Bone v Mini Majhel Pty Ltd
[2020] FCCA 1483
•11 June 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BONE v MINI MAJHEL PTY LTD & ANOR | [2020] FCCA 1483 |
| Catchwords: PRACTICE AND PROCEDURE – Application for default judgment against the First and Second Respondents – Court’s power to make declarations of contravention on an application for default judgment – where the First and Second Respondents failed to defend proceedings – default judgment entered. INDUSTRIAL LAW – Application for order for compensation under section 545 (2) (b) of the Fair Work Act 2009 (Cth) – failure to pay minimum entitlements in accordance with Hair and Beauty Industry Award 2010 – liability of corporation for breaches of the Fair Work Act 2009 (Cth) – accessorial liability – Order for compensation. |
| Legislation: Fair Work Act 2009 (Cth), ss.44, 45, 90 (2), 125, 539, 545, 547 (2), 550 Federal Circuit Court Rules 2001 (Cth), rr.13.03 (2) (a) and (b) (ii), (iv) and (vii), 13.03B (2) (c), 13.03C (1) Federal Circuit Court of Australia Act1999 (Cth), s.76(3) |
| Cases cited: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 Fair Work Ombudsman v Al Hilfi [2015] FCA 313 |
| Applicant: | BENJAMIN WILLIAM BONE |
| First Respondent: | MINI MAJHEL PTY LTD |
| Second Respondent: | HARPREET SINGH |
| File Number: | SYG 1652 of 2019 |
| Judgment of: | Judge Tonkin |
| Hearing date: | 14 May 2020 |
| Date of Last Submission: | 14 May 2020 |
| Delivered at: | Brisbane |
| Delivered on: | 11 June 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Ford |
| Solicitors for the Applicant: | Mills Oakley Lawyers |
| No appearance by the First Respondent |
| No appearance by the Second Respondent |
ORDERS
THE COURT DECLARES THAT the First Respondent Mini Majhel Pty Ltd:
(a)Contravened section 45 of the Fair Work Act 2009 (Cth) during the period from 23 August 2016 and 13 March 2019 by:
(i)Failing to pay Benjamin Bone minimum rates of pay in accordance with clauses 17 and 19 of the Hair and Beauty Industry Award 2010 (“the Award”); and
(ii)Failing to Benjamin Bone pay penalty rates for work performed on a Saturday in accordance with clause 31.2 (c ) of the Award; and
(iii)Failing to make superannuation contributions for the benefit of Benjamin Bone as required by clause 24.2 of the Award;
(b)Contravened section 44 (1) of the Fair Work Act 2009 (Cth) on 13 March 2019 by failing to pay Benjamin Bone untaken paid annual leave at the end of his employment period pursuant to subsection 90 (2) of the Fair Work Act 2009 (Cth);
(c)Contravened section 125 of the Fair Work Act 2009 (Cth) by failing to give Benjamin Bone a Fair Work Information Statement as required; and
(d)Contravened section 535 (3) of the Fair Work Act 2009 (Cth) and regulation 3.42 of the Fair Work Regulations 2009 by failing to make available requested employee records for inspection and copying or post the requested employee records within the time frames prescribed by regulation 3.42 of the Fair Work Regulations 2009, or at all.
THE COURT DECLARES THAT the Second Respondent Mrs Harpreet Singh was involved within the meaning of section 550 (1) of the Fair Work Act 2009 (Cth) in each of Mini Majhel Pty Ltd’s contraventions referred to above.
THE COURT ORDERS:
Default judgment be entered against Mini Majhel Pty Ltd and Mrs Harpreet Singh pursuant to rr 13.03 (2) (a) and (b) (ii), (iv) and (vii), 13.03B (2) (c) and 13.03C (1) of the Federal Circuit Court Rules 2001.
Pursuant to section 545 of the Fair Work Act 2009 (Cth) Mini Majhel Pty Ltd pay compensation to Benjamin Bone in the amount of $49,502.14 within 28 days of service of this order on Mini Majhel Pty Ltd.
Pursuant to section 76 (3) of the Federal Circuit Court of Australia Act1999 (Cth) Mini Majhel Pty Ltd pay the Applicant $1403 in lieu of interest within 28 days of service of this order on Mini Majhel Pty Ltd.
Within 14 days of the date of these orders, the parties file written submissions of no more than 10 pages addressing the issue whether the Court should impose pecuniary penalties on Mini Majhel Pty Ltd and Mrs Harpreet Singh for contraventions under subsection 546 (1) of the Fair Work Act 2009 (Cth).
The issue of penalty be determined following the receipt of written submissions pending compliance with Order 4 hereof.
The Applicant serve a copy of these orders on the First and Second Respondents within twenty-four hours after these orders are made available by the Court.
The Response and Cross Claim filed on 23 September 2019 and the Respondent’s Points of Response filed on 25 November 2019 be and are hereby dismissed.
These orders are made upon admissions which the First and Second Respondents are taken to have made, consequent upon non-compliance with orders of the Court.
Liberty to apply.
