Basi v Namitha Nakul Pty Ltd

Case [2022] FCA 712

FEDERAL COURT OF AUSTRALIA

Basi v Namitha Nakul Pty Ltd [2022] FCA 712

File number(s): NSD 523 of 2019
NSD 730 of 2019
Judgment of: HALLEY J
Date of judgment: 21 June 2022
Catchwords:

INDUSTRIAL RELATIONS – allegations of contraventions of ss 45, 323, 325, 343 and 345 of the Fair Work Act 2009 (Cth) (FW Act) relating to employment of applicants – application of Restaurant Industry Award 2010 (Award) – terms and conditions of applicants’ employment by respondents – whether one applicant entitled to payment on quantum meruit basis for work performed – whether s 557C of the FW Act operates in proceedings – where payslips admitted to be incorrect – where conflicting evidence about duties performed by applicants – whether applicants afforded breaks required by the Award – correct classification of applicants’ duties under the Award – whether applicants’ hours of work were arranged in contravention of the Award – whether applicants were paid amount payable under the Award for work performed – serious contraventions of Award established

INDUSTRIAL RELATIONS – alleged loans made by second respondent to applicants – no loans found to be made – alleged loans properly characterised as “cashback payments” – where second respondent made threats, exerted undue influence or pressure, and made misrepresentations contrary to the FW Act, in relation to cashback payments and payments to cover PAYG tax obligations and visa sponsorship application costs

INDUSTRIAL RELATIONS – where second respondent knowingly concerned in contraventions of civil penalty provisions of FW Act committed by first respondent

Legislation:

Evidence Act 1995 (Cth) s 128

Fair Work Act 2009 (Cth) ss 12, 44, 45, 46, 47, 90, 117, 323, 325, 341, 342, 343, 344, 345, 360, 362, 535, 536, 545, 546, 550, 557A, 557C, 793

Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth)

Migration Act 1958 (Cth)

Explanatory Memorandum, Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017

Fair Work Regulations 2009 (Cth) regs 3.31, 3.32, 3.33, 3.34, 3.36, 3.37, 3.46

Restaurant Industry Award 2010 cls 3, 4.1, 5, 20, 31.1, 31.2, 30.2, 32, 33, 35, 35.2
Cases cited:

Ahmed v Al-Hussain Pty Ltd t/as The Cheesecake Shop (No 2) [2019] FCA 670

Ahmed v Al-Hussain Pty Ltd t/as The Cheesecake Shop (No 3) [2019] FCA 848

Auimatagi and Another v Australian Building and Construction Commissioner (2018) 267 FCR 268; [2018] FCAFC 191

Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) (2015) 239 FCR 461; [2015] FCA 1196

Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2021] HCA 17

Bluescope Steel (AIS) Pty Ltd and Another v Australian Workers’ Union (2019) 270 FCR 359; [2019] FCAFC 84

Burke v LFOT Pty Limited (2002) 209 CLR 282; [2002] HCA 17

Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445; [2011] VSC 184

Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (1999) 140 IR 131; [1999] FCA…

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Details
AGLC
Basi v Namitha Nakul Pty Ltd [2022] FCA 712
Case
[2022] FCA 712
Decision Date

CaseChat Overview and Summary

The case of Basi v Namitha Nakul Pty Ltd involved claims by the applicants, Mr Midhun Basi and Mr Syed Haider, against the respondents, Namitha Nakul Pty Ltd and Mr Vaisakh Mohanan Usha. The applicants alleged contraventions of various sections of the Fair Work Act 2009 (Cth) (FW Act) and the Restaurant Industry Award 2010 (Award) relating to their employment terms and conditions. The applicants sought, among other things, payment on a quantum meruit basis for work performed and relief in respect of alleged contraventions of the FW Act by the respondents.

The legal issues before the court included whether Mr Haider was entitled to a quantum meruit payment for work performed at the Nowra Restaurant, the application of section 557C of the FW Act to the proceedings, the accuracy of payslips, the nature and classification of the applicants' duties, compliance with break requirements, the arrangement of working hours, and payment of amounts due under the Award. The court was also required to determine whether alleged loans made by Mr Usha to the applicants were indeed loans, or whether they were properly characterised as "cashback payments," and whether there were contraventions of the FW Act concerning these payments and other obligations.

