Bell v Anglican Aged Care Services Group T/As Benetas

[2017] FCCA 1050

FEDERAL CIRCUIT COURT OF AUSTRALIA

BELL v ANGLICAN AGED CARE SERVICES GROUP T/AS BENETAS [2017] FCCA 1050

Catchwords:
INDUSTRIAL LAW – Fair Work – breach of Enterprise Agreement and Award – consideration of matters relevant to breach – payment when details of breach provided.

Legislation:

Fair Work Act  2009, ss.50, 546(3), 557

Cases cited:

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7

Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543

Applicant: PENELOPE BELL

Respondent: ANGLICAN AGED CARE SERVICES GROUP T/AS BENETAS

File Number: MLG 1292 of 2016

Judgment of: Judge McNab

Hearing date: 1 May 2017

Date of Last Submission: 1 May 2017

Delivered at: Melbourne

Delivered on: 25 May 2017

REPRESENTATION

Counsel for the Applicant: Mr D'Abaco

Solicitors for the Applicant: Wilcox Lawyers

Counsel for the Respondent: Mr Harrington

Solicitors for the Respondent: K&L Gates

IT IS DECLARED THAT:

1. The First Respondent has contravened:

   (a)Appendix D of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, Clause 42.1 of the Nurses Award 2000 and Clause 46.1 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 by failing to pay overtime;

   (b)Appendix D of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, Clause 43.7 Nurses Award 2000, and Clause 21.1(c) of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 by failing to pay meal allowances;

   (c)Clause 17.1 of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, and Clause 26.1 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 by failing to pay on-call allowance;

   (d)Clause 17.3 of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, and Clause 26.2 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 by failing to pay telephone calls (while on call);

   (e)Clause 17.2 of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, and Clause 46.8 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 by failing to pay recall to work (while on call); and

   (f)Appendix D of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012 and Clause 33 of the Nurses Award 2000 by failing to pay higher duties allowance.

ORDERS

1. The Respondent pay the Applicant the following:

   (a)$2,000 in respect of breaches of Appendix D of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, Clause 42.1 of the Nurses Award 2000 and Clause 46.1 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 in relation to unpaid overtime;

   (b)$2,000 in respect of breaches of Appendix D of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, Clause 43.7 Nurses Award 2000, and Clause 21.1(c) of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 in relation to unpaid meal allowances;

   (c)$2,000 in respect of breaches of Clause 17.1 of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, and Clause 26.1 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 in relation to unpaid on-call allowance;

   (d)$500 in respect of breaches of Clause 17.3 of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, and Clause 26.2 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 in relation to unpaid telephone calls (while on call);

   (e)$500 in respect of breaches of Clause 17.2 of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012, and Clause 46.8 of the Benetas, Nurses and Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 in relation to unpaid recall allowance (while on call); and

   (f)$500 in respect of breaches of Appendix D of the Benetas, Nurses and HASA Staff Enterprise Agreement 2009-2012 and Clause 33 of the Nurses Award 2000 in relation to unpaid higher duties allowance.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1292 of 2016

PENELOPE BELL

Applicant

And

ANGLICAN AGED CARE SERVICES GROUP T/AS BENETAS

Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant issued proceedings for underpayment of entitlements under industrial agreements on 26 May 2016. The applicant sought compensation payments of unpaid entitlements and the imposition of pecuniary penalties with the penalties payable to her.

2. The claim was not particularised and the quantum of claim was not specified. The parties attended mediation on 28 October 2016 where the matter was not resolved. Orders were made by consent on 16 November 2016 that the applicant provide full and detailed particulars of her claim by 8 February 2017. A series of extensions of time were requested in relation to the provision of particulars and by consent an amended statement of claim was filed which set out the set out in detail the basis and the quantum of the plaintiff’s claim on 4 April 2017.

3. The respondent has admitted six contraventions of the relevant industrial agreements and those contraventions are set out in the orders made by the Court.

4. Shortly after the amended statement of claim, outlines of evidence of the applicant and Elaine Fitzgerald, a former Facility Manager  of the nursing home facility where the applicant had been employed, were filed, the respondent agreed to pay (and subsequently did pay) the sum of $26,631.14. That sum exceeded the claim of underpayment ($25,531.08) and included the payment of $4,000 towards costs and interest. The respondent paid the claims made by the applicant in full, save that it reduced the payment in respect of the claimed underpayment of overtime by deducting 20% (paying $11,598.40 rather than $14,498.40).

