On 12 October 2023 the Federal Court of Australia handed down two important and eagerly anticipated judgements dealing with the SDA attempt to stop the Shine Lawyers McDonald’s Class Action, which is supported by RAFFWU. The important win means the action can now move forward with the important case affecting over 300,000 current and former McDonald’s workers.

The Judgement in Elliott-Carde v McDonald’s Australia Limited (Stay Application) [2023] FCA 1210 found (with emphasis added):

E.2     Relevant Findings

I    Background and the Commencement of the Litigation

61    As has already been noted above, the central common issue involves a consideration of the terms of the Award and the EA. As noted in the Introduction (at [4]), the number of Workers affected is estimated as being somewhere in the region of 300,000 to 350,000.

62    The SDA is a substantial, long-established, and significant union entitled to represent the Workers. Delphicallyhowever, in response to a question to senior counsel asking him to identify the SDA membership density of Workers, the response given was initially: “Around 10 per cent, your Honour” (at T37.28). A short pause then followed during which further instructions were provided and then a clarification was made: “Less than 10 percent. There we go” (at T37.28–29). No evidence was adduced on this topic, and I would regard the pinpoint number given as having all the precision of a VFA crowd estimate. All one can say is that only a very small percentage of the Workers are members of the SDA.

63    Because the Peak Affidavit was not read, there was no evidence adduced as to: (a) who within the SDA became aware of non-compliance with the alleged rest break obligations and how this information was imparted; (b) when that person or persons became aware; (c) what was done when that state of awareness first arose; and (d) the contemporaneous reasoning processes of that person or persons for taking the course the evidence reveals the SDA ultimately took. I do not think the absence of evidence is particularly important given what was done (and not done) is revealed by the record. It should be recalled, however, that where a party fails to adduce evidence-in-chief on a relevant matter within the knowledge of witnesses the party calls, the Court should not draw inferences favourable to that party: see Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 (at 418E per Handley JA)Whatever doubts exist from the incomplete evidence, it is uncontroversial that between 2010 (when the Award commenced) and 16 December 2020 (when the first pre-class action case was filed), the SDA did not commence any proceeding in relation to the matters the subject of the Class Action, notwithstanding the issues raised in these proceedings were first considered by RAFFWU as early as November 2018 and litigation was commenced in the Queensland Registry of this Court in 2019 (QUD 703 of 2019) (Tantex case).

64    The Tantex case was heard in June 2020 and later resulted in a judgment (Retail and Fast Food Workers Union Incorporated v Tantex Holdings Pty Ltd [2020] FCA 1258; (2019) 299 IR 56) delivered by Logan J in August 2020. The relevant Worker was a former employee of the franchisee respondent, and the franchisee admitted some breaches of the requirements of cl 29.1 of the EA as to ten-minute paid drink breaks (see [6] per Logan J). Again, doing the best I can with the incomplete evidence adduced and the inferences rationally available to be drawn, I find that the SDA must have been aware of the perceived problem, being the central common issue, no later than 2018, and probably well before this time.

65    In any event, the evidence does not establish that the SDA did anything useful when it became aware and, consistently with the misconception later advanced by the SDA that Pt IVA was unavailable to advance the claims of Workers, no class action litigation was commenced by the SDA prior to, or concurrent with, the Tantex case (or indeed any other type of litigation). This is in contrast to the RAFFWU and its solicitors, who immediately commenced discussions about a potential class action against MAL and launched a public campaign for Workers “to register for fair compensation to build potential class action”.

66    But even more perplexing is that even then, the SDA did not move promptly in identifying how the central common issue could be resolved in the most effective way. Despite senior counsel for the SDA submitting the Tantex case was a “pivot”, the evidence, such as it is, demonstrates that in the period between the delivery of judgment by Logan J and the filing of the Class Action, the SDA apparently thought it was useful to engage in the exercise of taking “initial instructions” from “more than 9,000” Workers. It then apparently took more detailed instructions from about 1,860 Workers and lawyers then took “a combination of supplementary instructions and in-depth instructions from more than 265” Workers. How long this all took is unclear, but it was obviously a substantial exercise. The Ats Affidavit, affirmed by the solicitor for the SDA, provides the SDA:

has a specific team which has been predominantly devoted to work on the SDA actions (in addition to work on the actions done by organisers and legal and industrial officers) which currently has approximately 13 employees, and has had as many as 16 employees at any one time.

