Clothing & Allied Trades Union of Australia v Pedita Australia Pty Ltd

[1986] FCA 574

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY No. V14 of 1986

)

DIVISION	INDUSTRIAL	)
B E T W E E N :

THE CLOTHING AND

ALLIED TRADES UNION

OF AUSTRALIA

A N D :

FEDITA AUSTRALIA PTY.

LTD.

8 DECEMBER, 1986 KEELY J .

REASONS FOR JUDI;MENT RE PENALTY

On It) November 1986 the court decided. under S. 119 or

the Conciliation and Arbitration Act 1904 cthe Act), that the

respondent had breached the Ulothlng Trades cBradmll1

Industries Limited Group) Job Protection Award 1983 cthe

award) in relatlon to its termlnation, on S March 1985. of

the employment of Mrs. Joyce Legg,who was a member ot the

applicant at all material times. These reasons for ~udgment

should be read in the light	of	the reasons delivered on	18
November 1986.

At the hearing the parties had jolntly requested that

the further hearing or the application be ad~ourned until a

date to be tixed atter the court had declaed whether the

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2 .

award had been breached by the respondent. That request was in order to enable them to consider the court's reasons f-or decision and If the court there found that there had been a

breach O t the award, to have discussions as to what was the

amount to which Mrs. Legg was entitled under the award (see

S. 1 1 9 t 3 ) of the Act): turther, to address submissions to the

court on the question of penalty. The adlourned hearing took

place on 3 December 1986.

On that date the partles were in agreement that, on

the basis of the court's finding that the award had teen

breached, the amount to which Mrs. Legg was entitled under

the award was the sum of $2,666.85 and that the approprlate deduction by the respondent for taxatlon on that amount was

$133.42; they were also agreed that, deducting the latter

figure from the former, it was appropriate that $2.533.43 be

the amount to be ordered by the court under S. 119(31 of the

Act. The court is satisried that Mrs. Legg has not been paid

an amount to which she is entitled under the award, namely

$2.666.85 but the order is for the respondent to pay to Mrs.

Joyce Legg the sum ot $2,533.43; that is the amount agreed

upon by the parties as being appropriate. based upon the

proposed deductlon or $133.4L for taxation.

The respondent has breached two clauses of the award:

namely, (1) a breach of clause 5, conslsting of a tallure to

give Mrs. Legg the approprlate notlce of termination and

a failure to pay her "!or the period equal to the difference

between tour weeks' notice and the perlod of notice actually

given" and 1 2 ) a breach of clause 9 m tailing to pay to her

the appropriate "severance pay". Although there have been

breaches of two different clauses ot the award, Mr. Hinkley.

of counsel, on behalf of the applicant. accepted that they

arose out of a course of conduct by the respondent and should

be treated as constituting a single breach of the award for

the purpose of determining the question of penalty (cp. S.

1 1 9 ( 1 A ) or the Act).

Hr. Ginnane. of counsel. on behalf of the respondent,

submitted that the applicant should not be heard on the

question of penalty. After hearing short argument from both

parties on th&t question I decided to (1) hear the respondent

a3 to all matters which it desired to advance in mltigation

of penalty; ( 2 ) hear any submlssions by the applicant

directing the court's attention to any findings o t the

court. or any evidence before the court. which in it3

submission were relevant to any of the respondent's

submissions: 1 3 ) hear the respondent's counsel In reply to

any such submlsslons.

The appllcant's counsel was informed that he could

seek to put any other submlssions relevant to penalty but. In

order to do so. would have to put submlsslons In answer to

Mr. Glnnane's suhmlsslon that an appllcant under S. 113 does

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4.

not have the right to advance such submissions. As that

question has not been fully debated I have not tormed any

opinion on it. Matters which mlght be relevant to that

question, which were reterred to by me during counsel's

submission on this question, Included the question 01 whether

an applicant under S. 119 would have a right of appeal

against the amount or the penalty imposed by the court. It

might also be relevant to have regard to legislative changes

In recent years as to the right of a prosecutor to appeal

against the leniency of a sentence. It is also possible that

some assistance may be gained by reference to Trade Practices

Commission v Madad Ptv. Ltd. (1979) 41) FLR 453 at 456-7.

That decision was, of course, dealing with a somewhat

different question namely the placlnu of evidence before the

court as to facts relevant to penalty - as to which see now

Order 49 Rule 5 of the Federal Court Rules.

