Black v Young Republic & Anor
[2012] FMCA 729
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BLACK v YOUNG REPUBLIC & ANOR | [2012] FMCA 729 |
| INDUSTRIAL LAW – Small claims jurisdiction – unpaid wages – unpaid accrued annual leave upon cessation of employment – no appearance by or for the respondents – application granted. |
| Fair Work Act 1999, ss.12, 87, 90, 545, 548 Federal Magistrates Court Rules 2001, r.13.03C |
| Jones v Groovy Freighters Pty Ltd [2010] FMCA 673 McShane v Image Bollards Pty Ltd [2011] FMCA 215 Lebot v Energetic IT Pty Ltd [2011] FMCA 755 Glynn v Napoleon Hair & Beauty Pty Ltd [2011] FMCA 1050 |
| Applicant: | REBECCA BLACK |
| First Respondent: | YOUNG REPUBLIC - ACN 150 507 583 |
| Second Respondent: | ANDREW YANG |
| File Number: | SYG 1649 of 2012 |
| Judgment of: | Nicholls FM |
| Hearing date: | 17 August 2012 |
| Date of Last Submission: | 17 August 2012 |
| Delivered at: | Sydney |
| Delivered on: | 24 August 2012 |
REPRESENTATION
| The Applicant: | In Person |
| The First Respondent: | No Appearance |
| The Second Respondent: | No Appearance |
ORDERS
The first and second respondent contravened the Fair Work Act 2009 (Cth).
The first and second respondent pay the applicant the sum of $6,971.86 less tax within 28 days of the date of this order.
The first and second respondent pay the applicant’s costs set in the amount of $691.00 within 28 days of this order.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1649 of 2012
| REBECCA BLACK |
Applicant
And
| YOUNG REPUBLIC - ACN 150 507 583 |
First Respondent
| ANDREW YANG |
Second Respondent
REASONS FOR JUDGMENT
This is an application by Ms Rebecca Black (“the applicant”), made on 27 July 2012 and amended in Court on 17 August 2012, pursuant to the Fair Work Act 2009 (Cth) (“FWA”). The applicant elected to make that application under the small claims procedure, as provided for in s.548 of the FWA.
The applicant alleges that her former employer, Young Republic (“the first respondent”) and one of the co-founders of that business, Mr Andrew Yang (“the second respondent”), breached the National Employment Standards by failing to pay to her, upon the cessation of her employment, her accrued annual leave. Further, that the respondents breached a safety net contractual entitlement by failing to pay her salary while she was employed for a period of just over two months.
The applicant sought the payment of $564.08 and $6,407.78, respectively, as remedy for those alleged breaches. Further, the applicant sought costs associated with the making, and prosecution, of her application. That is the filing fee of $157 and hearing fee of $534, imposed by this Court.
Small Claims Jurisdiction
Section 548 of the FWA relevantly provides that:
“(1) Proceedings are to be dealt with as small claims proceedings under this section if:
(a) a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Magistrates Court; and
(b) the order relates to an amount referred to in subsection (1A); and
(c) the person indicates, in a manner prescribed by the regulations or by the rules of the court, that he or she wants the small claims procedure to apply to the proceedings.
(1A) The amounts are as follows:
(a) an amount that an employer was required to pay to, or on behalf of, an employee:
(i) under this Act or a fair work instrument; or
(ii) because of a safety net contractual entitlement; or
(iii) because of an entitlement of the employee arising under subsection 542(1);
(b) an amount that an outworker entity was required to pay to, or on behalf of, an outworker under a modern award.
Limits on award
(2) In small claims proceedings, the court may not award more than:
(a) $20,000; or
(b) if a higher amount is prescribed by the regulations--that higher amount.
Procedure
(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
(4) At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.
… ”
In Jones v Groovy Freighters Pty Ltd [2010] FMCA 673, Burnett FM (at [9]) noted that:
“… in relation to small claims I make the observation that consideration ought be given for these proceeding to be conducted on a delegated basis by a registrar because … the conduct of these proceedings is extremely resource intense. Even with the best will in the world, these matters cannot be disposed of expeditiously when one has regard to the need to conduct proceedings in accordance with judicial standards …”
Further, Burnett FM noted that (at [10]):
“… Commonly small claims applications are conducted in the States by their Tribunals rather than courts. They are called upon to determine these disputes in a manner which can be described as somewhat “quick and dirty” to provide flexibility to dispose of such proceedings both informally and cost effectively.”
In McShane v Image Bollards Pty Ltd [2011] FMCA 215, Lucev FM (at [7]) also commented on the nature of small claims proceedings and the exercise of the Court’s judicial power within the proceedings informal structure:
“Although the Court is not bound by the rules of evidence, and may act informally, and without regard to legal forms and technicalities in small claim proceedings in the Fair Work Division, this does not relive an applicant from the necessity to prove their claim. The Court can only act on evidence having a rational probative force.”