67    Why this array of SDA actors was directed to the laborious task of working up individual cases rather than taking focussed and prompt action in relation to what it should have immediately appreciated was a widespread, central common issue on behalf of all Workers is essentially unexplained. What we know is that prior to the Class Action, the SDA commenced proceedings on behalf of 583 workers only, peppered across the pre-class action cases.

68    At the risk of repetition, in this period the SDA must, or should, have been aware not only that there was a widespread problem, but that the overarching purpose of civil litigation demanded that any litigation to resolve the problem for all Workers needed to be commenced in some form of representative capacity and that others were spending resources investigating and “book building” in relation to conducting such a case as a class action. It should have also known that the only way of tolling the limitations period for commencing compensation claims on behalf of Workers would be to commence some form of representative action.

69    Counsel for the SDA sought to explain this stasis (in the absence of any evidence) by submitting the SDA did not believe there was a “systemic” problem prior to the decision in TantexAt best, this is very difficult to understand given the nature of the central common issue and the number of Workers. But in any event, it does not account for the lacklustre and misdirected approach taken following Tantex.

70    I remarked during oral argument that if the issue had been properly thought through, all the SDA needed was a substantial common issue of fact and law shared between seven or more persons to commence a class action, a not uncommon course taken by unions: see J Caruana and Morabito, ‘Australian Unions – the Unknown Class Action Protagonists’ (2011) 30(4) Civil Justice Quarterly 382. Counsel responded that penalties against the employer are unavailable in a Pt IVA proceeding. This submission is without foundation. Indeed, penal relief under the FW Act is increasingly being sought by funded representative applicants in this Court: see, for example, Bradshaw v BSA LimitedAugusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194; (2020) 283 FCR 123. In any event, as I explain below, this submission, together with the later contention that the SDA could not avail itself of the Pt IVA mechanism, suggests the matter was not adequately thought through.

71    What the record reveals is that even when the SDA stirred itself into belated action, it did so in a piecemeal way, commencing the cluster of pre-class action  cases and post-class action cases for named Workers. The commencement of litigation by the SDA on behalf of the broader class of Workers employed by 324 franchisees (and which, contrary to the class action applicants’ submissions, was only foreshowed on 23 March 2022) did not occur until the filing of the Bandec case on 11 August 2022 – notably, after conferral had occurred with the class action applicants.

72    By contrast, those responsible for the Class Action moved, if not with alacrity, then at least more promptly than the SDA. As previously noted, in about August 2020, Ms Antzoulatos of Shine commenced discussions with the RAFFWU about investigating a potential class action, the investigation was publicly announced on 30 September 2020 and by 31 October 2021, more than 17,000 Workers had registered to participate in the foreshadowed class action. The continuing investigation, negotiating with litigation funders and undertaking a book build driven by media and online advertising took time, leading to the commencement of the Class Action (and the consequent tolling of the limitation period for all Workers under s 33ZE(1) of the FCA Act) on 6 December 2021. Needless to say, any commercial considerations as to commencing a funded open class proceeding were different than those considered by the SDA, which could self-fund. The SDA did not have to concern itself with book building and the delays and costs this process occasions.

73    In summary, the approach of the SDA in bringing forward the claims of Workers has been suboptimaland has been characterised by significant and inadequately explained delay. I do not consider there has been any relevant dilatoriness by the class action applicants and their approach has been forensically explicable.

Download the entire judgement here: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1210

Or download as a word document here: 2023FCA1210

A further judgement was delivered by the Full Court of the Federal Court of Australia this morning which related to technical issues. Download that judgement here: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2023/2023fcafc0162