5. The applicant accepted that payment in settlement of those claims. The remaining two claims of breach, which were denied by the respondent, were:

   a)a claim of a failure to pay monies due on termination of employment within 24 hours; and

   b)a failure to provide a service and training certificate.

6. Those matters were determined by the Court on 1 May 2017 by orders dismissing those claims after adjudication on their merits. Oral reasons were given at the hearing for their dismissal.

7. The matter then proceeded to hearing on the question of penalty on 1 May 2017. Counsel for the applicant relied upon a written outline of submissions and the applicant gave evidence of the circumstances surrounding the provision of documents in relation to on-call duties. The respondent relied on a written outline of submissions on penalty; an affidavit of David Hartnett sworn 28 April 2017, which went to the background of the provision of the particulars by the applicant; and a further amended defence. The respondent also relied upon an affidavit of Leanne Lawrence, a Human Resources Manager of the respondent, sworn 27 April 2017. Ms Lawrence gave evidence before the Court and was cross-examined in relation to the evidence that she gave by affidavit.

Factual Background

1. The Court did not have the benefit of an agreed statement of facts however it is apparent from a review of the submissions and the evidence filed that the following matters are admitted:

   a)The respondent is a not for profit provider of residential care, in-home care, respite care, housing services and retirement living throughout Victoria.

   b)The head office of the respondent is located at 789 Toorak Road Hawthorn East.

   c)The respondent operates 13 residential sites and employs approximately 1,479 employees. The respondent provided services to more than 4,000 aged care residents in the year 2015/2016.

   d)The applicant was employed in a full time capacity by the respondent from 24 April 2014 until 17 December 2015 (a period of about 20 months) as a Clinical Care Coordinator.

   e)Between 24 April 2014 and 20 October 2014, the applicant’s employment was regulated by the Benetas, Nurses and HASA Employees Enterprise Agreement 2009-2012 (‘the 2009 Agreement’) and the Fair Work Act 2009 (Cth) (‘Fair Work Act’).

   f)After 21 October 2014, the applicant’s employment was regulated by the Benetas Nurses Aged Care Employees (Residential Care) ANMF and HWU Enterprise Agreement 2014 (‘the 2014 Agreement’) and the Fair Work Act.

   g)The applicant was initially paid an hourly rate of $39.52. Towards the end of her employment her hourly rate of pay was $41.94.

   h)The applicant supervised approximately 40 enrolled nurses and personal care workers, and provided nursing care to residents and liaised with residents.

Breaches of the Employment Agreements and Fair Work Act

1. The following breaches are admitted by the respondent:

   a)The respondent failed to pay overtime to the applicant in the amount of $7,369.12 in respect of overtime hours she worked during her employment with the respondent.

   b)The respondent failed to pay meal allowances to the applicant in the sum of $657.82 in respect of overtime hours she worked during her employment with the respondent.

   c)The respondent failed to pay on call allowance to the applicant during her employment with the respondent, in the sum of $14,498.

   d)The respondent failed to pay the applicant $2,134.36 in respect of phone calls made while she was “on call” during her employment with the respondent.

   e)The respondent failed to pay the applicant $493.40 in respect of occasions when she was required to return to the workplace while “on call”.

   f)The respondent failed to pay higher duties allowance to the applicant in the sum of $378.04 in respect of circumstances when the applicant was required to perform duties at a higher rate than the classification that she was employed under.

   g)In failing to make the payments outlined above in (a) – (f), the respondent breached provisions contained in the 2009 Agreement and the 2014 Agreement, and s.50 of the Fair Work Act.

