Buksh v Holmesglen Institute (No 2)

[2022] FedCFamC2G 295

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Buksh v Holmesglen Institute (No 2) [2022] FedCFamC2G 295

File number(s):	MLG 1802 of 2020
Judgment of:	JUDGE BURCHARDT
Date of judgment:	22 April 2022
Catchwords:	INDUSTRIAL LAW – Ex tempore ruling on admitted contraventions in respect of 1 week’s pay (underpayment) and 3 erroneous payslips – contraventions at absolute bottom end of the scale – declarations made as agreed and penalties of $1000 for each contravention imparted.
Legislation:	Fair Work Act 2009 (Cth)
Cases cited:	Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Division:	Division 2 General Federal Law
Number of paragraphs:	23
Date of hearing:	22 April 2022
Place:	Melbourne
The Applicant:	The Applicant was self-represented
Counsel for the Respondent:	Mr Denton
Solicitor for the Respondent:	MinterEllison

ORDERS

MLG 1802 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

BEN BUKSH

Applicant

AND:

HOLMESGLEN INSTITUTE

Respondent

ORDER MADE BY:	JUDGE BURCHARDT
DATE OF ORDER:	22 APRIL 2022

THE COURT DECLARES THAT:

1.The Respondent contravened s 50 of the Fair Work Act (“The Act”) by failing to pay the applicant $622.21 in wages and associated superannuation.

2.The Respondent contravened s 536 of the Act by providing three timeslips with erroneous dates of work.

3.The Respondent pay a pecuniary penalty of $1000 in respect of the two contraventions above and that the penalties be paid to the applicant. 

4.Respondent to file and serve submissions as to costs on or before 27 April 2022 limited to three pages. 

5.Applicant to file and serve submissions as to costs on or before 4 May 2022 limited to three pages.

6.The issue of costs be dealt with on the papers. 

THE COURT NOTES THAT:

A.These Orders have been amended pursuant to rule 17.05(2)(h) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT
Revised from Transcript

JUDGE BURCHARDT

1. On 11 March 2022, I gave judgment in this matter.  I dismissed Mr Buksh’s adverse action claims, but I noted that the respondent admitted some of the contraventions in relation to pay and payslips.  At paragraph 89, I said:

   So in conclusion, Mr Buksh’s claim of adverse action must comprehensively fail.  Nonetheless, this leaves the admitted contraventions in relation to the (in the scheme of things small) contraventions that are implicitly admitted by the admission of the underpayments.  The matter will need to be listed for consideration of what orders should be made as a result of those underpayments. 

2. The applicant’s original form 2 application did not in fact seek pecuniary penalties.  That box was not ticked in the form; only the box for compensation.  But the applicant’s statement of claim did raise underpayment of wages and of superannuation at paragraphs 14 and 15 of the statement of claim first filed.  The claims for relief sought in that statement of claim did include pecuniary penalties.  It is not necessary to traverse the subsequent amendments to the statement of claim, because the claim for underpayments and consequential relief is clearly before the Court.

3. The defence filed by the respondents at paragraph 7 admits first that the applicant transitioned from causal to part-time employment on 28 October 2019, that on 9 November 2019, the applicant was paid for work in the weekend of 26 October 2019 at part-time and not casual rates, leading to an underpayment of $622.21.  That sum was actually paid to the applicant on 15 February 2021, together with some other matters, including a consequential underpayment of superannuation, and another matter that emerged during the investigation that gave rise to those payments, which was not in fact at any stage part of this proceeding.

4. The parties have filed materials relevant to penalty pursuant to my orders at 11 March 2022.  On 29 March 2022, the applicant filed his submissions.  I have to say, and this obviously arises from his self-representation, that most of the matters he sought to refer to are irrelevant, and the submissions are hard at times to construe.  They appear to advance new claims which cannot be determined as part of this proceeding, which is obviously limited to those matters that have been pleaded and prosecuted.  I note that Mr Buksh sought penalties to be imposed at the highest level because of the trauma to him of the entire experience.  There is of course, as the respondent’s subsequent written submissions point out, no formal medical evidence to support any such assertion.

