Bobridge v Choppair Helicopters Pty Ltd and Anor (No.2)

[2019] FCCA 828

FEDERAL CIRCUIT COURT OF AUSTRALIA

BOBRIDGE v CHOPPAIR HELICOPTERS PTY LTD & ANOR (No.2) [2019] FCCA 828

Catchwords:
INDUSTRIAL LAW – Final ruling on form of relief.

Legislation:

Fair Work Act 2009

Cases cited:

Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) FCA 216

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Kelly v Fitzpatrick [2007] FCA 1080
FWO v Promoting U Pty Ltd & Anor [2012] FMCA 58
Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336

Applicant: EMMA BOBRIDGE

First Respondent: CHOPPAIR HELICOPTERS PTY LTD (T/AS THE HELICOPTER GROUP (AUST) (A.C.N. 087 863 723)

Second Respondent: MICHAEL VAN DER ZYPP

File Number: MLG 1919 of 2014

Judgment of: Judge Burchardt

Hearing date: 23 January 2019

Date of Last Submission: 23 January 2019

Delivered at: Melbourne

Delivered on: 5 April 2019

REPRESENTATION

Counsel for the Applicant: Mr Champion

Solicitors for the Applicant: Robinson Gill

The First and Second Respondents: The Second Respondent appeared in person and on behalf of the First Respondent

ORDERS

1. The applicant is to prepare minutes of declarations and orders to give effect to the Court’s reasons and file and serve same by 4.00 pm on or before 11 April 2019.

2. In the absence of agreement by the respondents to the applicant’s proposed declarations and orders, the matter will be re-listed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1919 of 2014

EMMA BOBRIDGE

Applicant

And

CHOPPAIR HELICOPTERS PTY LTD (T/AS THE HELICOPTER GROUP (AUST) (A.C.N. 087 863 723)

First Respondent

MICHAEL VAN DER ZYPP

Second Respondent

REASONS FOR JUDGMENT

Introductory

1. This is the final stage, hopefully, in long-running litigation between Emma Bobridge and the respondents.  I already, on 5 August 2016, dealt with what might be described as the substantive issues between the parties.  That decision was appealed.  What is left is the applicant’s application for the imposition of penalties.  It should be noted that counsel for Ms Bobridge has expressly sought to reserve for later consideration the question of any application for costs.

The adjournment application

1. On 22 January 2019 at 4.14 pm, Mr Van der Zypp, the second respondent, emailed my associate seeking an adjournment of the proceeding.  I did not grant the adjournment application, but granted Mr Van der Zypp leave to appear by telephone.

2. No application for reasons has been made, but it is appropriate

   
   

   to record briefly why I declined the adjournment application.

3. The matter was set down for hearing on 23 January 2019 at a hearing on 1 October 2018, which Mr Van der Zypp attended.  He was therefore aware of the hearing date from that day.  He has filed written submissions on behalf of the respondents on 31 October 2018.

4. The reason for the adjournment was said to be (and I accept that it is so) Mr Van der Zypp was supporting his mother for the first anniversary

   
   

   of his father’s death.  He was, therefore, going to be in New South Wales.  Self-evidently, his plans to travel must have been made at some antecedent point, and he was in New South Wales when he made the application.

5. Given that he must have known some considerable time beforehand that the anniversary of his father’s death was on the date set for hearing his application was self-evidently hopelessly late.

6. Furthermore, as Mr Van der Zypp had already filed written submissions, the prejudice was him was likely not to be so great, especially if he appeared by telephone.  The application for an adjournment had included “if his Honour is unable to grant the adjournment, I am happy for the matter to be decided in my absence”.

7. As indicated, these matters led to my insisting that the matter proceed, bearing in mind that any adjournment, given the Court’s very busy list, would be likely to be for a very protracted period of time.

The appropriate methodology

1. In my view, the Court should adopt the now-generally accepted four steps set out in a number of cases, including Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) FCA 216 at [24], Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [23], [27], [46], [55] and [78] and Kelly v Fitzpatrick [2007] FCA 1080 at [30].

2. These are:

   (a)

   the first step for the Court is to identify the separate contraventions involved.  Each contravention of each separate obligation found in the Fair Work Act 2009 (“FW Act”) is

   
   

   a contravention of a civil remedy provision for the purposes of s.539(2) of the Act;

   (b)secondly, the Court should consider whether any of the contraventions constitute a single course of conduct such that they are treated as a single contravention pursuant to s.557(1) of the Act or may otherwise be grouped on the basis of their common elements;

   (c)third, the Court should consider an appropriate penalty to impose in respect of each identified contravention or group of contraventions, having regard to all the circumstances of the case, including the maximum penalties available for each contravention;

   (d)the final task is to take a last look at the aggregate penalty reached as a result of the antecedent steps to determine whether the outcome is an appropriate response to the contravening conduct when looked at as a whole.  This process involves an instinctive synthesis and is referred to as the totality principle.

