 (Cth) and its predecessors, has been considered by Courts. It is necessary to consider those cases to establish whether they have any bearing on the issue currently for determination. In Australian Workers’ Union & Steven John McGee v John Holland Pty Ltd [2001] FCA 93 (20 February 2001) the third party was a trade union. Justice Goldberg of the Federal Court considered a situation where the respondent John Holland Pty Ltd had offered employment to a member of the Australian Workers’ Union (AWU), Mr McGee. In that case, a rival Union, the Construction Forestry Mining and Energy Union (CFMEU) had pressured the respondent company to terminate Mr McGee’s employment on the basis inter alia of his membership of the AWU. Justice Goldberg held in that case the respondent’s managers had genuinely believed that the employment of Mr McGee had been effected in a manner inconsistent with the terms of a certified agreement with the CFMEU. Further, it was held that the reasons of the respondent for the dismissal of Mr McGee had been to avert an industrial stoppage on its worksites, and not because Mr McGee was a member, and a proposed delegate of the AWU. It was also held that the reasons of the CFMEU for seeking the termination of Mr McGee’s employment did not transfer to John Holland Pty Ltd. Similarly, in Wood (on behalf of the Industrial Relations Bureau) v Lord Mayor, Councillors and Citizens of the City of Melbourne (1979) 41 FLR 1 there was considerable pressure placed on the employer in the form of union bans, to bring about the standing down and the dismissal of an employee who had not joined in industrial action. It was held in that case that placation of the Union, and concern about disruption to council services as a result of union bans, was the dominant reason for the dismissal of the employee and not the fact that he had refused or failed to join in industrial action. It is noteable that in both cases, considerable loss and damage was caused (or likely to be caused) to the employer by the actions (or threatened actions) of the third parties. Effectively this factor broke the chain of causation so that the employers’ motives were not those of the third parties, and the third parties’ motives could not be attributed to the employers. It is also notable that the third parties were trade unions standing outside of the employment relationship subject of the proceedings, and had no contractual relationship with either the employees or the employers concerned in that relationship. In Shannon v Transfield Worley [2001] FCA 527 (4 May 2001) the fact situation was that Transfield Worley, a Joint Venture (the first respondent), was engaged by Woodside Energy Limited (the second respondent) to provide maintenance, repair, servicing and other associated works on its sites, installations and facilities. There is no suggestion in the facts set out in the judgement of Justice Carr that the second respondent in any way supervised or exercised any control over the employees of the first respondent. Rather the nature of the contract between the first and second respondent appears on the facts to have been one where the first respondent provided both labour and supervision to undertake certain work in the second respondent’s operations. It was contended for the applicant in that case, that after the first respondent and Mr Shannon entered into a contract of employment, a manager of the second respondent told (or instructed) the first respondent that Mr Shannon was not to be employed at any of its operations or facilities. The first respondent dismissed Mr Shannon. The applicant in that case had previously been employed by a wholly owned subsidiary of the second respondent, and had been an active shop steward for a trade union during that time. It was contended for the applicant that the second respondent had instructed the first respondent to dismiss him for reasons which can generally be described as being related to his trade union activity, being prohibited reasons within the terms of various subsections of s. 298L of the Workplace Relations Act 1996 (Cth). Significantly, it was noted by Justice Carr that it was common ground between all parties that the first respondent did not terminate Mr Shannon’s employment for any reason actually held by it, which was a prohibited reason. It was also conceded by the applicant’s solicitors in a letter to the first respondent’s solicitors, that it was not part of the applicant’s case that any of the pleaded reasons for the dismissal were advised to or known by the first respondent at the relevant time. Counsel for the applicant also submitted that all that could be proved was that the first respondent acted on the instruction of the second, so that its motive was simply that it was told to do something. It was held by Justice Carr in that case that s. 298L(1) of the Workplace Relations Act (Cth) prohibits in strong mandatory terms, an employer from dismissing an employee for a prohibited reason or a reason that includes a prohibited reason. Further it was held that the word “for” in that section qualified the reason why the employer engages in the conduct, and it was not reasonably arguable that the reasons referred to in s. 298K could mean reasons not held by the employer. Thus, if (as the applicant had conceded) there was a vacuum devoid of prohibited reasons on the first respondent’s part, it did not follow that the vacuum must be filled by the reasons held by the second