1
Fair Work Act 2009
Section 526 - Application to deal with a dispute involving stand down
Mr Stephen Ball
v
Thomas Foods International Murray Bridge Pty Ltd
(C2018/914)
DEPUTY PRESIDENT ANDERSON ADELAIDE, 7 MAY 2018
Application to deal with a dispute involving stand down – production impaired by
catastrophic fire – laboratory technician stood down – offer of temporary secondment
accepted – revised offer of temporary secondment rejected – indefinite stand down without
pay – fairness between the parties – revised offer unreasonable – employee entitled to remedy
in settlement of dispute - parties to consult on orders
[1] On 22 February 2018 Mr Stephen Ball (Mr Ball or ‘the Applicant’) made an
application to the Fair Work Commission (the Commission) under section 526 of the Fair
Work Act 2009 (FW Act) to deal with a stand down dispute.
[2] The Respondent to the application is his employer, Thomas Foods International
Murray Bridge Pty Ltd (‘Thomas Foods’). This business is part of the broader Thomas Foods
Group.
[3] I conducted a conference of the parties on 20 March 2018 at which time I conciliated
the matter. It did not resolve. Mr Ball requested that the dispute be arbitrated. I considered
that the appropriate course.
[4] I issued directions on 20 March 20181 and listed the matter for hearing and
determination on 13 April 2018.
[5] I conducted a further directions hearing on 4 April 2018 to consider a request by Mr
Ball for the production of documents. I made no order for production, but issued Further
Directions on matters relevant to Mr Ball’s request.2
[6] On 10 April 2018 I granted the employer permission under section 526 of the FW Act
to be legally represented at the arbitration on the ground that the matter was likely to be more
efficiently dealt with if the employer was represented. Mr Ball did not oppose permission.
The grant of permission was made on specified conditions.3
[7] In the lead-up to the arbitration both Mr Ball and Thomas Foods filed materials with
the Commission in accordance with my directions.
[2018] FWC 2483[Note: a correction has been issued to this document]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2018fwc2483_pr606902.htm
[2018] FWC 2483
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[8] I arbitrated the matter by determinative conference on 13 and 18 April 2018. Mr Ball
was self-represented with the assistance of his father-in-law Mr Kassebaum. Thomas Foods
was represented by Mr Foley of Norman Waterhouse Lawyers and Ms Young the Group
Human Resources Manager of Thomas Foods.
[9] I heard evidence from Mr Ball and from Ms Young, and received submissions from
both parties. I found both Mr Ball and Ms Young to be reliable witnesses. Mr Ball necessarily
gave evidence that was, in some respects, more detailed given his involvement in events to
which Ms Young was not a party. There are few if any material factual differences between
the respective cases. I make findings of fact based on the oral and documentary material
before me. Some of the evidence before me was hearsay and opinion. I give less weight to
such evidence except where it concerns uncontroverted facts.
[10] At the conclusion of proceedings I reserved my decision.
[11] For the sake of completeness I note that also on 22 February 2018 Mr Ball made a
general protections application (not involving dismissal) under section 372 of the FW Act. He
claimed to have been subjected to undue influence and coercion in breach of sections 344 and
355. Thomas Foods agreed to participate in a conference on that application. The facts
underpinning the section 372 application concern the same events in Mr Ball’s section 526
application. The conciliation conference I conducted on 20 March 2018 was concurrently a
conference for the purposes of section 374(1) of the FW Act. As that matter did not resolve, I
exercised no further jurisdiction on the section 372 application. I did not consider it
appropriate to issue advice in the terms of section 375 of the FW Act.
Background
[12] This case concerns a dispute relating to the circumstances and terms under which a
laboratory technician working at Thomas Foods Murray Bridge was stood down by his
employer in the aftermath of a catastrophic fire on 3 January 2018 which destroyed the
employer’s production facilities at that site.
[13] The employee, Mr Ball, claims that the stand down was both unlawful and unfair. He
seeks to have the dispute resolved by the Commission making orders that compensate him for
his loss of remuneration since being stood down and orders that he be paid his contractual
remuneration for any work that he performs during the period of stand down. In the
alternative, he seeks orders that compensate him for his loss of remuneration since being
stood down and orders that he be paid a redundancy payment at the minimum level required
by the National Employment Standards.
[14] The employer, Thomas Foods, says that Mr Ball’s stand down was both lawful and
fair, and that no orders should be made. It says that he is not entitled to a redundancy payment
as his position is not redundant.
[15] In arbitrating this matter, the events leading up to and since the stand down are
relevant, as well as the terms and conditions under which Mr Ball was employed.
[2018] FWC 2483
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The Facts
[16] Thomas Foods is a significant employer in regional South Australia operating abattoirs
and production facilities. It is headquartered at Murray Bridge in South Australia where it
operates its largest plant. This includes a slaughterhouse and a processing plant where it
employs production workers and maintenance technicians. Located on the same site, but in
separate buildings are a laboratory and also administration facilities. Thomas Foods is the
town’s major employer, indeed the largest employer in the Murraylands.
[17] Relevant for current purposes, the Thomas Foods Group also operate a smaller meat
production facility at Lobethal in the Adelaide Hills where it also employs production
workers and maintenance technicians. The Lobethal operations are conducted by a separate
wholly-owned entity in the Thomas Foods Group, Lobethal Abattoirs Pty Ltd.
[18] A small laboratory exists at the Lobethal site but it is not accredited by the federal
regulator (NATA). The Murray Bridge laboratory is accredited.
[19] Overall, Thomas Foods employed approximately 1,400 employees at Murray Bridge
prior to the events of 3 January 2018, made up as approximately 1,300 production workers, 22
quality checkers, 5 laboratory technicians and the remainder administrative and executive
staff.
[20] Mr Ball worked as a salaried laboratory technician in the laboratory at Murray Bridge.
Although originally employed (according to his letter of appointment) as a food process
worker on 17 August 2015 under the T & R Murray Bridge Pty Ltd Food Process Worker
Enterprise Agreement 20104, he commenced from the outset in the laboratory, not on the
production line. After a month’s probation he was promoted to a full time salaried staff
position as Laboratory Technician. He commenced in that role from 5 October 2015 and was
thereafter employed under the terms of a new letter of offer of 24 September 2015 which he
accepted on 26 September.5
[21] The letter of 24 September 2015 constituted Mr Ball’s contract of employment for
current purposes. The following extracts from the contract are relevant:6
Clause 2.1 Application of Award: “This is a salaried staff (Award-exempt)
position…”
Clause 3 Location: “The location of work is Murray Bridge facility. This is your
principle (sic) location of work.”
Clause 4 Reporting: “You must comply with all lawful and reasonable instructions.”
(see also clause 9.1(j))
Clause 24 Termination (3rd to last paragraph): “The Company may direct you not to
report for duties for a period of time, subject to you still receiving your salary
throughout that period.”
Clause 24 Termination (last paragraph): “If your position is made redundant,
severance payments will apply in accordance with the Fair Work Act 2009 (Cth), as
amended from time to time.”
[2018] FWC 2483
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Clause 26 Other Terms and Condition: “The above is a brief summary only of the
terms and conditions that cover your employment at TFI. A more complete set of
policies that apply to your employment with TFI is available in the Company’s Group
Employee Handbook.”
[22] Mr Ball reported to the Laboratory Manager or the Plant Manager.
[23] In the two years and three months until January 2018 Mr Ball remained based at
Murray Bridge. He did not work from any other location other than very occasional visits to
other facilities or training venues for work purposes. In this period there were no material
changes to the terms of his contract of employment other than performance reviews and salary
increases.
[24] Mr Ball is a young man of 26 years living at Nairne with a wife who works but is
pregnant expecting their first child in August 2018. He has a $420,000 home mortgage. He
holds a Bachelor Degree in Animal Science. However, he does not hold technical
qualifications in meat testing. His skill as a meat tester was developed on the job, from
training and observation.
[25] Mr Ball’s core functions as a Laboratory Technician were to test samples of meat from
the Murray Bridge and Lobethal production facilities for safety and health, and to prepare
reports on the findings. He worked alongside four other laboratory technicians (including his
Manager). A further twenty two quality checkers also worked at Murray Bridge but not in the
laboratory. Quality checkers perform a different role. To undertake his work, Mr Ball used
plant and equipment in the laboratory.
