Bell v Ouyen Hotel Pty Ltd (No.2)

[2020] FCCA 2370

FEDERAL CIRCUIT COURT OF AUSTRALIA

BELL v OUYEN HOTEL PTY LTD (No.2) [2020] FCCA 2370

Catchwords:
INDUSTRIAL LAW – Applications for consequential orders and relief for following liability judgment – consideration of matters relevant to quantum of penalties – declarations sought by applicant found by court to be superfluous.

Legislation:

Fair Work Act 2009 (Cth), ss 45, 340, 535, 536, 546, 557.

Fair Work Regulations 2009 (Cth), div 3, pt 3-6.

Cases cited:

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at 36
Kelly v Fitzpatrick [2007] FCA 1080 at 14
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Others (2015) 258 CLR 482 at 55
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; [2016] 293 FCR 336

Applicant: ELAINE MARGARET BELL

Respondent: OUYEN HOTEL PTY LTD

File Number: MLG 3617 of 2018

Judgment of: Judge Burchardt

Hearing date: Not applicable

Date of Last Submission: 21 August 2020

Delivered at: Dandenong

Delivered on: 3 September 2020

REPRESENTATION

Counsel for the Applicant: Mr McKenney

Solicitors for the Applicant: Davies Watson Lawyers

Counsel for the Respondent: Mr Havenstein

Solicitors for the Respondent: Australian Public Transport Association

ORDERS

1. The respondent pay the applicant:

   (a)$10,299.25 for underpayment of wages;

   (b)$5,000 for hurt and distress;

   (c)Interest of $3,664.69

2. The respondent pay pecuniary penalties to the applicant pursuant to s 546 of the Fair Work Act 2009 (Cth) in the amount of $60,000.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

MLG 3617 of 2018

ELAINE MARGARET BELL

Applicant

And

OUYEN HOTEL PTY LTD

Respondent

REASONS FOR JUDGMENT

Introductory

1. On 19 June 2020 I delivered reasons for judgment in this matter.  I then noted that the issues of penalties and relief would be required to be addressed separately.  I directed the parties to forward written submissions as to those matters.  It should be noted that there is a high degree of agreement in the parties’ written submissions, and I will formulate this judgment consistent with that agreement.

The Agreed Contraventions

1. It is common cause between the parties that I have found that the respondent contravened section 340 of the Fair Work Act 2009 (Cth) by removing the applicant from the Ouyen – Hattah run (the general protections claim).

2. I have also found that the respondent underpaid the applicant by failing to pay her the rates prescribed the Passenger Vehicle Transportation Award 2010 in the amount of $10,299.95. It should be noted that although the respondent’s submissions accept that the underpayment claim is a civil remedy provision, they qualified their submissions (paragraphs 6b) by noting if the underpayment was a breach of only the wholly interrelated collateral contract, there would be no breach of section 45 of the Act to which penalties would apply. I accept that qualification in principle but should make it clear that the applicant succeeded on her award claim. What I said at paragraph 68 was:

   Whether these breaches of the Award and/or are breaches of the wholly interrelated collateral contact does not appear to be a matter of any moment because, on either basis, the applicant must succeed.

   What I intended to say, which with respect I think in substance I did say, was, “That the applicant succeeded both under the Award and under the collateral contract.”

3. Finally, it is common cause that the applicant was not provided payslips in contravention of sections 535 and 536 of the Act and Division 3 of Part 3-6 of the Fair Work Regulations2009 (Cth).

4. Relevantly for the present purposes, I also ordered the respondent to pay the applicant $5,000 for hurt and distress.

The Approach to Penalty

1. I accept the submissions of the respondent, (paragraph 2, respondent’s submissions).

2. I note that the parties are agreed that the maximum penalty for each of the three contraventions is $63,000.  I further note that the respondents do not take issue with the awarding of prejudgment interest in the sum of $3,664.49. 

The Approach to Penalty

1. I accept that a recent and helpful guide to the methodology for assessing penalties is that set out by Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at [36]. The Court has to first identify the separate contraventions, which has already been done above. The Court then has to consider whether each separate contravention should be dealt with independently or whether there should be some degree of aggregation for those contraventions arising out of the course of conduct (section 557 of the Act). The respondent’s submissions do not suggest that there should be any such grouping, in this case, and I accept that that is so.

2. The next step is to:

   Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.

3. In the circumstances of this case, there is no suggestion that further such adjustment is appropriate.

4. The next step is to, “Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation,” following which the Court should apply the totality principle.

5. Both sets of written submissions address the matters that the Court should take into consideration in assessing penalty.  Both have referred to the well-known remarks of Tracey J in Kelly v Fitzpatrick [2007] FCA 1080 at [14]. It is not necessary to re-catalogue these in total although they are all, obviously, relevant. But it should be noted that the matters that Tracey J identified are not to be treated as a rigid catalogue of matters requiring attention. Each case must be assessed on its own facts.

6. It should further be noted that the High Court has given clear guidance, in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Others (2015) 258 CLR 482 at [55], where French CJ, Kiefel, Bell, Nettle and Gordon JJ said:

   No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:

   "Punishment for breaches of the criminal law traditionally involves three elements:  deterrence, both general and individual, retribution and rehabilitation.  Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Part IV [of the Trade Practices Act].  ... The principal, and I think probably the only, object of the penalties imposed by section 76 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 the Act."