   (This recitation is taken from written submissions in another matter but in my view it is an accurate summary of the approach the Court should take).

The Award Contraventions

1. As the applicant’s written submissions correctly point out, the Court has found that the first respondent contravened 15 Award provisions,

   
   

   10 pursuant to the Helicopter Pilots Award and 5 of the Air Pilots Award.  Mr Van der Zypp has contravened two Award provisions.  These are set out, albeit grouped, in the Schedule to the applicant’s written submissions.  There were 20 contraventions originally alleged at trial.  The applicant was unsuccessful as to her uniform allowance claim and was unsuccessful as a result of the appeal in relation to her claim for superannuation or accident pay.  I note that no separate penalties are sought to the superannuation claims 3, 13 and 18.

Grouping to reflect single course of conduct pursuant to section 557 of the FW Act or otherwise on the basis of common elements

1. The applicant has grouped a number of the contraventions as set out in the annexure to the written submissions.  Nothing has been put by the respondents to challenge the grouping proposed by the applicant, and in my view, the groupings proposed are a fair reflection of the common elements that the various contraventions constituted.

The penalties to be posed in respect of each identified group of contraventions

1. It should be noted that I am satisfied that the maximum penalties described in the Schedules to the applicant’s written submissions are, indeed, the applicable and appropriate ones.  As the written submissions of the applicant made clear, these are the penalties applicable at the time the contraventions occurred.

2. As the applicant’s written submissions point out, the Court (or more accurately, the Federal Court) has developed a range of considerations, which are often taken into account in assessing penalties under the FW Act, which are, however, not mandatory (see Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith at [91] per Bucannan J).

3. Because the applicant has urged differential assessments of the percentage to be applied in relation to the contraventions, it is appropriate to apply to each contravention or group of contraventions separately.

The failure to pay minimum annual salary under the Awards

- introductory

1. The amount underpaid under the Helicopter Pilots Award was $29,924.99, and the amount under the Air Pilots Award was $27,719.09.  This compounded because it led to underpayment of superannuation also.

2. Although it will be necessary to deal with each of the alleged contraventions separately, as the applicant has proposed different percentages of penalty, there are some overarching matters with which it is appropriate to deal, as they constitute the relevant circumstances in which the contraventions took place.

3. As the applicant correctly submits, the overall quantum of underpayment was very significant.  I accept the submission that an underpayment of some $150,000 is a very significant shortfall.

4. The employment of Ms Bobridge, particularly in the Northern Territory, was exploitative.  She worked six days work per week in what I have found to be very unsatisfactory living conditions, particularly at Kings Creek Station.  Ms Bobridge worked six days a week and was paid less than half the Award minimum wage.  It was exploitative also in the sense that Mr Van der Zypp was well aware that this was the pathway by which new pilots got their start in the industry.

5. From the evidence given at the trial, and as I have found already,

   
   

   Mr Van der Zypp continued to treat the Awards as being irrelevant to his operations.  This not only compounds, as it were, the nature of the contraventions, but more particularly points to the need for both specific and general deterrence.

6. The respondents have expressed no contrition, and while, of course, this does not lead to any increase in penalties to be imposed, it means that they do not get the benefit for such contrition had it been expressed.

7. The respondents have, at no time, taken any steps to cooperate with the Fair Work Ombudsman, who it would appear from Schedule 3 from the applicant’s written submissions, endeavoured without success to engage with the first respondent.

8. Against these general remarks, I turn to consider each contravention or group of contraventions.

Failure to pay minimum annual salary under the Helicopter Pilots Award and the Air Pilots Award

1. The sums underpaid in respect of these contraventions amount in total to over $57,000.  That is a lot of underpayment.  It took place over

   
   

   a protracted period of time.  There has been no contrition expressed, as earlier noted, and no corrective action, save to the extent that the court system has enforced it.  As the applicant’s Schedule points out, this had a knock-on effect in an underpayment of superannuation.  It is noted that notwithstanding his knowledge of the Award, Mr Van der Zypp continued to employ Mr Watson at an underpayment, right up to and including the first trial.  Specific deterrence gains a particular significance in these circumstances.  I think that the appropriate penalty for this contravention should be assessed as some 75 per cent.

Failure to pay supervisory pilots allowance under Helicopter Pilots Award Air Pilots Award

1. The underpayments in this regard amounted to some $18,648.  Once again, this is a substantial amount.  Furthermore, the evidence,

   
   

   as I have found it, made it clear that these claims were made out. 

   
   

   I note that the applicant submits that this should be in the range of some 30 to 40 per cent, and I will assess that at 30 per cent accordingly.