Pursuant to Rule 16.05(2) (a) of the Federal Circuit Court Rules 2001, the Respondent is at liberty to apply to set aside these orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
SYG 1652 of 2019
| BENJAMIN WILLIAM BONE |
Applicant
And
| MINI MAJHEL PTY LTD |
First Respondent
| HARPREET SINGH |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant Benjamin Bone commenced proceedings by way of a claim filed against the First and Second Respondents on 4 July 2019 and further amended claim filed on 8 November 2019 seeking declarations, compensation, interest and penalties pursuant to section 545 and 546 of the Fair Work Act 2009 (Cth) (“the FW Act”). Mr Bone claims that his former employer Mini Majhel Pty Ltd (“Mini Majhel”) contravened sections 45, 44, 90(2), 125 and 535 (3) of the FW Act and/or as prescribed by the Hair and Beauty Industry Award 2010 (“the Award”) and that Mrs Harpreet Singh was involved in those contraventions. Mr Bone seeks an order for declarations and compensation against Mini Majhel and an order for declarations and pecuniary penalties against Mini Majhel and Mrs Singh.
Procedural history
On 22 July 2019 the Second Respondent appeared on her own behalf at a directions hearing before Judge Emmett who declined to grant the Second Respondent leave to appear on behalf of the First Respondent. On 22 July 2019 the matter was transferred by Judge Emmett to the Brisbane Registry.
On 19 August Mr Ash solicitor appeared for the Applicant before Judge Jarrett. There was no appearance by or on behalf of the First and Second Respondents. The Court ordered the Applicant to file and serve any amended claim by 4 p.m. on 19 August 2019 with the Respondents to file and serve any response and defences by 4 p.m. on 2 September 2019. Further procedural orders were made including that the matter be referred to a Registrar for mediation pursuant to Part 27 of the Federal Circuit Court Rules 2001 on a date to be fixed but no later than 1 November 2019. The matter was adjourned to 8 November 2019 and the Applicant given liberty to apply for default orders in the event of the Respondents’ failure to comply.
On 30 August 2019 the Second Respondent filed an application in a case seeking to extend time in which to file response documents. On 16 September 2019 the Applicant filed an affidavit and on 23 September 2019 filed an application in a case seeking default judgment. On 23 September 2019 the Second Respondent filed a Response, Cross Claim and supporting affidavit.
On 8 November 2019 the Applicant appeared through his solicitor before Judge Jarrett. Mrs Singh appeared on her own behalf. The application in the case filed by the Applicant was dismissed. The Respondent’s application for an extension of time was granted with leave to file documents by 4 p.m. on 22 November 2019. The Court ordered “if the First Respondent fails to file points of cross claim by 4 p.m. on 22 November 2019 the cross claim is dismissed.”
On 22 November 2019 the Second Respondent filed an affidavit and on 25 November 2019 the Respondents filed Points of Response to the application. On 13 December 2019 the Second Respondent filed a further affidavit.
On 9 December 2019 the Applicant filed a further affidavit. The matter was listed for directions on 16 December 2019. On that day the Applicant’s solicitor and Mrs Singh appeared. The matter was adjourned to 18 February 2020.
On 24 December 2019 the Second Respondent filed two further affidavits and an affidavit from Kylie Atwell and Melva Wheeler. On 11 February 2020 the Applicant filed a further affidavit.
On 18 February 2020 the Applicant’s solicitor appeared with no appearance by or on behalf of the First and Second Respondents. The matter was listed for hearing on 14 May 2020. Directions were made for the Applicant to file an outline of argument by 4 p.m. 23 April 2020 with the Respondents to file an outline of argument by 4 p.m. 3 April 2020. The Applicant was required to file by 7 May 2020 a statement of agreed facts and conclusions of law.
On 23 April 2020 the Applicant filed an Outline of Argument. No further documents were received from the Respondents.
On 14 May 2020 Counsel appeared on behalf of the Applicant. There was no appearance by or on behalf of the First and Second Respondents. The matter proceeded[1] in the absence of the Respondents.
[1] The matter proceeded electronically via audio link pursuant to sections 66 to 69 of the Federal Circuit Court of Australia Act 1999 (Cth) and Joint Practice Direction 2 of 2020 – Special Measures in Response to COVID-19
Default Judgment
The Federal Circuit Court Rules 2001 provide as follows:
Rule 13.03A:
(1) For rule 13.03B, an applicant is in default if the applicant fails to:
(a) comply with an order of the Court in the proceeding; or
(b) file and serve a document required under these Rules; or
(c) produce a document as required by Part 14; or
(d) do any act required to be done by these Rules; or
(e) prosecute the proceeding with due diligence.
(2) For rule 13.03B, a respondent is in default if the respondent:
(a) has not satisfied the applicant's claim; and
(b) fails to:
(i) give an address for service before the time for the respondent to give an address has expired; or
(ii) file a response before the time for the respondent to file a response has expired; or
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.
Rule 13.03B:
(1) If an applicant is in default, the Court may order that:
(a) the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or
(b) a step in the proceeding be taken within the time limited in the order; or
(c) if the applicant does not take a step in the time mentioned in paragraph (b) - the proceeding be stayed or dismissed, as to the whole or any part of the relief claimed by the applicant.
(2) If a respondent is in default, the Court may:
(a) order that a step in the proceeding be taken within the time limited in the order; or
(b) if the claim against the respondent is for a debt or liquidated damages - grant leave to the applicant to enter judgment against the respondent for:
(i) the debt or liquidated damages; and
(ii) if appropriate - costs; or
(c) if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings - give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant; or
(d) give judgment or make any other order against the respondent; or
(e) make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.
