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This was an interlocutory decision in a class action against technical services company BSA Ltd (BSA). An essential issue in the proceeding is whether BSA has misclassified its workforce as independent contractors rather than employees. BSA has filed cross-claims, seeking reimbursement of payments in the event that the Court determines that the class members are employees, as alleged by the applicants. Those cross-claims have been stayed until the initial trial of the applicants’ claims, and common questions.

The form of the opt out notice was approved on 2 August 2021, distributed by 13 August 2021, and the opt out deadline was 24 September 2021. Evidence before the Court demonstrated that BSA had held around 30 ‘tool box’ meetings with workers between July and August. At those meetings, a written script was read aloud, and workers were pointed to an FAQ document published on BSA’s website. The number of workers who received the material was not clear, but was potentially up to 1,400 of the estimated 5,600 class members. 

The applicants applied for a corrective notice to be distributed, and for a class member communications protocol to apply until the end of the opt out period. BSA filed its own interlocutory application that it be permitted to distribute a further notice to class members.

Justice Bromberg held that a corrective notice was to be distributed to all known class members, including any person who may have filed an opt out notice. His Honour also held that it was appropriate for the Court to impose a communications protocol for the duration of, though not extending beyond, the opt out period. The FAQ document was ordered to be removed from BSA’s website, unless the corrective notice was attached to it. His Honour concluded that class members were not likely to be sophisticated persons with a good understanding of the legal system. 

The communications from BSA, which his Honour ultimately held were apt to mislead at least a significant proportion of class members:

  • were directed at the opt out process and the decision as to whether class members should opt out;

  • suggested that because of the cross-claims, class members may face financial risks should they not opt out – notably, the issue of cross-claims had been addressed in the approved opt out notice itself “in a manner designed to inform group members of what they need to know for the opt out process, without causing unnecessary pressure or confusion about any potential risk that the cross-claims may impose upon them” (at [18]);

  • suggested that ‘independent analysis’ had confirmed class members had been overpaid and so their exposure in the class action was a real risk, not just BSA’s belief (at [19]); and

  • made assertions suggesting that, should the Court consider class members to be employees, they may lose advantages they currently enjoy as contractors – notably on this point, his Honour considered that the consequences suggested by BSA were a risk of the proceeding itself, rather than the participation (or opting out) of any individual class member (at [21]-[23]).

After reviewing the authorities, his Honour made the following observations about the integrity of the opt out process:

[16] A respondent’s capacity to communicate directly with group members who are not legally represented ought not to be restrained without good cause. However, communications which may mislead some or all group members or which may unfairly impose pressure or confusion on group members and therefore materially compromise the integrity of the opt out process ordinarily warrant the Court’s intervention in furtherance of its protective role.

[17] The communications and prospective communication here in question are, in my view, directed (at least in part) to the opt out process and, in particular, to the decision to be made by group members as to whether or not to opt out of the proceeding. There are aspects of those communications that were and are apt to mislead at least a significant proportion of group members. I have reached that conclusion taking into account the evidence before me that, in the main, the group members are not sophisticated individuals likely to have a good understanding of the legal process.

Bradshaw v BSA Ltd [2021] FCA 1080

Federal Court of Australia, Bromberg J,
7 September 2021

Applicants’ Solicitors: Shine Lawyers;
Respondent’s Solicitors: Johnson Winter & Slattery;
Applicants’ Funder: N/A

Austlii Link: Accessible here

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