[26] On the evening of Wednesday 3 January 2018 a catastrophic fire engulfed and
destroyed the entire meat processing production facilities at Murray Bridge. Emergency
services were required at the site for a number of days after the fire. The fire did not spread to
the laboratory or the administration buildings. The laboratory remained operational. The fire
was accidental. Its cause is discussed later in this decision.
[27] The following day, 4 January, the company sent a memo to all staff which included
the following:7
“Our company has begun making alternate processing arrangements across our group
operation and networks to continue to manage our customer requirements. In all this
the safety and wellbeing of all our staff is our highest priority. Staff will therefore not
be returning to the site until it has been declared completely safe to do so. Our
management is working closely with the relevant authorities in that regard and we will
be keeping all our staff notified as news comes to hand. The company will continue to
stand by and support our staff during this time including providing access to
counselling services and looking into possible redeployment arrangements across our
national operations where relevant in the short term.”
[28] The fire presented many immediate and profound challenges for the employer. This
included making arrangements for as many as possible of its 1,400 employees at Murray
Bridge to be relocated to alternate sites and businesses in the Thomas Foods Group in South
Australia and interstate.
[2018] FWC 2483
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[29] One such relocation option that was deemed feasible was to the smaller Lobethal
abattoir, some 60 kilometres north west of Murray Bridge. To achieve this, in the weeks
following the fire the employer established a second shift at Lobethal and made arrangements
to bus employees to and from Murray Bridge.
[30] In the week following the fire, Mr Ball remained employed at Murray Bridge. As the
Laboratory was untouched by the fire and functioning, and as there was a pipeline of a few
days of meat testing in the lab, productive laboratory work could continue. On Friday 5th
January, Monday 8th, Tuesday 9th and Wednesday 10th Mr Ball went about his regular duties
in the laboratory (on Thursday 4th he along with all other employees were stood down with
pay (my emphasis) and on Saturday 6th he offered to work overtime patrolling the site with
emergency workers).
[31] On 10 January 2018 Mr Ball’s laboratory manager Mr May informed him that only
essential staff were required to remain working at Murray Bridge, that he was not one of
those, and that he would need to take annual leave until the situation clarifies.
[32] Hence, Mr Ball was stood down without pay from 11 January 2018.
[33] Mr Ball was anxious about his job and also keen to help the business in the midst of its
crisis. He messaged the quality assurance manager (Ms Abbott) indicating that he would be
interested in doing quality checking work (including at Lobethal) if there was no laboratory
work for him. He was told his name would be added to that list.
[34] Mr Ball took annual leave from his (10.3 days) accrual on Friday 12th, Monday 15th
and Tuesday 16th January. He attended work at Murray Bridge on Tuesday 16th, Wednesday
17th and Thursday 18th January but helped out with non-laboratory duties including stocktake
in the cold store and removal and transportation of staff lockers to Lobethal.
[35] Mr Ball queried his employment status with the Human Resources Manager (Lailaine
Reading) on 18 January. He was told to attend an induction at Lobethal the following day
where he would be provided an offer of temporary work or otherwise stood down without pay
(my emphasis).
[36] Mr Ball attended the induction at the Lobethal site on Friday 19 January. He was
provided a letter dated 19 January 2018:
“Dear Stephen,
Offer of temporary secondment work at the Lobethal Plant - Contract employee
We refer to the fire at the Murray Bridge Plant on Wednesday 3 January 2018. As a
result you have been stood down without pay until further notice.
During the period of stand down, Thomas Foods International Murray Bridge has
identified work that you could perform at its Lobethal Plant as an alternative to
ongoing stand down without pay. The seconded work will be within your skill set.
[2018] FWC 2483
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Should you decide to decline this offer of temporary secondment work at the Lobethal
Plant, you will remain on stand down without pay until further notice.
The terms of your employment and your accrued entitlements will remain as per your
current employment contract with Thomas Foods International Murray Bridge Pty Ltd.
Your ongoing entitlements while working at the Lobethal Plant will also continue
accrue in accordance with your current employment contract with Thomas Foods
International Murray Bridge Pty Ltd.
You may access your leave entitlements, including your annual leave, banked
overtime, or your personal leave bank to cover some, or all, of the current stand down
period. Please contact Jenny Robinson on (08) 85329248 if you wish to do so.
We hope to have the Murray Bridge plant up and running again as soon as possible. At
that time, you will be asked to return to duties at the Murray Bridge plant.
Further discussions would be held with you at that time and you will be kept up to date
over the intervening period.
As discussed, you will commence working at the Lobethal Plant on Monday 22nd
January 2018 and shift will be determined by the business needs.
If you agree to the temporary secondment to the Lobethal Plant in the above terms,
please sign the section below and return this document to us as soon as possible.
Please keep a copy for your records. If you have any questions, please do not hesitate
to contact us.
Yours sincerely
Lailaine Reading
HR Manager
I agree to be temporarily seconded to the Lobethal Plant in the above terms
……………………….
Print name
……………………….
Signature and date”
[37] Mr Ball accepted the offer and signed and dated the acceptance 19/1/18.
[38] After the induction and accepting the offer, Mr Ball had a query which resulted in
three email exchanges that day with Ms Reading:8
“From: Stephen Ball
Sent: Friday 19 January 2018 11.09am
To: Lailaine Reading
Subject: Re Temporary Secondment
[2018] FWC 2483
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Hi Lailaine
Could you please confirm that my pay rate and hours will remain as they were at
Murray Bridge before I start at Lobethal on Monday. If not I’d like to arrange a
meeting to discuss this further. This new role of Mutton boner/slicer is so far outside
my skill set as a Lab Technician I would prefer to be in the QA team or back in the
Lab at Murray Bridge as it is still operational.
Kind Regards
Stephen Ball
From: Lailaine Reading
Sent: Friday 19 January 2018 4.12 pm
To: Stephen Ball
Subject: Re Temporary Secondment
Hi Stephen
Your pay rate will remain the same, your working hours will be as per the
requirements for the AM Mutton Boning Room. This is the role we have for you at
present, you signed the secondment letter so we are expecting you for work Monday
22/1/17 at 6am is this still the case?
Kind Regards
Lailaine Reading
HR Manager
From: Stephen Ball
Sent: Friday 19 January 2018 4.54pm
To: Lailaine Reading
Subject: Re Temporary Secondment
Hi Lailaine
Thanks for getting back to me. I realise this is a time of uncertainty for everyone. I
have signed the offer of temporary secondment and will be on the site Monday 22/1.
The offer states that seconded work will be within my skill set, as I have no experience
or skills as a mutton boner or slicer, I expect that this will be a very short term solution
and that I can resume my duties as a Laboratory Technician ASAP as I know the lab is
still operational. Otherwise, I’ll to give it a go and see if it’s a good fit for me.
Kind Regards
Stephen Ball”
[39] During the day, Mr Ball also phoned the Fair Work Commission and contacted a
solicitor to ascertain his rights.
[40] Mr Ball worked at Lobethal as a mutton boner in the week of Monday 22 January to
Thursday 1 February (other than being absent on 29 January for a doctor’s visit with his
pregnant wife). He received minimal training in the work and by the week’s end was on
lighter duties due to difficulty meeting its physical demands.
[41] On Tuesday 30 January Mr Ball was informed that a revised offer of temporary
secondment would be made to him. He would remain working at Lobethal in the Mutton
Boning Room but be employed under the Lobethal Food Process Worker Employee
[2018] FWC 2483
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Collective Agreement 2008, or be stood down without pay. He was told he would need to
make this decision by Friday 2 February.