(3) The Registrar must enter judgment for the debt or liquidated damages, costs and interest against the respondent as specified in leave granted under paragraph (2)(b), without giving notice, or further notice, to the respondent, if the applicant has filed in the Registry:
(a) an affidavit, or affidavits, proving:
(i) service of the application claiming judgment for the debt or liquidated damages; and
(ii) that the respondent is in default; and
(b) an affidavit for the debt or liquidated damages in accordance with the approved form.
(4) Unless the Court otherwise orders, if a respondent to a cross-claim is in default:
(a) a judgment or decision on any claim, question or issue in the proceeding on the originating process; or
(b) any other cross-claim in the proceeding;
is binding as between the cross-claimant and the respondent to the cross-claim, to the extent that the judgment or decision is relevant to any claim, question or issue in the proceeding on the cross-claim.
(5) In subrule (4):
“decision” includes a decision by consent.
“judgment” includes a judgment by default or by consent.
(6) The Court may make an order of the kind mentioned in subrule (1), (2) or (4), or any other order, or may give any directions, and specify any consequences for non-compliance with the order, that the Court thinks just.
Rule 13.03C:
(1) If a party to a proceeding is absent from a hearing (including a first court date), the Court or a Registrar may do 1 or more of the following:
(a) adjourn the hearing to a specific date or generally;
(b) order that there is not to be any hearing, unless:
(i) the proceeding is again set down for hearing; or
(ii) any other steps that the Court or the Registrar directs are taken;
(c) if the absent party is an applicant – dismiss the application;
(d) if the absent party is a party who has made an interlocutory application or a cross claim – dismiss the interlocutory application or cross claim;
(e) proceed with the hearing generally or in relation to any claim for relief in the proceeding.
(2) If a party to a proceeding is absent from a hearing, the Court or a Registrar may also make an order of the kind mentioned in subrule 13.03B(1), (2) or (4), or any other order, or may give any directions, and specify any consequences for non-compliance with the order, that the Court or the Registrar thinks just.”
Default judgment – applicable legal principles
In Fair Work Ombudsman v Al Hilfi [2015] FCA 313 (2 April 2015) Besanko J made a number of observations with respect to the Court’s power to make declarations on an application for default judgment. He said as follows:
“[19] In Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 (“Arthur v Vaupotic Investments Pty Ltd”) at [3] Heerey J said that O 35A r 3(2)(c) did not require proof by way of evidence of the Applicant’s claim, but rather, satisfaction on the part of the Court that, on the face of the statement of claim, there was a claim for relief and that the Court had jurisdiction to grant that relief. In that case, in relation to an alleged infringement of a registered design, Heerey J gave judgment in default, including injunctions and orders for delivery up and the payment of costs.
[20] The decision in Arthur v Vaupotic Investments Pty Ltd has been followed in subsequent cases involving applications for default judgment: Australian Competition and Consumer Commission v 1Cellnet LLC [2005] FCA 856 (injunctions and other orders under the Trade Practices Act 1974(Cth); Luna Park Sydney Pty Limited v Bose [2006] FCA 94 (damages for breach of contract); Humphries v Halifax Vogel Group Proprietary Limited [2008] FCA 569 (injunction and other relief in connection with the infringement of a patent). Where the Rule of Court dealing with default judgment is engaged by a respondent’s default, the allegations of fact in the statement of claim are deemed to be admitted: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd & Others [2007] FCAFC 146; (2007) 161 FCR 513 at 523, [42]. I agree with Flick J in Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [19] and [23] that, despite the difference in wording between O 35A r 3(2)(c) and r 5.23(2)(c), this principle applies to r 5.23(2)(c) in the same way it did to O 35A r 3(2)(c).
[21] In Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd and Others [2006] FCA 1427;(2006) 236 ALR 665, Kiefel J, sitting as a judge of this Court, made a number of important points which were not overturned or criticised by the Full Court when the matter went on appeal (Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (In Liquidation) and Others [2007] FCAFC 146; (2007) 161 FCR 513). First, her Honour held that O 35A r 3(2)(c) involves an admission of the facts alleged in the statement of claim. It does not involve a concession by a respondent that the Applicant is entitled to the relief sought (at 677, [44]). Secondly, her Honour said that the view that declarations would not be made on deemed admissions was, in fact, based on a rule of practice, not a rule of law. In view of modern developments in the use of declarations, caution should be exercised in applying the rule of practice (at 680-681, [58]). Her Honour went on to say (at 681, [59]):
“It may no longer be correct to have a practice which operates as a prohibition in every case of default and preferable to consider the circumstances pertaining to the particular case and the purpose and effect of the declaration. Millett J made declaratory orders in Patten v Burke Publishing Co Ltd [1991] 1 WLR 541; [1991] 2 All ER 821 where justice to the plaintiff required it. The order, however, operated principally inter partes and it might be doubted whether it would be of interest to other persons. Cases such as this, involving the protection of consumers, are of public interest. Declarations are often utilised in such cases to identify for the public what conduct contributes a contravention and to make apparent that it is considered to warrant an order recognising its seriousness. It is however important that there be no misunderstanding as to the basis upon which they are made. This could be overcome by a statement, preceding the declarations, that orders are made: “upon admissions which [the respondent in question] is taken to have made, consequent upon non-compliance with orders of the court”.
