Employment Advocate v Barclay Mowlem Construction Limited [2005] FCA 16 (20 January 2005)

INDUSTRIAL LAW – Freedom of association – alleged termination of a contract for services with an independent contractor for prohibited reasons – where no formal contract – whether contract formed – whether a reasonable observer would conclude from the dealings between the two companies that they intended to conclude a bargain

INDUSTRIAL LAW – Freedom of association – alleged termination of a contract for services with an independent contractor for prohibited reasons – where no formal contract – whether contract formed – whether respondent’s representatives had actual or ostensible authority to enter into a subcontract binding the respondent

INDUSTRIAL LAW – Freedom of association – alleged refusal to engage an independent contractor for prohibited reasons – whether respondent refused to engage – whether material distinction between refusing to engage an independent contractor and deciding to award subcontract to one independent contractor in preference to another

INDUSTRIAL LAW – Freedom of association – prohibited reasons – onus of proof – statutory presumption that respondent engaged in alleged conduct for prohibited reasons – where more than one prohibited reason alleged – whether respondent must rebut statutory presumption in relation to each alleged prohibited reason – whether applicant must prove the facts forming the basis of each prohibited reason

WORDS AND PHRASES – ‘refuse to engage’

Evidence Act 1995 (Cth) s 60 and s136
Workplace Relations Act 1996 (Cth) s 83BA, s 170LT, s 298K, s 298L, s 298U and s 298V

Australasian Meat Industry Employees’ Union v Belandra Pty Ltd (2003) 126 IR 165 followed
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 applied
Booth v Bosworth [2001] FCA 1453; (2001) 114 FCR 39 cited
Burnie Port Corporation Pty Ltd v Maritime Union of Australia [2000] FCA 1768; (2000) 104 FCR 440 followed
Employment Advocate v Williamson [2001] FCA 1164; (2001) 111 FCR 20 referred to
Maritime Union of Australia v Burnie Port Corporation Pty Ltd (2000) 101 IR 435 cited
Maritime Union of Australia v CSL Australia Pty Ltd (2002) 113 IR 326 cited
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 208 ALR 213 cited

NIGEL HADGKISS ACTING AS DELEGATE OF THE EMPLOYMENT ADVOCATE v BARCLAY MOWLEM CONSTRUCTION LIMITED ACN 009 830 460

NSD 2497 of 2003

BRANSON J
20 JANUARY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2497 of 2003

BETWEEN:	NIGEL HADGKISS ACTING AS DELEGATE OF THE EMPLOYMENT ADVOCATE APPLICANT
AND:	BARCLAY MOWLEM CONSTRUCTION LIMITED ACN 009 830 460 RESPONDENT
JUDGE:	BRANSON J
DATE OF ORDER:	20 JANUARY 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT further hearing of the application be stood over to a date to be fixed.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2497 of 2003

BETWEEN:	NIGEL HADGKISS ACTING AS DELEGATE OF THE EMPLOYMENT ADVOCATE APPLICANT
AND:	BARCLAY MOWLEM CONSTRUCTION LIMITED ACN 009 830 460 RESPONDENT

JUDGE:	BRANSON J
DATE:	20 JANUARY 2005
PLACE:	SYDNEY

1 This application for orders under s 298U of the Workplace Relations Act 1996 (Cth) (‘the Act’) raises two principal issues of significance. The first of these issues is whether the evidence supports a finding that a contract for services was entered into on or about 28 November 2002 between the respondent and an independent contractor, namely Robson Excavations Pty Limited (‘Robsons’). The second of these issues is the true meaning of the expression ‘refuse to engage’ in the context of par 298K(2)(d) of the Act.

2 Section 298K is contained in Part XA of the Act, which is concerned with freedom of association. Paragraph 298K(2) contains the following proscription:

3 The applicant, by an application dated 19 December 2003, sought orders under s 298U of the Act against the respondent. By his amended statement of claim the applicant alleged that on or about 29 November 2002 the respondent terminated a contract for services that it had entered into with Robsons, or alternatively refused to engage Robsons as an independent contractor (see pars 298K(2)(a) and (d)).

4 The respondent defended the application on the following bases. First, that it did not enter into a contract with Robsons and thus there was no contract for services that it had entered into with Robsons in existence on or about 29 November 2002 which it could terminate. Secondly, that its admitted decision to award a contract to a subcontractor other than Robsons in preference to awarding the contract to Robsons did not amount to a decision to ‘refuse to engage’ Robsons as an independent contractor within the meaning of par 298K(2)(d) of the Act.

