Australian Federation of Air Pilots v Geraldton Air Charter Pty Ltd
[2020] FCCA 380
•25 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALIAN FEDERATION OF AIR PILOTS v GERALDTON AIR CHARTER PTY LTD | [2020] FCCA 380 |
| Catchwords: INDUSTRIAL LAW – Penalty – admitted contraventions – failure to provide rosters in accordance with the applicable award – failure to provide Fair Work Information Statement – factors for consideration – penalty imposed. |
| Legislation: Air Pilots Award 2010, cl.25 |
| Cases cited: AEE Insurance Ltd v Trifunivski (No.2) [2011] FCA 1204 |
| Applicant: | AUSTRALIAN FEDERATION OF AIR PILOTS |
| Respondent: | GERALDTON AIR CHARTER PTY LTD |
| File Number: | PEG 391 of 2018 |
| Judgment of: | Judge Kendall |
| Hearing date: | On the papers |
| Date of Last Submission: | 7 February 2020 |
| Delivered at: | Perth |
| Delivered on: | 25 February 2020 |
REPRESENTATION
| Solicitors for the Applicant: | Australian Federation of Air Pilots |
| Solicitors for the Respondent: | Sparke Helmore Lawyers |
DECLARATIONS AND ORDERS
The Court declares that:
The respondent contravened the following civil remedy provisions:
(a)section 44(1) of the Fair Work Act 2009 (Cth) by not providing a Fair Work Information Statement (“FWIS”) before (or as soon as practicable after) each of the pilots commenced employment with the respondent pursuant to s.125 of the Fair Work Act 2009 (Cth).
(b)section 45 of the Fair Work Act 2009 (Cth) by not compiling rosters that complied with clause 25 of the Air Pilots Award 2010.
The Court orders that:
Pursuant to s.546 of the Fair Work Act 2009 (Cth) the respondent pay a penalty of $10,800.
Pursuant to s.546(3)(b) of the Fair Work Act 2009 (Cth) the pecuniary penalty imposed against the respondent be paid to the Australian Federation of Air Pilots within 28 days of the date of these orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 391 of 2018
| AUSTRALIAN FEDERATION OF AIR PILOTS |
Applicant
And
| GERALDTON AIR CHARTER PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter arises by application filed on 19 July 2018 by the Australian Federation of Air Pilots (the “AFAP”).
The respondent, Geraldton Air Charter Pty Ltd (“GAC”), provides commercial aviation services. GAC employs pilots to carry on its business.
GAC has, by its defence filed on 26 September 2019, made admissions regarding contraventions of the Fair Work Act 2009 (Cth) (the “FW Act”). The contraventions arise from the employment by GAC of three pilots (the “pilots”) between 3 November 2015 and 1 December 2017.
As GAC has admitted the contraventions that have been alleged by the AFAP, the sole issue that remains for the Court to determine is the quantum of the penalties that should issue against GAC.
The contraventions
GAC’s admitted contraventions are:
a)contravening s.44(1) of the FW Act by not providing a Fair Work Information Statement (“FWIS”) before (or as soon as practicable after) each of the pilots commenced employment with GAC pursuant to s.125 of the FW Act; and
b)contravening s.45 of the FW Act by not compiling rosters that complied with cl.25 of the Air Pilots Award 2010 (the “Award”). Pursuant to cl.25, GAC was obliged to compile rosters that:
i)covered a minimum 14 day period;
ii)were published not less than 7 days prior to the Roster period; and
iii)specified in details each pilot’s duty days and duty periods, stand-by duty, reserve duty days and periods free of duty and leave periods.
The AFAP has alleged that there are six contraventions in total – three relating to s.44(1) of the FW Act and three relating to s.45 of the FW Act. Each of the three pilots did not receive a copy of the FWIS as required by s.125(1) of the FW Act. Similarly, all three pilots did not receive rosters that were compliant with the Award.
GAC has admitted that there were six contraventions in total.
Proceedings before the Court
On 5 September 2019, the Court made Orders by consent for a hearing as to Declarations and Penalty to be dealt with on the papers. Both parties were ordered to file any affidavits and submissions that they wished to rely on.
The following affidavits of the pilots were filed by the AFAP:
a)affidavit of Gustave Maurice Leclercq filed 4 November 2019;
b)affidavit of Marc Bryon White filed 4 November 2019; and
c)affidavit of Ned Thomas Shields filed 4 November 2019.