[42] On Wednesday 31 January Mr Ball emailed Lailaine Reading in the following terms:9
“From: Stephen Ball
Sent: Wednesday 31 January 2018 8.53pm
To: Lailaine Reading
Subject: Re Temporary Secondment
Hi Lailaine,
As we've previously discussed I want to continue working for TFI in a mutually
agreed upon position, so long as the position is subject to the continuation of the
employment terms in my TFI Murray Bridge contract either in some capacity at
Lobethal or as a lab technician in the still operational Lab at Murray Bridge. I agreed
to the Temporary Secondment at TFI Lobethal because I was assured my pay and
hours would remain the same as they were at Murray Bridge, even if the duties
assigned to me are substantially different from those of a Lab Technician. However,
now you intend to further alter my employment conditions by transferring me to the
Lobethal Food Process Worker Employee Collective Agreement which, if agreed to,
results in a major reduction in salary. Having spoken to the Fair Work Ombudsman
and a solicitor I have been advised that if I cannot continue employment under the
previously agreed upon conditions, then an alternative to your proposed changes is to
be made redundant. As I have been a contracted staff member for between 2 and 3
years, would you please confirm, the redundancy conditions of six week’s pay plus
two weeks in lieu of notice and the dollar amount to be paid, so I can consider all of
my options. I have embraced all of the opportunities presented to me in my time at TFI
and would greatly appreciate being able to continue my employment under the
conditions signed by both parties in the original Letter of Temporary Secondment.
Kind regards
Stephen Ball”
[43] On 1 February 2018 Mr Ball received a letter from the employer as follows:10
“PRIVATE AND CONFIDENTIAL
1 February 2018
Dear Stephen
Offer of temporary secondment work at the Lobethal Plant
We refer to the fire at the Murray Bridge Plant on Wednesday 3 January 2018. We
also refer to our letter to you shortly thereafter offering you seconded Food Process
Worker duties at the Lobethal Plant. We note your signed acceptance to that offer. We
also refer to the emails between you and Lailaine Reading since then dated 19 and 31
January 2018.
[2018] FWC 2483
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Initially, you were stood down without pay due to the fire. You will understand this
time is difficult for the Company and employees. We have genuinely endeavoured to
do the best we can for all our employees in these extremely difficult circumstances.
Unfortunately, QA contract work or technician work cannot be identified for you at
either Murray Bridge or Lobethal at this time due to the fire. However, as mentioned
in our original letter to you, we have identified Food Process Worker duties for you at
Lobethal. As mentioned, that work would be covered by Lobethal Food Process
Worker Employee Collective Agreement 2008 (Lobethal Food Process Worker
Agreement).
We note in your emails that, although you do not have Food Process Worker
experience, you are prepared to give it a go. Our offer of Food Process Worker duties
at Lobethal remains at this time.
These duties would be covered by the Lobethal Food Process Worker Agreement.
Please advise if you still wish to pursue Food Process Worker duties at Lobethal in
these terms.
Should you decide to now decline this offer of temporary secondment work at the
Lobethal Plant, you will remain on stand down without pay until further notice. The
state of stand down does not constitute a redundancy causing termination of
employment. Therefore, it does not attract redundancy pay.
Should you have any queries please contact me on 838967.
Yours sincerely
Lailaine Reading
HR Manager
Thomas Foods International”
[44] Mr Ball was given until close of business the following day, 2 February, to advise
whether he agreed to the revised offer of 1 February or be stood down without pay.
[45] Mr Ball felt ill with stress and made an appointment with his general practitioner. He
telephoned Ms Reading on the afternoon of 2 February. He advised that the offer was not fair
or right; that he had seen a solicitor and would be lodging a complaint with the Fair Work
Commission; and that his doctor had that morning certified him unwell and unable to work
between 2 and 9 February. He emailed the sick certificate to Ms Reading.
[46] Mr Ball was also certified unfit to work between 9 and 16 February and then again
between 19 February and 5 March.
[47] During this period, correspondence was exchanged between solicitors for Mr Ball and
solicitors for Thomas Foods.11 Mr Ball also received a letter dated 20 February 2018 from the
Group HR Manager Morna Young:12
“CONFIDENTIAL
[2018] FWC 2483
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20 February 2018
Dear Steven
Murray Bridge stand down
We refer to the fire on 3 January 2018 at the Murray Bridge site. We also refer to the
letter from Norman Waterhouse to your legal representatives dated 14 February 2018.
We refer to the relevant correspondence predating that letter.
Since 14 February 2018 there has been email correspondence between you and
Lailaine Reading. We note that you have provided us with a medical certificate
covering 19 February 2018 to 5 March 2018 inclusive. Thank you for the provision of
that medical certificate.
Currently you remain on stand down due to the fire. We reiterate our previous
confirmation to you that the temporary secondment work in the terms of the 19
January 2018 correspondence has ceased.
In your correspondence since 14 February 2018, you have indicated that you are
available to work at Lobethal provided your pay rate and other employment benefits
remain the same as those that you were provided at Murray Bridge as a Laboratory
Technician. Our 14 February 2018 correspondence to your legal representative
confirmed that this work was no longer available. That has not changed.
However, the Company remains willing to discuss with you work options at the
Lobethal site. Currently, the only potential work is food processing work. That work,
if agreed, would be in the terms of the Lobethal Food Process Worker Employee
Collective Agreement 2008 as the alternative to stand down without pay. Therefore,
any work at Lobethal at this time would not be at your Murray Bridge rates.
Should you wish to discuss the potential for you to work at Lobethal in the above
terms, please contact Lailaine Reading. Currently you remain stood down, but we note
your current absence due to a medical condition.
Should you wish to discuss this matter, please contact me.
Yours faithfully,
Morna Young
Group HR Manager”
[48] Mr Ball filed these proceedings (and the related section 372 application) on 22
February.
[49] Although he had secured independent legal advice, Mr Ball lodged proceedings in his
own right and represented himself with his father-in-law’s assistance.
[50] As at the dates of hearing (13 and 18 April), Mr Ball remained stood-down without
pay. His last day of paid work (as a mutton boner but at his Murray Bridge pay rate) had been
[2018] FWC 2483
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1 February 2018. He was on paid personal leave until 5 March. Although he believed he had
exhausted his annual leave and personal leave accruals in the period since the fire, Ms
Young’s evidence was that he continues to accrue these entitlements at his Murray Bridge rate
of pay. Hence, Ms Young said that Mr Ball had 3 days personal leave and 2 days annual leave
in his leave bank as at 13 April.
The Legal Principles
[51] In this matter, the Commission is arbitrating a stand down dispute notified under
section 526 of the FW Act. It provides:
“526 FWC may deal with a dispute about the operation of this Part
(1) The FWC may deal with a dispute about the operation of this Part.
(2) The FWC may deal with the dispute by arbitration.
Note: The FWC may also deal with a dispute by mediation or
conciliation, or by making a recommendation or expressing an opinion (see
subsection 595(2)).
(3) The FWC may deal with the dispute only on application by any of the
following:
(a) an employee who has been, or is going to be, stood down under
subsection 524(1) (or purportedly under subsection 524(1));
(b) an employee in relation to whom the following requirements are
satisfied:
(i) the employee has made a request to take leave to avoid being
stood down under subsection 524(1) (or purportedly under
subsection 524(1));
(ii) the employee’s employer has authorised the leave;
(c) an employee organisation that is entitled to represent the industrial
interests of an employee referred to in paragraph (a) or (b);
(d) an inspector.
(4) In dealing with the dispute, the FWC must take into account fairness
between the parties concerned.”
[52] Any orders made in dealing with the dispute have legal consequence:
“527 Contravening an FWC order dealing with a dispute about the operation of
this Part
A person must not contravene a term of an FWC order dealing with a
dispute about the operation of this Part.
[2018] FWC 2483
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Note: This section is a civil remedy provision (see Part 4-1).”
[53] The statutory provisions setting out the circumstances in which a (national system)
employer can stand down a (national system) employee are set out in sections 524 and 525:
“524 Employer may stand down employees in certain circumstances
(1) An employer may, under this subsection, stand down an employee during
a period in which the employee cannot usefully be employed because of one of
the following circumstances:
(a) industrial action (other than industrial action organised or engaged in
by the employer);
(b) a breakdown of machinery or equipment, if the employer cannot
reasonably be held responsible for the breakdown;
(c) a stoppage of work for any cause for which the employer cannot
reasonably be held responsible.