5 By agreement the hearing was conducted on the basis that the Court would initially determine only whether the respondent had acted in contravention of s 298K of the Act as alleged by the applicant. Issues of the appropriate order or orders, if any, to be made under s 298U if it were determined that the respondent had acted in contravention of s 298K were agreed to be appropriate for later consideration.

6 I have reached the conclusion that the contention of the respondent that it had not at the relevant time entered into a contract with Robsons should be upheld. However, for the reasons set out below, I have formed the view that the respondent did ‘refuse to engage’ Robsons as an independent contractor within the meaning of par 298K(2)(d). I have also formed the view that, by reason of the statutory presumption contained in s 298V of the Act, it is to be presumed that the respondent’s refusal to engage Robsons as an independent contractor was for prohibited reasons. The Court’s power to make orders under s 298U of the Act is thus enlivened.

8 The position of Employment Advocate is created by s 83BA of the Act. The Employment Advocate is authorised by par 298T(2)(d) to make an application to the Court for orders under s 298U in respect of conduct in contravention of Part XA of the Act. The respondent has not challenged the entitlement of the applicant to institute this proceeding as a delegate of the Employment Advocate (see s 83BE of the Act).

9 The respondent is a company that operates in the building and engineering industry. The NSW Building Group is a business unit of the respondent. At all relevant times Peter Thomas Munnings (‘Mr Munnings’) was the General Manager, Steven Murphy (‘Mr Murphy’) was the Administration Manager, Bill McGarry (‘Mr McGarry’) was the Design Manager and Bill Chatfield (‘Mr Chatfield’) was the Commercial Manager of the NSW Building Group.

10 The respondent has established written guidelines intended to define the limits of authority of executives and managers of the respondent relating to the purchase and disposal of chattels and the procurement of services and subcontracts (‘the Guidelines’). The Guidelines, which were received in evidence, indicate that a contract under seal requires the joint signatures of either two Directors or the Company Secretary and a Company Director and that a contract not under seal requires the signature of the Group General Manager. The Guidelines also indicate that only a Group General Manager has authority to approve project purchasing within budget in an amount in excess of $1 million. Mr Munnings was at the relevant time a Group General Manager within the meaning of the Guidelines. Mr Munnings gave evidence that his role with the respondent involved him in approving recommendations for the engagement of subcontractors. The only evidence touching on the authority of officers and employees of the respondent to formulate recommendations for the engagement of subcontractors is referred to in [49] below.

11 Robsons is a company that provides excavation and other civil construction works to developers and builders. Robsons operates mainly in New South Wales in the areas of northern Sydney, the Central Coast, the Hunter region and Lake Macquarie. Kevin Francis Rigg (‘Mr Rigg’) is the Operations Manager and Andrew Arthur Newberry (‘Mr Newberry’) is a Project Manager for Robsons. Mr Rigg and Mr Newberry gave affidavit evidence in this proceeding. Neither of them was cross-examined and I accept their respective evidence.

12 In an affidavit affirmed by him on 26 March 2004 Mr Newberry gave evidence as follows:

On 10 December 2002 the Australian Industrial Relations Commission certified the Robson Excavations Pty Ltd Enterprise Agreement 2002 (‘the Robsons EBA’) pursuant to s 170LT of the Act. The Robsons EBA came into force on that day and is to remain in force until 9 December 2005. The Robsons EBA is a ‘non-union agreement’.

13 In October or November 2002 the respondent was awarded a contract for the construction of a large residential apartment complex in Gosford (‘the Gosford project’). Presumably in anticipation of being awarded the contract, the respondent had earlier put subcontracts for the Gosford project out to tender. On 9 September 2002 Robsons submitted to the respondent a tender in respect of excavation, storm water and other civil works for the Gosford project. The initial tender price was $2.62m plus GST.

14 Initially Mr Newberry’s dealings with the respondent were conducted through Matthew Smart (‘Mr Smart’). Mr Smart’s position with the respondent was apparently that of an estimator. On 2 October 2002 Mr Smart advised Mr Newberry that certain work was no longer to form part of the Gosford project and on the same day Mr Newberry agreed to a consequential reduction in Robsons’ tender price.