[Footnote omitted.]
The observations made by Burnett FM and Lucev FM are, in my respectful view, important. While the small claims process allows for the Court to act in an informal manner, without regard to legal forms and technicalities and to not be bound by rules of evidence and procedure (s.548(3)), those allowances must be balanced against the Court’s exercise of its judicial power. That is, the Court can only make a decision where a claim is supported by some probative basis in fact. Further, that decision must be supported by a reasoned judgment that addresses the issues in the case.
In this light, I also have regard to what was said by:
1)Federal Magistrate Lucev in Lebot v Energetic IT Pty Ltd [2011] FMCA 755:
“Small claims jurisdiction – practice and procedure
[7] Section 548(3) of the FW Act provides as follows:
Procedure
(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
[8] Rule 45.11(2) of the FMCA Rules provides as follows:
(2) The Court is not bound by any rules of evidence and procedure when dealing with a small claims application and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
[9] Although the Court is not bound by the rules of evidence, and may act informally and without regard to legal forms and technicalities in small claims proceedings in the Fair Work Division, this does not relieve an applicant from the necessity to prove the claim. The Court can only act on evidence having a rational probative force. For that reason the Court had Mr Lebot give evidence which confirmed the detail of his claim as it appeared in the Form 5 claim form, plus other details which the Court considered it necessary to enquire about.”
2)Federal Magistrate O’Sullivan in Glynn v Napoleon Hair & Beauty Pty Ltd [2011] FMCA 1050:
“[15] I have had the benefit of evidence this morning from Ms Glynn who has adopted as true and correct in every particular the details of both her employment and the breaches of the Award referred to in the Form 5 accompanying her application save that she only sought $866.60 as she only sought pay for public holidays and payment in lieu of notice. She was employed as a hairdresser by the respondent for only a short period in late 2010. The Award governing her employment was the Hair and Beauty Industry Award 2010. Ms Glynn’s Form 5 particularised the contraventions as well as the amounts owing.”
Is The Application Within the Small Claims Procedure?
In the current case, the applicant has elected to proceed under the small claims procedure of the Court’s Fair Work jurisdiction. In order for that application to be valid, the claim must be related to an amount that the respondents were required to pay as set out in s.548(1A) of the FWA. Further, the Court may not award, unless prescribed by the regulations, more than $20,000 (s.548(2) of the FWA).
The applicant’s claim for unpaid accrued annual leave concerns an amount that the respondents would be required to pay because of s.90(2) of the FWA. As such, it is an amount as set out in s.548(1A)(a)(i) of the FWA. The applicant’s claim for unpaid wages is an amount that the respondents would be required to pay because of a “safety net contractual entitlement”, as it was “… an entitlement under a contract between the employee [Ms Black] and the employer [Young Republic] that relates to … the subject matter described in … subsection 139(1)” (s.12 of the FWA). As such, it is an amount as set out in s.548(1A)(a)(ii) of the FWA.
Finally, the applicant seeks orders that the respondents pay, as remedy, $6971.86 which is well within the limits that the Court can award (s.548(2)(a) of the FWA).
The Claim
The applicant’s claims are set out in the points of claim (referred to as the “Form 5”), filed on 27 July 2012, and amended in Court on 17 August 2012. Specifically:
1)The applicant was employed by the respondents, on 14 November 2011, as a “Project Administrator” (item 16 and 21 of the Form 5) or “Project Coordinator” (as per her employment contract, a copy of which is attached to the Form 5).
2)Her duties within that role included organising and executing events, disposing of and organising online products and the administration of online marketing and social media (item 18 of the Form 5).
3)The applicant was employed full time and worked Monday to Friday 9.30am to 5.30pm (I note that the hours specified in the employment contract are between 8.30am to 5.30pm with a one hour, un-paid lunch break, totalling 38 hours per week).
4)On 16 January 2012, just over two months after its commencement, the applicant’s employment ceased.
The applicant alleges that the respondents failed to pay her the wages she was owed, as well as her accrued annual leave entitlements.
Before the Court
The matter was first before the Court on 8 August 2012. At that time, the applicant appeared in person. There was no appearance by, or for, the first respondent. [I note that the second respondent was not added as a party nunc pro tunc until the final hearing – see further below.]
The applicant sought leave to rely upon her affidavit of service, filed on 30 July 2012, in which she affirmed that the application and Form 5 were served on “Marianne Sea of Young Republic” on 28 July 2012. Ms Sea was said to be one of the two principals of Young Republic (see further below). In light of that affidavit of service, I proceeded to set the matter down for hearing on 17 August 2012.