[22] As far as the particular circumstances of this case are concerned, declarations are appropriate because they are likely to have a deterrent effect: Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd and Others (2004) FCA 693; (2004) 207 ALR 329 at 333, [22] per Lee J; Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) [2010] FCA 1156 at [210] per McKerracher J. Furthermore, there is utility in setting out the basis for any pecuniary penalties which may be ordered: Rural Press Ltd & Others v Australian Competition and Consumer Commission & Others [2003] HCA 75; (2003) 216 CLR 53 at 92, [95] per Gummow, Hayne and Haydon JJ.
[23] Finally, I am not bound to refuse declarations because no-one appeared to oppose them being made. The persons with the requisite interest in opposing the declarations could have appeared and could have opposed them. The fact that they have chosen not to do so does not mean that declaratory relief cannot be granted: Australian Competition and Consumer Commission v MSY Technology Pty Ltd & Others [2012] FCAFC 56 at [14], [18] and [34].
The Federal Circuit Court Rules 2001 provide the Court with the power to give judgment or make any other order against the defaulting party. I am satisfied that the First and Second Respondents had notice of the proceedings. The Respondents had taken steps in the proceedings filing a Response and supporting affidavits. The First and Second Respondents failed to comply with orders and directions of the Court, failed to appear on 8 February 2020 and failed to appear during the hearing of the matter on 14 May 2020 having been called three times with several attempts being made to contact the Second Respondent by telephone. Due to the First and Second Respondents failure to comply with Rules 13.03A (2) (a) (b) (ii) (iv) (vii), 13.03B (2) (c) and in particular the failure of the Respondents to comply with Rule 13.03C (1) the Court proceeded to hear the matter in the absence of the Respondents. Judgment was reserved.
Documents relied on
The Applicant relied on the amended claim filed 20 August 2019, affidavits filed by the Applicant on 16 September 2019, 9 December 2019 and 11 February 2020. A legible copy of the documents Exhibited to the Applicant’s affidavit filed on 16 September 2019 were tendered (Exhibit A4) as was the Applicant’s birth certificate (Exhibit A5). The Applicant relied on paragraph 15 of the affidavit filed by Mrs Singh on 25 November 2019 and paragraph 18 of Mrs Singh’s affidavit filed on 23 December 2019.
Relief and orders sought by the Applicant
The Applicant sought the following declarations:
a)Contrary to section 45 of the Fair Work Act 2009 (Cth) between 23 August 2016 and 13 March 2019 the First Respondent contravened the Fair Work Act 2009 (Cth) by:
i)Failing to pay the correct wages to the Applicant as prescribed by clause 17 and 19 of the Hair and Beauty Industry Award 2010 (“the Award”);
ii)Failing to pay the correct Saturday loading payments to the Applicant as prescribed by clause 31.2 of the Award; and
iii)Failing to make superannuation contributions for the benefit of the Applicant as required by clause 24.2 of the Award.
b)Contrary to section 44 of the Fair Work Act 2009 (Cth) on 13 March 2019 the First Respondent:
i)Contravened section 90 (2) of the Act by failing to pay the Applicant untaken annual leave on termination of employment; and
ii)Failed to give the Applicant a Fair Work Information Statement as required by section 125 of the Fair Work Act 2009 (Cth).
c)Contrary to section 535 (3) of the Fair Work Act 2009 (Cth) and regulation 3.42 of the Fair Work Regulations 2009 the First Respondent did not make available requested employee records for inspection and copying or post the requested employee records within the time frames prescribed by regulation 3.42 of the Regulations, or at all;
d)Pursuant to section 550 of the Fair Work Act 2009 (Cth) the Second Respondent was involved in the contraventions of the Fair Work Act 2009 (Cth) and contraventions of the Award by the First Respondent.
The Applicant sought the following orders:
a)Pursuant to section 545 of the Fair Work Act 2009 (Cth) the First Respondent pay compensation to the Applicant in the amount of $49,502.14 less taxation deductions required by law; and
b)The First Respondent pay interest on the sum of $49,502.14 for the period 13 March 2019 to the date of the application in the amount of $1403.
In addition the Applicant sought that pursuant to subsection 546 (1) of Fair Work Act 2009 (Cth) (“FW Act”) the First Respondent and Second Respondents pay pecuniary penalties with any pecuniary penalties imposed to be paid to the Applicant.
Consideration of the application
In determining this matter I proceeded on the basis that the allegations of fact in the Applicant’s amended claim (including the Schedule to the claim) are deemed to be admitted.
At all relevant times Mini Majhel Pty Ltd:
a)is and was a “constitutional corporation” within the meaning of section 12 of the FW Act;
b)operated a business providing hairdressing services from two hairdressing salons – Babydoll Hair and Body in Belmont, Queensland and Gigi Hair in Paddington, Queensland from 23 August 2016;
c)was bound by the Fair Work Act 2009 (Cth) in respect of the employment of Mr Bone; and
d)was required to apply the Hair and Beauty Industry Award 2010 regarding that employment.
At all relevant times Mrs Harpreet Singh was:
a)the sole director and secretary of Mini Majhel Pty Ltd (“Mini Majhel”);
b)a person responsible for the management of Mini Majhel;
c)a person responsible for ensuring that Mini Majhel complied with its legal obligations; and
d)a person authorised to swear an affidavit on behalf of Mini Majhel[2].
