Bartlett v Signostics Ltd (in Liq) (No.2)
[2019] FCCA 3506
•4 December 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BARTLETT v SIGNOSTICS LTD (IN LIQ) (NO.2) | [2019] FCCA 3506 |
| Catchwords: INDUSTRIAL LAW – Workplace rights – adverse action – threat to take adverse action – failure to pay annual leave – declaration – penalty. |
| Legislation: Corporations Act 2001 (Cth), s.471B Fair Work Act 2009 (Cth), ss.340(1), 341, 342(1) & (2), 361, 535, 535(1) & (2), 546(2)(b) and 557C Fair Work Regulations 2009 (Cth), reg.3.36 |
| Cases cited: Bartlett v Signostics Limited (In Liq) (No 1) [2019] FCCA 2989 Khiani v Australian Bureau of Statistics [2011] FCAFC 109 |
| Applicant: | STEWART GAVIN BARTLETT |
| Respondent: | SIGNOSTICS LTD (IN LIQUIDATION) |
| File Number: | ADG 525 of 2017 |
| Judgment of: | Judge Heffernan |
| Hearing date: | 4 July 2019 |
| Date of Last Submission: | 4 July 2019 |
| Delivered at: | Adelaide |
| Delivered on: | 4 December 2019 |
REPRESENTATION
| Solicitors for the Applicant: | Mr G Bartlett of Bartlett Workplace Lawyers & Consultants |
| The Respondent: | No appearance |
THE COURT DECLARES THAT:
The respondent took adverse action against the applicant contrary to section 340(1) of the Fair Work Act 2009 (Cth) (‘the FW Act’) when it threatened to injure him in the course of his employment by deducting amounts from his lawful entitlements on separation from his employment (‘the medical evidence adverse action’).
The respondent took adverse action against the applicant contrary to s.340(1) of the FW Act when it failed to pay him the full amount of his entitlements for annual leave on separation from his employment (‘the annual leave adverse action’).
The amount of the unpaid annual leave referred to in paragraph (2) above was $33,627.91.
ORDERS
Pursuant to s.546(2)(b) of the FW Act, the respondent do pay a pecuniary penalty to the applicant in the amount of $10,000 for the medical evidence adverse action by 1 January 2020.
Pursuant to s.546(2)(b) of the FW Act, the respondent do pay a pecuniary penalty to the applicant in the amount of $10,000 for the annual leave adverse action by 1 January 2020.
Pursuant to s.545 of the FW Act, the respondent do pay to the applicant an amount of $33,627.91 for unpaid annual leave, together with an amount of $3,489.00 in interest on that amount by 1 January 2020.
The respondent to pay the costs of the applicant on an indemnity basis from 28 November 2017 as agreed or assessed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADG 525 of 2017
| STEWART GAVIN BARTLETT |
Applicant
And
| SIGNOSTICS LTD (IN LIQUIDATION) |
Respondent
REASONS FOR JUDGMENT
(As corrected)
This is an application alleging breaches of the Fair Work Act 2009 (Cth) (‘the Act’). It is alleged that adverse action was taken by the Respondent employer against the Applicant employee because he had exercised a workplace right and thus injured him in his employment.[1] This is alleged to have occurred in the context of refusing to pay him annual leave entitlements for which he was owed (‘annual leave adverse action’). Further, the Respondent is alleged to have taken adverse action against the Applicant because he exercised a workplace right, thus injuring him in his employment and/or altering his position to his prejudice in the context of requiring him to provide medical certificate for personal leave taken almost a decade earlier (‘medical certificate adverse action’).
[1] Sections 340(1)(a)(ii) and 342(1) Item 1B.
Finally, it is alleged that the Respondent failed to keep employee records, contrary to s.535 of the Act by failing to keep records that set out the annual leave taken by the Applicant and the balance of his annual leave entitlement from time to time (‘failure to keep records’).
I have previously determined an application for civil penalties and, by virtue of the Court’s accrued jurisdiction, contractual claims as between the Applicant and the Respondent.[2]
[2] Bartlett v Signostics Limited (In Liq) (No 1) [2019] FCCA 2989.
The Applicant relies on the same evidence adduced with respect to the civil penalties proceedings.
