FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
Boyd v Glenvill Pty Ltd (No 2) [2021] FedCFamC2G 164
File number(s):
MLG 1676 of 2019
Judgment of:
JUDGE A KELLY
Date of judgment:
18 October 2021
Catchwords:
INDUSTRIAL LAW – Contraventions of Fair Work Act 2009 (Cth) – Penalties – order made under s 545(2)(b) for payment of compensation – order made for payment of, commissions – order made order made under s 547 for payment of pre-judgment interest – whether appropriate for penalties to be imposed for the contraventions – applicable principles – penalty order made under s 546(1) to be paid by respondent.
INDUSTRIAL LAW – Contraventions of Fair Work Act 2009 (Cth) – Penalties – to whom penalty should be paid – where s 546(3) provides the court may order that penalty, or part of the penalty, be paid to the Commonwealth, a particular organisation or a particular person – where question posed by s 546(3) as to whom penalty should be paid – proper construction of s 546 – where ordinarily ‘usual’ order is for penalty to be paid to the applicant – use of judicial guidelines in exercise of power to make order under s 546(3) – rationale for penalty being paid to applicant – payment serves to protect against stultification of enforcement proceedings – applicable principles – where fundamental role of court is to quell controversies – case management – whether rigid adherence to a settled practice of making usual order is inimical to role of Ch III court – criteria for directing to whom penalty is to be paid – whether court foreclosed from having regard to disentitling conduct – where claims pressed for determination vastly exceed relief granted – orders made splitting penalty for payment to applicant and the Commonwealth.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Boyd v Glenvill Pty Ltd (No 2) [2021] FedCFamC2G 164
Case
[2021] FedCFamC2G 164
Decision Date
CaseChat Overview and Summary
In Boyd v Glenvill Pty Ltd (No 2), the applicant sought penalties against the respondent for contraventions of the Fair Work Act 2009 (Cth). The primary dispute centred on the imposition of penalties for the contraventions and the appropriate recipient of any penalties awarded. The case was heard and determined by a judge of the Federal Circuit and Family Court of Australia.
The legal issues addressed by the court involved determining whether penalties were appropriate for the contraventions under section 546(1) of the Fair Work Act 2009 (Cth) and identifying to whom any penalties should be paid, considering the provisions of section 546(3). The court had to interpret these sections in light of the particular circumstances of the case, including the conduct of the parties and the principles of deterrence and enforcement of the Act.
The court concluded that penalties totalling $25,000 were appropriate to ensure specific and general deterrence. In deciding to whom the penalties should be paid, the court considered the statutory framework and judicial guidelines. It determined that one half of the penalties should be paid to the applicant and the other half to the Commonwealth, based on the extent of the contraventions and the role of each recipient in enforcing the Act. This decision was made to underscore the importance of compliance and deterrence.
The court made orders for the penalties to be split between the applicant and the Commonwealth and also allowed the applicant a sum of $3,500 for costs incurred due to the respondent's unreasonable conduct. Orders were also made in relation to the computation of claims for commission and interest.
Orders
Orders of the court
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Background
Background to the litigation
Two substantive questions are raised for determination by the application for penalties. First is the question posed by s 546(1) whether it is appropriate that penalties be imposed for the contraventions that have been established. Secondly, the question posed by s 546(3) concerns to whom any penalties should be paid. The issues posed by those questions are distinct but overlapping. For the reasons which follow, I conclude that pecuniary penalties totalling $25,000 should be imposed on the respondent. I have determined that one half of the penalties should be paid to the applicant and the remaining half to the Commonwealth.Background It is unnecessary to rehearse much of the background that is already set out in the first reasons. The applicant was employed as a design manager by the respondent from March 1998 until the respondent terminated his employment by letter dated 7 March 2019 at a time when he was on sick leave. At the time of trial, the applicant was 65 years of age. Over an extended period of several months preceding his dismissal, the applicant had been engaged in discussions seeking to resolve claims for commission which he had accrued over some years. The respondent’s CEO, CFO and General Manager[s] were involved in those discussions with the applicant. Over the period of the applicant’s employment, the respondent’s business had grown under the management of its CEO who had taken a family business out of administration and rebuilt it. Additionally, a number of greenfield and other commercial property development businesses were established during that time. In contrast with the growth and success of those other businesses, the performance of the respondent’s business was lacklustre. While the CEO had been challenged over many years in lifting the performance of the respondent’s business, in recent years, substantial other demands on his time effectively precluded him from focussing on the respondent’s activities. Indeed, such was the scale and ambition of other projects being undertaken, the respondent’s Board of Directors had, in effect, instructed the CEO (who was also its managing director), that if he wished to pursue his ambitions of large-scale property development then he could do so only by dedicating himself exclusively to those endeavours. In due course, the CEO appointed a new General Manager who evaluated the performance of all staff in the respondent’s business. The new General Manager reported upon his conclusions, first to the CEO and then to the Board of Directors who endorsed his recommendations which included that the applicant’s employment should be terminated. The applicant’s employment was terminated without notice or any reasons being assigned. The respondent denied any conduct relied upon by the applicant constituted adverse action. Over a long period the respondent resisted all attempts by the applicant to engage in any meaningful way upon the resolution of his claims to commission. During this period, the applicant made a final attempt to resolve the impasse by engaging a solicitor to liaise with the respondent in relation to the proper construction of the terms of the employment contract relating to commission. When the new General Manager discovered this letter had been written he was in a state of disbelief that an employee who had engaged a lawyer upon such a matter was still employed.