15 In late November 2002, Mr Munnings appointed Mr Murphy and Mr McGarry to discuss with potential subcontractors the initial works to be undertaken on the Gosford project. In cross-examination Mr Munnings agreed that Mr Murphy and Mr McGarry were asked to discuss with potential subcontractors the respective tenders that they had submitted, including possible changes to the scope of the work the subject of the tenders and the tender prices.

16 On 20 November 2002 Mr McGarry requested Robsons to revise its tender. By a letter dated 21 November 2002 and signed by Mr Newberry, Robsons did revise its tender.

17 On 22 November 2002 a meeting was held at which Mr McGarry, Mr Newberry and Mr Rigg were present. Mr Newberry and Mr Rigg gave a presentation concerning Robsons’ revised tender and certain pricing issues were discussed. During the meeting Mr McGarry asked questions concerning Robsons’ industrial relations and in particular raised the topic of Robsons’ relations with the Construction, Forestry, Mining and Energy Union (‘CFMEU’). Near the end of the meeting Mr McGarry gave to Mr Newberry and Mr Rigg a copy of a document which he described as ‘the standard subcontractor agreement used by Barclays for contractors who have been awarded contracts by us’. He invited them to raise any issues that they might have with the document.

18 By letter dated 25 November 2002 and signed by Mr Newberry, Robsons confirmed that it had further revised its tender as requested by the respondent and indicated that it required certain changes to be made to the standard subcontractor agreement. It confirmed that it was in a position to commence work shortly.

19 On 26 November 2002 Mr Newberry attended a meeting at the respondent’s offices in Bridge Street, Pymble. Mr McGarry and another employee of the respondent were present when Mr Newberry arrived. Shortly thereafter Mr Rigg arrived and then Mr Murphy arrived. The Robsons’ tender and the standard subcontractor agreement were the subject of detailed discussion during this meeting. Changes to the Robsons’ tender, including the work to be completed and the tender price, were negotiated. The Robsons’ tender price was finalised at $1.12 million. Mr McGarry indicated on more than one occasion during the meeting that the respondent wanted to do a deal with Robsons. During the course of the meeting, after Mr Newberry and Mr Rigg submitted a revised offer, Mr McGarry said to them words to the effect:

20 Thereafter those present at the meeting shook hands and Mr Newberry or Mr Rigg confirmed that he would make immediate arrangements to have an excavator on the site the next day. Mr Rigg then left the meeting. Thereafter Mr Newberry agreed to provide to the respondent copies of Robsons’ public liability and workers compensation policies. Mr Newberry was also given a document to complete that was headed ‘Information Requirements from Subcontractor’ (‘the Information Requirements Document’). The Information Requirements Document seeks information, principally of a formal nature, concerning the subcontractor such as its name, address, legal status (i.e. company, sole trader or partnership), the insurance cover held by it and the industrial instrument or instruments governing the employment of its workforce. Additionally, Mr Newberry was asked to complete a thirteen page document each page of which is headed ‘Subcontract Assessment Checklist A’. This document (‘the Checklist A Document’) seeks a wide range of information including commercial information concerning the subcontractor, confirmation that the subcontractor understands the subcontract, details of the subcontractor’s workforce and additional information concerning the subcontractors’ industrial relations. Mr Newberry agreed to take the document away and complete it. Late in the meeting Mr McGarry said words to the effect:

The meeting held on 26 November 2002 closed between 9.30 am and 10.00 am with those still present shaking hands.

21 At about 1.30 pm on 26 November 2002 Mr Newberry faxed to Mr Murphy copies of Robsons’ public liability and workers compensation certificates of insurance. It is admitted on the pleadings that sometime that day Mr Murphy made a note to the following effect:

No evidence was called that explained either why Mr Murphy made this note or its significance.

22 At about 4.30 pm on 26 November 2002 Mr Newberry received a telephone call from Mr McGarry. The two men had a conversation to the following effect:

Mr McGarry: I want the job put on hold for 24 to 48 hours to do some more risk analysis.

Mr Newberry: We currently have an AWA which expires shortly and our new EBA is currently before the AIRC for ratification.

Mr Newberry: I don’t know. Union membership is not compulsory in our company.

23 Mr Newberry faxed a copy of the Robsons EBA to Mr McGarry at approximately 5.00 pm that afternoon.

24 On 27 November 2002 Mr Newberry completed the Information Requirements Document and the Checklist A Document and sent copies of them to the respondent, marked to the attention of Mr Murphy, by facsimile transmission.