respondent. Conclusions I accept the submission for the respondent that the contract between it and Mindrill, whereby the respondent in effect supplied Mindrill’s workforce, is a relatively new type of employment arrangement. Such arrangements can give rise to -- 10 of 14 -- 11 complexity where a host company such as Mindrill has the capacity to make decisions or engage in conduct which effects an employee of a labour hire company such as the respondent. The complexity increases when the employee seeks to contest those actions or decisions utilising industrial relations legislation. An employee in such circumstances will face considerable difficulty, principally because significant rights under industrial relations legislation are contingent on the existence of an employment relationship between the employee and the entity from which the rights are claimed. Here the AMEPKU has not sought to make Mindrill party to the current proceedings. Neither has the AMEPKU sought to establish that the control exercised by Mindrill over the performance of work by Mr Fenech was such that it became Mr Fenech’s employer on a joint basis with the respondent. In Damevski v Guidice [2003] FCAFC 252 (13 November 2003), the Full Court of the Federal Court of Australia set out a list of cases concerning labour hire arrangements, in which either contractual relationships had been found between a worker and a host company, or where the concept of dual employment had been entertained: [76] – [78]. See also the decision of Commissioner Blades in Koppe v Compass Group (Australia) Pty Ltd t/a Support Services and Another (2004) 177 QGIG 41 where the issue of joint employment was considered. In the current case, the AMEPKU sought to establish that the respondent knew, or ought to have known, that its client Mindrill was engaging in conduct with respect to Mr Fenech, of the type described in s. 105(2) of the Act, for a prohibited reason as described in s. 104 of the Act. The respondent sought to resist the claim on the basis that if Mindrill had engaged in conduct for a prohibited reason, the respondent did not have knowledge of that reason and Mindrill’s reasons could not therefore be attributed to the respondent. In essence, the respondent’s submission was that actual knowledge and acquiescence on its part, in any such conduct on the part of Mindrill, would be required before the Commission could make a finding in favour of the AMEPKU. I am unable to accept this submission. It is not the motive or intellectual cause of the employer’s conduct that is caught by s. 105(2). Rather the Commission must be positively satisfied that the fact or circumstance to which the employer’s conduct is attributable exists, and that this circumstance was substantial, and an operative factor in the employer’s decision to engage in conduct described in s. 105(2): Allied Express Transport Pty Ltd v Bruce Humphrey (2002) 169 QGIG 569 at 571 per Hall P. In forming a view as to whether it is positively satisfied in this regard, the Commission is entitled to take into account the entirety of the factual matrix in which the relevant fact or circumstance existed. It is clear from s. 104(3), that the factual matrix considered by the Commission may include the conduct of persons who are directly or indirectly party to, or concerned in conduct described in s. 105(2), where it is contended that the conduct was engaged in for reasons which are prohibited by s. 104. This is also clear from the terms of s. 122 with respect to the conduct of agents of companies. I see no reason why the Commission cannot consider the conduct of entities and persons outside the employment relationship. While a corporation is an entity in its own right and can be found to have breached the provisions of the Act under consideration in this case, it is axiomatic that a breach on the part of a corporation can only occur as a result of actions by its officers or agents. Recognition of this is found in s. 122 of the Act. As Justice Smithers pointed out in Wood (on behalf of the Industrial Relations Bureau) v Lord Mayor, Councillors and Citizens of the City of Melbourne (1979) 41 FLR 1 at 19: “In the task of ascertaining the mind of the defendant corporation…that mind may be located in the mind of one authorised officer or of more than one person exercising the executive power of the corporation. It is a pure question of fact, where in particular circumstances that corporate mind may be located. In a case where two officers are concerned in the solution of an administrative problem and are working jointly to solve it and decide what the corporation is to do and are working in harmony and full confidence, the one with the other, the mind of the corporation is to be found in the course of conduct agreed upon between them and the reasons which in the end are the operating reasons for the policy agreed upon.”