Findings of Fact Not Admitted Between the Parties

1. It is a finding of the Court, and not admitted by the Applicant that her employment terminated on 17 December 2015.

2. Having regard to the evidence of Ms Lawrence, I make the following findings of fact:

   a)during the time of the applicant's employment, Ms Elaine Fitzgerald was employed as a Facility Manager  and required to manage the operations of the respondent at the Eaglehawk facility

   b)In her role as Facility Manager, Ms Fitzgerald had responsibility for client service, quality of care and business administration of that facility. Ms Fitzgerald's business administration role included a delegated responsibility for the correct payment of employees’ entitlements arising under the industrial instruments governing their employment and the rosters under which they worked.

   c)Notwithstanding Ms Fitzgerald's role as a Facility Manager, the overall responsibility in relation to the payment of entitlements rested with the respondent and the respondent's responsibility is not derogated from as a result of the appointment of Ms Fitzgerald.

   d)The applicant raised no claim in writing in relation to the payment of entitlements with Benetas or with the respondent or its employees. Further there is no note of any communication from Ms Bell that she consider that she was underpaid for any loadings and allowances which form part of the claim in these proceedings.

3. Once the applicant provided particulars of the claim and the respondent was aware that the applicant intended to call evidence from Elaine Fitzgerald that she had authorised the applicant to be on call, the respondent promptly determined to make a payment to the applicant in excess of the quantum of her claim.

4. The respondent, by Ms Lawrence, gave evidence in relation to remedial steps that the respondent had taken in the following terms:

   "Benetas has reviewed its systems. Clinical after hours on-call arrangements are now rostered and shared with either Colton close or the neighbouring St Lawrence Kangaroo flat facility. All nonclinical matters that arise out of hours are directed to the Facility Managers. An audit of mobile telephones issued to staff has been conducted. This audit showed that there were no staff in possession of a work issued mobile telephone who should not have one. Any new mobile telephone accounts can only be created with a general manager approval. A roster review is also under way to ensure that Facility Managers retain responsibility for rostering effectively and efficiently and approve any subsequent changes made to issued rosters.

5. I accept the evidence of Ms Lawrence in relation to those matters.

Factors relevant to penalty

1. The factors relevant to the imposition of a penalty under the Fair Work Act have been summarised by Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [26]-[59] as follows:

   a)the nature and extent of the conduct which led to the breaches;

   b)the circumstances in which that conduct took place;

   c)the nature and extent of any loss or damage sustained as a result of the breaches;

   d)whether there had been similar previous conduct by the Respondents;

   e)whether the breaches were properly distinct or arose out of the one course of conduct;

   f)the size of the business enterprise involved;

   g)whether or not the breaches were deliberate;

   h)whether senior management was involved in the breaches;

   i)whether the party committing the breach had exhibited contrition, taken corrective action and co-operated with the enforcement authorities;

   j)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

   k)the need for specific and general deterrence.

2. This represents a checklist and is not a prescriptive statement of the matters which may be taken into account in the exercise of the Court's discretion.[1]

   [1] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 [91].

Nature and Extent of the Conduct

1. The conduct incurred in circumstances where the applicant was not paid over time or an on-call allowance over a period of about 20 months. These breaches occurred in a context where the applicant is an experienced nurse and raised no claim in relation to the failure to pay entitlements under the agreement until about six months after the termination of her employment.

2. On the other hand, it is the responsibility of the respondent to ensure that its employees are paid in accordance with the industrial instruments under which it operates and it is not sufficient for it to rely on management at each of their facilities to ensure compliance. Whilst that is an exploration for the systemic failure in this matter, it does not excuse the breach and the respondent accepts that this is the case.

3. It is certainly not the case that the respondent is engaged in conduct in order to reduce costs or to consciously avoid payment of entitlements.

Loss or Damage

1. I accept that the loss to the applicant in this case is significant in comparison to the level of her salary. I note that the applicant's weekly wage at the date of termination of employment was $1,593.72 and the admitted underpayment of $22,631.14 represents a significant portion of her entitlements.

Similar previous conduct

1. There is no evidence of similar previous conduct.

Whether breaches arose out of the one course of conduct

1. I accept the respondent is entitled to the benefit of s.557 of the Fair Work Act and that the total number of contraventions is six, although there have been breaches of the on-call allowance, telephone allowance, over time, meal allowances on numerous occasions.

The size of the respondent's business

1. The respondent is a large employer. The respondent's 2015/2016 Annual Report indicates that:

   a)the respondent owns and manages 13 aged care homes across Melbourne and additionally provides care to people in their own homes;

   b)it employs up to 1,500 people;

   c)in the 2016 financial year the respondent had an operating profit of $3.8 million and total equity of $186 million.