(2) However, an employer may not stand down an employee under
subsection (1) during a period in which the employee cannot usefully be
employed because of a circumstance referred to in that subsection if:
(a) an enterprise agreement, or a contract of employment, applies to the
employer and the employee; and
(b) the agreement or contract provides for the employer to stand down
the employee during that period if the employee cannot usefully be
employed during that period because of that circumstance.
Note 1: If an employer may not stand down an employee under
subsection (1), the employer may be able to stand down the employee in
accordance with the enterprise agreement or the contract of employment.
Note 2: An enterprise agreement or a contract of employment may also
include terms that impose additional requirements that an employer must meet
before standing down an employee (for example requirements relating to
consultation or notice).
(3) If an employer stands down an employee during a period under
subsection (1), the employer is not required to make payments to the employee
for that period.”
“525 Employee not stood down during a period of authorised leave or absence
An employee is not taken to be stood down under subsection 524(1) during a
period when the employee:
(a) is taking paid or unpaid leave that is authorised by the employer; or
(b) is otherwise authorised to be absent from his or her employment.
[2018] FWC 2483
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Note: An employee may take paid or unpaid leave (for example, annual
leave) during all or part of a period during which the employee would
otherwise be stood down under subsection 524(1).”
[54] Stand down provisions in the industrial arena are not exclusively statutory rules.
Historically, stand down provisions were inserted in awards made by federal and State
industrial relations tribunals on an industry-by-industry basis before parliaments established
statutory rules, such as those in the FW Act, to apply more broadly in the economy. With the
advent of collective enterprise bargaining, stand down provisions also came to be included in
a variety of enterprise agreements.
[55] Hence, the current industrial relations landscape (federal and State) sees stand down
provisions generally sourced from statute and from enterprise agreements.
[56] Principles guiding the operation and application of these provisions were summarised
by a full bench of the Commission in SSX Services Pty Ltd v The Australian Workers Union:13
“Importantly, the right to stand down employees under s.524 arises from the effect of
the section itself. The right is not dependent on approval of the Commission. However,
to the extent that a dispute arises in relation to the exercise of that right, the
Commission is empowered by s.526 to deal with that dispute by arbitration. The
Commission is required to take into account fairness between the parties concerned
and thereby incorporate an overall discretionary factor into the task of determining a
dispute over whether the right to stand down is correctly invoked in the circumstances.
The parties are bound by s.527 to comply with an order of the Commission dealing
with a dispute.”
Consideration
Jurisdictional Pre-requisites
[57] Thomas Foods could only stand down Mr Ball under the authority of section 524 of
the FW Act and Mr Ball can only make an application under section 526 if they are covered
by these statutory provisions. To be so covered, they respectively need to be a national system
employer and a national system employee. There is no dispute that this is so. Mr Ball’s
employer is Thomas Foods International Murray Bridge Pty Ltd. It is a constitutional
corporation (and thus a national system employer) for the purposes of section 14 of the FW
Act.
[58] Mr Ball has standing to notify this dispute and have it determined. He is an employee
who has been stood-down or purportedly stood-down under section 524. He has standing
under section 526(3)(a).
Characterisation of the Dispute
[59] The decision of the Commission in SSX Services Pty Ltd v The Australian Workers
Union noted that the statutory provisions make it important to correctly identify the subject
matter of a dispute the subject of arbitration for the purposes of any stand down order.14 When
characterising a dispute regard should be had to the nature of the dispute alleged in the
[2018] FWC 2483
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originating application and the factual circumstances as they evolve for the purposes of
conciliation and arbitration.15
[60] It is apparent from both Mr Ball’s originating application16, the written and oral
submissions, documents filed by both parties and the issues raised during conciliation and
arbitration proceedings that this dispute is of the following nature:
It concerns one employee only, Mr Stephen Ball;
It concerns the circumstances and terms under which Mr Ball, as a laboratory
technician working at Thomas Foods Murray Bridge, was stood down by his employer
in the aftermath of a catastrophic fire on 3 January 2018 which destroyed the
employer’s production facilities at that site;
It concerns the circumstances and terms under which Mr Ball has continued to be
stood-down including the offers of alternative employment and the conduct of Mr Ball
and Thomas Foods in relation to those offers;
It concerns the status of Mr Ball’s employment including whether he was lawfully or
fairly stood-down and whether as a consequence of conduct by he or the employer his
contract of employment has otherwise been breached or ceased (including by
redundancy);
It concerns whether any remedy or orders should be made in settlement of the dispute.
[61] Aside from the dispute being narrowly confined to one employee (despite a larger
number of employees having been stood down following the 3 January fire), it involves a
broad range of considerations pertaining to Mr Ball including the lawfulness of the stand
down, the fairness of the stand down and the current status of his contract of employment.
Stand down provisions pertaining to Mr Ball
[62] At the date of the fire (3 January) Mr Ball was employed as a Laboratory Technician
under the terms of the letter of offer of 24 September 2015. This was a salaried position
(expressed as “salaried staff (Award-exempt)”)17 and understood by Mr Ball and by Thomas
Foods as such. Although food processing workers and maintenance workers were covered by
two separate enterprise agreements operating at the Murray Bridge site18, neither strictly
applied to Mr Ball in his work as a salaried Laboratory Technician.
[63] The legal basis relied upon by Thomas Foods to have stood down Mr Ball is the
statutory provision in section 524 of the FW Act. In initial correspondence to the Commission
representatives for Thomas Foods placed reliance on a stand down provision in the
Maintenance Technician Enterprise Agreement 2015.19 However, in written submissions20
and at the hearing the employer contended that Mr Ball is not covered by an enterprise
agreement.
[64] Mr Ball’s evidence was that he was not sure if the Maintenance Technician Enterprise
Agreement applied to him as whilst he did not consider himself a maintenance technician
from time to time the employer made reference to the agreement when dealing generally
about staff matters at the Murray Bridge site. Ms Young’s evidence was that “until recently
the Respondent genuinely believed the Applicant’s work was covered” by the agreement “but
as part of these proceedings has formed the view that no enterprise agreement covers the
Applicant’s employment.”21
[2018] FWC 2483
15
[65] I do not consider that Mr Ball was covered by Maintenance Technician Enterprise
Agreement. No reference was made in Mr Ball’s 12-page contract of employment to the
operation or coverage of an enterprise agreement. His wages and conditions (including
remuneration increases) were not varied by reference to that agreement. The scope of that
agreement covers “maintenance and associated tasks”. It is not expressed to cover technicians
working in the laboratory nor is there a classification for such employees. The work
performed by Mr Ball was skilled and specialist. It was technical and scientific in nature. It
was not associated with site or plant maintenance.
[66] In any event, I note that even if Mr Ball was covered by the Maintenance Technician
Enterprise Agreement, the stand down provision in the agreement (clause 17) would by virtue
of section 524(2)) bear a relationship to the rights and obligations on Thomas Foods set by
section 524(1) of the FW Act in that where a clause in an agreement is silent the FW Act
applies.22
[67] I am satisfied that this dispute falls to be determined by reference to the provisions of
section 524 of the FW Act, and not the stand down provisions of the Maintenance Technician
Enterprise Agreement.
Legality of the Stand down
[68] The standing down of an employee is a significant matter, especially where the
employer exercises a right under section 524(3) to do so without pay.23 It self-evidently has
significant impacts on the relevant employee – a denial of some or all income, and an inability
to gain the reward and satisfaction from being productively employed. Absent the
circumstances permitting a lawful stand down, the denial of wages and perhaps even the
denial of productive work would constitute a breach of an employer’s contractual duties. For
the employee, the impact of being denied wages is likely to be significant on their living
standards, with that significance increasing over time as savings (if any) are used to meet
daily living costs. Cascading effects may also impact those who are dependent on that
employee’s earnings.
[69] For these reasons, the statutory rules concerning stand down are specific and limited to
certain circumstances only.24 Unless one of the circumstances set out in section 524(1) are
made out, Mr Ball’s stand down would not be lawful.
[70] It is agreed that Mr Ball’s stand down was not because of industrial action. Section
524(1)(a) does not apply.
[71] Thomas Foods rely on the provisions of section 524(1)(b) and (c) as the basis for its
stand down of Mr Ball. Mr Ball says that neither is made out, and that thereby the stand down
is unlawful.
