Brobbel v Mack
[2008] FMCA 1355
•31 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BROBBEL v MACK & ANOR | [2008] FMCA 1355 |
| INDUSTRIAL LAW – Penalty – declarations of breach of awards and Workplace Relations Act. |
| Crimes Act 1914 (Cth), s.4AA Workplace Relations Act 1996 (Cth), ss.728, 792, 793, 807 |
| Wells v Locarno Management [2008] FCA 1034 |
| Applicant: | ANTHONY BROBBEL |
| First Respondent: | S & C MACK PTY LTD |
| Second Respondent: | ANDREW MACKINTOSH |
| File Number: | MLG 1563 of 2007 |
| Judgment of: | Turner FM |
| Hearing date: | 22 August 2008 |
| Date of Last Submission: | 22 August 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 31 October 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Moore |
| Solicitors for the Applicant: | Piper Alderman |
| Counsel for the Respondents: | Mr McKenney |
| Solicitors for the Respondents: | MW Law |
ORDERS
The first respondent is to pay the sum of $19,800.00 to the Court within 14 days, with that sum to be paid into Consolidated Revenue.
The first respondent pay Ms Jeni Marshall (the employee) the amount of $12,581.70 (gross) less any lawful deductions within 28 days of these orders being made, by way of bank cheque made out to Ms Marshall.
The Court makes the following declarations:
(a)On 7 March 2007 the first respondent contravened s.792(1)(a) of the Workplace Relations Act 1996 (Cth) (the “Act”) by dismissing Ms Jeni Marshall from her employment with the first respondent for the dominant reason that she was entitled to the benefit of the Shop, Distributive and Allied Employees Association- Victorian Shops Interim Award 2000 and the Shop, Distributive and Allied Employees Association- Victorian Shops Interim (Roping-in No.1) Award 2003.
(b)On 7 March 2007 the second respondent contravened s.792(1)(a) of the Act by being a person involved in the first respondent’s contravention of s.792(1)(a) of the Act referred to in paragraph (a) within the meaning of that term in s.728(2) of the Act.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1563 of 2007
| ANTHONY BROBBELL |
Applicant
And
| S & C MAKC PTY LTD |
First Respondent
| ANDREW MACTINOSH |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The applicant is a Workplace Inspector appointed under the Workplace Relations Act 1996 (Cth) (the “Act”). He takes this action on behalf of a former employee of the first respondent. The employee was employed on 20 February 2006 and dismissed on 21 March 2007.
The second respondent was, at all relevant times the sole director and company secretary of the first respondent. He admits to being responsible for decisions relating to the employment of all staff employed by the first respondent.
The employee complained to the second respondent that she was being under-paid according to the Shop, Distributive and Allied Employees Association- Victorian Shops Interim Award 2000 (the “Interim Award”) and/or the Shop, Distributive and Allied Employees Association- Victorian Shops Interim (Roping-in No.1) Award 2003 (the “Pre-Reform Award”).
The employee first became aware that she was entitled to the benefits of the Interim Award on 29 January 2007. On 28 February 2007 she asked the payroll clerk whether she was entitled to annual leave loading and was told that “leave loading went out years ago”. In a telephone conversation on the same day the second respondent asked her what was going on and said that after making enquiries he believed that annual leave loading had been abolished. The second respondent attempted to find out what the employee was entitled to and read a document downloaded from WageNet. He also considered information from the Australian Retailers Association. The second respondent told the employee that he was aware that the employee had been speaking to other employees about rates of pay and that he wanted to know what was said. The second respondent told the employee that he did not think he could trust her and that the issue had to be resolved by Friday. The next day (1 March 2007) the second respondent told the employee that he did not want to see her until midday on 5 March 2007, and that she should check and make sure she was right. The employee attended a meeting with the second respondent on 5 March 2007, and asserted that she was entitled to the conditions under the Interim Award.
The employee said that she wanted back pay. The second respondent rejected the claims and said that he would be seeking legal advice.
He said that the employee should consider herself to be on annual leave and not attend the workplace.
The second respondent deposes that he:
“…became frustrated by the process of not understanding and having demands made of me from Jeni Marshall (sic the employee)…about awards that at the time I knew nothing about. I now realise that what I did was wrong and regret the decision I made to terminate (the employee’s) employment. I acted out of ignorance as to the proper award conditions, and was frustrated by not being able to easily find what the answer was. I never intended to break the law.”