[2] Affidavit of Harpreet Singh filed 24 December 2019 #1
Mr Bone was employed by Mini Majhel between 23 August 2016 and 12 March 2019[3] (“the period of employment”). He commenced working for Mini Majhel at Babydoll Hair and Body in Belmont Queensland as an apprentice hairdresser.[4]
[3] Affidavit of Kylie Attwell filed on 24 December 2019 at #6
[4] Annexures BWSB 1 – 4 to Mr Bone’s affidavit filed on 9 December 2019 and Exhibit A5; Affidavit of Harpreet Singh filed 24 December 2019 #9
Pursuant to business records from MIG Training Organisation[5] Mr Bone commenced as a second year hairdressing apprentice. That document records as follows:
“The Applicant commenced the apprenticeship with Babydoll on 23 August 2016. He signed into the course for Certificate III in Hairdressing (he had 15 units completed from previous training). When he commenced at Babydoll he was in second year as he had served the full time equivalent of 1 year, 4 months, 3 weeks and 4 days.
Mr Bone was a second year apprentice between 23 August 2016 and 30 March 2017 and a third year apprentice between 30 March 2017 and 30 March 2018. He nominally completed his Certificate III apprenticeship on 30 March 2018 with actual completion of the Certificate III on 9 September 2018.”
[5] Letter from MIG Training Organisation dated 6 February 2020 from the Administration Manager at Annexure BWSB 3 to the Applicant’s affidavit filed on 11 February 2020
During his period of employment Mr Bone:
a)was engaged on a full time basis and worked 38 hours a week including each Saturday;
b)worked at each of two salons as directed by Mrs Harpreet Singh;
c)performed duties including hairdressing and other duties associated with providing a hairdressing service; and
d)was classified as a second year apprentice and covered by the Hair and Beauty Industry Award.[6]
[6] Affidavit of Benjamin Bone filed 11 February 2020 para 8 (b) and 9 and Annexure BWSB 3
Mr Bone alleged that Mini Majhel contravened section 45 of FW Act and the terms of the Award as it applied to Mr Bone by failing to pay the correct minimum rates of pay to Mr Bone for work performed in accordance with clauses 17 and 19 and clause 31.2 of the Hair and Beauty Industry Award 2010. He alleged:
a)For the period 23 August 2016 to 30 March 2017 the applicable minimum rates of pay under the Award were $19.44 per hour for work performed during the week and $25.86 per hour for work performed on Saturdays. Mr Bone worked 1001.14 hours on weekdays and 187.71 hours on Saturdays during this period. Mr Bone was paid at the rate of $9.05 per hour for working weekdays and $10.00 per hour for working Saturdays. Mini Majhel underpaid Mr Bone $13,379.02.
b)For the period 31 March 2017 to 30 June 2017 the applicable minimum rates of pay under the Award were $19.44 per hour for work performed during the week and $25.86 per hour for work performed on Saturdays. Mr Bone worked 416 hours on weekdays and 78 hours on Saturdays during this period. Mr Bone was paid at the rate of $9.20 per hour for working weekdays and $10.10 per hour for working Saturdays. Mini Majhel underpaid Mr Bone $5489.12.
c)For the period 1 July 2017 to 30 March 2018 the applicable minimum rates of pay under the Award were $20.08 per hour for work performed during the week and $26.71 per hour for work performed on Saturdays. Mr Bone worked 1243.43 hours on weekdays and 233.24 hours on Saturdays during this period. Mr Bone was paid at the rate of $14.00 per hour for working weekdays and $17.00 per hour for working Saturdays. Mini Majhel underpaid Mr Bone $9823.86.
d)For the period 30 March 2018 to 30 June 2018 the applicable minimum rates of pay under the Award were $20.08 per hour for work performed during the week and $26.71 per hour for work performed on Saturdays. Mr Bone worked 416 hours on weekdays and 78 hours on Saturdays during this period. Mr Bone was paid at the rate of $14.00 per hour for working weekdays and $17.00 per hour for working Saturdays. Mini Majhel underpaid Mr Bone $3286.66.
e)For the period 1 July 2018 and 9 September 2018 the applicable minimum rates of pay under the Award were $20.79 per hour for work performed during the week and $27.65 per hour for work performed on Saturdays. Mr Bone worked 320 hours on weekdays and 60 hours on Saturdays during this period. Mr Bone was paid at the rate of $18.00 per hour for working weekdays and $18.00 per hour for working Saturdays. Mini Majhel underpaid Mr Bone $1471.80.
f)For the period 10 September 2018 to 12 March 2019 the applicable minimum rates of pay under the Award were $22.04 per hour for work performed during the week and $29.31 per hour for work performed on Saturdays. Mr Bone worked 836.57 hours on weekdays and 156.86 hours on Saturdays during this period. Mr Bone was paid at the rate of $18.00 per hour for working weekdays and $18.00 per hour for working Saturdays. Mini Majhel underpaid Mr Bone $5153.80.
Pursuant to section 48 of the FW Act, the Award covered the whole of the applicant’s employment period.[7] I am satisfied that Mr Bone was underpaid a total of $38,604.27.[8]
[7] Affidavit of Benjamin Bone filed 16 September 2019 at BWB3
[8] Applicant’s Amended Claim filed 8 November 2019 at document titled Schedule
Mr Bone alleged that contrary to section 45 of the FW Act Mini Majhel did not make any superannuation contributions for Mr Bone’s benefit during his period of employment as required by clause 24.2 of the Award. Mrs Singh admitted that she failed to make superannuation contributions for Mr Bone’s benefit.[9] Mr Bone calculated there were outstanding superannuation contributions owed to him in the amount of $9725.34. I am satisfied that Mini Majhel failed to make $9725.34 in superannuation contributions on Mr Bone’s behalf.