[72] Section 524(1)(b) refers to circumstances in which an employee cannot be usefully
employed because of “a breakdown of machinery or equipment, if the employer cannot
reasonably be held responsible for the breakdown.”
[73] The 3 January 2018 fire did not damage machinery or equipment in the laboratory.
The laboratory was not burnt down. It continued to function after the fire. Mr Ball worked
there on 5, 8, 9 and 10 January. It remains the location from which the one remaining
[2018] FWC 2483
16
technician (Mr Ball’s manager) continues to work. For these reasons Mr Ball submits that
Section 524(1)(b) does apply.
[74] I do not agree. Such a construction is a limiting and artificial interpretation of the
provision. The evidence before me is that machinery and equipment in the meat processing
plant was completely destroyed by the fire. I consider that when machinery or equipment has
been destroyed to a point of either disrepair or beyond repair, it has broken down. Further, the
evidence is that meat processed from the plant was the most substantial (but not exclusive)
source of product tested in the laboratory.
[75] Further, section 524(1)(b) operates in conjunction with its chapeau, which provides
that:
“An employer may, under this subsection, stand down an employee during a period in
which the employee cannot usefully be employed because of one of the following
circumstances:…”
[76] The section does not require the employee who “cannot be usefully employed” to be
working in the same building where the machinery and plant were destroyed. Although I do
not consider geographic co-location to be a necessary precondition for the operation of the
subsection, in Mr Ball’s case the meat processing plant is on the same site as the laboratory
albeit in different buildings. I consider there to be a sufficient connection between the
machinery breakdown and Mr Ball’s work for it to be said that Mr Ball could not be usefully
employed once the pipeline of meat to be tested was exhausted due to the destruction of
equipment used to produce that product.
[77] I note that section 524(1)(b) applies only “if the employer cannot reasonably be held
responsible for the breakdown”. I deal with this below.
[78] Section 524(1)(c) refers to circumstances in which an employee cannot be usefully
employed because of “a stoppage of work for any cause for which the employer cannot
reasonably be held responsible.”
[79] There is no doubt that work at the Murray Bridge site stopped on the evening of 3
January as a result of the fire. It resumed, on a limited basis, in the week that followed in the
laboratory and in the administration block. I am satisfied that there was a stoppage of work
pertaining to Mr Ball’s employment – on 4 January, and then again after 10 January when he
was advised that there would not be sufficient work for him to keep performing his laboratory
duties.
[80] Mr Kassebaum, on behalf of Mr Ball, submitted that even if there was a stoppage of
work (or a breakdown of machinery for that matter) both sections 524(1)(b) and 524(1)(c) are
not made out because the stoppage (or breakdown) was not for a cause “for which the
employer cannot reasonably be held responsible.”
[81] The essence of this submission is as follows. Although the fire was catastrophic the
cause was within the control or responsibility of the employer in that it was caused by sparks
from welding operations being performed in an offal bin by an employee of Thomas Foods in
the meat processing plant. Mr Ball says that Thomas Foods had control and responsibility of
the site including for the safe operation of welding activities and compliance with relevant
[2018] FWC 2483
17
safety and health standards for the operation of such tasks. His submission is that the
employer failed to comply with such standards and thereby failed to provide a safe system of
work. As such, he submits that it was within the employer’s control and responsibility to
prevent the fire. Not having done so, it cannot be said that the stoppage or breakdown on
which the stand down is founded were circumstances for which the employer could not
reasonably be held responsible.
[82] In support of this submission Mr Kassebaum relied on the common law doctrine of
vicarious liability in which an employer is liable for torts committed by an employee when
working within their ostensible authority. If, at law, this employer was vicariously liable for
the actions of the welder then (it was said) they cannot be excused from responsibility for the
purposes of section 524 of the FW Act.
[83] In reply, Thomas Foods said that whilst the fire was caused by sparks from welding
operations conducted by an employee, it was accidental and as far as reasonably practicable
the workplace was safe.25 It says that its insurers have accepted that position.26 In any event,
the employer submits that the doctrine of vicarious liability has only limited operation as it
was “adopted not by way of an exercise in analytical jurisprudence but as a matter of
policy.”27
[84] I do not consider it necessary to determine this question because (for reasons set out
below) I am able to (and do) determine this dispute having regard to considerations of fairness
irrespective of the lawfulness or unlawfulness of the stand down.
[85] However, was I required to determine this question I do not consider that I have
adequate evidence to make the findings of fact on which the submissions about employer
responsibility and vicarious liability are founded. For example, the evidence of Ms Young
about the cause of the fire was of a general nature only, and largely second or third hand
hearsay from more senior executives. I was not provided with evidence of what the insurer
has or has not said. I was told that certain reports by the authorities on the cause of the fire are
incomplete. I was not provided evidence of the company’s insurance policy nor the extent to
which the policy covered losses for different causes, or its coverage for employment costs
arising from a fire. None of this is surprising or a criticism of either Mr Ball or Thomas
Foods; self-evidently, I am not conducting an investigation into the fire, and have no
jurisdiction to do so.
[86] I therefore do not adopt the legal conclusions about vicarious liability (or for that
matter, statutory liability under health and safety legislation) which Mr Kassebaum invited me
to do, other than to say that they were not advanced frivolously and, with a more certain body
of evidence, may warrant more specific scrutiny. That scrutiny would necessarily involve the
meaning of the phrase “for which the employer cannot reasonably be held responsible” and
whether the stoppage or breakdown were “the natural and probable consequence”28 of the
conduct of Thomas Foods.
[87] Although I do not determine the dispute on this basis, my view, on at least the body of
evidence before me, is that it was lawful for Thomas Foods to stand down Mr Ball on 4
January and again after 10 January in the wake of the 3 January fire.
Fairness between the Parties
[2018] FWC 2483
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[88] The parliament has, by virtue of section 526 of the FW Act, conferred on the
Commission a jurisdiction to hear a dispute concerning stand down and to have that dispute
brought before it by an employee who has been or is going to be stood down.
[89] Determining the dispute involves the exercise of discretion, applied according to law
and well-established principles governing the settlement of disputes by industrial tribunals.29
In resolving that dispute, a specific statutory directive is expressed in section 526(4): the
Commission “must take into account fairness between the parties concerned.”
[90] Thus, this matter is to be determined by considerations of fairness.
[91] Thomas Foods submitted that a stand down is prima facie fair if it is lawful. Whether
conduct can be fair if unlawful, or whether the converse could be true are interesting
questions but not necessary to be explored in determining this matter. I will leave the interface
between lawfulness and fairness to legal jurisprudence tutorials in law schools and text books.
Suffice to say, for the purposes of this matter I consider fairness to be a broader consideration
than lawfulness, and not one dependent on making a finding on lawfulness.
[92] Fairness involves what is just and right between the parties having regard to the
relevant statutory framework and the facts and circumstances established by evidence.
[93] Importantly, fairness in this statutory context is expressed as fairness “between the
parties”. It is not a narrow question of what is fair to Mr Ball or fair to Thomas Foods. It
concerns fairness having regard to their dual circumstances and interests. In the case of a
stand down this is a point of particular importance. By definition, a stand down (at least one
reliant on section 524(1)(b) or (c)) involves a disruption to production not caused by the
conduct of the person being stood down nor the conduct of the business employing them. In
those circumstances, it would not be unsurprising if a fair outcome involves some or both
parties feeling that they are required to bear a burden or sustain a loss that is not theirs or their
responsibility. Fairness between the parties, objectively assessed, may not displace some
sense of lingering injustice felt by one or both sides.
[94] As in this case, resolving a stand down dispute involves making judgments about how
to make the best (in the sense of the fairest) of a bad situation. A catastrophic fire that turns
years of business toil and investment to ash and which disrupts much needed employment and
household incomes in regional South Australia is clearly of that character.
[95] I also consider it relevant to have regard to the fact that whilst this dispute is purely a
matter between an individual employee and his employer, the factual matrix involves
decisions the employer made in the wake of the fire and in a relatively short period of time
concerning over one thousand employees, many hundreds of which were also displaced, stood
down and in many cases relocated. These considerations are relevant to the reasonableness
and practicalities of offers made to Mr Ball and the timing of employer responses and requests
for information.