The court found that Mr Haider was indeed entitled to a quantum meruit payment for the work he performed at the Nowra Restaurant. It determined that section 557C of the FW Act did not operate in the proceedings to limit the applicants' ability to recover unpaid wages. The court concluded that the applicants did not work 12-hour days without breaks and that the respondents failed to arrange the applicants' hours of work in a manner consistent with the Award and failed to pay weekend holiday rates, which constituted serious contraventions of the Award and the FW Act. Furthermore, the court found that Mr Usha was knowingly involved in these contraventions. The court also established that no loans were made by Mr Usha to the applicants but that demands for cashback payments and other payments were made in contravention of the FW Act. Finally, the court found that Mr Haider was entitled to a quantum meruit payment for the work he undertook to prepare the Nowra Restaurant for trading.

The court ordered the parties to provide agreed draft declarations and orders to give effect to the reasons for judgment. In the event of no agreement, each party was required to file and serve draft declarations and orders proposing to be made by specific dates. The applicants and respondents were also required to file written submissions regarding penalties and any affidavit evidence by specified dates. The proceeding was listed for a case management hearing.

Orders

Orders of the court

1. The parties provide agreed draft declarations and orders to give effect to the reasons for judgment delivered today and, in default of agreement, each party file and serve draft declarations and orders it proposes to be made, on or before 19 July 2022.

2. The applicant file and serve written submissions as to penalty (limited to 5 pages) and any affidavit evidence on or before 12 July 2022.

3. The respondents file and serve written submissions as to penalty (limited to 5 pages) and any affidavit evidence on or before 19 July 2022.

4. The proceeding be listed for a case management hearing at 9.30 am on Tuesday, 26 July 2022.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

TABLE OF CONTENTS

INTRODUCTION

[1]

Admitted contraventions of the FW Act

[8]

Contested claims advanced by the applicants

[9]

Principal conclusions

[17]

THE PARTIES AND WITNESSES

[18]

Overview

[18]

Mr Midhun Basi

[23]

Mr Syed Haider

[40]

Namitha Nakul Pty Ltd and Mr Vaisakh Mohanan Usha

[52]

Ms Priyadevi Sunil Kumar

[63]

Mr Sujith Ayyappadas Sulatha

[68]

Ms Sandhya Sujith Sulatha

[73]

FACTUAL BACKGROUND

[79]

Wollongong Restaurant

[79]

Nowra Restaurant

[87]

Financial position of Namitha Nakul

[94]

OVERVIEW OF LEGISLATIVE AND INDUSTRIAL SCHEME

[96]

Modern Award Compliance – s 45

[96]

The Restaurant Industry Award 2010

[101]

Fair Work Act 2009 (Cth)

[118]

Obligation to pay amounts payable – s 323

[118]

Unreasonable requirement by employer that employee pay or spend money – s 325

[121]

Part 3-1 – General Protections

[127]

Obligation to keep records – s 535

[130]

Fair Work Act Remedies – Part 4-1

[136]

THE APPLICANTS’ EMPLOYMENT

[140]

When did Mr Basi commence employment with Namitha Nakul?

[140]

When did Mr Haider commence employment with Namitha Nakul?

[152]

Background facts

[154]

Evidence of Mr Haider, Mr Usha and Ms Kumar

[160]

Consideration

[182]

Is Mr Haider entitled to payment by Namitha Nakul for the work he performed on the Nowra Premises between about July 2016 and October 2016 on a quantum meruit basis?

[195]

Submissions

[195]

Relevant principles

[199]

Consideration

[202]

Does s 557C operate in the present proceedings?

[206]

What were the hours of work performed by Mr Basi and Mr Haider at the Restaurants?

[219]

Submissions

[219]

Evidence

[224]

Payslips

[229]

Where was the food served at the Nowra Restaurant prepared?

[236]

Consideration

[240]

Were Mr Basi and Mr Haider afforded the breaks required by the Award when working for Namitha Nakul at the Restaurants?

[253]

What duties did Mr Basi and Mr Haider perform?

[261]

Evidence

[262]

Consideration

[272]

What is the appropriate Award classification for the employment of Mr Basi and Mr Haider by Namitha Nakul?