Specific issues that are relevant in this instance

The Nature and Extent of the Conduct Which Led to the Contraventions and the Circumstances in which that Conduct Took Place

1. The respondent is a reasonably small country-based business with limited, it would appear, clerical support.  It is something of a one-man band, the man being Mr Vallance.  The circumstances of the applicant’s employment had been well-known to Mr Vallance before he first bought the business in about 2012 and Ms Bell’s “work pattern” if I could so describe it was long-established.  When she asked for a pay increase, she was promptly removed from the Ouyen-Hattah run.  This was a direct response, as I have earlier found, by Mr Vallance to the request for extra pay for that work which Mr Vallance did not feel was justified.  It would be hard to find a more obvious contravention of the general protections provisions than this.

2. The failure to provide payslips was likewise, if you like, a systemic and continued one which in part reflected the generally casual nature of the arrangements between Ms Bell and the respondent but which, likewise, shows a significant, and on one view, remarkable, lack of appreciation of industrial instruments in Australia. 

3. Not only was Mr Vallance apparently unaware or unconcerned (“I’ve got better things to do than worry about payslips.”) about payslips, he remained wholly uninformed as to the existence of the Award.  For a man who had been running a transport-based business for some years, this is only a further compounding, as it were, of the general ignorance that Mr Vallance portrayed in respect of industrial obligations, generally.

Did the Breaches Arise Out of a Course of Conduct?

1. This, in my view, is not the case.  Each of the three contraventions are completely different in their character.  While they might be said to arise out of the course of conduct of being unaware of industrial instruments and legislation, that, in my view, is not an appropriate grouping in these circumstances.  They are discrete in their nature.

Were Senior Management Involved?

1. Mr Vallance was senior management, but he is also, in effect, the only management.  Little, in my view, turns on this aspect of the matter.

Were The Breaches Deliberate?

1. In respect of the general protections case, in my view, the breaches were indeed deliberate.  In respect of payslips, they might be more marginal and in respect of the underpayment that plainly arose out of a distinct difference of view to the methodology for payment. 

Has There Been Any Contrition or Corrective Action?

1. Mr Vallance was self-evidently completely uncontrite throughout the entirety of the proceeding.  It should be noted, however, that this does not in any way count against him so as to increase the gravity of the contravention.  Rather, all it means is that he is not entitled to the benefit of any reduction that contrition might have provoked.

2. Furthermore, there has been no corrective action of which the Court has been made aware.

The Need to Ensure Minimum Standards

1. This is important.  Ms Bell worked in casual employment in a rural locality.  It is important that workers in these relatively potentially disadvantaged positions, so far as their bargaining positions were concerned, particularly, with relatively low hours of work and low pay, are paid at the very minimum to which the law entitles them.

The Need for Specific and General Deterrents

1. The respondent says it now provides payslips and has taken greater steps to make itself aware of Award obligations.  In that regard, I suspect that the need for specific deterrence is relatively limited because the outcome of this proceeding is likely to represent a salutary warning to Mr Vallance to ensure that the first respondent does not fail to comply with its obligations in the future.

2. General deterrence is important.  Small employers, whether in the city or in the country, need to be made well-aware of the importance of complying with the law.

At What Level Should Each Contravention Be Placed?

1. The applicant submits that penalties, in effect, of $25,000 for each contravention be established in a total of $75,000.  It should be noted that the parties agree that the maximum pecuniary penalty for each breach is $63,000. 

2. The respondents do not make any precise submissions but submit (paragraph 12v) that:

   “Taking into consideration the unique employment arrangements between the parties, weighs in favour of assessing penalties at the lower end of the scale.”

3. The penalties sought by the applicant are, it will be seen, almost exactly 40 per cent of the applicable maximums.  In my view, bearing in mind all the matters to which I have referred, the level suggested by the applicant is prima facie appropriate.

The Totality Principle

1. It should be noted that the respondent’s submissions at paragraph 12c assert:

   The respondent is a small business operated by Mr Vallance who is assisted by his wife and a pay clerk. Although there is no evidence of the Respondent’s financial means, it is submitted that it is probable that any penalty will be paid by Mr Vallance and that this should be given appropriate weight when considering the need for specific and general deterrence. It is submitted that if the penalties to be imposed are crushing, then the respondents should be permitted to put affidavit evidence from Mr Vallance as to his financial circumstances.

2. No application for the respondents to put on material from Mr Vallance has been pressed.

3. The application of the totality principle has been described as one of instinctive synthesis.  It involves looking at the proposed penalties as a whole to assess whether they are just and appropriate.  The Court also bears in mind that that result should not be crushing.

4. In the circumstances of this case and notwithstanding that in one sense the penalties sought against the respondent are effectively penalties sought against Mr Vallance as an individual, in my view, the total amount payable should be some $60,000. The respondent’s conduct, taken overall, merits this outcome.

Conclusions 

1. There will be orders that the respondent pay the applicant:

   (a)$10,299.95 for underpayment of wages;

   (b)$5,000 for hurt and distress;

   (c)Interest of $3664.49

2. The respondent will also be ordered to pay penalties the total aggregate of $60,000 which should be paid to the applicant.  There is no good reason why this should not be the case in this instance (Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; [2016] 293 FCR 336).

3. The applicant has sought declarations.  The general trend of present authority appears to tend to the conclusion that declarations should only be made when, as it were, they add something substantive to the orders that are to be made.  In my view, in the circumstances of this particular case, declarations will not add anything to the orders that the Court makes, and it is therefore inappropriate to do so.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date: 3 September 2020