On 17 August 2012 the applicant again appeared in person. There was no appearance by, or for, the respondents.
The applicant sought to admit into evidence an “Australia Post Tracking Summary” (subsequently admitted as Applicant’s Exhibit One – “AE1”). That document provided that an “Express Post” parcel was delivered to a “A YANG” on 13 August 2012.
It was the applicant’s oral evidence to the Court that the delivered parcel contained a copy of the orders made by the Court at the first Court date. That is, setting the matter down for hearing on 17 August 2012. Further that the parcel included a letter from the applicant addressed to the first and second respondents, as well as Ms Sea, notifying the addressees of the fact that the matter was listed for a final hearing on 17 August 2012 and that, in the event of their non-appearance, Ms Black would be asking the Court to proceed to a hearing in their absence pursuant to r.13.03C(1)(e) of the Federal Magistrates Court Rules 2001 (Cth) (“FMC Rules”). Further, the applicant’s oral evidence was that Mr Yang and Ms Sea had both represented to her that they were the principles of Young Republic and that, to the best of her knowledge, that was true.
Given the applicant’s oral evidence, and AE1, I was satisfied that the first respondent had been properly served (through a responsible person with authority to accept service) and was on notice of the hearing. Further, that the first respondent was aware that the matter could, in the event of non-appearance, proceed to a final hearing. Nothing had been heard from the first respondent, or anyone on its behalf, to indicate that there was any difficulty in arranging someone to attend. Nor was an adjournment sought. In those circumstances, and pursuant to r.13.03C(1)(e) of the FMC Rules, the matter proceeded to a hearing.
The Final Hearing
At the final hearing, the applicant gave oral evidence in support of her claims as set out in her Form 5. She did so in a clear and forthright manner. In addition, the applicant sought leave to amend her application and the Form 5. First, the applicant sought that Mr Yang be named as the second respondent. Second, the applicant sought to amend item 26 of the Form 5 to include the costs associated with the initiation and prosecution of her application.
Mr Yang as Second Respondent
In relation to the first amendment, the applicant submitted that Mr Yang had been served with documents relating to her application directed to the first respondent, of which he was a principal, and that he had reasonable notice of the final hearing (as per her oral evidence and AE1). Further, that he was named in the Form 5 under the heading “Part B – Details of employer or outworker Entity”. Specifically, that in relation to item 6: “Name of employer or outworker entity” the applicant had provided: “Young Republic (Andrew Yang)”.
Further, the applicant’s contract of employment, attached to the Form 5, provided that the “parties to the contract” were the applicant and “Andrew Yang, Co-Founder”. Mr Yang had signed that contract “On behalf of Young Republic”. In light of that contract, and the applicant’s oral evidence that, to the best of her knowledge, the signature on the document was Mr Yang’s signature, I was satisfied that that the applicant had entered into an employment contract with Young Republic and that Mr Yang had been the signatory to that contract on behalf of the first respondent.
Given the applicant’s oral evidence and submissions to the Court, I was satisfied that Mr Yang, personally, had knowledge and notice of the application made to the Court and of the final hearing. Further, and with reference to s.548(4) of the FWA, given the above and in light of the employment contract, it was appropriate that an order be made adding Mr Yang as the second respondent nunc pro tunc.
Costs Incurred in the Initiation and Prosecution of the Proceedings.
The second amendment the applicant sought was the addition of two sums to the “Remedy sought” in the Form 5. They were a filing fee of $157 and a hearing fee of $534, both incurred in the initiation and prosecution of her application to this Court. Leave was granted for those amendments.
It was the applicant’s evidence that the cost of her initiating the proceedings had been $157. That sum is the filing fee for an application to this Court. That fee was paid by the applicant on 27 July 2012. Given the success of the applicant’s application to the Court (see further below) it is appropriate that she recover the cost of initiating these proceedings. As such, an order will be made requiring the respondents to pay that amount.
Further, it was the applicant’s oral evidence that the cost of the matter proceeding to a hearing was $534. That fee was paid by the applicant on 17 August 2012. For the same reason as expressed above in relation to the filing fee, it is appropriate that an order be made requiring the respondents to pay that sum.
Unpaid Wages
The applicant alleged that, save for $900, she was owed her wages for the entire period of her employment. That is from 14 November 2011 to 16 January 2012 (item 25 of the Form 5). Given that the applicant’s annual salary was $50,000 (see [1](a) of her employment contract), the applicant sought an order that the respondents pay her $6,407.78. [1]
[1]The applicant’s annual salary was $50,000. Given that there are 52 weeks in a year, that annual salary equates to a weekly income of $961.54 ($50,000 ÷52). The applicant was employed to work five days a week, which meant her daily wage was $192.31 ($961.54 ÷5). The applicant was employed for 38 days and claims that she was only paid $900 over that period. The sum of allegedly unpaid wages is $6,407.78 ($192.31 × 38 - $900). (See as set out at Part I of the Form 5).