[9] Response filed 25 November 2019 #9
Mr Bone alleged that Mini Majhel failed to reimburse his tuition fees of $395 when he attended classroom based training. As this amount does not form part of any claim by Mr Bone nor does he seek reimbursement of the amount I make no finding.
Mr Bone alleged that Mini Majhel failed to pay Mr Bone any accrued and untaken annual leave due to him when his employment ended in accordance with subsection 90 (2) of FW Act. Mr Bone calculated that he had accrued 7 days annual leave when his period of employment ended. Under the Award he was entitled to 7 x 7.6 hours at the Award rate of $22.04 per hour as at 12 March 2019. This amounts to $1172.53.[10] I am satisfied that Mini Majhel failed to pay Mr Bone his untaken paid annual leave entitlements of $1172.53
[10] Applicant’s Amended Claim filed 8 November 2019 at document titled Schedule
Mr Bone alleged that Mini Majhel failed to give him a Fair Work Information Statement as required by section 125 of the FW Act. I am satisfied that Mr Bone did not receive a Fair Work Information Statement during his period of employment with Mini Majhel.
Mr Bone alleged that Mini Majhel did not make available requested employee records for inspection and copying or post the requested employee records with the timeframes described by regulation 3.42 of the Fair Work Regulations 2009 and contrary to section 535 (3) of the FW Act. I am satisfied that Mini Majhel did not comply with the request for employee records contrary to section 535 (3) of the FW Act.
Considerations regarding the determination of accessorial liability
Mr Bone sought declarations and penalties pursuant to section 545 and 546 of the FW Act against Mrs Singh for her involvement within the meaning of section 550(2) of the FW Act in Mini Majhel’s contraventions.
In Fair Work Ombudsman v Priority Matters Pty Ltd & Anor (No 4) [2019] FCCA 56 Judge Driver set out succinctly the relevant principles applicable in matters concerning accessorial liability at [30] as follows:
“(a) a person (including a body corporate[11]) will only be regarded as “involved” in a contravention if the person intentionally participated in the contravention;
(b) intentional participation requires actual, not constructive, knowledge of the essential matters that make up the contravention;[12]
(c) being “knowingly concerned” in a contravention requires association with, implication in, or a practical connection with the contravening conduct;[13]
(d) however, it is not necessary that the person physically do anything to further the contravention. It is sufficient if the person, by what they said and agreed to do, in fact became associated with and thus involved, in the relevant sense, in the conduct constituting the contravention;[14]
(e) it is the knowledge of the alleged accessory and not what might be postulated of a hypothetical person in the position of the alleged accessory which must be demonstrated, although what might be postulated of such a hypothetical person is not irrelevant. Knowledge must be the only rational inference available;[15]
(f) the requisite actual knowledge must be present at the time of the contravention. A later acquisition of knowledge of the essential matters is not sufficient;[16] and
[11] Section 2C of the Acts Interpretation Act 1901 (Cth).
[12] Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 4-5; Yorke v Lucas and Quinlivan v Australian Competition and Consumer Commission (2004) 160 FCR 1 at [9].
[13] Qantas Airways Ltd v Transports Workers’ Union ofAustralia [2011] FCA 470; (2011) 280 ALR 503 at [324]-[325]; Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299 Wilcox J at 357 citing Ashbury v Reid [1961] WAR 49; see Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [227].
[14] R v Tannous (1987) 10 NSWLR 303 at 308; cited in Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 154 IR 228, per Le Miere J at [29]; Qantas Airways at [325].
[15] Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220.
[16] South Jin at [234].
(g) there are three qualifications with regard to knowledge:
(i) first, it is unnecessary to prove that the respondents knew that their actual participation was a breach of the Fair Work Act. This is consistent with the common law and statutory principle that no person will be excused from liability because of ignorance of the law;[17]
(ii) secondly, where there is a combination of suspicious circumstances and a failure to make enquiry, it may be possible to infer actual knowledge (wilful blindness);[18] and
(iii) where the accessory is involved in and has actual knowledge of the “system” of non-compliance, proof of actual knowledge of each single instance of non-compliance is not necessary. Proof of the accessory’s knowledge of the system of non-compliance is a conventional and not novel means of establishing the accessory’s liability.[19]”
[17] Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561.
[18] Pereira at 219-220 per Mason CJ, Deane, Dawson, Toohey and Gaudron JJ; Compaq Computer at 5.
[19] Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 8) (2010) 275 ALR 293 at [172]; Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034 at [955]-[957].
In Fair Work Ombudsman v Valuair Limited (No 2) [2014] FCA 759 Buchanan J stated at [122]:
“Proof of a case under s 550 (2) (c) need only demonstrate knowledge of the facts upon which liability depends. It does not require proof of the legal consequences of those facts or proof of intent (see Yorke v Lucas [1985] 158 CLR 661).