Finding himself in that position the second respondent could have sought the advice of the person employed by the first respondent to handle matters of administration relating to employees. The failure to do so was careless.
The second respondent wrote to the employee on 7 March 2007 advising her that he had contacted Wageline and the Australian Retail Association who advised him that the employee had been paid under the correct award. He then stated:
“In regards to your current employment with Aumann’s Building and Garden Supplies I wish to inform you that I have no other alternative but to give you 2 weeks notice of termination of your employment with the company due to irreconcilable differences in the way that you have not worked as a team member and have on numerous occasions displayed unrest among my other staff.
On 21st March 2007 your final pay will be completed with your holiday leave entitlements. A separation certificate will be issued on this date with your final pay slip.
Wishing you all the best in your future endeavours.”
It is alleged that the employee was dismissed for a prohibited reason, in contravention of s.792(1)(a) of the Act, being that she was dismissed for the dominant reason that she was entitled to the benefit of an industrial instrument, namely the Interim Award and the Pre-Reform Award, which is a prohibited reason pursuant to s.793(1)(i) of the Act.
The respondents admitted contravention of s.792(1)(a) on the basis of facts set out in the Statement of Agreed Facts filed with the Court on 19 August 2008.
Paragraph 6 of that Statement states that:
“The Applicant will no longer pursue orders pursuant to s.807(1)(b) for compensation to be paid to (the employee), in light of an agreement reached between the Applicant and the Respondents. Further, the Applicant will no longer pursue a penalty against the Second Respondent.”
Paragraph 8 of that Statement states that:
“By agreement reached on 15 February 2008 between the Applicant and the Respondents, the First Respondent admitted the Applicant’s allegations.”
The first respondent admits contravening s.792(1)(a) of the Act on
7 March 2007, by dismissing the applicant from her employment for the dominant reason that she was entitled to the benefit of the Interim Award or the Pre-Reform Award.
The second respondent admits to contravening s.792(1)(a) on 7 March 2007 by being a person involved (within the meaning of s.728 of the Act) in the first respondent’s contravention.
Section 728 provides:
“Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.
(2) For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.”
On 22 June 2007 the Workplace Ombudsman sent an email to the respondents alleging under payment of the employee of $7823.32.
On 2 July 2007 the respondent’s solicitor sent a cheque for $7823.32 to the Workplace Ombudsman. By letter dated 9 July 2007 the Workplace Ombudsman accepted that the breach had been rectified.
Declarations and agreed compensation
It was alleged that the employee suffered financial loss of $12,581.70 gross as a result of her dismissal, constituting approximately 16 weeks’ remuneration.
The parties seek declarations and an order by consent as set out below. The Court makes declarations and an order as follows:
a)On 7 March 2007 the first respondent contravened s.792(1)(a) of the Workplace Relations Act 1996 (Cth) (the “Act”) by dismissing Ms Jeni Marshall from her employment with the first respondent for the dominant reason that she was entitled to the benefit of the Shop, Distributive and Allied Employees Association- Victorian Shops Interim Award 2000 and the Shop, Distributive and Allied Employees Association- Victorian Shops Interim (Roping-in No.1) Award 2003.
b)On 7 March 2007 the second respondent contravened s.792(1)(a) of the Act by being a person involved in the first respondent’s contravention of s.792(1)(a) of the Act referred to in paragraph 1 within the meaning of that term in s.728(2) of the Act.
c)The Court orders by consent that the first respondent pay Ms Jeni Marshall (the employee) the amount of $12,581.70 (gross) less any lawful deductions within 28 days of these orders being made, by way of cheque made out to Ms Marshall.
The hearing on 22 August 2008 was a hearing as to penalty.
Penalty
The facts in this case show ignorance of the law by the second respondent and a careless disregard for the rights of the employee. It is no excuse for the second respondent to say that he was confused and did not know what he was doing. Ignorance of the law is no excuse. An employer dealing with an employee and their rights under the law has a responsibility to make enquiries to find out what the employee is entitled to, and what is required of the employer. It is no defence for an employer to obtain advice but say that it left him frustrated by things that he knew nothing about. An employee of the first respondent is responsible for all administration matters relating to employees.
The second respondent could at least have sought the advice of that employee. He did not. It would have been appropriate for that person to have been involved in the discussions with the employee.