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Nothing in the making of orders which apportion the liability to pay the penalties to more than one of the designated recipients would undermine the principal objects of s 546; namely, specific and general deterrence. Once a price on the contraventions has been determined which has been considered sufficiently high to deter repetition by the respondent and others pursuant to s 546(1), the objects of specific and general deterrence respectively will be reinforced by framing orders pursuant to s 546(3) that require the contravene to pay a part of the penalty to the affected individual and to pay a part or parts, as the case requires, to the Commonwealth and a particular organisation. Conclusion I have determined the application for penalties and the orders that I consider appropriate to be made for the reasons above. The total penalties of $25,000 should be paid as to one half to the applicant and as to the other half, to the Commonwealth. In my view it will serve as a spur to deterrence that the respondent pays a part of the penalty to the applicant and a part to the Commonwealth. Orders for separate payments will underscore to the respondent and others the need for compliance with, specific and general deterrence against contraventions of, the Act. While the point is not of central significance, to some limited extent, the making of separate orders will serve to reinforce the importance of such compliance and deterrence. A claim was made for costs which I consider was not without some merit. Conscious of s 570 of the Act, and despite the respondent’s reliance on what has so frequently been described as the unprecedented and unique circumstances presented by the Covid-19 pandemic, I consider par 570(2)(b) was engaged in the circumstances as detailed by the applicant’s outline and oral submissions in relation to specific claims for costs which would not have been incurred but for particular and unreasonable conduct on the part of the respondent in the months immediately preceding the trial. This is not the only proceeding in which the Covid-19 pandemic has been deployed as a supposed reason why it was said not to be possible either to comply with court orders or to co-operate in relation to the orderly disposal of matters required for the conduct of the trial. I will allow the applicant a sum of $3,500 for such costs. The parties have consented in orders being made in relation to the computation of the claims for commission and interest. Although it was submitted (on two occasions) such commission and interest would be paid by week’s end, it is appropriate the order be made by consent so as to deal finally with all issues. The court acknowledges the assistance of counsel.
Ratio Decidendi
Legal Principle Established
That said, the involvement of senior management is a matter of real significance. Meaningful penalties are appropriate both in terms of specific and general deterrence to the respondent’s personnel in this case and those who occupy similar positions of responsibility elsewhere. Transgressions by senior management are less likely to attract leniency.Contrition, corrective action & co-operation As stated, the applicant was dismissive of any supposed contrition on the part of the respondent. I do not accept that submission. I am not prepared to find that the respondent’s CEO was not genuine in making his affidavit in which he expressed his apology and regret for the contraventions which have been proven. He was not cross-examined. Undoubtedly, there are those cases in which a respondent’s belated contrition might more accurately be viewed as little more than regret at having been caught. That was not entirely accurate in this case, if only because both parties enjoyed a measure of success in the ultimate outcome. Put another way, by his original claim the applicant pursued far broader relief, some of which was abandoned for the first time in opening and others of which were pursued albeit for a lesser quantum. Questions of contrition and co-operation should not be seen in a vacuum. Right to the point of closing submissions, the applicant pursued an alternative claim for compensation of many hundreds of thousands of dollars if reinstatement was not granted. While the two subjects may be quite unrelated, at another level proof of a contravention was essential to whether the applicant had any entitlement to compensation because of loss suffered as a result and whether the court considered it appropriate that the respondent paid a penalty. The pursuit of claims that were objectively inflated may have impeded resolution of the penalty proceeding. Without distracting attention from contrition and conduct in relation to the contraventions, I am prepared to take account of the stance the respondent adopted in the proceeding before, during and after the trial, having regard to the manner in which the claims were formulated and pursued against it. I do not ignore that the respondent’s CEO attended throughout the entirety of the hearings, both on liability and in relation to penalty. Other aspects of the respondent’s conduct warrant consideration, including the failure to pay the sums that were ordered on 23 February 2021. The applicant submitted that this conduct was merely the latest manifestation of the respondent’s disregard toward the applicant and, more particularly its disregard of orders made by this court. I do not overlook those matters. I also accept the respondent’s senior personnel are intent on adopting steps to mitigate the risk of any further contraventions of the Act. While it is true that the respondent did pay the amount of some accrued entitlements, it only did so on the eve of trial. I accept that in some cases, the respondent contested liability where its decisions to do so were validated. In other respects, I regarded some of its defences as near untenable.