5. On 8 April 2022, the respondent filed its submissions.  They noted and agreed with the minor rectified underpayments, and noted the error in the three payslips which is presently being dealt with by the Court.  The written submissions agreed that there should be declaratory relief, and they referred to the explanations provided in the affidavit material of Patricia Farnes.  At paragraph 45 of her first affidavit, Ms Farnes relevantly stated:

   Mr Buksh has claimed that he was underpaid, as he was paid at the part time rate for a period of time when he was actually a casual employee. Upon investigation, unfortunately, I have discovered that, on one occasion, this is correct. A payroll error was made and Mr Buksh was inadvertently paid at the part time rate for some hours of work in his last period of casual employment. This was not intentional, and was due to confusion on the part of payroll at the time that Mr Buksh changed over to part time employment. The underpayment was rectified on 15 February 2021. 

6. It should be noted that there was no cross-examination or other challenge to that evidence during the trial. The respondent admits in the circumstances, it has contravened section 50 of the Act in relation to the wages, and section 536 in relation to the payslips. Ms Farnes’ affidavit at paragraph 49 relevantly stated:

   I am aware that Mr Buksh has also claimed that payslips issued to him were false or misleading. I do not agree that any payslip issued to Mr Buksh was false. He was always paid the amount stated on the payslip. However, during Mr Buksh's employment as a casual employee, there are payslips on which the dates to which the payment related are stated as being dates relating to the period in which payment was made, rather than the dates between the work for which the payment was being made was performed. While there was no intention to mislead, I accept that not stating the dates of the period in which the relevant work was performed on the payslip may be confusing to the recipient. 

7. I note that in the written submissions, the respondent sought there be no penalties, but noted that the maximum for each contravention was $63,000.  I do not otherwise propose to traverse the submissions in any great detail. Ms Farnes’ most recent affidavit of 8 April 2022 refers to the rectification of the underpayments on 15 February 2021, and points out that there had been no other such underpayments either to Mr Buksh or anyone else, and notes the size of the employer, having over 1000 employees.  It is put that the payslips error was minor, and did not occasion any actual loss.

8. In her affidavit at paragraph 12, Ms Farnes said:

   As outlined at paragraph 49 of my September 2021 Affidavit, I am aware that Mr Buksh claimed that payslips issued to him were false or misleading. Through the investigation which it conducted in early 2021, Holmesglen identified that the 'pay period' date (which refers to a date on which the relevant fortnight ends) in each of payslips which were issued to Mr Buksh whilst he was employed as a casual employee was incorrect as that date did not refer to the correct fortnight when the work was performed. I am aware that this is because casual employees are paid on a fortnightly basis for the work they have done in preceding fortnight and on the basis of timesheets they have completed. Full time and part time employees are also paid fortnightly but during the currency of each fortnight. .

9. At paragraph 14:

   There was no intention for the payslips which were provided to Mr Buksh to be misleading, however Holmesglen appreciates that not stating the dates of the period in which the relevant work was performed on the payslip may be confusing.

   And goes on, at paragraph 15:

   I am not aware of Holmesglen having received any complaints from any other casual employees about information in payslips given to them since the start of 2021. 

10. I note that paragraph 16, Ms Farnes said:

    Holmesglen is deeply sorry to Mr Buksh for the errors and regrets that the errors which I have outlined in this affidavit occurred. I am pleased that, to my knowledge, no further errors relating to underpayments of this kind have occurred since and can confirm that Holmesglen is ensuring that it continues to meet all of its obligations under the FW Act.

    And she goes on to depose that there is no prior contraventions so far as she is aware in respect of underpayments or payslip issues. 

11. On 19 April 2022, Mr Buksh filed a further response.  He sought that there be payment of any penalties imposed to him.  The rest of the materials, as I say, are largely irrelevant.  His affidavit of 20 April 2022 appears to seek to agitate new claims about sick leave, and possibly other matters.  It will be recalled that I said, during an earlier interlocutory ruling, that I did not propose to allow ambulatory claims to be made in this matter, and that remains the position.  If Mr Buksh has other claims or complaints, then he may pursue them as he is advised, but not as part of this proceeding. 

12. Accordingly, turning to the methodology to deal with the contraventions, first of all, the Court has to determine what particular contraventions have taken place. Plainly, there is one contravention in relation to the underpayment of wages, and one further contravention in the underpayment to superannuation arising from the non-payment of the wages themselves. And there are three further contraventions in relation to the payslips. However, this is a case, in my view, in which s 557 clearly applies by virtue of sub-section (2)(c) in relation to section 50, and in relation to sub-section (2)(o) in relation to section 536.