25 On 29 November 2002 Mr McGarry returned a telephone call earlier made to him by Mr Rigg. The two men had a telephone call to the following effect:

Mr McGarry: The decision has been made to go with the contractor from a previous alliance.

Mr Rigg: Bill, we know what’s going on. We know it is an issue with our EBA.

Mr McGarry: It has got nothing to do with that. We are going with a contractor from a previous alliance.

Mr Rigg: ... Who do I need to talk to in your organisation that has actually made this decision?

26 Mr Rigg subsequently attempted to contact Mr Lawes by telephone but was unsuccessful.

27 On 5 December 2002 Mr Munnings signed and dated in a space marked ‘Authorised Manager Approval’ a single page document entitled ‘Supplier or Subcontractor Recommendation and Approval’ in respect of the excavation and stormwater works for the Gosford project (‘the Subcontractor Approval Document’). By doing so Mr Munnings approved acceptance of a tender of an independent contractor other than Robsons. The Subcontractor Approval Document indicates on its face that it was prepared by Mr Murphy.

28 The tender summary on the Subcontractor Approval Document shows the price of the recommended tender as $1,404,029 and describes it as the ‘Lowest Conforming Tender’. The tender summary shows the price of the Robsons tender as $1,896,899 rather than the tender price of $1.12 million negotiated between Robsons and the respondent on 26 November 2002. The documentation annexed to the Subcontractor Approval Document includes correspondence from the recommended subcontractor concerning its tender, the Checklist A Document completed by the recommended subcontractor, the Information Requirements Document completed by the recommended subcontractor, a certificate of currency of workers compensation insurance of the recommended subcontractor and what appears to be a draft schedule intended to form, when finalised, part of the proposed contract with the recommended subcontractor. The annexed documentation discloses that the subcontractor whose tender was recommended for approval had a Certified Enterprise Agreement or Australian Workplace Agreement to which the ‘CFMEU/AWU’ were parties. No comparable documents, or any documents, concerning the Robsons’ tender were annexed to the Subcontractor Approval Document.

29 At the time that Mr Munnings gave oral evidence he agreed that he reviewed and signed the Subcontractor Approval Document but had no recollection of reviewing the documents annexed to it. He agreed that he placed trust and confidence in the work of those who had prepared the Subcontractor Approval Document and ‘the greatest trust’ in Mr Chatfield. Mr Chatfield had initialled a handwritten note dated 5 December 2002 on the Subcontract Approval Document. Mr Chatfield’s note reads ‘OK subject to tagged comment’. The tagged comment to which this note refers is a series of notes made by Mr Chatfield on yellow adhesive paper concerning the form and terms of the proposed subcontract. The Subcontractor Approval Document also bears a signature in a space marked ‘Contract Signed’ but no date has been entered in the place provided for a date under that signature.

30 The only witness from whom the respondent adduced evidence was Mr Munnings. As a result the respondent did not adduce evidence to explain how the Subcontractor Approval Document came to be prepared in the terms that it was or why the Robsons’ tender was not recommended for approval.

31 Robsons did not undertake work as subcontractors to the respondent in respect of the Gosford Project.

32 The first issue to be determined is whether, as the applicant contends, a contract was entered into on or about 26 November 2002 between the respondent and Robsons for the undertaking by Robsons of excavation works on the Gosford project. The relevant test is whether a reasonable observer would conclude from the dealings between the respondent and Robsons that the two companies intended, on or about 26 November 2002, to then and there conclude a bargain (Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 per Gleeson CJ at 548-551).

33 A significant factor relevant to the objective determination of the companies’ respective intentions is that Mr McGarry confirmed late in the course of the meeting held on 26 November 2002 that a formal contract would be drawn up to govern the relationship between the respondent and Robsons and that Robsons would have to sign the formal contract. The respondent’s practice of using a standard subcontractor agreement had first been raised by Mr McGarry on 22 November 2002. Mr Newberry did not at any time challenge the suggestion that a formal contract would have to be signed by Robsons (see [20] above).