[277]

Did Namitha Nakul arrange the hours of work of Mr Basi and Mr Haider in a way that contravened the Award?

[287]

What did Namitha Nakul pay Mr Basi for his work?

[294]

Did Namitha Nakul pay Mr Basi the amount payable to him pursuant to the Award for the work he performed?

[299]

Prior to 15 November 2016

[299]

From 15 November 2016

[306]

What did Namitha Nakul pay Mr Haider for his work?

[328]

Did Namitha Nakul pay Mr Haider the amount payable to him pursuant to the Award for the work he performed?

[331]

Was Mr Usha knowingly concerned in any of the alleged contraventions committed by Namitha Nakul?

[336]

Did Namitha Nakul and Mr Usha contravene the Award in respect of Mr Basi and Mr Haider?

[340]

DID MR USHA MAKE LOANS TO MR BASI AND MR HAIDER?

[343]

Introduction

[343]

Alleged loans to Mr Basi

[345]

Did Mr Usha lend Mr Basi $3500 on 28 October 2016?

[346]

Did Mr Usha lend Mr Basi $5000 on 10 January 2017?

[358]

Did Mr Usha organise a loan to Mr Basi on about 25 January 2017?

[364]

Did Mr Usha lend Mr Basi $10,000 on 19 January 2018?

[378]

Alleged loans to Mr Haider

[385]

Did Mr Usha lend Mr Haider $1900 on or about 15 November 2016?

[388]

Did Mr Usha make three loans of $500 to Mr Haider?

[392]

CASHBACK ARRANGEMENTS

[396]

Did the requirement to make the cashback payment contravene ss 323 and 325 of the FW Act?

[411]

WERE ANY CONTRAVENTIONS “SERIOUS CONTRAVENTIONS”?

[418]

COERCION, UNDUE INFLUENCE AND MISREPRESENTATIONS

[429]

Introduction

[429]

Relevant statutory provisions and principles

[432]

Cashback arrangements

[444]

August 2017 Basi Payment

[456]

January 2018 Basi Payment

[471]

September 2017 Haider Payment

[485]

DISPOSITION

[496]