On the evidence before the Court, that is the applicant’s contract of employment, her annual salary was $50,000. Further, it was the applicant’s unchallenged evidence that, with the exception of sporadic payments of varying sums totalling $900, she was not paid any income for the period she worked at Young Republic. That period of time was said to be, excluding several days of unpaid leave over the Christmas period, 38 days.
Before the Court, the applicant gave evidence that she had calculated the sum of unpaid wages in the manner set out in Part I of the Form 5. That is by determining her weekly salary, and from that her daily wage, and that she had multiplied that daily wage by 38 days. While she recognised that her contract provided for her wage to be paid monthly, it was the applicant’s evidence that the circumstances required her to calculate her weekly salary, as oppose to her monthly salary, as she was seeking payment for a specific number of days (not for a monthly period).
In light of the applicant’s unchallenged and persuasive oral evidence before the Court, as set out above, I find that the applicant was not paid the wages for the period of her employment with the first respondent (save for a total of $900 in “random” payments). The respondents’ failure to pay the applicant the wages owing to her is a breach of the applicant’s safety net contractual entitlements, as it was an entitlement of her contract with the Young Republic that she be paid her salary each month.
Further, in the circumstances and given the applicant’s salary as provided for in her employment contract and her evidence as to how she arrived at that sum, I was satisfied that the applicant should be paid $6.407.78. An order will be made accordingly.
Unpaid Accrued Annual Leave Entitlements
The applicant alleged that she was not paid her accrued annual leave entitlements upon the cessation of her employment. The applicant’s contract provided for “four weeks paid annual leave at the completion of twelve months employment”. However, s.90(2) of the FWA provides that:
“If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.”
Further, s.87(2) of the FWA stipulates that:
“Accrual of leave
(2) An employee's entitlement to paid annual leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year.
Note: If an employee's employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.”
In those circumstances, despite the wording of the applicant’s employment contract (“…annual leave at the completion of the twelve months employment” [emphasis added]), Young Republic was, under the FWA, required to pay the applicant accrued annual leave upon the cessation of her employment. The applicant’s evidence was that Young Republic did not do so.
The amount of annual leave said to have been accrued by the applicant was set out in an annexure to the Form 5, heading “Leave Calculation Results”. The applicant’s oral evidence was that that document had been printed, by her, from the website of the Fair Work Ombudsman. It provides that “Under the National Employment Standard, the outstanding annual leave accumulated between 14 November 2011 and 16 January 2012 is 22 hour(s) and 44 minute(s)”. That calculation was said to be based on the following factual scenario:
“● Full-time employee not working as a shift worker
● Working 38:00 ordinary hours per week on Mondays, Tuesdays, Wednesdays, Thursdays and Friday
● Unpaid leave taken:
◦From 23 December 2011 to 02 January 2012.
● No annual leave taken”
Based on what is before me, that is the applicant’s oral evidence and the documents annexed to the Form 5, I accept that that factual scenario is accurate. The applicant’s evidence was that she worked a 38 hour week, was employed full time from 14 November 2011 to 16 January 2012 and that she took no leave. Further, her evidence is that she took unpaid leave over the Christmas period. There is nothing before me to suggest that the period of unpaid leave was other than, or longer than, 23 December 2011 to 2 January 2012. On that basis, I accept that the applicant was entitled to the payment of 22 hours and 44 minutes leave.
Further, in light of the applicant’s unchallenged evidence, I accept that the applicant was not paid that leave. The respondents’ failure to pay the applicant that leave upon the cessation of her employment is a breach of s.90(2) of the FWA.
Given the applicant’s salary of $50,000, her leave entitlement was $575.15[2]. The applicant has sought an order in the sum of $564.08 which is within her entitlement. An order will be made accordingly.
[2]The applicant worked a 38 hour week. Her weekly income, as set out above, was $961.54. Therefore her hourly rate of pay was $25.30 ($961.54 ÷ 38 hours). Her accrued annual leave entitlement is 22 hours and 44 minutes. That is $575.15 (22.75 hours × $25.30).
Conclusion
In light of the above, I find that the applicant has been successful in making out her application to the Court, specifically the claims made in her Form 5. That is that, in contravention of the FWA, the respondents failed to pay to her, upon the cessation of her employment, her accrued annual leave. Further, that the respondents breached a safety net contractual entitlement, specifically an entitlement provided for in her employment contract, by failing to pay her wages for 38 days of employment (save for $900). In those circumstances, it is also appropriate that the respondents pay the applicant’s costs incidental to these proceedings. Orders will be made accordingly.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Nicholls FM
Date: 24 August 2012
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