CHRISTY v BRADLEY

[2018] FCCA 3207

FEDERAL CIRCUIT COURT OF AUSTRALIA

CHRISTY v BRADLEY [2018] FCCA 3207

Catchwords:
INDUSTRIAL LAW – SMALL CLAIMS – Hair and Beauty Industry Award 2010 – consideration of applicant’s classification prior to apprenticeship – consideration of hours worked by applicant – underpayment of wages.

Legislation:

Fair Work Act 2009, s.548.

Fair Work Regulations 2009, reg.4.01

Hair and Beauty Industry Award 2010, cls.4.1, 17, 19

Applicant: EMILY CHRISTY

Respondent: TELISHA BRADLEY

File number: MLG 1200 of 2018

Judgment of: Judge Mercuri

Hearing date: 6 August 2018

Date of last submission: 6 August 2018

Delivered at: Melbourne

Delivered on: 9 November 2018

REPRESENTATION

Advocate for the applicant: In person

Solicitors for the applicant: None

Advocate for the respondent: In person

Solicitors for the respondent: None

ORDERS

1. The respondent pay to the applicant the sum of $3,417.58 in respect of unpaid wages to which she was entitled under the
   Hair and Beauty Industry Award 2010.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1200 of 2018

EMILY CHRISTY

Applicant

And

TELISHA BRADLEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant seeks orders for underpayment of wages in respect of her employment with the respondent over the period from 2 November 2016 to 5 April 2017. 

2. The application was brought in this court’s small claims jurisdiction and as such is regulated by the provisions in Division 3 of Part 4.1 of the Fair Work Act 2009(Cth) (“the FW Act”) and Regulation 4.01 of the
   Fair Work Regulations 2009 (Cth) (“the FW Regulations”).

3. Neither party was legally represented.

Background

1. The facts in this matter are not significantly in dispute. 

2. The respondent operates a hairdressing salon in Mount Martha. In 2016, the respondent employed the applicant to work in her salon commencing on 2 November 2016. Prior to her employment with the respondent, the applicant had commenced a hairdressing apprenticeship in Adelaide but had not completed it.

3. The parties entered into an Apprenticeship Training Contract
   (“the apprenticeship contract”) on 9 February 2017. Clause 3 of the apprenticeship contract states that the commencement date of the apprenticeship was 4 January 2017. Clause 5 of the apprenticeship contract provided that the apprenticeship was subject to a three month probation period and clause 4 provided that the nominal term of the training contract was 36 months.

4. In response to the following question at clause 40 of the apprenticeship contract:

   40     Prior to commencing THIS Apprenticeship/Traineeship, has the apprentice/trainee work for, or been hosted by the employer/host employer?

   the parties ticked ‘yes’.

5. The parties then indicated that the previous employment commenced on 2 November 2016 and concluded on 3 January 2017, that it was full time employment for 38 hours per week. In response to the question ‘nature of employment’, the parties said ‘normal employment relationship’.

6. The parties also completed a form entitled ‘Request for additional/less time credit on apprentice training contract’. In this form, the parties requested a 12 month credit on the duration of the applicant’s apprenticeship by reference to the applicant’s prior apprentice experience in Adelaide. 

7. Both parties agree that the applicant was engaged as a second year apprentice from 4 January 2017. One of the issues in dispute between the parties is the nature of the applicant’s employment prior to that date. 

8. The applicant’s employment was terminated for reasons of redundancy by letter dated 29 March 2017 with the employment coming to an end on 5 April 2017.

9. After the applicant ceased employment, she raised concerns about underpayment of wages with the respondent. It is common ground that following these discussions, the respondent, through her solicitor, acknowledged that there had been a ‘mistake’ in relation to the applicant’s pay rate; namely, that the applicant was paid at the rate of a first year apprentice rather than at the rate of a second year apprentice. 

10. In correspondence from the respondent’s solicitor to the applicant dated 11 May 2017, the respondent conceded that the applicant had worked
    672.59 hours and had been underpaid approximately
    $807.11 (gross) which, after tax resulted in a net figure of $552.87. This amount was paid to the applicant and the applicant concedes as much.

Issues

1. The following issues arise for determination in this matter:

   a)the applicant’s proper classification for the period from
   2 November 2016 to 3 January 2017. The applicant says that she ought to have been paid as a salon assistant whereas the respondent says that the applicant was, at all times employed as a second year apprentice (“the classification issue”); and 

   b)the number of hours worked by the applicant each week. The respondent states that the applicant regularly did not attend for work when required and therefore although she was employed on a full time basis, she did not feel that it was appropriate to pay her for those times when she did not attend for work. The applicant says that overall she did work at least 38 hours per week (“the hours of work issue”).

The classification issue

1. The respondent’s position is that she runs a small business and had no intention of employing a ‘salon assistant’. Rather, she said that as her business was growing, she was looking to recruit a hairdresser or possibly someone who was close to completing their hairdressing apprenticeship.