The Respondent placed itself into voluntary creditors’ liquidation on 28 February 2019. That was at a time after these proceedings had been issued and after the matter had been listed for trial. That development occurred as a result of a resolution of the Respondent’s sole shareholder, an American company called Echonous Inc. The effect of that was that these proceedings and the earlier proceedings to which I have referred were stayed. Pursuant to the Corporations Act 2001 (Cth) (‘the Corporations Act’), the Applicant applied for and obtained an order before Middleton J in the Federal Court of Australia on 13 June 2019 pursuant to s.471B of the Corporations Act. The Federal Court gave permission for the applicant to continue these proceedings and the earlier proceedings in this Court. There were no terms imposed on the order. The wording of the relevant order was as follows:
“The Plaintiff be given leave to continue proceedings in the Federal Circuit Court against Signostics Proprietary Limited (in Liquidation) (ACN 081 578 378) for unpaid accrued annual leave and unpaid contractual entitlements, also alleging contraventions of the Fair Work Act 2009 (Commonwealth) being proceedings ADG524/17 and ADG525/17.”
The Liquidator indicated that he had no intention of defending either the civil penalties proceedings or these proceedings. In the course of my judgment in Bartlett v Signostics Ltd (In Liq) (No 1) (‘the related judgment’) I made a number of findings of fact adverse to the Respondent. The factual matrix against which this application is made is the same as for the earlier matter and I adopt my earlier observations and findings of fact for the purpose of these proceedings.
The Applicant relies on his affidavits of 28 November 2018 (‘Applicant’s first affidavit’) and 1 July 2019 (‘Applicant’s second affidavit’) together with the exhibits that were tendered at the hearing of this matter. I accept the evidence of the Applicant as it concerns the details of his employment and all aspects of the narrative and chronology with respect to the conduct and representations of the Respondent and the various employees, agents and servants of the Respondent identified by the Applicant in his evidence.
In order to establish adverse action, a number of elements must be proven:
(1)The existence, exercise (or non-exercise) or proposed exercise (or proposed non-exercise) of a workplace right.[3]
(2)The causal link, namely, the adverse action alleged against the Respondent was taken because the person against whom the adverse action has been taken has one or more of the relevant characteristics or has done one or more of the relevant acts referred to in subparagraph (1) above.[4]
[3] Section 340(1).
[4] Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at para [31].
The definition of ‘workplace right’ referred to in s.341 of the Act is broad.
“(1)A person has a workplace right if the person:
(a)is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b)is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c)is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee—in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument”
In this matter, the Applicant alleges he made a series of complaints and inquiries with respect to his employment and thus exercised a workplace right. The same complaints and inquiries are alleged to have been the impetus for the three incidents of adverse action on each occasion. The complaints and inquiries were made by the Applicant on repeated occasions orally and in writing and concerned: the proposals by the Respondent to change the nature of his duties requiring him to perform tasks for which he was not qualified; his ongoing role as Chief Operating Officer; the obligation of the Respondent to inform employees as soon as practicable of its decision to make them redundant; and the Applicant’s own responsibilities as an officer and director of the Respondent.
The ambit of what amounts to a complaint for the purpose of s.341 is generally agreed to be broad, but not at large.[5] In my view, the complaints and inquiries of which the Applicant has given evidence establish the relevant nexus. The matters raised clearly had implications for the Applicant’s own employment and the nature of the duties he performed as well as the rights and employment of other employees.[6] I turn to consider the causal link and whether the alleged adverse action was taken by the employer ‘because’ of the exercise of the workplace rights. In my view, with respect to the medical evidence adverse action and the annual leave adverse action, it was. I note that in the related judgment I made the following findings:
“50.I have considered the affidavit material read by the applicant, the annexures to those affidavits, and the various exhibits tendered by him at trial. In the absence of a respondent, the applicant understandably did not give evidence. I accept the evidence of the applicant as set out in his affidavits. I accept the underlying thesis of his submissions. In other words, I accept that once the respondent realised that the applicant was, from its perspective, less co-operative than it would have liked, having been told of the respondent’s decision to drastically reduce the size of its Australian operations and retrench most of its local work force, it determined to make his position with it untenable and made a series of decisions aimed at avoiding its obligation to pay the applicant his full entitlements when his employment ceased. It clearly took the view that the applicant had become a thorn in its side. Those inferences are open on the evidence and I am prepared to draw them. The respondent’s actions were clearly motivated by the issues raised by the applicant in the discussions and correspondence referred to in his evidence.
[5] Construction, Forestry, Mining and Energy Union (CFMEU) v Pilbara Iron Co (Services) Pty Ltd (No 3) [2012] FCA 697.
[6] See Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] 243 IR 468 at [42]; Henry v Leighton Admin Services Pty Ltd (2015) 299 FLR 342 at [77].
…
60.Further, the respondent was, as I have already found, motivated in its actions by bad faith towards the applicant. It appears to have been motivated by malice towards him as a result of his forthright behaviour after he learned that the respondent was to shut down most of its local operations. Whilst the conduct of the respondent only amounted to a single contravention, that contravention involved a concerted course of conduct with a high degree of deliberation, completely ignoring the complaints made by the applicant.”