The Court notes that all three of the affidavits filed by the AFAP were not properly executed (i.e., they were not affirmed/sworn). Although these affidavits are not in admissible form, GAC simply noted this fact but did not object to them being relied upon. GAC also made submissions as to their content. The Court will consider them accordingly.
GAC filed an affidavit of Wendy Mann affirmed 5 December 2019. Wendy Mann is one of the directors of GAC.
The Court also has before it written submissions filed by the AFAP on 4 November 2019 and written submissions filed by GAC on 7 February 2020. GAC did not file their submissions in accordance with the orders of the Court dated 5 September 2019 and had to be prompted by the Court to file their submissions. The parties subsequently provided the Court with a minute of consent orders extending the time for compliance with the Court’s orders.
Issue before the Court
GAC has acknowledged that the admitted contraventions involve contraventions of the “civil remedy provisions” of the FW Act and that, as such, the Court has power to make orders for the payment of pecuniary penalties: s.546(1) of the FW Act.
The sole issue for the Court to determine is the quantum of the penalty that is appropriate in the circumstances of this case.
In line with Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4 at [106]-[121], any penalty that is awarded should be paid to the AFAP. No submission was made otherwise.
Consideration
Grouping of the contraventions
The course of conduct provisions contained in s.557 of the FW Act may apply where two or more contraventions have been found. Depending on the circumstances of the contraventions, these provisions allow for the grouping of multiple contraventions into a single contravention. However, where the contraventions concern differing obligations under the FW Act, these contraventions cannot be grouped: Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62 at [17]-[18].
The parties agree that the three contraventions relating to s.44(1) of the FW Act should be grouped together. Likewise, the three contraventions relating to s.45 of the FW Act should be grouped together.
These grouped contraventions contain common elements and arose out of a single course of conduct by GAC.
The Court is satisfied that, having regard to s.557(1) of the FW Act, the contraventions outlined above should be grouped as agreed by the parties.
As a result, there are two grouped contraventions that the Court must consider:
a)a contravention of s.44(1) of the FW Act; and
b)a contravention of s.45 of the FW Act.
Determining the quantum of the penalty
Section 539(2) of the FW Act provides the individual penalty for contraventions of the sort agreed in this matter. The AFAP made no submission that the contraventions in this matter were serious contraventions as that term is defined in s.557A of the FW Act. As GAC is a body corporate, s.546(2)(b) of the FW Act, read with s.539(2), prescribes that the maximum penalty for each contravention is 300 penalty units.
A penalty unit is defined in s.12 of the FW Act to have the same meaning as found in the Crimes Act 1914 (Cth) (the “Crimes Act”). In this matter, the parties agree that the contraventions occurred between the period of 3 November 2015 and 1 December 2017.
The penalty unit at the time the contraventions commenced was $180: s.4AA(1) of the Crimes Act (see also Crimes Legislation Amendment (Penalty Unit) Act 2015). While there was an increase in this amount during the period the contraventions occurred, it is appropriate to apply the lesser penalty: Murrihy v Betezy.com.au Pty Ltd (No.2) [2013] FCA 1146 at [6]-[28].
The maximum penalties which can be imposed on GAC by reference to the FW Act and the Crimes Act are as follows:
| Contravention (Column 1 of s.539(2) of the FW Act) | Maximum Penalty Unit (Column 4 of s.539(2) of the FW Act) | Maximum Penalty Unit considering s.546(2) of the FW Act | Relevant Penalty Unit in accordance with s.4AA(1) of the Crimes Act | Maximum Penalty that can be applied |
| Item 1 – contravention of s.44(1) of the FW Act | 60 | 300 | $180 | $54,000 |
| Item 2 – contravention of s.45 of the FW Act | 60 | 300 | $180 | $54,000 |
The Court cannot impose a penalty that exceeds the amounts specified above. The Court may take into account a number of factors that can reduce or mitigate this maximum amount.
Civil penalties are not intended to serve a retributive function: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [59]. Instead, as articulated by the Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 (ABCC v CFMEU) at [98]:
Whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance: Trade Practices Commission v CSR Ltd [1990] FCA 521; (1991) ATPR 41-076 at 52,152 [42]; Commonwealth v Director, FWBII at [55] (per French CJ, Kiefel, Bell, Nettle and Gordon JJ). The principal object of a pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene; both specific and general deterrence are important: Chemeq at [90]; Ponzio at [93]. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 659 [66]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 at 265 [62]-[63]. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 at 418 [32].