2. She also stated that although the applicant did not have as much experience as she had hoped, she seemed keen to complete her apprenticeship and had some experience. It was on this basis that she had employed the applicant, in her mind, as an apprentice. The respondent also gave evidence that she did not enter into an apprenticeship contract immediately as the applicant had a number of personal issues going on at the time, including her wedding and some health issues. 

3. The applicant states that she was keen to enter into an apprenticeship contract as soon as possible. She says that she frequently asked the respondent as to when they would do so and that it was her pressing the matter which resulted in the parties ultimately entering into the apprenticeship contract in February 2017. 

4. The applicant otherwise relies upon the terms of the apprenticeship contract itself which states that the apprenticeship did not commence until 4 January 2017. She says that she was employed before that and if she was not employed as an apprentice, she was employed as a full time employee. In those circumstances, the proper classification under the Hair and Beauty Industry Award 2010 (“the Award”), which applies to her work is that of a salon assistant.

5. The Award which regulates the applicant’s employment relevantly provides:

   10.1  Employees under this award will be employed in one of the following categories:

   - full-time employees;

   - part-time employees; or

   - casual employees.

   10.2  At the time of engagement an employer will inform each employee of the terms of their engagement and in particular whether they are to be full-time, part-time or casual.

   11.    A full-time employee is an employee who is engaged to work an average of 38 hours per week.

   …

   16.1  All employees covered by this award must be classified according to the structure set out in Schedule B.  Employers must advise their employees in writing of their classification and of any changes to their classification.

   16.2  The classification by the employer must be according to the skill level or levels required to be exercised by the employee in order to carry out the principal functions of the employment as determined by the employer.

6. Schedule B sets out the various classifications and descriptors. They are fairly brief. Relevantly, a Level 1 employee is defined to mean a receptionist or salon assistant. Level 3 is a hairdresser who holds a Certificate III in Hairdressing (or equivalent) and Level 5 is a hairdresser who holds a Certificate IV (or equivalent) or a trichologist who is a hairdresser and holds a Certificate IV in Trichology (or equivalent).

7. Clause 17 of the Award then prescribes minimum weekly rates of pay based on the classification level. Clause 19 of the Award prescribes the minimum award rates for apprentices. Relevantly, it provides that for an apprentice who had not completed year 12 (as was the case for the applicant), the minimum award rate of pay for a first year was 50% of the standard rate and for a second year, 60% of the standard rate.

8. The ‘standard rate’ is defined as the minimum weekly wage for a
   Level 3 employee in clause 17 of the Award. 

9. The applicant provided a copy of the Fair Work Ombudsman’s pay guide for the Award for the period from 1 July 2016. The weekly pay rate for a Level 1 employee at the relevant time was $738.80 (and an hourly rate of $19.44). The pay rate for work on a Saturday for a Level 1 employee is $25.86. The weekly rate for a Level 3 employee at the relevant time was $783.80. Applying clause 19 of the Award to these rates results in a weekly rate of $391.90 (and an hourly rate of $10.31) for a first year apprentice and a weekly rate of $470.28 (and an hourly rate of $12.37) for a second year apprentice. 

10. The question remains as to what the applicant’s classification was for the period from 2 November 2016 until 3 January 2017. Clause 4.1 of the Award relevantly states:

    This award covers employers throughout Australia in the hair and beauty industry and their employees in the classifications listed in clause 17. 

11. The respondent clearly operates in the hair and beauty industry; the question is whether the applicant was employed as a salon assistant as claimed.

12. The respondent says that the applicant was employed as an apprentice from 2 November 2016. She points to the fact that the work that she did was not consistent with that of a salon assistant. In particular, she points to the fact that the applicant undertook colour work for clients of the salon and that this is not consistent with the work of a salon assistant. 

13. The respondent has put correspondence and a statutory declaration before this court from clients who have stated that in the period before Christmas 2016, the applicant:

    a)coloured their hair, work which the respondent says is not work of a salon assistant; and

    b)discussed how happy she was to be working as an apprentice with the respondent.

14. Whilst it is the case that this court is not bound by the rules of evidence in exercising its small claims jurisdiction, this material is of limited value in determining the issues in dispute. 

15. The applicant says that her apprenticeship did not commence until
    4 January 2017 and that prior to that time, she was employed as a salon assistant. Unfortunately, the Award does not define the role of a salon assistant. What is clear however, is that Level 1 is the lowest classification level provided for in the Award and no training or qualifications are required for that role. The fact that the applicant may have been required to undertake some colour work under the respondent’s supervision is not determinative of whether or not she was employed as a salon assistant. 

16. The respondent also relies on a document which is entitled
    ‘Salon Assistant’.  This appears to be a ‘job description’ for a particular role. This document is not determinative of the limitation on the type of work performed by a salon assistant under the Award. 