34 Another significant factor relevant to an objective determination of the companies’ respective intentions is that during the course of the meeting held on 26 November 2002 Mr Newberry agreed to provide to the respondent copies of Robsons’ public liability and workers compensation certificates of insurance and also a considerable body of additional information. The information to be provided by the completion of the documents given to Mr Newberry on 26 November 2002 included important formal information such as the legal name and ABN number of Robsons. More significantly, it also included information apparently relevant to a judgment as to the appropriateness of Robsons as a subcontractor (eg the names of trade creditor referees for Robsons, details of similar projects completed by Robsons recently, and confirmation that Robsons has no contractual claims currently running). Completion of the documents was also calculated to result in Robsons giving assurances as to project specific safety planning and undertakings to provide the respondent with information touching on, amongst other things, Robsons’ industrial relations throughout the life of the Gosford project. The request for, and the provision of, the information, assurances and undertakings provided by the completion of these documents suggests against the parties proceeding on the basis that they had already entered into a binding agreement.

35 Each of the above factors, in my view, suggests against the respondent and Robsons intending during the meeting held on 26 November 2002 then and there to conclude an agreement. The nature of the subject matter of the proposed subcontract and its monetary value are additional factors that tend to support a conclusion that the intention of the respondent and Robsons on 26 November 2002 was to postpone the creation of contractual relations until, at least, the respondent had formally approved Robsons as a subcontractor and possibly until a formal contract was drawn up and executed.

36 The appropriate conclusion, in my view, is that the respondent and Robsons did not intend to conclude a bargain before the respondent had an opportunity to give consideration to the documents, including the completed Information Requirements Document and the Checklist A Document, that Mr Newberry agreed on 26 November 2002 to provide to the respondent. The fact that those present at the meeting of 26 November 2002 shook hands during the course of the meeting and again at the conclusion of the meeting is not a factor that, as it seems to me, undermines this conclusion. I take this view notwithstanding the unchallenged evidence that in the relevant industry deals are sometimes done on a handshake.

37 I accept that those present at the meeting of 26 November 2002 thought that their negotiations would lead to a deal being concluded with the result that Robsons would be a subcontractor to the respondent on the Gosford project. However, I conclude that Mr McGarry, by saying words to the effect ‘[Y]our offer is accepted on the condition that you can start work tomorrow’, is in the circumstances to be understood as having conveyed that, provided Robsons could start work the next day, he and Mr Murphy, as the employees of the respondent with site-specific responsibility for negotiating subcontracts, would recommend that the Robsons tender be accepted by the respondent. I do not consider that a reasonable observer would conclude that those present at the meeting of 26 November 2002 considered that the information that Mr Newberry agreed during the course of that meeting to provide to the respondent was irrelevant to the question of whether the respondent would in fact engage Robsons as an independent contractor. Rather I consider that a reasonable observer would conclude that those present at the meeting of 26 November 2002 expected the respondent to give consideration to the desirability of engaging Robsons as an independent contractor in the light of the information to be provided by Mr Newberry, albeit that they thought that consideration would result in a decision favourable to Robsons. Mr McGarry’s reference to a condition that Robsons be able to start work the next day does not, in my view, undermine the above conclusion. Nothing in the evidence before the Court suggests an inability in the respondent to complete the formalities necessary for the approval of Robsons as a subcontractor during the course of 26 November 2002. Indeed an inference is open to be drawn from the evidence that consideration was given to the desirability of engaging Robsons as an independent contractor during the course of 26 November 2002 and questions raised as to Robsons’ suitability to be so engaged.

38 For the above reasons I am not satisfied that those present at the meeting of 26 November 2002 intended then and there to conclude a bargain.

39 The above conclusion renders it strictly unnecessary for me to determine the issue of whether Mr McGarry had actual or, assuming that an estoppel could operate in the context of an application under s 298U of the Act, ostensible authority to enter into the alleged subcontract on behalf of the respondent. However, lest this matter should require consideration by the Full Court, I should briefly record my conclusion on these questions.

40 I am satisfied that Mr McGarry did not have actual authority to enter into the alleged subcontract on behalf of the respondent. The alleged subcontract was not signed under company seal or at all; it was either an oral contract or a contract partly in writing and partly oral. In my view the Guidelines make clear that no employee of the respondent within the NSW Building Group, other than possibly Mr Munnings, had actual authority to enter into such a subcontract on behalf of the respondent where the subcontract price exceeded $1 million.