Disability allowance

1. This was, as the applicant submits, a separate allowance.  It should be noted that Ms Bobridge is only successful as to part of her claim (failing in relation to the claims for payment while at Yulara).  I accept the range proposed by the applicant of 10 to 20 per cent.  Given the amounts involved, in my view, a 10 per cent penalty is an appropriate outcome.

Annual leave under the Helicopter Pilots Award and Air Pilots Award

1. The sums underpaid here amount to in excess of $28,000.  They were, of course, simply, as the applicant’s Schedule points out, an inevitable consequence of the underpayments of minimum entitlements.  But in my view, a penalty of 30 per cent is appropriate.  Annual leave is an important entitlement.

Annual leave loading

1. Here, the sums underpaid amount to in excess of $5,000.  The penalties proposed are put as being in the range of $1,500 to $2,500.  I think that a penalty of $1,500 is appropriate for an underpayment of this quantum.

Duty free time – underpayment of accrued days off

1. The underpayment amount, in total, exceeds $14,000.  The applicant was working a recurring six day week in the Northern Territory and did not get the time off to which she was entitled.  I accept that the penalty for this should be fixed at 40 per cent.  It was a significant omission.

Non-payment of overnight allowance

1. This is put as being in the 5 to 15 per cent range, and I accept that that is reasonable.  Given the underpayment amounted to $1,733.10 and that 5 per cent is $1,650, I think that is the appropriate amount.

Meal allowance

1. The underpayment here amounts to over $8,600.  The meal allowance was an Award entitlement which the applicant was, in effect, made to earn by performing additional work.  A penalty of 40 per cent of the maximum is, in my view, appropriate.

Underpayment of casual minimum rates

1. The underpayment in this case was small, being some $252.  This was a fairly trifling amount, which arises out of the respondents’ general laxity in observing Award obligations.  I will set a penalty of $1,000.

Accident pay

1. The underpayment in this instance was $8,649.  The applicable penalty maximum is $51,000.  There was no dispute that the sum had not been paid, and no challenge to Ms Bobridge’s methodology.  The accident pay not paid was $6,555.95.  As I found, the Award obligation was triggered once the worker’s compensation claim was established.  This is a significant matter, and I think that a penalty of 30 per cent of the maximum is appropriate.

The contraventions by Mr Van der Zypp

1. Mr Van der Zypp has been found liable for the failures to pay minimum annual salary under both the Helicopter Pilots Award and the Air Pilots Award pursuant to the earlier judgments.  As earlier indicated, the sums underpaid were in excess of $57,000.  As with the first respondent, this was a serious matter, and penalty should be imposed at the same percentage level namely 75 per cent.

The totality principle

1. In the oral submissions made before the Court, counsel fairly acknowledged that so far as is known, this is the first contravention established against either of the respondents.  It was submitted that in accordance with the authority of FWO v Promoting U Pty Ltd & Anor [2012] FMCA 58 at [57], any impecuniosity on the part of the respondents should not mean the diminution of the amounts to be paid. It was pointed out that there was no evidence as to Choppair’s finances, even though Mr Van der Zypp’s written submissions had raised allegations of impecuniosity. It was submitted that if the respondents were to submit that the penalties were crushing, then proper material should be put on.

2. In his oral submissions, Mr Van der Zypp had but little to say.  He left penalties to the Court, but noted that he had taken remedial steps by engaging Employsure (if I understood the name correctly) to ensure that there is no further infractions. 

3. It needs to be borne in mind that the conduct of the respondents was over a protracted period of time and caused very significant loss to

   
   

   Ms Bobridge.  There had been no concessions to Ms Bobridge.  While Mr Van der Zypp, in both written and oral submissions, has complained of the strain that this litigation has imposed upon him, he certainly has not, at any stage, expressed any similar concern for the strain and cost of litigation upon Ms Bobridge.

4. While the cumulative total of the penalties are, indeed, significant, it has been pointed out on numerous occasions that Parliament has set significant levels of penalty for the sort of conduct in which the respondents engaged, and such contraventions must attract penalties that will deter others from contravening in the future.  In all the circumstances, in my view, the penalties proposed are proportionate and appropriate to the respondents conduct.

To whom should the penalties be paid?

1. I had been referred to the case of Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336, where the Full Court, at [96],[100-101] and [114] – the Court determined that the general rule is that the penalty is to be paid to the party instituting the proceeding.

   
   

   I accept the force of this submission.  It follows that the penalty should be paid to Ms Bobridge.  Indeed, it is disconcerting that Mr Van der Zypp, in what one can only infer is an ongoing hostility to

   
   

   Ms Bobridge, has sought that the penalties be paid to the Court.

2. I will request the applicant to draw declarations and orders to give effect to these conclusions, and provide same to the Court and the Respondents.  I will list the matter in the event of disagreement.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date:  5 April 2019