. Justice Smithers also held (41 FLR 1 at 20) that a decision was the act of deciding, and the corporation was entitled to have the total transaction looked at objectively by the court. In looking at the transaction it was the duty of the court to draw such inferences as were proper on the evidence, as to who it was that played the decision making part in the relevant activities including advice that was acted upon. Further, Justice Smithers stated that it was a fallacy to say that any state of mind to be attributed to a corporation must always be the state of mind of one particular officer alone and that the corporation could never know more than that one man knew or believed. It should be noted that the Conciliation and Arbitration Act 1904 (Cth) being considered by Justice Smithers in Wood reversed the onus of proof with respect to the reason actuating the dismissal, so that it lay on the defendant employer. Much has been made in the submissions for the respondent in this case of the fact that on the AMEPKU’s case, a person acting on behalf of a third party – the host company – engaged in the conduct complained of. In my view, this is not fatal to the AMEPKU’s case. The Act establishes mutual rights and obligations between employers and employees arising out of the employment contract. Those rights exist both at common law and under legislation such as the Industrial Relations Act 1999. A party to an employment contract cannot avoid the rights and obligations arising out of it by contracting with a third party outside of the employment relationship. To hold otherwise would allow an employer -- 11 of 14 -- 12 to enter into a contract with a third party and then rely on the terms of that contract to avoid its obligations to its employees, by arguing that it was compelled to take certain actions because of a direction by that third party. Employers have obligations to treat employees fairly and lawfully. In circumstances where an employer effectively gives control over its employees to another entity, it may be held responsible for any unfairness or unlawfulness arising from the conduct of that entity towards its employees. For example, if a supervisor or manager of Company A engages in conduct of the type described in s. 105 of the Act, for prohibited reasons within the meaning in s. 104 of the Act, Company A may be held liable for such conduct. That liability is not removed simply because the conduct is engaged in by a supervisor or manager of Company B. Where Company A has given Company B rights to supervise and manage employees of Company A, Company A is obligated to take reasonable steps to ensure that those rights are exercised in a manner which is fair, lawful and otherwise consistent with its obligations to those employees. In light of relevant case law and s. 104(3) and s. 122 of the Act, actual knowledge that conduct is or has been engaged in for a prohibited reason on the part of all persons said to have been directly or indirectly party to or concerned in the conduct, is not required to establish a breach of the provisions of Chapter 4 of the Act. Where the existence of facts and circumstances to which the employer’s conduct is attributable is established, and those facts and circumstances are substantial and the reasons for the conduct, it may be sufficient for an applicant for relief under Chapter 4 of the Act to establish constructive knowledge on the part of relevant persons – knowledge that would have been obtained had inquiries that an honest and reasonable person would have made in the ordinary course of the transaction in question been made. To hold otherwise would enable directors, other officers, employees or agents of companies to avoid liability for their conduct by simply failing to make inquiries. This approach is consistent with the main purpose of Chapter 4 (refer s. 101 of the Act); the principal object of the Act as stated in s. 3(a), (c), (h), (i); and the over arching requirement for the Commission to base its decisions on equity, good conscience and the substantial merits of the case, having regard to the interests of the persons immediately concerned and the community as a whole. Clearly the intention of the legislature is inter alia to ensure that employees are not dismissed, disadvantaged or injured because they propose to become, or not become, a member or representative of an industrial association. The interpolation of a third party in the employment relationship should not prevent implementation of the clear object of the legislation, particularly where the employer gives that third party the right to supervise or manage its employees. In my view, in Wood; McGee; and Shannon (supra) can be distinguished from the present case on the basis that the respondent effectively employed labour for its client Mindrill. The respondent’s arrangements with Mindrill, allowed Mindrill to supervise its employees; form views about their productivity and efficiency; and direct the respondent to take action including issuing warnings to its employees and removing them from Mindrill’s worksite. It is clear from the evidence that Mindrill undertook a significant role in the management and supervision of the respondent’s employees. It is also clear that the respondent’s managers accepted at face value what they were told by Mindrill’s managers about Mr Fenech’s work performance and acted in accordance with Mindrill’s wishes in issuing him with a warning and ultimately removing him from Mindrill’s worksite. In these circumstances, it is appropriate to consider the conduct of both Mindrill and the respondent in determining whether the allegations of the applicant have been proven. Mr Fenech was employed by the respondent without an interview, to perform essentially the same work he had previously performed while employed by its client Mindrill. This indicates that there was at that point no difficulty with Mr Fenech’s conduct, capacity or work performance from the perspective of the respondent or Mindrill. The oral and written warnings, and the dismissal of Mr Fenech coincided respectively with Mr