41 I did not hear argument on the issue of whether an estoppel could operate in the context of an application under s 298U of the Act to prevent a respondent from asserting that it was not bound by a contract. I therefore express no view on the issue. On the assumption that an estoppel could operate in this context, I am not satisfied that the conduct of the respondent was such as to hold out Mr McGarry as having authority to enter into a subcontract with Robsons. Although Mr McGarry’s own conduct is not irrelevant to any representation by the respondent, a representation coming from Mr McGarry alone would be insufficient to give rise to an estoppel binding the respondent (Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 208 ALR 213 at [36]). I reject the submission of the applicant that because Mr McGarry and Mr Murphy were authorised to discuss bulk earthworks with potential subcontractors, and to negotiate the scope of subcontract work and tender prices, and to do so using the respondent’s New South Wales head office, they were held out by the respondent as having authority to conclude subcontract agreements on behalf of the respondent. There is, in my view, a clear distinction between authority to conduct negotiations, even to an advanced stage, and authority to enter into contractual relations.

42 I also reject the submission that subs 129(3) of the Corporations Act assists the applicant in this regard. Subsection 129(3) provides:

No evidence was placed before the Court from which I could identify the types of powers and duties customarily exercised by officers of the kind of Administration Managers or Design Managers of companies similar to the respondent. In particular the evidence does not assist me in determining whether officers of that kind would customarily exercise the power of entering into subcontracts on behalf of their respective employing companies.

43 I conclude that it has not been established that a contract was entered into between the respondent and Robsons on or about 26 November 2002.

44 As mentioned above, the applicant by his amended statement of claim alleged in the alternative that on or about 29 November 2002 the respondent refused to engage Robsons as an independent contractor. The respondent denied this allegation on the basis that, as it contended, there is a material distinction between refusing to engage an independent contractor and deciding to award a particular subcontract to one contractor in preference to another. By its written submissions the respondent argued:

45 The applicant argued in favour of construing par 298K(2)(d) of the Act in a way that would facilitate the purposes of the Act. He placed reliance in this regard on Australasian Meat Industry Employees’ Union v Belandra Pty Ltd [2003] FCA 910; 126 IR 165 (‘Belandra’s case’). In Belandra’s case North J gave consideration to the proper construction of the phrase ‘refuse to employ’ in par 298K(1)(d). That paragraph contains a prohibition against an employer, for a prohibited reason, refusing to employ another person. At [49]-[51] his Honour observed:

46 A similar approach was adopted in Maritime Union of Australia v Burnie Port Corporation Pty Ltd [2000] FCA 1189; 101 IR 435 where Ryan J was also required to give consideration to whether an employer had refused to employ an applicant for employment. At [44] Ryan J said:

47 Although an appeal from his Honour’s decision was allowed (Burnie Port Corporation Pty Ltd v Maritime Union of Australia [2000] FCA 1768; 104 FCR 440) the Full Court at [14] said:

48 The structure of s 298K of the Act suggests that in the phrases ‘refuse to employ another person’ in par 298K(1)(d) and ‘refuse to engage another person as an independent contractor’ in par 298K(2)(d) the term ‘refuse’ is intended to bear a similar meaning. For this reason acceptance of the respondent’s submission identified in [44] above would implicitly involve rejection of the approach adopted by Ryan J in Maritime Union of Australia v Burnie Port Corporation Pty Ltd at [44] which the Full Court on appeal did not consider to be tainted by error. I do not consider that I am free to reject that approach which, in any event, I find persuasive. I therefore conclude that the respondent, by deciding to engage a subcontractor other than Robsons to undertake the work for which Robsons had tendered notwithstanding its active consideration of Robsons’ tender, refused to engage Robsons as an independent contractor within the meaning of par 298K(2)(d) of the Act.

49 It is necessary to give consideration to when it was that the respondent refused to engage Robsons as an independent contractor. Mr Munnings gave evidence that the process that had been adopted by the respondent over many years was that any recommendation for the engagement of a subcontractor would be put forward by the relevant ‘site’ and that the recommendation would be sent to Mr Chatfield for review. I understand Mr Munnings’ reference to the ‘site’ to mean those officers or employees of the respondent with site-specific responsibilities. In the circumstances of this case that was Mr McGarry and Mr Murphy. Mr Munnings said that Mr Chatfield had a practice of diligently going through recommendations and that he would raise with the ‘site’ any queries that he had regarding the recommendations.