2. The respondent conducts a significant operation. I also bear in mind that the Annual Report also discloses that the respondent is a not-for-profit organisation and paid a social dividend in excess of $1 million through which it funded affordable housing for older people, research and programs for disadvantaged older people. I also note that rather than paying a dividend to shareholders it would appear that it has invested significantly in maintaining its facilities for the purposes of providing services.

3. It is a large business and has a dedicated Human Resources Department. I note the commitment made by the respondent to improve its systems to avoid a recurrence of the current breaches before the Court.

Deliberateness of the breaches

1. I have found that the breaches are not deliberate.

Contrition, corrective action and cooperation with authorities

1. No authority has been involved in this proceeding. In my view the respondent has sought to cooperate with the applicant to resolve the matter at an early stage when it was notified of the detail of the claims made against it in a way that could be responded to.

Ensuring compliance with minimum standards

1. I accept that the respondent has acted upon the systemic failing identified in this proceeding and has acted to ensure compliance with the applicable industrial instruments.

Specific and general deterrence

1. Specific and general deterrence forms part of the factors relevant to the imposition of a penalty under the Fair Work Act.[2]

   [2] See Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 [26]-[29]; Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, 93.

2. In this case I am not of the view that there should be a significant penalty imposed as specific deterrence. This is not a case of a kind where the respondent has been on notice of a failure to pay entitlements which has involved a regulator or where there has been a purported but ineffective compliance with standards after an investigation and warning.

3. It is appropriate to group the six breaches into two groups with the overtime and meal allowances being one group and the balance of the breaches being a second group.

4. The applicant has submitted that the Court should impose upon the respondent a penalty in the range of between 30 – 50% ($16,200 –$27,000) in respect of each of the contraventions founds. Accordingly it submits that the Court should impose pecuniary penalties on the respondent in the range of $97,200 – $162,000. The applicant submits that the Court is required to take a look at the aggregate penalties which she submits should be imposed and determine whether those amounts are an appropriate response to the respondent’s conduct and are not oppressive or crushing.

5. It also submits that any pecuniary penalty ordered to be paid by the respondent should be paid to the applicant in accordance with s.546(3) of the Fair Work Act. It makes this submission based on the fact that the applicant is the only person affected by the contraventions and is the person who initiated the enforcement application.

6. In my view, a total penalty in the sum of $7,500 is an appropriate penalty in circumstances where the respondent has no prior history of breaching the Fair Work Act, the underpayments occurred in circumstances where the management of the matters leading to the underpayments and accordingly the breaches of the Fair Work Act were directly under the management of a Facility Manager empowered to ensure compliance with industrial instruments, and where the respondent has acted promptly to rectify breaches once it became aware of same. There was no deliberate action which led to a breach of the industrial instruments.

1. I accept the need for general deterrence should be taken into account and there is a need to impose a penalty to act as a warning to others not to engage in similar conduct.[3] In my view it is also appropriate to set a penalty which accounts for a differentiation between a party who has deliberately breached terms of industrial instruments as a part of a calculated business decision and then has failed to meaningfully engage with a regulator or prosecutor and a party who has inadvertently breached obligations imposed by industrial instruments. A failure to so differentiate may lead to a result where there is no incentive on parties who inadvertently breach to cooperate either with regulators or with parties seeking to enforce entitlements.

   [3] see Kelly v Fitzpatrick [2007] FCA 1080 [28].

2. Having regard to the foregoing matters I consider the appropriate penalty for each of the admitted breaches is:

   a)$2,000 in respect of a failure to pay overtime for hours she worked during her employment with the respondent.

   b)$2,000 in respect of unpaid meal allowance.

   c)$2,000 in respect of failure to pay on call allowance to the applicant during her employment with the respondent.

   d)$500 in respect of phone calls made while she was “on call” during her employment with the respondent.

   e)$500 in respect of occasions when she was required to return to the workplace while “on call”.

   f)$500 in respect of circumstances when the applicant was required to perform duties at a higher rate than the classification that she was employed under.

3. I order that the penalty be paid to the applicant pursuant to s.546(3) of the Fair Work Act. I make that order in circumstances where the applicant is the only person affected by the contravention and where she was the person who had to institute proceedings in order to obtain the settlement that she obtained.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge McNab

Date: 25 May 2017