Fenech’s election as the AMEPKU delegate at Mindrill’s worksite; a meeting of AMEPKU members at Mindrill’s worksite in relation to an enterprise bargaining agreement; and a request by Mr Fenech to a manager of Mindrill for leave to attend a trade union training course. Given the evidence as to the level of supervision exercised by Mindrill over Mr Fenech, I do not accept that it was inappropriate for Mr Fenech to have directed a request for leave to attend this training course to a manager of Mindrill. This evidence needs to be viewed against the back drop of previous events and transactions between Mindrill and the AMEPKU. There was uncontested evidence to the effect that Mindrill had resisted making an enterprise bargaining agreement with the AMEPKU in its own right and that conferences had been held before another member of the Commissioner Brown in relation to this refusal. The evidence also established that the AMEPKU had been pursuing claims against Mindrill in respect of unpaid wages for its members for the period they were employed by Mindrill. On the respondent’s own case, the concern of Mindrill about the wages claims, caused Mindrill to take the fairly drastic step of terminating the employment of part of its workforce and effectively contracting with the respondent, a labour hire company, to employ the same work force to continue to perform work at Mindrill’s worksite. There was also evidence of antipathy, between Mr Haines of Mindrill and Mr Trask. In my view this evidence leads to a reasonable inference that Mindrill through, Mr Haines, had antipathy towards the AMEPKU. Further, a reasonable inference can be drawn that the respondent, through its managers who dealt with Mindrill, were aware or should have been aware of this antipathy. When considered in its totality, the evidence leads to a reasonable inference that the respondent through its managers and the managers of its client Mindrill removed Mr Fenech from Mindrill’s site for reasons which included a prohibited -- 12 of 14 -- 13 reason as defined in s. 104(1) (a) of the Act. However, the respondent has produced evidence to counter this inference. Through that evidence the respondent sought to establish that a productivity measurement system operated by Mindrill, had established that Mr Fenech was not meeting required productivity standards. While some examination of the productivity data had been carried out by the respondent’s managers, the allegations about Mr Fenech’s lack of productivity had been accepted at face value. The case for the respondent was essentially that in the circumstances of the relationship between Mindrill and the respondent, reliance on the productivity data and the advice from Mindrill’s managers about Mr Fenech’s productivity levels, had been unreasonable. After considering the evidence in relation to the productivity measurement system, I am unable to accept that it provided a reasonable basis for a conclusion that Mr Fenech was not a productive employee. Mr Muller did not understand the productivity measurement system and demonstrated this by his inability to give evidence about how it worked and what it measured. The fact that Mr Muller formed a view that Mr Fenech should be given a warning, and drafted a warning letter in terms essentially dictated by Mindrill, before having a discussion with Mr Fenech about the allegations may have been unfair, but at the point the warning was given, the respondent, through Mr Muller, did not have knowledge of the possibility that Mindrill was embarking on a course of conduct of the type described in s. 105 of the Act for prohibited reasons as described in s. 104(1)(a) of the Act. However, that situation changed as a consequence of the discussion between Mr Trask and Mr Muller subsequent to the warning being issued. Mr Muller does not dispute that the discussion took place, and does not essentially dispute what he is alleged by Mr Trask to have said. What Mr Muller does dispute is the inference that should be drawn from what he said to Mr Trask. In respect of this discussion, I accept the evidence of Mr Trask, in preference to that of Mr Muller. I am reasonably satisfied that after his discussion with Mr Trask about that warning, Mr Muller was put on notice that there was a serious allegation to the effect that the respondent’s client Mindrill had caused the warning to be issued to Mr Fenech on the basis that he was the AMEPKU’s delegate at Mindrill’s worksite. I am reasonably satisfied that Mr Muller accepted that there was some substance to this allegation. It is improbable that Mr Muller would have withdrawn the warning if he had not accepted that there was some substance to the allegations made by Mr Trask and I do not accept his evidence as to the basis upon which the withdrawal of the warning occurred. In this regard the inference is strengthened by the lack of follow up in relation to the warning on the part of the respondent, and the fact that the warning was not reinstated, even after Mr Muller allegedly discussed the allegation with Mr Haines of Mindrill. I am also of the view that it would be improbable for Mr Muller to have discussed difficulty with Mindrill paying its bills from the respondent on time, in the context of the allegations raised by Mr Trask and the fact that Mr Trask was participating in the conversation in his capacity as an official of the AMEPKU. I am also of the view that a reasonable and honest person in Mr Muller’s position would have made