The parties agreed that the factors relevant to the determination of the penalty in this case may include:
a)the circumstances of the conduct (including deliberate defiance or disregard of Commonwealth workplace relations legislation);
b)the consequences of the contravening conduct;
c)the objects of Commonwealth workplace relations legislation;
d)deterrence, both general and specific;
e)the contravener’s contrition (if any); and
f)the totality principle.
(Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [18]-[55]).
The Court recognises that it should not apply “a checklist approach” to the factors outlined above and may take other factors into consideration: Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No.2) [2010] FCA 977 at [10]. The Court has also had regard to the remarks in ABCC v CFMEU as to the purpose of civil penalty provisions. Furthermore, the Court has taken into account the fact that one of the objects of the FW Act is to ensure a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards and modern awards: s.3(b) of the FW Act.
It is against this background that the Court has approached its consideration of the appropriate penalty in this matter.
The circumstances and consequences of the conduct and similar previous conduct
The AFAP submits that at least two of the pilots were new to the profession and were not experienced or knowledgeable as to the entitlements to which they were owed. Each of the contraventions caused uncertainty in the lives of the pilots. This is particularly the case in relation to the failure to provide the pilots with a roster that was compliant with the Award.
GAC submits that there is no evidence that the contraventions had any effect on the pilots. In relation to the contravention of s.44(1) of the FW Act, although it was not compliant with the Award, a roster system was in place. On this basis, it is submitted that the contravention is not deliberate. Nor did GAC derive any financial benefit from it. In relation to the contravention of s.45 of the FW Act, GAC submits that the director, Ms Mann, was facing difficult personal circumstances, the business lacked any human resources expertise and there was never any intention to inconvenience or harm any employees.
Here, there is no evidence that there was any financial loss to the pilots because of the contraventions.
With reference to the contravention of s.44(1) of the FW Act, the Court accepts that there were personal implications for the pilots. There was a lack of certainty and stability in their working hours. While GAC may submit that there is no evidence to sustain this finding, the affidavits of the pilots each make a statement to this effect. The Court considers it entirely plausible that a roster that was not compliant with the Award would cause inconvenience and disruption to employees.
The Court also accepts that the non-compliance with the Award was not deliberate. Ms Mann’s affidavit details the systems that were in place. While Ms Mann’s evidence detailed the constantly changing nature of GAC’s business, given that the Award requires the roster to be supplied in a particular way it cannot be said that the circumstances that arose here were not considered when the Award was drafted.
In relation to the contravention of s.45 of the FW Act, the Court does not consider that because at least two of the pilots were new to the profession that they were vulnerable. Nonetheless, the failure to provide a FWIS to (even seasoned) employees undermines their ability to understand and be conscious of their rights and entitlements.
While the Court has considered Ms Mann’s personal circumstances, it does not consider these to be of significant weight. On Ms Mann’s own evidence, she was not aware that GAC had to provide a FWIS. Hence, while Ms Mann and her husband faced health issues and other trying circumstances the fact remains that they were nonetheless ignorant of the requirements. The evidence does not go so far as to say that it was because of these circumstances that Ms Mann was not aware of the obligation. Rather, it refers to matters which have arisen since GAC commenced operations and the difficulties it has faced. Even accepting these difficulties, ignorance is no excuse.
There is no evidence before the Court that GAC has previously been the subject of any findings that it had contravened the FW Act. Ms Mann’s evidence was that GAC had never been accused of contravening any provisions of workplace legislation. Nor has GAC been the subject of any litigation concerning workplace matters. The Court gives this some weight in finding that the contraventions were not deliberate.
Overall, the Court considers that the circumstances and consequences of the contraventions are not of a serious nature. They are of a low to moderate severity.
Contrition
The AFAP submits that while GAC has admitted to the contraventions this admission was not brought about easily. The parties engaged in two mediations and no apology was offered.
GAC submits that Ms Mann has demonstrated her regret on behalf of GAC. Ms Mann’s evidence shows that GAC has taken steps to rectify the contraventions and has also engaged an employee relations firm to ensure that no further contraventions occur.
The Court gives some weight to the steps that have been taken by GAC to rectify the contraventions and to ensure that no further contraventions occur: AEE Insurance Ltd v Trifunivski (No.2) [2011] FCA 1204.