50 As mentioned above, the documentation provided to Mr Chatfield in this case recommended engagement of an independent contractor other than Robsons. No detailed information concerning any other tender or tenderer was included in that documentation. Having regard to the perceived need to have work on the Gosford project commence quickly, this omission tends to suggest that a decision as to the identity of the independent contractor to be engaged had been made at the time that the documentation was compiled; that is, that what remained to be approved were the terms of the formal contract. Mr Munnings’ acceptance of the possibility that, by the time that he signed the Subcontractor Approval Document, the recommended subcontractor was already working on site tends similarly to suggest that the identity of the independent contractor to be engaged had by that time been determined.

51 This conclusion is consistent with the evidence that on 29 November 2002 Mr McGarry advised Mr Rigg that a decision had been made ‘to go with a contractor from a previous alliance’ and that the person to whom he could talk about the decision was the respondent’s Construction Manager. The failure of the respondent thereafter to communicate with Robsons in respect of its tender tends to suggest that what Mr McGarry told Mr Rigg was right, at least to the extent that he conveyed that a decision had been taken not to engage Robsons as an independent contractor. In my view the evidence leaves open an inference that at the time of Mr McGarry’s statements to Mr Rigg a decision had been made, by an officer of the respondent authorised to make such a decision, that Robsons was not to be engaged as a subcontractor on the Gosford project. Nothing in the Guidelines, in my view, stands in the way of this inference. The guidelines do not purport to govern authority to determine generally, or in respect of any particular project, with whom the respondent will enter into contracts or the characteristics of those with whom the respondent will enter into contracts.

52 In the absence of any evidence explaining the circumstances in which Mr McGarry came to say the things that he did on the 29 November 2002, or the form and content of the Subcontractor Approval Document and its annexures, I draw the inference that on, or shortly before, 29 November 2002 a decision was made by an officer of the respondent authorised to make such a decision that Robsons was not to be engaged as a subcontractor on the Gosford project (Booth v Bosworth [2001] FCA 1453; 114 FCR 39 at [30]- [42]). I do not consider it necessary to reach a definite view about whether it was Mr Lawes or another officer of the respondent who made the decision that Robsons not be engaged as an independent contractor.

53 I am satisfied that on or about 29 November 2002 the respondent refused to engage Robsons as an independent contractor.

54 The applicant by his amended statement of claim alleges that the respondent’s conduct of refusing to engage Robsons as an independent contractor was, within the meaning of s 298L of the Act, for one or more of the following prohibited reasons:

56 I gave consideration to the significance of s 298V of the Act in Maritime Union of Australia v CSL Australia Pty Ltd [2002] FCA 513; 113 IR 326 at [56]- [61]. In that case at [59] I noted that s 298V reversed the onus of proof not only with respect to the dominant reason for the relevant conduct but with respect to all operative reasons for that conduct.

57 Where an allegation is made, as it has been in this case, that conduct was carried out for one or more of the prohibited reasons identified in s 298L, the presumption contained in s 298V presumably operates with respect to each of those reasons. I use the expression ‘presumably’ as I did not receive any submissions from the parties in this respect. I proceed on the basis that, where more than one reason for conduct is alleged, s 298V operates to lead to a finding that conduct was carried out for each of the reasons in respect of which the statutory presumption is not rebutted.

58 The respondent submitted that there was no evidence either that Robsons had any employees who were not, or did not propose to be, members of an industrial association, or that if it did, that that fact was known to the respondent. This submission appears to overlook the statutory presumption contained in s 298V. As the applicant has alleged that the relevant conduct of the respondents was carried out because one or more of Robsons’ employees were not, or did not propose to become, members of an industrial association, and it would constitute a contravention of Part XA of the Act for the respondent to carry out the conduct for that reason, it is to be presumed in this proceeding that the conduct was carried out for that reason unless the respondent proves otherwise. The respondent did not prove otherwise.