The Full Court in EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 at [34] discussed the concept of a person being “knowingly concerned” and said “… knowledge and involvement was sufficient to implicate Mr Lau in Blue Impression’s contraventions of section 45 of the Fair Work Act 2009 (Cth) irrespective of the fact that Mr Lau did not know about the particular employment of Mr Zheng or the particular hours that he worked or the particular provisions in the Award that gave rise to Mr Zheng’s entitlement to be paid a particular penalty rate. As Katzmann J said in Grouped Property Services [2016] FCA 1034 at [957] ‘where an alleged accessory is aware of a system producing certain outcomes and those outcomes constitute contraventions of the Act it is unnecessary to show that the alleged accessory knew the details of each particular instance of those outcomes in order to show the requisite knowledge’.”
Mini Majhel as a corporate entity can only act through individuals.[20] Where a company acts through a particular person, then that person will be found to be liable as an accessory, in the absence of contrary evidence. Mrs Harpreet Singh was the sole director and secretary for Mini Majhel. She had the capacity to control, direct and influence the conduct of Mini Majhel at all times during Mr Bone’s period of employment in relation the rates of pay he received but also in relation to the terms and conditions of his employment.
[20] Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
Section 550 (2) (c) of the FW Act provides:
“A person is involved in a contravention of a civil remedy provision if, and only if, the person (c) has been in any way by act or omission, directly or indirectly, knowingly concerned in or party to the contraventions.
In Yorke & Another v Lucas[1985] HCA 65 a matter concerning the application of s 75B of the Trade Practices Act 1974 (Cth), (s 75B is similar but not identical to s550(2) (c) of the FW Act) the Court said that, in order to fall within the terms of s75B, the alleged accessory must have knowledge of all of the essential facts even if he or she does not know that those facts constitute a contravention.
In Leighton Contractors Pty Ltd v Construction, Foresting, Mining and Energy Union [2006] WASC 144; (2006) 154 IR 228 Le Miere J when construing s48 (2) of the Building and Construction Industry Improvement Act 2005 (Cth), that section being in identical terms to s.550(2) of the FW Act, said at 234, [25]:
“A person is directly or indirectly knowingly concerned in or party to a contravention if he or she has full knowledge of the essential facts or matters constituting the contravention and is an intentional participant by virtue of some act or conduct on his or her part which contributes to the commission of the offence. The person must engage in some act or conduct, including an intentional omission, which implicates or involves him or her in the contravention.”
Mrs Singh in her capacity as sole director for Mini Majhel had hands on involvement in the hairdressing business operated by Mini Majhel. She was directly responsible for employing Mr Bone engaging him as an apprentice hairdresser on 23 August 2016. No contract in writing existed between Mini Majhel and Mr Bone. Mrs Singh employed Mr Bone by way of an oral contract of employment. When Mr Bone commenced working for Mini Majhel he was a second year apprentice. He denied having any conversation with Mrs Singh that he agreed to commence his employment as a first year apprentice. Though records indicate that he was paid as a first year apprentice he deposed this was an error. In any event he denied he was employed as a “junior stylist” as asserted by Mrs Singh. No classification of “junior stylist” exists under the Award. I am satisfied that Mrs Singh was aware Mr Bone was a second year apprentice when he commenced employment with Mini Majhel.
Mrs Singh managed both hairdressing salons operated by Mini Majhel and directed Mr Bone regarding which particular salon he was required to perform work on a particular day including Saturdays during the period of his employment.
It is common ground that Mrs Singh was the person responsible for paying Mr Bone and was aware there was an “Award”[21] that applied during Mr Bone’s period of employment. She organised payment of Mr Bone at hourly rates less than the hourly rates applicable under the Hair and Beauty Industry Award. Mrs Singh attached to her Response filed on 23 September 2019 a schedule of payments made to Mr Bone under an “Award”[22] without any specific reference to the minimum hourly rates applicable under the Hair and Beauty Industry Award 2010.
[21] Response filed 23 September 2019 page 4 of 4
[22] Response filed 23 September 2019 page 4 of 4
In Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [194] White J held it was not necessary for a person to know of the application of any particular award, it was sufficient that the accessory knew that an award was applicable.
Mr Bone said Mrs Singh was regularly late in paying wages and would pay him in instalments. He relied on correspondence on a date unknown from Ms Singh whereby he sent her a text message “will the $100 that was missing from this weeks’ pay be transferred as well?” and she replied “I will do that this pay.”
He did not receive pay slips within one day of being paid or weekly. He often received five of more payslips at once every couple of months. He received less than 40 payslips over his employment period of two and a half years. He received no payment summary for the financial year ending 30 June 2019. Mrs Singh acknowledged that she was responsible for providing Mr Bone with pay slips.
Towards the end of his period of his employment Mr Bone was placed on “garden leave” by Mrs Singh between 2 March and 12 March 2019. He resigned from employment with Mini Majhel and was removed by Mrs Singh from having administrator’s rights over Facebook on the day he resigned.
In Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor [2018] FCCA 378 Kelly J said at [355]:
“…a secondary participant who is an intentional participant in the payment of employees entitlements and knows that the entitlements are governed by an Award which prescribes a minimum entitlement and knows the employee’s rate of pay of pay knows the essential elements that constitute the primary offence.”
