Appco appeals ruling in $85M ‘sham’ contracting class action
Class Actions June 5, 2018 11:41 am By Christine Caulfield | Melbourne

Leading fundraising company Appco Australia Group is challenging a judge’s decision to let a $85 million wage case move forward as a class action.

Appco, which is represented by Baker & McKenzie, filed an application for leave to appeal in the Federal Court on Friday. The case, led by Adero Law, was brought by worker Jacob Bywater on behalf of thousands of Appco fundraisers.

“We do not believe that Mr Bywater’s case can ever give rise to ‘common issues of law or fact’ relevant to everyone represented in the class action – which is a key requirement for a class action,” Appco Australia CEO Perveen Virdee said in a statement.

“We also do not believe it is possible for a court to determine the employment status of all the people represented by Mr Bywater. We continue to believe that Appco Australia cannot defend itself properly against these claims in the context of a class action.”

The action accuses Appco of misclassifying its army of sales people as independent contractors to avoid paying minimum wage, overtime, superannuation and other benefits. More than 1000 workers have signed up to join the case.

Despite criticising the “clarity” of the case, Justice Michael Wigney ruled on May 18 that the case had properly alleged that Appco had a standardised system it applied to all group members and could move forward as a represented proceeding.

That alleged system, he said, was “so prescriptive and all-encompassing that they compel a conclusion that all individuals who were party to, or engaged pursuant to, that system were employees of Appco”.

Appco said it was clear from the judgement that Judge Wigney was “highly critical” of the way the case had been put forward.

“[He] acknowledged that Appco Australia’s application to strike it out had some merit,” the company said.

The action was lodged in December 2016 by Jacob Bywater on behalf of himself and other salespeople he claimed were employed by Appco as charity fundraisers but were made to sign “sham” independent contracts in breach of the Fair Work Act.

Appco filed an interlocutory application in April 2017 calling for a declaration from the court that the case was not a representative proceeding because the defined group had no common ground.

But Bywater successfully argued the case had properly alleged common issues because Appco’s system for managing its salesforce applied, invariably, to all group members.

While Judge Wigney found some “problems” in the pleading of commonality between group members, the case met the threshold test for a representative case under the Federal Court Act, he said.

“Mr Bywater’s case, as pleaded, is that the agreements, systems and structures alleged … applied to all group members and that those agreements, systems and structures compel the conclusion that all the group members were employees of Appco. That is not an assumption or hypothesis. Rather, it is something that must in due course be proved if the alleged common questions are to be answered in Mr Bywater and the group members’ favour.”

The case is Bywater v Appco Group Australia Pty Ltd.

The appeal is Appco Australia Group Pty Ltd v Jacob Cornelius Bywater.

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Christine Caulfield

Christine Caulfield has been a journalist for 18 years. She was most recently the Co-Managing Editor at US legal news publication Law360. Prior to that she worked as the County Court reporter for The Herald Sun. She is Co-Founder and Editor of Lawyerly.