Background

Background to the litigation

Ms Sujith generally presented as an honest and truthful witness. In common with Ms Kumar and Mr Sulatha, however, her evidence as to the limited amount of cooking being undertaken at the Nowra Restaurant and the cooking skills of Mr Basi and Mr Haider was again inconsistent with the apparent logic of events as explained above. I am satisfied that her evidence on these matters was overstated and I have discounted it in making findings on these matters.FACTUAL BACKGROUND Wollongong Restaurant Namitha Nakul entered into a lease for Shop 4, the Wollongong Restaurant, on 22 January 2016. The lease commenced on 15 January 2016. Between 15 January 2016 and 10 March 2016 the Wollongong Restaurant underwent minor renovations before opening officially as an a la carte restaurant serving South Indian cuisine on 11 March 2016. Namitha Nakul entered into a lease for Shop 2, the Wollongong Restaurant, on 15 October 2017. The opening hours for the Wollongong Restaurant varied from time to time and were:(a)between March and April 2016: seven days a week from 10.00 am to 10.00 pm;(b)from April 2016 to July 2019: Tuesday through Sunday from 12.00 pm to 10.00 pm;(c)from July 2019 to January 2020: Tuesday through Sunday from 12.00 pm to 2.30 pm and from 5.00 pm to 9.30 pm; and(d)from January 2020 to March 2020: Tuesday through Sunday from 5.00 pm to 9.30 pm. Between March 2016 and March 2017, Mr Usha was the head chef of the Wollongong Restaurant and had various cooking, supervising, cleaning and management duties. Between March 2017 and March 2020, Ms Kumar was the head chef of the Wollongong Restaurant. The head chef was usually assisted in the kitchen by other employees. The Wollongong Restaurant had two different shifts, a lunch shift from 12.00 pm to 2.30 pm and a dinner shift from 5.30 pm (or 6.00 pm) to 9.30 pm. During the lunch shift the Wollongong Restaurant also offered a lunch special with curries already prepared in warmers in the kitchen. In August 2018, Namitha Nakul terminated its lease for Shop 2 of the Wollongong Restaurant after failing to comply with a final notice of demand from Colliers International dated 29 June 2018 for unpaid rent. In March 2020, Namitha Nakul terminated its lease for Shop 4 and the Wollongong Restaurant was permanently closed.Nowra Restaurant On or about 20 September 2016, Namitha Nakul entered into a lease for the Nowra Restaurant at 1/78 Junction Street, Nowra. The lease commenced retrospectively on 24 August 2016. The Nowra Restaurant initially traded under the name “1980’s A Nostalgic Restaurant” and in the period between 31 October 2016 and March 2017 it was operated on a day to day basis by Mr Ashik Thiruvathakath Korundavalapil (Ashik) and his wife Ms Sabitha Ayangil (Sabitha). Between January and March 2017, the Nowra Restaurant was closed three times following health inspections by the Shoalhaven City Council. In mid-March 2017, Mr Usha arranged for renovation works to be undertaken and for an inspection by Shoalhaven City Council to be conducted, before Namitha Nakul commenced operating the Nowra Restaurant in April 2017 under the name “Adithya Kerala Nowra”.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Seventh, Mr Haider alleges that he is entitled to make a quantum meruit claim for the work he performed at the behest of Namitha Nakul and Mr Usha to prepare the Nowra Restaurant for trading between July and October 2016. Principal conclusions For the reasons that follow, I have concluded that:(a)Mr Basi was employed full time by Namitha Nakul between 19 July 2016 and 27 August 2018 at the Restaurants at a classification of Cook Grade 4 at the Wollongong Restaurant and subsequently as a Cook Grade 5 at the Nowra Restaurant;(b)Mr Haider was employed for an average of 30 hours a week by Namitha Nakul in the period between 10 July 2016 and 30 October 2016, and then in the period between 31 October 2016 and 14 August 2018 he was employed full time by Namitha Nakul at a classification somewhere between Cook Grade 3 and Cook Grade 4, but ultimately closer to Cook Grade 4, at the Restaurants;(c)the applicants did not work 12 hour days for six days a week for Namitha Nakul;(d)it was not possible to conclude on the balance of probabilities that the applicants had worked overtime hours or had worked for more than five hours on any given day without a break, notwithstanding, to the extent relevant, the operation of s 557C of the FW Act;(e)the respondents failed to arrange the hours of work of the applicants in a manner consistent with the Award and failed to pay weekend holiday rates in contravention of clause 34.1 of the Award, and therefore s 45 of the FW Act, this failure amounted to a serious contravention for the purposes of s 557A of the FW Act, and Mr Usha was knowingly involved in that serious contravention;(f)Namitha Nakul failed to pay the amounts due and payable to the applicants under the Award in contravention of clause 20 of the Award, and therefore s 45 of the FW Act, this failure amounted to a serious contravention for the purposes of s 557A of the FW Act, and Mr Usha was knowingly involved in that serious contravention;(g)Mr Usha did not make any loans to Mr Basi or Mr Haider;(h)Namitha Nakul through Mr Usha demanded that Mr Basi make payments back to Namitha Nakul from his wages of approximately $511 each fortnight by way of cashback payments in contravention of ss 323 and 325 of the FW Act, this demand amounted to a serious contravention by Namitha Nakul for the purposes of s 557A of the FW Act, and Mr Usha was knowingly involved in that serious contravention;(i)Mr Usha made demands to Mr Basi for payment of money to cover Namitha Nakul’s PAYG liability for Mr Basi in contravention of ss 325, 343 and 345 of the FW Act, and that, by reason of s 793(1) of the FW Act, Namitha Nakul also made those contraventions;(j)Mr Usha made demands to Mr Haider for payment of money to cover Namitha Nakul’s visa sponsorship costs in contravention of s 325 of the FW Act, and that, by reason of s 793(1) of the FW Act, Namitha Nakul also made those contraventions; and(k)Mr Haider is entitled to a quantum meruit payment from Namitha Nakul for the work that he undertook between 10 July 2016 and 30 October 2016 to prepare the Nowra Restaurant for trading.THE PARTIES AND WITNESSESOverview

Ratio Decidendi

Legal Principle Established

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