[96] Taking into account all of the circumstances and evidence, for the reasons set out
below, I have concluded that whilst the initial decision to stand down Mr Ball from 11
January 2018 was fair, the stand down of Mr Ball without pay from 6 March (when he was no
longer on personal leave) was unfair as it is of an ongoing and indeterminate nature, and is
now excessive. I have also concluded that the terms of alternative employment offered to Mr
[2018] FWC 2483
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Ball and agreed on 19 January 2018 were fair, but that the terms of alternative employment
that were offered on 1 February 2018 were unfair and that their rejection was reasonable.
[97] Leaving aside the stand down with pay on 4 January (which is not in contest), Thomas
Foods initially stood down Mr Ball without pay on 11 January 2018 because, in the wake of
the fire, it formed the view that by 10 January there was insufficient work in the Murray
Bridge laboratory for Mr Ball to be employed in his usual duties as a laboratory technician.
By then, the pipeline of work had dried up because the Murray Bridge processing plant was
no longer in production. Of the five laboratory technicians (including the manager) there was
only work available for one, and that largely came from meat processed at the smaller-scale
Lobethal plant. This was not an unreasonable view to form.
[98] Nor was it unreasonable for Thomas Foods to offer Mr Ball alternative work. Indeed,
that was a reasonable course and one which Mr Ball was willing to consider as he not only
wanted to help the business in its time of trouble, but also needed to maintain his income. The
offer was that Mr Ball work as a mutton boner (with a different but related employer) on the
meat production line at Lobethal. This was expressed as “temporary secondment work” in the
letter of 19 January 2018.
[99] It was said by the employer in that letter that “the seconded work will be within your
skill set”. Although unintended, that was an erroneous statement. Unlike the hundreds of
Murray Bridge meat processing workers who were offered work processing meat at Lobethal
(where it may be said that the temporary work was within their skill set) an offer to a
laboratory technician to work as a mutton boner on a production line is clearly not within their
skill set. Mr Ball’s evidence, which I accept, was that he had never worked on the production
line (even when first employed) and when he did so at Lobethal had very little training or
guidance. Unsurprisingly, within days it took a physical toll on him requiring medical
treatment in consequence of which he was prescribed light duties.
[100] Mr Ball accepted the offer of 19 January 2018 but the evidence about that acceptance
is instructive. Its terms, its acceptance and communication about it were in writing. I am able
to make findings with a degree of confidence based on the documentation and the oral
evidence before me.
[101] Firstly, the offer was “temporary” but just how temporary was not expressed.
[102] Secondly, the offer was not an open choice without consequence. It was a take it or
leave it offer where the alternative was no work and no income. The employer expressly
said:30
“Should you decide to decline this offer of temporary secondment work at the Lobethal
Plant, you will remain on stand down without pay until further notice.”
[103] Thirdly, Mr Ball was hesitant for two reasons: that the work was outside his skill set,
and that his pay rate and hours must remain as they were at Murray Bridge. Both issues were
the subject of the three email exchanges he had with Ms Reading on 19 January, prior to
commencing on 22 January.
[104] With respect to his skill set, Mr Ball advised that he would “give it a go” for a
temporary period but wanted to work within his skill set:
[2018] FWC 2483
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“This new role of Mutton boner/slicer is so far outside my skill set as a Lab Technician
I would prefer to be in the QA team or back in the Lab at Murray Bridge as it is still
operational.”31
“The offer states that seconded work will be within my skill set, as I have no experience
or skills as a mutton boner or slicer, I expect that this will be a very short term solution
and that I can resume my duties as a Laboratory Technician ASAP as I know the lab is
still operational. Otherwise, I’ll to give it a go and see if it’s a good fit for me.”32
[105] With respect to his pay rate, the letter of offer by the employer was very specific:
“The terms of your employment and your accrued entitlements will remain as per your
current employment contract with Thomas Foods International Murray Bridge Pty Ltd.
Your ongoing entitlements while working at the Lobethal Plant will also continue
accrue in accordance with your current employment contract with Thomas Foods
International Murray Bridge Pty Ltd.”33 (my emphasis)
[106] Taking up the invitation in the offer to contact Ms Reading with any questions, Mr
Ball sought to make it doubly sure that he was to be paid his Murray Bridge pay rate if he was
to do mutton boning work at Lobethal:
“Could you please confirm that my pay rate and hours will remain as they were at
Murray Bridge before I start at Lobethal on Monday. If not I’d like to arrange a
meeting to discuss this further.”
[107] That same day, he received this assurance from Ms Reading:
“Your pay rate will remain the same, your working hours will be as per the
requirements for the AM Mutton Boning Room.”34 (my emphasis)
[108] I consider that both parties were open, transparent and (aside from the inaccurate
statement about the work being within his skill set) reasonable to the other in negotiating the
terms of the letter of offer of 19 January, the context in which it was made and the basis of its
acceptance.
[109] However, the conduct of Thomas Foods on 30 and 31 January and 1 February
materially altered the positon vis-à-vis Mr Ball that had been agreed and was operating during
the previous two weeks. The letter of 1 February 2018 advised Mr Ball that he would be
offered work as a mutton boner at Lobethal on different terms – under the Lobethal Food
Process Worker Employee Collective Agreement 2008. It was again presented as a take it or
leave it option – accept these terms or you will again be stood down without pay. It advised
that quality assurance work or technician work could not be found for him.
[110] This revised offer of “temporary secondment” was sent on 1 February despite Mr Ball
the previous day informing Ms Reading that such terms would not be acceptable and were
contrary to the agreement of 19 January:35
“I want to continue working for TFI in a mutually agreed upon position, so long as the
position is subject to the continuation of the employment terms in my TFI Murray
[2018] FWC 2483
21
Bridge contract either in some capacity at Lobethal or as a lab technician in the still
operational Lab at Murray Bridge. I agreed to the Temporary Secondment at TFI
Lobethal because I was assured my pay and hours would remain the same as they were
at Murray Bridge, even if the duties assigned to me are substantially different from
those of a Lab Technician. However, now you intend to further alter my employment
conditions by transferring me to the Lobethal Food Process Worker Employee
Collective Agreement which, if agreed to, results in a major reduction in salary.”
[111] I do not need to determine whether it was lawful (in the sense of not breaching or
repudiating Mr Ball’s contract of employment) for Thomas Foods to unilaterally bring the
agreement of 19 January to an end. I have grave doubts whether that was so, given principles
of repudiatory breach of contract.36 I need not form a concluded view on that question
because I am determining this issue by reference to fairness between the parties.
[112] I consider the conduct of Thomas Foods in unilaterally ending the agreed terms of
temporary secondment of 19 January; in offering a temporary secondment doing the same
work but on materially different terms; and presenting that offer to him as the only alternative
to stand down without pay to have been unfair and unreasonable on each ground.
[113] The evidence before me is that Mr Ball would have incurred a reduction in his
contracted rate of pay in the order of 35% (depending on what shifts were worked) if he had
accepted work on the terms of the Lobethal Food Process Worker Employee Collective
Agreement 2008. Across a year, this would equate to approximately a $25,000 reduction in
remuneration.
[114] It was not unreasonable for Mr Ball to reject the offer of 1 February. He had a
contractual entitlement to his substantive rate of pay. There are no provisions in his contract
for remuneration being paid other than at his substantive rate of pay. For example, even if he
were directed not to report for duties (in the context of performance or conduct
considerations), his contract contemplated payment of his salary.37
[115] In practical terms, Mr Ball was being asked to perform the same work that he was ill-
suited for but which he had agreed two weeks earlier but with a 35% reduction in pay. This
level of reduction was substantial and material. In circumstances where he had made it clear
that he would only work as a mutton boner if he remained on the rate of pay applicable to his
substantive position, and given that he had received an undertaking to that effect on 19
January, he was acting reasonably in rejecting the offer.