Ms Mann’s evidence was that when she was advised of the requirement to provide a FWIS, GAC immediately did so. Her evidence also suggests that when an issue was raised with the roster GAC took steps to implement a solution.
It appears that both of these remedial actions took place prior to these proceedings being commenced. If it were the case that remedial action was only taken after proceedings commenced, the Court would have some concern. However, in these circumstances, it can be said that GAC acted with contrition.
It is accepted that this matter was required to have two mediations before GAC was prepared to concede the contraventions. The Court does not consider this of significance. The fact remains that the concession of GAC meant that the matter was not required to proceed to a full trial.
While [46] of Ms Mann’s affidavit could be read as Ms Mann justifying her contravention of s.44(1) of the FW Act, the fact that GAC remedied this contravention indicates that GAC is prepared to comply with the obligations of the Award. Noting that Ms Mann also provides an apology in her affidavit, the Court does not consider, as the AFAP submits, that no consideration should be given to GAC’s contrition.
Overall, the contrition shown by GAC (through Ms Mann) has led the Court to consider that a penalty in the low range is appropriate.
Deterrence
When considering deterrence the Court must look at both specific and general deterrence. Again, the Court bears in mind the discussion of the Full Court in ABCC v CFMEU, outlined above at [26].
With reference to specific deterrence, the Court notes that GAC continues to operate. In these circumstances, specific deterrence focuses on whether the penalty imposed would deter GAC from any further contravention. It will be relevant to look at the remedial steps that have been taken to ensure that no contravention occurs in the future: Plancor Pty Ltd v Liquor; Hospitality and Miscellaneous Union [2008] FCAFC 170 at [37].
As outlined above, remedial steps have been taken by GAC. In particular, GAC has acquired the services of an employee relations firm to provide needed assistance.
When considering general deterrence, the Court notes that the AFAP refers to the case of Fair Work Ombudsman v Broome Helicopter Services Pty Ltd & Anor (No.2) [2019] FCCA 2713. The Court agrees that a measure of general deterrence ought be considered appropriate in the assessment of penalty as it may serve as a further warning to employers about complying with an award and being aware of the obligations owed under an award.
While GAC submits that the facts of this case are relatively unique, the Court must nonetheless be consistent in requiring employers to comply with the National Employment Standards and awards.
However, the Court does consider that the penalty should be at the lower end of the range when considering specific and general deterrence.
The appropriate penalty
In the Court’s view the contraventions in this case are at a low to mid-range. Having regard to the remedial actions that GAC has taken and the absence of any deliberate contravention, the Court does not believe that a penalty in the sum sought by the AFAP is appropriate.
On the other hand, the Court does not consider that this matter merits no penalty (as GAC submits). To do so would suggest that an ignorance of an employer’s obligations is viewed favourably or can substantially justify any contravention.
Accepting that the effect of the contraventions has not been significant, that GAC has not obtained any benefit from the contraventions and a degree of contrition and remorse has been shown, the Court considers that an appropriate penalty is as follows:
a)for the contravention of s.44(1) in failing to provide a compliant work roster, the appropriate penalty is $8,100 (being 15% of the maximum penalty); and
b)for the contravention of s.45 in failing to provide the pilots with Fair Work Information Statements, the appropriate penalty is $2,700 (being 5% of the maximum penalty).
The total penalties to be imposed for the two contraventions without considering the totality principle equal $10,800.
Totality
When considering the totality of the penalty the Court must also analyse whether the amount suggested is oppressive. That sum must also be proportionate to the seriousness of the conduct: Mornington Inn v Jordan [2008] FCAFC 70 at [42]-[43]; Fair Work Ombudsman v Promoting U Pty Ltd & Anor [2012] FMCA 58 at [52]-[54].
The Court does not consider the sum of $10,800 to be oppressive. Nor is it disproportionate to the conduct in question. It reflects a small percentage of the maximum penalty that can be imposed.
On the other hand, this level of penalty is not likely to be seen as little more than a “throw away cost” or a cost that GAC would regard as a result of everyday business. It is sufficient enough to deter repetition and demonstrate that contraventions of this sort are not acceptable: Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 at [62]-[63].
No reduction to the amount will be given.
Conclusion
In light of the above, the Court will make declarations that GAC contravened ss.44(1) and 45 of the FW Act and a penalty in the sum of $10,800 will be awarded to the AFAP.
I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of Judge Kendall
Associate:
Date: 25 February 2020
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