full and proper inquiries about Mindrill’s productivity measurement system, as a result of the allegation made by Mr Trask. Mr Muller made no such inquiries. At best, on his own evidence, Mr Muller put Mr Trask’s allegation to Mr Haines of Mindrill and accepted at face value Mr Haines’ denial. Subsequently, with no further examination of the productivity measurement system operated by Mindrill, and in the knowledge that Mr Trask had raised serious issues about the validity of the first warning, Mr Muller again accepted allegations about Mr Fenech’s lack of productivity on the basis of what he was told by Mr Haines, and removed Mr Fenech from Mindrill’s worksite. In my view, any reasonable train of inquiry on the part of Mr Muller would at least have required a discussion with Mr Fenech before a concluded view about his alleged poor productivity was formed. If Mr Muller was unable to explain the productivity measurement system to the Commission in his evidence at the hearing of this application, he could not in my view have reasonably believed that the system established a valid reason for the removal of Mr Fenech from Mindrill’s worksite, even allowing for the lapse in time between these events. On balance, for the reasons set out above, the respondent has not produced evidence sufficient to counter that inference or to establish at least an equal probability that the conduct with respect to Mr Fenech was not for reasons which included a prohibited reason. I am satisfied that the removal of Mr Fenech from Mindrill’s worksite resulted in a situation where Mr Fenech was disadvantaged or injured. Notwithstanding a contract of employment which provided for Mr Fenech to be moved between sites and which did not guarantee maximum or minimum hours of work, Mr Fenech had ongoing and regular work at Mindrill’s worksite. There was no fixed period or term for such employment, and in my view it was reasonable for Mr Fenech to have an expectation that he would continue to work at Mindrill’s worksite for the foreseeable future, or at least while the respondent had a contract with Mindrill for the supply of labour (there was no evidence as to if and when this contract had ceased). As a result of his removal from Mindrill’s site Mr Fenech suffered financial loss. The case conducted for the respondent did not address the issue of whether Mr Fenech’s employment had been terminated. Neither did it address the contention made by the AMEPKU that because of a defence to an unfair dismissal application made on behalf of Mr Fenech, the respondent was estopped from arguing that there had been no dismissal. Given the finding I have made in relation to the disadvantage or injury suffered by Mr Fenech as a result of the respondent’s conduct, it is not necessary to decide this point, although there is authority for the proposition that employee of a labour hire company may be dismissed, in circumstances where that employee is removed from a -- 13 of 14 -- 14 particular worksite and placed in limbo without work and without pay: Koppe v Compass Group (Australia) Pty Ltd t/a Support Services and Another (2004) 177 QGIG 41 at 43 per Blades C. In all of the circumstances I am of the view that it is appropriate in this case for an award of compensation to be made to Mr Fenech for the disadvantage and injury he suffered as a result of the respondent’s conduct. In this case I can see no basis for departing from the established approach to the calculation of compensation, which has been followed by the Commission in formulating awards of compensation to employees found to have been unfairly dismissed: see Barsha v Motor Finance Wizard (Sales) Pty Ltd (2002) 171 QGIG 139. In this case, it is relevant that Mr Fenech was a casual employee and had been employed for a relatively short time by the respondent. It is also relevant that Mr Fenech had a reasonable expectation of remaining in his position at Mindrill’s worksite and was effectively one month away from a period of service enabling him to access remedies for unfair dismissal. I am satisfied that Mr Fenech took reasonable steps to mitigate the loss of his employment. Non-refundable earnings from other sources must also be taken into account. Further, I have given consideration to the seriousness of the respondent’s conduct and the fact that it occurred more by omission than direct action on the part of the respondent. After considering these factors, I have determined to award a global amount of compensation in the amount of $7,500. I have also decided, consistent with the decision of President Hall in ALHMWU v Performance Security Services (2000) 164 QGIG 198, that this is not an appropriate case for the imposition of a penalty. While I accept that no evidence was called by the respondent in relation to its current position, it appears that the owners of the respondent have ceased trading and gone into retirement. The respondent is to pay to Mr Fenech the amount of $7,500 within 28 days of the date of release of this decision. The amount is to be taxed according to taxation law. I order accordingly. I.C. ASBURY, Commissioner. Hearing Details: 2004 3 and 4 November Released: 24 December 2004 Appearances: Mr E. Moorhead of the Automotive, Engineering, Metals, Printing and Kindred Industries Industrial Union of Employees, Queensland for the applicant. Mr C. Joy of Craig Joy Workplace Consulting Pty Ltd for the respondent. Government Printer, Queensland The State of Queensland 2005. -- 14 of 14 --