17. The applicant’s evidence was that she provided services within the salon generally, including washing clients’ hair, assisting with the phones and so on. 

18. I find in the applicant’s favour in this regard and am satisfied on the basis of the evidence before me that the applicant’s apprenticeship did not start before 4 January 2017. I am also satisfied that the work undertaken by the applicant could fall within the description of a salon assistant, being the lowest classification otherwise permitted under the Award.

19. It was clearly the parties’ intention that the applicant would be employed as an apprentice. However, until they completed the apprenticeship contract, she was not an apprentice and, importantly, the employer was not entitled to pay her the reduced rate payable to an apprentice under the Award.

20. The Award requires all employees to be employed in a classification specified in Schedule B.  The lowest classification is that of a salon assistant. 

21. I find that until the commencement of her apprenticeship on 4 January 2017, the applicant was employed as a salon assistant and her claim for unpaid wages for that period is allowed.

Hours of work issue

1. Having determined the rate of pay which the applicant ought to have received, the second issue which arises for consideration is the number of hours that she worked over the relevant period. 

2. The applicant has filed payslips which she received from the respondent setting out what she was paid and the hours of work. The respondent conceded that these payslips were not provided to the applicant at the time but were ‘created later’. The respondent gave evidence that she was having some issues with her bookkeeping and accounting and therefore the applicant did not receive the payslips on time. Indeed, the dates on the payslips are not consistent with the dates that the applicant was actually employed, with some pre-dating her employment. 

3. The respondent did not produce any evidence to confirm the actual hours she alleges the applicant worked. The applicant’s evidence is that the salon was open for extended hours each day and that whilst there were times when she came in late or left work early, on average she generally worked more than 38 hours per week. 

4. The applicant also gave evidence that there were occasions when the respondent would not have any work for her and would simply send her home and not pay her for the time.

5. For her part, the respondent states that the applicant had a range of personal issues at the time and that she only paid her for the hours that she actually worked. She said:

   Emily took a lot of time off. She was quite unwell for most of the time she worked for me.  So, as a small business owner, I can’t pay someone to work 38 hours if they’re not there.  The only time I ever sent her home was if she was significantly unwell and wasn’t able to work.[1]

   [1] Transcript page 14 at lines 11 to 16.

6. The applicant said:

   I only ever took off time when I had worked over the 38 hours, or if I knew I had 38 hours or, like, there was the 38 hours of work in the salon that – booked in that week, I knew that I was going to get that, I would take time off or say, “look I know” – like ‘Can I come in a little bit later?’ So I generally worked 38 hours most weeks, and if over that, then I would ask for a little bit of time off.[2]

   [2] Transcript page 23 at lines 1 to 5.

7. On the basis of the evidence before me, I prefer the evidence of the applicant with respect to her hours of work.

8. The applicant was employed on a full time basis; that is, 38 hours per week. The respondent’s records, such as they are, are incomplete and it is unclear why they do not relate to the actual period during which the applicant was employed. There is no documentation provided in support of the respondent’s claim that the applicant was unwell and was taking additional time off due to illness after she had exhausted her sick leave entitlements. Whilst I accept that the respondent is a small business owner, she is nonetheless required to keep appropriate employee records.  Had she done so, it would have made the task in determining this issue more straightforward. 

9. I have also had regard to the applicant’s evidence, which I prefer, that she worked long hours on some days and therefore had the flexibility to take some time off in lieu of those long days on other days. I accept her evidence that she worked on average 38 hours per week.

Conclusion

1. On this basis, I therefore find that the applicant was entitled to be paid $738.80 per week for the period from 2 November 2016 to
   3 January 2017.

2. On the basis of the payslips provided to her, the applicant claims that during that period she worked 185.5 hours during the week and 46 hours on a Saturday and based on her bank account reconciliations, she was in fact paid $2,625.73. On the basis of the pay scales for the relevant period, I find that the applicant was underpaid in the sum of $2,169.95.

3. I also find that for the period from 4 January 2017 to
   5 April 2017, in the absence of any evidence that she was not ready willing and able to perform her duties for the full 38 hour week for which she was engaged, the applicant should have received 13 weeks’ pay at the weekly rate of $469.98 being the second year apprentice rate of pay.  That produces a total of $6,109.74.  I accept the applicant’s evidence that she was paid $4,055 for that period leaving a shortfall of $2,054.74. 

4. Following some discussions between the parties, the respondent paid the applicant the gross sum of $807.11 (less tax of $254.24). On the basis that the tax has been withheld on the applicant’s account, the full gross amount should be deducted from the amount the respondent owes.

5. I therefore order that the respondent pay the applicant the sum of $3,417.58 in lieu of underpayment of wages to which the applicant is entitled under the Award.

I certify that the preceding I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Mercuri

Date:     9 November 2018