13. I propose to treat the underpayments of pay and superannuation as one contravention, because they arose as clearly concomitant on the course of conduct.  It was the underpayment of wages that necessarily led to the underpayment of superannuation.  Similarly, I propose to treat the three payslips as being one contravention, as they once again plainly arise out of the course of conduct.  It would be ridiculous to do otherwise. 

14. I turn now to what might be described as the purpose of this proceedings.  The High Court had made very clear in the very recent decision of Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 that the primary purpose of civil penalties is to deter both the perpetrator and others, and to set a price as it were sufficient to do so. The Court did, however, say at [46]-[48], the following, which I will read out in full:

    It does not follow, as the Full Court suggested and as the CFMMEU argued in this Court, from the rejection of the Full Court's "notion of proportionality" that s 546 must be taken to require the imposition of a penalty approaching the maximum in relation to any and every contravention by a recidivist offender. It is important to recall that an "appropriate" penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a "one‑off" result of inadvertence by the contravenor rather than the latest instance of the contravenor's pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law on the part of a union official, or where the official responsible for a deliberate breach has been disciplined by the union. In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.

    The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors of the kind adverted to by French J in CSR. For example, where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.

    It is not necessary to multiply examples further. It is sufficient to say that a court empowered by s 546 to impose an "appropriate" penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act.

15. Now, the sort of relevant factors to which the High Court referred in that passage include a number of matters which arise in this case.  First of all, these were minor infractions, and particularly so in the case of payslips.  Second, both the contraventions arose in circumstances of some confusion, because in the first case, Mr Buksh was transferring from causal employment to permanent part-time employment, and in respect of the payslips, this seems to have been just a systemic failure.

16. The underpayments have been rectified, although not that quickly, because the employment ceased in, I recall, late 2019, and the rectification was in 2021.  Remorse has been expressed through Ms Farnes.  I note that Mr Buksh’s written submissions take issue with that, but the fact is that that is deposed and before the Court.  This is a large employer with over 1000 employees with no prior contraventions alleged of any sort.  The error that has caused the underpayment and the difficulty with the payslips have both been addressed.

17. Having said that, of course, there is a public interest in large employers getting these things right, and that is something I am required to consider.  I am also required to consider specific deterrence.  In the context of the circumstances of this case, there is no particular weight to be given to specific deterrence. I have no doubt that Holmesglen has done what was required to be done to ensure that this will not happen again, and its record as an employer appears to suggest that it is generally compliant, in any event.

18. Once again, general deterrence is also of somewhat limited significance in this case.  These were minor transgressions arising out of no more than confusion or minor error.

19. Now, I should briefly refer to the parties’ oral submissions. Mr Buksh noted the underpayment in the operation of section 50 and the operation of section 536. He wanted to raise, as I say, other matters, but for the reasons given at the time, that was not appropriate.

20. Counsel for the respondent was essentially content to rely upon the written submissions filed, and noted that some of the written submissions were slightly overtaken by the High Court’s ruling in Pattinson.  I note that the submission as to the general irrelevance of Mr Buksh’s submission is one I uphold.  The Court has made its findings, and although there is a capacity to challenge them through appeal, that is the only way in which that can be done.  Any mention of settlement discussions plainly is inadmissible, and I have no regard to it. 

21. The Court therefore concludes that these were very minor contraventions.  There was one in relation to pay in one week, and the payslip matters were really, in the scheme of things, as trivial as they could be.  Declaratory relief has been agreed.  That does not make it automatic that the Court would do so.  The Court has to form a positive appreciation the declarations are appropriate and in the public interest. 

22. But in these circumstances, I think that they are;  that they will have the dual quality of illustrating the matters that have occurred, and through their publication to the extent necessary, which I have already said is fairly limited, will deter Holmesglen, certainly, and very probably, anyone else who may read it.  The penalties are at a maximum of $63,000 for the two contraventions, as I have grouped them.  I regard this matter as being at the absolute bottom end of the scale. 

23. There was some delay until February 2021.  There is nothing to suggest it was contumelious or deliberate.  I suspect it was simply inadvertent.  I have borne in mind the totality principle that requires the Court as a last step to step back and make sure that it regards the penalties to be imposed as appropriate to the conduct.  In my view, there should be a pecuniary penalty of $1000 for each contravention, and it should be paid to the applicant as is standard practice in these matters.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt.

Associate:

Dated:       28 April 2022