59 Contrary to the respondent’s alternative submission on this issue, the evidence does not positively establish that Robsons had no employees who were not, or did not propose to become, members of an industrial association. So far as the respondent places reliance on par 18 of Mr Rigg’s affidavit sworn on 26 March 2004, I upheld an objection taken by the respondent to the admissibility of the evidence contained in this paragraph. So far as the respondent placed reliance on par 46 of Mr Newberry’s affidavit sworn on 26 March 2004 I ruled that this paragraph was to be received in evidence with a limitation on the use that could be made of it. The limitation was that Mr Newberry’s hearsay statements touching on the union membership of Robsons’ employees were not to be used as evidence of the truth of the statements (see ss 60 and 136 of the Evidence Act 1995 (Cth)). This limitation was imposed at the request of the respondent. However, even had these two paragraphs been received in evidence unconditionally they would have been evidence of no more than that Mr Newberry did not know how many employees of Robsons belonged to a union. This is not a case in which the evidence as a whole positively establishes that all of Robsons’ employees were members of an industrial association and that there could be no basis for the prohibited reason (cf Employment Advocate v Williamson [2001] FCA 1164 (FC); [2001] FCA 1164; 111 FCR 20 per Gray J at [23]).

60 I conclude that the respondent is to be presumed in this proceeding to have refused to engage Robsons as an independent contractor for a prohibited reason, namely because Robsons at the relevant time had one or more employees who were not, or did not propose to become, members of an industrial association.

61 The respondent submitted that as the Robsons EBA had not come into force as at 29 November 2002, the applicant’s allegation that the respondent’s conduct was for the prohibited reason that Robsons was entitled to the benefit of an industrial instrument must fail. This submission was dependent upon a further submission that there was no evidence that any of the AWAs to which Robsons was at one time a party was in force at any relevant time. I reject this latter submission. Mr Newberry gave evidence to the effect that Robsons agreed with its employees to enter into the Robsons EBA to replace the AWAs on which all but four of its field staff operated. It is to be inferred from this evidence, in my view, that the employment of Robsons’ field staff was governed by AWAs during the course of the negotiations that led to the certification of the Robsons EBA. I reject as extremely unlikely the possibility that all of these employees had left their employment with Robsons before 29 November 2002. I am satisfied that Robsons was entitled to the benefit of industrial instruments as at, and immediately before, 29 November 2002.

62 I conclude that the respondent is to be presumed in this proceeding to have refused to engage Robsons as an independent contractor for the additional prohibited reason that Robsons was entitled to the benefit of an industrial instrument.

63 The respondent conceded that there was evidence that Robsons proposed to participate in a proceeding under an industrial law. The relevant proceeding, I presume, was the proceeding for the certification of the Robsons EBA. However, the respondent submitted that the evidence showed that Mr Munnings did not know of this circumstance. I am not persuaded that the evidence shows positively that Mr Munnings did not know of this circumstance. In any event, the extent of Mr Munnings’ knowledge is not the critical issue. The respondent has not proved that the decision of the respondent not to engage Robsons as an independent contractor, whoever it was who made the decision, was not made for this prohibited reason, or for reasons that did not include this prohibited reason.

64 I conclude that the respondent is presumed in this proceeding to have refused to engage Robsons as an independent contractor for the further additional prohibited reason that Robsons proposed to participate in a proceeding under an industrial law.

65 The respondent submitted that Robsons, as a corporation, could not give evidence in a proceeding under an industrial law. I do not understand the applicant to have pressed reliance on this alleged prohibited reason. It is not necessary to give it further consideration.

66 For the above reasons I find that the respondent has engaged in conduct in contravention of Part XA of the Act. The proceeding will be listed for a further hearing on

the question of the order or orders, if any, that it is appropriate in all of the circumstances of the case for the Court to make.

I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Counsel for the Applicant:	J Fernon SC and R Bromwich

Solicitor for the Applicant:	Australian Government Solicitor

Counsel for the Respondent:	F Corsaro SC and I Neil

Solicitor for the Respondent:	Corrs Chambers Westgarth

Date of Hearing:	1 & 2 November 2004

Date of Judgment:	20 January 2004

•	Robsons had one or more employees who are not, or do not propose to become, members of an industrial association (sub-par 298L(1)(c)(i));
•	Robsons was entitled to the benefit of an industrial instrument, namely, the AWAs which expired on 3 December 2002 or the s 170LK agreement lodged with the Commission on or about 18 November 2002 (par 298L(1)(h));
•	Robsons was participating in or proposed to participate in a proceeding under an industrial law, namely, the certification of the s 170LK agreement by the Commission under Division 4 of Part VIB of the Act on 10 December 2002 (par 298L(1)(j);
•	Robsons proposed to give evidence in the proceeding under an industrial law described in the previous paragraph (par 298L(1)(k)).

Federal Court of Australia

Employment Advocate v Barclay Mowlem Construction Limited [2005] FCA 16 (20 January 2005)