[116] Thomas Foods submits that between 19 January and 1 February it had tried but been
unable to find work for Mr Ball within his skill set. I accept Ms Young’s evidence38 that it
had “hoped” to do so, but that work was unavailable. Mr Ball did not hold qualifications
enabling him to work as a quality assurance employee. However, the absence of sufficient
work being available as a laboratory technician did not make the terms offered reasonable.
Assessing reasonableness involves a consideration of the terms of an offer not just the
availability of work being offered.
[117] Thomas Foods submits that the 19 January offer was expressed to be a “temporary
secondment” and a new offer of 1 February was evidence that the 19 January arrangement
was only temporary. Whether temporary or not, the fact that such an arrangement had been
made between the parties only two weeks earlier for the performance of the same work at the
[2018] FWC 2483
22
same temporary location is relevant to the reasonableness of the 1 February offer and the
reasonableness of its rejection. Whether the company “genuinely believed and hoped” on 19
January (as Ms Young attested39) that it could soon find temporary laboratory technician work
for Mr Ball at Lobethal is not the point. Having been unable to do so, on 1 February 2018 it
chose to offer the terms it did to Mr Ball; and those terms were unreasonable.
[118] The only conclusion that can be reasonably reached on the evidence is that because Mr
Ball was, by 1 February 2018, less likely to be found work as a technician then he was
thereby likely to have to work (if he was going to work) for a further indeterminate period as
a mutton boner and that in those circumstances the company did not want to keep paying him
at his technician’s rate of pay even though it had done so immediately prior.
[119] In the circumstances, this was an unreasonable view by the employer. Whilst I accept
that in the ordinary course of business an employee should be remunerated for the value of
work being performed (that is, mutton boning work at mutton boning rate of pay) this was no
ordinary situation. Here the company had a skilled employee with a contract of employment
at a contracted rate of pay who had been open and transparent, and who was reluctantly giving
a go to lesser and unsuited lower skilled work but on the express condition that he be paid the
rate of his substantive position.
[120] By agreeing to perform lesser and ill-suited work Mr Ball was meeting the company
half way in the difficult circumstances it found itself. It was reasonable for him to expect the
company to meet him half way by maintaining his contracted rate of pay and the terms they
had negotiated for doing that alternative work a fortnight earlier.
[121] Also relevant to the reasonableness of the conduct of the parties is that the alternative
presented to Mr Ball was stand down without pay for an unspecified and indeterminate time
which was likely to be lengthy. The 1 February offer was that the stand down be “until further
notice”40. The evidence before me was that both Thomas Foods and Mr Ball understood this
to mean, unless circumstances changed (which was not forseeable), until the Murray Bridge
site was rebuilt and normal production levels resumed. This was estimated to be in the order
of 18 months to two years.
[122] Mr Kassebaum, on behalf of Mr Ball, submitted that a stand down is unlawful unless it
is for a short and specified duration. He referred me to the decision of the Commission in
TCFUA v Tuftmaster Carpets Pty Ltd where it was said (in the context of a stand down clause
in an agreement invoked after a fire):41
“However, it is clear that the clause does not permit the indefinite stand down of
employees. Stand downs are by their nature temporary. In the Award Simplification
case the Australian Industrial Relations Commission reviewed the 1994 Award (Print
R1336 at 11) and refused to subject the stand down provisions to the facilitative
clauses in the simplified award and said “the concept and rationale for a stand down
provision, in my opinion, is to address a specific situation and/or event. It should not
have a continuing application or life. Therefore, flexibility in its application does not or
should not arise.”
[123] In response, Thomas Foods points to a decision of the Commission in Stonestreet’s
Coaches42 in which it was said, in the context of a clause in an agreement concerning stand
[2018] FWC 2483
23
down pending disciplinary investigations, that undertakings were not required to limit the
duration of a stand down.
[124] Each of the aforementioned decisions are distinguishable on the facts, particularly
Stonestreet. It concerned undertakings in the context of statutory criteria applying to the
approval of an enterprise agreement. Mr Ball’s matter bears no relationship to a disciplinary
investigation. It concerns an indeterminate period of stand down arising wholly from external
events.
[125] As noted above, I am determining fairness between the parties, not lawfulness.
Whether or not, as a matter of law, section 524 of the FW Act can be invoked for an
unspecified and indeterminate period, I consider it unreasonable and unfair for Mr Ball to
have remained in a state of stand down without pay after the expiry of the period of his
personal leave (which ended on 5 March) and since. I take into account that the fire was
major, indeed catastrophic. I take into account that the employer was managing an extreme
human resource challenge that involved the interests of approximately a thousand employees.
I take into account that the employer was, at the same time, dealing with insurers, government
authorities, customers, the media and local communities.
[126] Nonetheless, it was apparent at least by 5 March 2018 when Mr Ball’s personal leave
ceased, that work as a laboratory technician was unlikely to be made available to Mr Ball
given the loss of production, and that that loss of production was going to be for a prolonged
period, probably until the Murray Bridge site was rebuilt. Even though it remains challenging,
after “the first month or two” the employer had a clearer view of what lay before it.43 There
was nothing reasonably foreseeable in early March or which has happened since which has
made it more or less likely that Mr Ball’s stand down will come to an end in a defined let
alone reasonable period of time.
[127] In these circumstances, I consider it unfair for Mr Ball to be continuing to be stood
down without pay some four months after the fire with no sign or prospect that the stand
down will be brought to an end except when the site is rebuilt and brought into production in
(at the very least) some 18 months to two years’ time.
Conclusion
[128] For the above reasons and taking into account all of the circumstances, whilst the
initial decision to stand down Mr Ball from 11 January 2018 was fair, the stand down of Mr
Ball without pay from 6 March (when he was no longer on personal leave) was unfair as it is
of an ongoing and indeterminate nature, and is now excessive. I have also concluded that the
terms of alternative employment offered to Mr Ball and agreed on 19 January 2018 were fair,
but that the terms of alternative employment that were offered on 1 February 2018 were unfair
and that their rejection was reasonable.
[129] It would have been reasonable between the parties for a person in Mr Ball’s position to
have been stood down for two months after a fire of this magnitude to allow the employer to
achieve a sufficient level of clarity about the implications of the fire for its business and for its
employment of Mr Ball, to consider the prospects (if any) of it being able to make work
available in a reasonable period of time to Mr Ball as a laboratory technician and to consider
the prospects (if any) of it being able to make alternative work available in a reasonable
period of time to Mr Ball, and negotiating reasonable terms on those matters with him.
[2018] FWC 2483
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[130] Beyond a period of two months, I consider the stand down without pay of Mr Ball to
have neither been fair nor reasonable between the parties.
Remedy
[131] Although not expressed quite in these terms,44 the effect of Mr Ball’s submissions is
that he seeks to have this dispute resolved by one of the following:
1. Option 1: Being employed to work at the Murray Bridge laboratory, which is still
operating, performing the duties of his substantive position and being paid his
substantive remuneration; or
2. Option 2: Being employed performing alternate duties on agreed terms and at an
agreed location but being paid the remuneration applicable to his substantive position;
or
3. Option 3: Being paid at his substantive remuneration for the full period of stand down;
or
4. Option 4: Being paid a redundancy payment (including his accrued entitlements and
lost remuneration).
[132] The first of these options I do not consider appropriate. I have found that Mr Ball
could not have been (and still cannot be) usefully employed in the Murray Bridge laboratory
once the pipeline of meat to be tested was exhausted due to the destruction of equipment used
to produce that product. That position, on the evidence before me, remains unchanged.
[133] I do not consider the third of these options to be appropriate. It would be unreasonable
to require Thomas Foods to be compelled to pay Mr Ball for the entire period of his stand
down, given that it is indeterminate, and likely to be for a prolonged period of time. Section
524(3) of the FW Act provides an employer a discretion to stand down an employee with or
without pay. I have concluded, in these circumstances, that a stand down without pay for a
period of two months was fair and reasonable, but not beyond.
[134] I consider that the second and fourth options provide an appropriate basis for
settlement of this dispute.
[135] In respect of the fourth option, Thomas Foods submits that Mr Ball’s substantive
position remains but that he is simply stood down without pay. Hence it is submitted that his
position is not redundant and Mr Ball has no entitlement to a redundancy payment. This
contention has been contested by Mr Ball, including by lawyers who were acting for him.45
[136] I do not need to determine, as a matter of law, whether a redundancy has occurred to
order that an appropriate payment to Mr Ball should be made in settlement of the dispute.