I turn to consider firstly the medical certificate adverse action. By email on 24 August 2017, an employee of the Respondent called Zinkov required the Applicant to provide medical certificates to support his having taken personal/carers leave on occasions beginning in May 2009.[7] It is patently transparent that the Respondent sought certificates that it must have known would be almost impossible for the Applicant to locate. However, I am not satisfied that its conduct could be said to have injured the employee in his employment or to have altered his position to his prejudice simply by virtue of the fact that the request was made. I am satisfied, as alleged in the alternative, that the Respondent’s request constituted a threat to deduct amounts of the Applicant’s entitlements to unpaid annual leave that would have otherwise have been payable on the termination of his employment. That was the clear implication of Zinkov’s request, particularly when seen in light of the other evidence. That amounted to adverse action within the meaning of s.342(2)(a) because a deduction from his entitlements would amount to an injury to him in the course of his employment within the meaning of Item (1)(b) of the table set out under s.342(1) of the Act.
[7] Applicant’s affidavit at para [74].
Those matters having been established, the reverse onus of proof embodied in s.361 is activated. The presumption of purpose is rebuttable. The respondent did not contest the proceedings. Even had it done so, merely taking issue with the allegations however vigorously would rarely be sufficient to displace the onus. That is because the question of causality, the ‘because’ aspect of s.341 is established by reference to the actual state of mind of the respondent.[8]
[8] Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500.
As a consequence, it is very hard for a respondent to displace the presumption of intent without the decision maker giving evidence.[9]
[9] Barclay, op cit, at para [45].
I am satisfied that the adverse action taken by the respondent relating to the demand for historical medical certificates was taken because the applicant had exercised a workplace right.
I find the medical evidence adverse action proven and will make a declaration and impose a penalty accordingly.
I am satisfied that the conduct alleged in the annual leave adverse action has been proven. Consistent with my findings to which I have already referred in the related judgment, I am satisfied that the respondent injured the applicant employee in the course of his employment by not paying him annual leave entitlements because the applicant exercised his workplace rights to make the complaints and raise the issues with the respondent as alleged. It is appropriate to make a declaration and impose a penalty for this contravention and in addition to compensate the applicant for the unpaid leave in the amount of $33,627.91 together with interest on the unpaid amount.
In terms of penalties for the above contraventions, for both, the maximum penalty is $63,000 comprised of five times 60 penalty units per breach, with each penalty unit being $210.[10] In the circumstances, as I have found them to be, taking into account the need for general deterrence and allowing for the fact that the respondent has had no breaches of the Act in the past beyond the above and those I have dealt with in the related judgment, I impose a penalty of $10,000 per breach.
[10] Section 546(2)(b).
I am not satisfied that the applicant has demonstrated a failure on the part of the respondent to keep annual leave records for leave he took prior to 14 May 2009, contrary to s.535(1) and (2) of the FW Act and reg.3.36 of the Fair Work Regulations 2009 (Cth). The FW Act came into operation on 1 July 2009, but the section implies an ongoing duty to keep records that had been created prior to that date. As pleaded, the applicant seeks to rely on s.557C of the Act which provides a presumption of an alleged purpose, but that section does not assist in establishing the fact of the failure itself.[11] The applicant has alleged dishonesty on the part of the respondent and his own case was to the effect not that relevant records had not historically been kept, but that they were ignored by the respondent in the course of the series of actions by which it deliberately failed to pay him his proper annual leave entitlements. Further, s.535 required the respondent to keep records of the relevant type for a period of seven (7) years. It does not follow in any event that a failure to keep records prior to 14 May 2009, if that was the case, would prove a relevant failure to keep records setting out the balance of the applicant’s entitlements to annual leave from time to time.
[11] Section 557C(1)(c).
With respect to costs, I note my findings in the related judgment regarding the conduct of the respondent in the proceedings brought by the applicant.
This is an appropriate matter in which to depart from the ordinary practice with respect to costs and grant the applicant’s request for costs on an indemnity basis.
I make the declarations and orders to be found at the beginning of these reasons.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Heffernan
Associate:
Date: 4 December 2019
CORRECTIONS (9 December 2019)
Page 2, Cover Sheet and Orders – Additional declaration number (3) added.
Page 2, Cover Sheet and Orders – Additional order number (3) added making 4 orders in total.
Page, 6, Paragraph 17, Line 8 – additional text added to the end of the sentence, “and in addition to compensate the applicant for the unpaid leave in the amount of $33,627.91 together with interest on the unpaid amount”.
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