To proceed to dismiss an employee while being frustrated at not knowing the legal position, shows a careless disregard for the employer’s obligations under the Act.
The maximum penalty provided by s.807(2) of the Act for an offence by a body corporate is 300 penalty units. Section 4AA of the Crimes Act 1914 (Cth) defines a “penalty unit” to be $110. The maximum penalty the Court can impose under s.807(1)(a) of the Act is therefore $33,000. The prosecution seeks a penalty in the range of 50-75% of that maximum.
It is submitted by the prosecutor that the Court should assess the level of seriousness of the breaches and take into account the contrition of the first respondent, to arrive at an assessment of seriousness of the breaches of award and of the Australian Fair Pay and Conditions Standard at 65-90%. It is submitted that the Court should then apply a further discount of 15% for the early admission of breach and other conduct in mitigation, for instance the second respondent’s lack of expertise in the area and the agreement reached for settlement of the employee’s other entitlements. This would reduce the range to 50-75%.
The submissions for the first respondent as to penalty can be summarised as follows:
b)The second respondent acted out of ignorance. This was not put as an excuse, but as a factor that should reduce penalty. The Court rejects that contention.
c)The second respondent cooperated with the authorities investigating the matter. The Court accepts that submission.
d)The second respondent was confused as to what award covered the employee. The Court does not accept that as a mitigating factor.
e)It is submitted that the second respondent was not responsible for these issues in the conduct of the business. He was the sole director and controlling mind of the business, with ultimate responsibility. The business employed a person to do administration in relation to employees. The failure to involve that person was careless.
f)It is submitted that the entitlement to the benefit of an individual instrument was the dominant but not the sole reason for dismissal. The Court does not regard that as a mitigating factor. It has been agreed what the dominant reason was.
g)It is submitted that the actions of the second respondent did not amount to threats of bullying. The Court views the relevant conduct as overbearing. Mr Moore accepted the words were “tense no doubt in robust exchanges” (Court transcript page 42 line 6).
h)It is submitted that there was no deliberate breach. That is accepted.
i)It is submitted that the Court has a discretion to not impose a penalty at all. The circumstances here call for a penalty.
j)It is submitted that a penalty in the lower range is appropriate. The Court assesses the penalty at 60% of the maximum for the reasons given below.
The Court accepts the submission of the prosecutor as to the seriousness of the breach. The Court does not accept that “lack of expertise” should result in a discount. The first respondent had access to an employee with expertise, but chose to go ahead without getting advice. The Court finds that in the circumstances here, including that there was no deliberate disregard for the law, and that there was an early admission of breach, a discount of 15% should be applied to the range of penalty sought reducing it to 50-75%. The second respondent is contrite about the breaches (Affidavit Andrew John Mackintosh, sworn 18 August 2008 paragraph 14).
The Court determines the appropriate penalty to be 60% because of the factors discussed above and because no previous breaches are alleged. The penalty is appropriate as a specific deterrent and a general deterrent.
The first respondent refers to the following passage from the decision of Justice Jessup in Wells v Locarno Management [2008] FCA 1034 at 23 as follows:
“The court is not bound by the agreement of the parties as to the level of penalty which should be imposed in a case such as the present. However, the court will not depart from an agreed figure merely because it might otherwise have been disposed to award some other figure. The predictability involved in the resolution of penal proceedings in accordance with a pre-trial agreement reached by the parties is something which should, as a matter of public policy, be regarded as beneficial. Only where the agreed penalty falls outside the permissible range should the court depart from the figure agreed by the parties. In this context, the permissible range is the range which would be permitted by the court, that is, a range within which the penalty is neither manifestly inadequate nor manifestly excessive. See NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285, 290-91; Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] ATPR 41-993, [53]; Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, 565; and Hills v Sutton (2007) 169 IR 327, 329.”
The Court was advised that the parties had not agreed that the range sought would be 50-75% (Court transcript page 26 line 5).
The decision in Wells is therefore of little relevance.
However the Court accepts that 50-75% is the appropriate range and fixes the penalty at 60%.
60% amounts to $19,800.00. That is an appropriate but not oppressive penalty on a business with 14 employees.
The Court orders the first respondent to pay the sum of $19,800.00 to the Court within 14 days, with that sum to be paid into Consolidated Revenue.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Turner FM
Associate: Danielle Keogh
Date: 24 October 2008
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