While the employer submits that a contract of employment is continuing (against which
entitlements are still being accrued), and while I accept this as a fact, I am of the view that the
circumstances are at least akin to a redundancy in that whereas prior to 3 January 2018 there
was sufficient work for five persons to be employed in the laboratory, there is now only
sufficient work for one person, and the employer has not selected that person to be Mr Ball.
[2018] FWC 2483
25
The employer’s evidence on this is clear.46 Further, the evidence before me is that there is no
reasonable likelihood of that position changing in the immediate future.47
[137] I am prepared to make an order that settles the dispute by requiring Thomas Foods to
make an appropriate payment to Mr Ball. That payment should be equivalent to what he
would have received had he been made redundant once his personal leave ceased on 6 March
2018 when his stand down without pay was no longer fair and reasonable, and which is
approximately two months after the fire. I am prepared to make this order because a sum
equivalent to a redundancy payment (with the additional components mentioned below) is a
fair and reasonable settlement.
[138] That order of a monetary sum would be comprised of:
a) A payment equivalent to the applicable notice of termination (2 weeks) and
redundancy payment (6 weeks) in the National Employment Standards of the FW Act
for a person of Mr Ball’s age and service, paid at the rate of pay of his substantive
position; and
b) A sum to compensate Mr Ball for the loss of remuneration he has incurred since 6
March 2018 (when it was no longer reasonable for him to be stood down without pay)
until the date his employment ceases (less remuneration, if any, he received after 6
March48); and
c) A sum equivalent to his outstanding annual leave accrual.
[139] A monetary order of this nature would necessarily be predicated on both parties
agreeing to the mutual termination of Mr Ball’s employment (under clause 24 of his contract),
or by the employer terminating Mr Ball’s employment (including on the ground of
redundancy) or Mr Ball resigning from his employment. In other words, it would be a
monetary payment consequential on a parting of the ways.
[140] Given the significance to both Mr Ball and to Thomas Foods should that course be
adopted, I am prepared to provide one final opportunity to the parties, in light of this decision,
to consider whether a resolution in terms of option 2 can be negotiated between themselves
(that is, Mr Ball being employed performing alternate duties on agreed terms and at an agreed
location but being paid the remuneration applicable to his substantive position).
[141] I will give the parties seven (7) days from the date of this decision to consider that
option and to discuss it, or reach such other resolution amongst themselves. I will relist this
matter shortly thereafter to be informed of its status.
[142] Should the matter not be otherwise resolved, I will thereafter issue an order consistent
with this decision in settlement of the dispute.
[143] Finally, I emphasise that this decision is based solely on the circumstances
surrounding Mr Ball’s employment with Thomas Foods, and the evidence pertaining to that
before me. I am not deciding whether stand downs by Thomas Foods in the wake of the 3
January 2018 fire at Murray Bridge of any other employees was lawful, reasonable or fair.
Self-evidently individual considerations apply to different persons and different categories of
[2018] FWC 2483
26
employees and the circumstances in which they have come to be employed, relocated or stood
down by the employer.
DEPUTY PRESIDENT
Appearances:
S. Ball, on his own behalf, and J. Kassebaum, for the Applicant
M. Foley, with permission, and M. Young, for Thomas Foods International Murray Bridge
Pty Ltd
Hearing details:
2018.
Adelaide.
13 and 18 April.
Printed by authority of the Commonwealth Government Printer
PR606787
1 Directions, Deputy President Anderson, 20 March 2018
2 Further Directions, Deputy President Anderson, 4 April 2018
3 Decision, Deputy President Anderson, 10 April 2018 [2018] FWC 2046
4 Letter of Offer 13.8.2015 A20
5 Letter of Offer 24.9.2015and Acceptance of Offer 26.9.15 A1
6 A1; MY1
7 R2
8 A8
9 A9
10 MY4
11 A11, A12, A13
12 A14
13 [2015] FWCFB 3964 at [17], 1 July 2015
14 Ibid
15 Ibid at [18]
16 F13 22 February 2018
17 A1 page 1
18 T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement 2010; Murray Bridge Maintenance Technician
Enterprise Agreement 2015 as per Exhibit MY2
19 R1, Letter 5 March 2018
20 Respondent’s Outline of Position 11 April 2018 paragraph 7
21 R3 Statement of Morna Young paragraph 10
WORK COMMISSION THE SEA
[2018] FWC 2483
27
22 See AFAP v Australian Helicopters Pty Ltd [2013] FWC 7863 at [9]; see also Explanatory Memorandum to the Fair Work
Bill 2008 paragraph 2080: “An enterprise agreement or a contract of employment may provide for stand down in a wider
range of circumstances than as provided in this Part (subclause 524(2)). If an enterprise agreement or a contract of
employment does not provide for stand down, or authorises stand down in more limited circumstances, or does not deal
with one of the specified circumstances in subclause 524(1), then the provisions for stand down set out in this Part will
apply.”
23 Food Preservers Union of Australia and All States Ready Foods and Others (1976) 182 CAR 391
24 Re Distilleries Award 1976 (1976) 180 CAR 786 at 787
25 R3 Statement of Morna Young paragraphs 6 and 13-17
26 Ibid paragraph 67
27 Citing the High Court of Australia in Hollis v Vabu Pty Llimited [2001] HCA 44 at [34]
28 See for example the Commonwealth Industrial Court in Vehicle Builders Employees’ Federation of Australia v Ford Motor
Co. of Australia Pty Ltd (1962) 3 FLR 198 at 200; Food Preservers Union v McCains Australia Pty Ltd (1977) 19 AILR
337; and Australian Workers Union v Electrolux Home Products Pty Ltd AIRC PR940929 at [72], 21 November 2003
29 For example, the High Court of Australia in Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [19]:
“’Discretion’ is a notion that "signifies a number of different legal concepts". In general terms, it refers to a decision-
making process in which "no one [consideration] and no combination of [considerations] is necessarily determinative of
the result." Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude
may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and
object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the
decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.”
30 A4 paragraph 3
31 A8 Email 19 January 2018 11.09am
32 A8 Email 19 January 2018 4.54pm
33 A4 paragraph 4
34 A8 Email 19 January 2018 4.12pm
35 A9 Email 31 January 2018 8.53pm
36 See for example the High Court of Australia in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) CLR
115 and a Full Bench of the Fair Work Commission in City of Sydney RSL v Balgowan [2018] FWCFB 5 at [18]:
“Relevantly, for present purposes, repudiation may exist where an employer reduces the wages of an employee without
the employee’s consent or where there is a serious non-consensual intrusion on the nature of the employee’s status and
responsibilities in a way which is not permitted by the contract. Similarly, if an employer seeks to bring about a change in
the employee’s duties or place of work which is not within the scope of the express or implied terms of the contract of
employment, the conduct may evince an intention to no longer be bound by those terms. Therefore, in these
circumstances if an employee does not agree to the change, which if agreed would amount to a variation of the contract,
the employee may claim to have been constructively dismissed.”
37 A1; MY1: Clause 24 “Termination” paragraph 4: “The Company may direct you not to report for duties for a period of
time, subject to you still receiving your salary throughout that period.”
38 R3 Statement of Morna Young paragraphs 30 and 31
39 Ibid paragraph 30
40 MY4
41 [2011] FWA 1891 at [69]
42 Stonestreet’s Coaches Pty Ltd Enterprise Agreement 2014 [2014] FWCA 7039
43 R3 Statement of Morna Young paragraphs 21 and 22
44 Mr Ball’s originating application at 3.1 sought redundancy payments and at 3.2 to be “usefully employed”; Mr Ball’s
written material A18 page 3 “ultimate goal is to be employed by TFI under the same conditions in my contract”
45 A13
46 R3 Statement of Morna Young paragraphs 44 to 47 and 53 to 60
47 Ibid paragraphs 53, 54 and 70
48 The evidence suggests that Mr Ball was on paid personal leave only until 5 March (MY5)