I find that Mrs Singh implemented a system of payment for Mr Bone paying him hourly rates of pay for work performed on weekdays and for work performed on a Saturday at rates less than the minimum hourly rates of pay applicable under the Hair and Beauty Industry Award 2010. I am satisfied there was a strong connection between Mrs Singh’s actions and the contravention of Mini Majhel pursuant to section 45 of FW Act in Mini Majhel’s failure to pay the correct minimum hourly rates of pay to Mr Bone for work performed in accordance with clauses 17 and 19 and clause 31.2 under the Award.
Mrs Singh had the capacity to control, direct and influence the conduct of Mini Majhel at all times during Mr Bone’s period of employment in relation to not only the rates of pay he received but also in relation to the terms and conditions of his employment. I am satisfied that Mrs Singh did not ensure that Mr Bone was provided with a Fair Work Information Statement as required by section 125 of the FW Act. I am satisfied that Mrs Singh was directly involved in the company’s failure to make any superannuation contributions for the benefit of Mr Bone[23] during his period of employment as required by clause 24.2 of the Award. I am satisfied the Mrs Singh failed to ensure that Mini Majhel complied with its legal obligations
[23] Mrs Singh deposed in her affidavit filed on 25 November 2019 that Mini Majhel did not make any superannuation contributions for Mr Bone’s benefit during his period of employment.
In her capacity to control, direct and influence Mini Majhel, Mrs Harpreet had authority to direct Mini Majhel’s bookkeeper to make records available. I am satisfied that Mrs Singh had knowledge that Mini Majhel did not make available requested employee records for inspection and copying or post the requested employee records with the timeframes described by regulation 3.42 of the Fair Work Regulations2009 and contrary to section 535 (3) of the FW Act. I am satisfied that Mrs Singh participated in and/or was implicated in the contravention by Mini Majhel of section 535 (3) of the FW Act.
Conclusion
I find that the First Respondent Mini Majhel Pty Ltd:
a)Contravened section 45 of the Fair Work Act 2009 (Cth) during the period from 23 August 2016 and 13 March 2019 by:
i)Failing to pay Benjamin Bone minimum rates of pay in accordance with clauses 17 and 19 of the Hair and Beauty Industry Award 2010;
ii)Failing to Benjamin Bone pay penalty rates for worked performed on a Saturday in accordance with clause 31.2(c) of the Award; and
iii)Failing to make superannuation contributions for the benefit of Benjamin Bone as required by clause 24.2 of the Award;
b)Contravened section 44(1) of the Fair Work Act 2009 (Cth) on 13 March 2019 by failing to pay Benjamin Bone untaken paid annual leave at the end of his employment period pursuant to subsection 90(2) of the Fair Work Act 2009 (Cth); and
c)Contravened section 125 of the Fair Work Act 2009 (Cth) by failing to give Benjamin Bone a Fair Work Information Statement as required; and
d)Contravened section 535 (3) of the Fair Work Act 2009 (Cth) and regulation 3.42 of the Fair Work Regulations 2009 by failing to make available requested employee records for inspection and copying or post the requested employee records within the time frames prescribed by regulation 3.42 of the Fair Work Regulations 2009, or at all.
I find that the Second Respondent Mrs Harpreet Singh was involved within the meaning of section 550 (1) of the Fair Work Act 2009 (Cth) in each of Mini Majhel Pty Ltd’s contraventions referred to above.
I make declarations accordingly.
I intend to order that pursuant to section 545 of the Fair Work Act 2009 (Cth) Mini Majhel Pty Ltd pay compensation to Benjamin Bone in the amount of $49,502.14 within 28 days of service of this order on Mini Majhel Pty Ltd.
With respect to the Applicant’s claim for interest section 51A (1)(a) of the Federal Court of Australia Act 1976 (Cth) (“FCCA Act”) provides for the making of orders for the inclusion of interest in judgments[24]. Subsection 76 (2) of the FCCA Act provides that a party to proceedings in this Court for the recovery of money in respect of this action may apply for an order under s76 (3). Subsection 76(3) of the FCCA Act provides:
“(3) If:
(a) an application is made under subsection (2); and
(b) the Federal Circuit Court of Australia or the Judge is not satisfied that good cause has been shown for not making an order under this subsection;
[24] See Federal Court Practice Note CM 16
the Federal Circuit Court of Australia or the Judge must either:
(c) order that there be included in the sum for which judgment is given interest at such rate as the Federal Circuit Court of Australia or the Judge thinks fit on the whole or any part of the money for the whole or any part of the period between:
(i) the date when the cause of action arose; and
(ii) the date as of which judgment is entered; or
(d) without proceeding to calculate interest in accordance with paragraph (c), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.
No calculations were relied on by the Applicant with respect to interest claimed. I intend to proceed pursuant to section 76 (3) (d) of the FCCA Act and order a lump sum be paid in lieu of interest.
With respect to the application that pecuniary penalties be imposed on the First and Second Respondents I intend to order that within 14 days of the date of these orders, the parties file written submissions addressing the issue whether the Court should impose pecuniary penalties on Mini Majhel Pty Ltd and Mrs Singh for contraventions under subsection 546 (1) of the Fair Work Act 2009 (Cth) as sought by the Applicant.
The issue of penalty is to be determined following receipt of written submissions pending compliance with these orders.
As the First and Second Respondent did not participate in the proceedings the Response and Cross Claim filed on 23 September 2019 and the Respondent’s Points of Response filed on 25 November 2019 be and are hereby dismissed.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Tonkin
Date: 11 June 2020
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