Mr. Glnnane advanced rour matters In mitigation. I

accept his submission that the court, in considering the

amount of the penalty in the present case, should not attach

any welght to the amount of the underpayment: he referred to

the fact that the amount to which Mrs. Legg was entitled had

been very significantly increased. arter the date of the

dismissal, as a result of a variation of the award made by

Conciliation the Arbitration and Commission with

retrospective effect to a date before the dismissal. In any

event the amount payable for severance pay would not

5.

necessarily be a relevant factor in considering the question

of the penalty to be imposed. It would not seem appropriate

to treat a breach in respect of an employee with a shorter

period of service (to whom a smaller amount of severance pay

was due) as being less serious than a breach in respect of a

longer serving employee. On the other hand It may be a

relevant factor if the amount is large and the employee has

had to wait for the payment of it for a long perlod of time -

particularly if the court found that the employer was wholly

or partly to blame for the delay. I have not formed any

concluded view on those aspects, which	do	not require a
decision in the present case.

I also accept Mr. Ginnane’s submission that it is

proper to take into account, In mitigation of penalty, the

fact that there is no evidence that the respondent, which has

operated a business since 1972 and employs a substantial

number of employees. has at any time prevlously breached any

award.

Mr. Ginnane also sought to rely upon the fact that the

award provision, which was made in 1983, had not been in

operation tor a lengthy perlod 01 time at the date of the

dlsmlssals. Allied to thls submlssion. and of greater

significance, was the tact (which I accept) that at the time

of the dismissal the respondent was unaware or the existence

of the award and accordingly the breaches were not deliberate

6.

breaches of the award. It should be understood, however,

that it would be quite wrong to think that an employer, which

had failed to take the necessary steps to ascertain what its

obligations were under all relevant awards, would, as a

result of that failure, be In a more favourable position than

an employer which had taken those steps and had been informed

as to what its obligations were. The absence of knowledge

does not in any way excuse the action of the respondent in

the present proceedings but it is relevant as showing the

absence of any deliberate defiance of the award; had such

defiance occurred, it would have supported the imposition of

a substantially greater penalty than that which would

otherwise be appropriate.

I have also taken into account the fact, relied upon

by Mr. Ginnane, that the respondent co-operated In ensuring

that these proceedings were not prolonged by evidence and

argument as to the question of the transmission of the

business to the respondent in 1984.

It should be added that I Indicated during the

hearing that I did not accept two submissions advanced by the

applicant. The first was that, after the dismissal. there

had been an attempted "cover-up" by the respondent. or by one

of its otficers, as to the reason xor the dismissal. The

second submission was that. by reason of the terms of the

respondent's letter dated 26 October 1984. oifering Mrs. Legg

l .

employment “under the same terms and conditions as you were

employed by Exacto Knitwear Pty. Ltd. . . . ‘ I , the respondent

had represented to Mrs. Leqg, that it was aware of all of the

terms of her previous employment, including the terms of the

1983 award. Both of those submissions are re~ected. An

alternative submission put by Mr. Hinkley was that the

respondent should have known of the existence of the award

and of its obligations under it. That matter has been dealt

with earlier in considering Mr. Ginnane’s submissions.

The maximum penalty is $1,000. I agree, with respect, with the principle stated by Ymithers and Evatt JJ., In the

Australian Industrial Court, in North Television v

Corporation Ltd. (1976) 11 ALR 599 at 612:-

“The provisions of S 119 empowering the

court to impose a penalty for breach or

non-observance of an award are directed to

ensure, or at least promote, obedience ot

awards, The procedure is not designed

merely as a means by which an employee may

sue for money due to him under an award.

No doubt the court has a discretion to

retrain from imposing a penalty in respect

of the breach of an award and in thls

connection the circumstances are to be

considered. It should remembered, be

however, that it is undesirable that an

employer should be encouraged to act on the

basis that if he fails to obey an award the

employee may not take action against him.

and that if he does, he, the employer, wlll

probably suffer no more than	if	he	had
obeyed the award.

8 .

In all the circum .stances ot the present c ase,

including the findings I have made on the evidence, in my

opinion a penalty of $250 is appropriate.

The applicant also applied, under S. 120 of the Act,

for an order that the amount of the penalty be paid to the

applicant. That application was not consented to by the respondent but In my opinion it is proper to grant it and accordingly an order will be made that the whole of the penalty of $250 be paid by the respondent to the Clothing and

Allied Trades Union of Australia.

A stay of 21 days of any orders made was sought and

not opposed and accordingly the execution	of the orders made
is stayed until 29 December 1986.

9.

Dates of Hearing : 3 December, 1986

Counsel for the Applicant	: Mr. R. W. Hlnkley
Solicitors for the Applicant	: Slater L Gordon
Counsel for the Respondent	: Mr. T. Ginnane
Solicitors for the Respondent	: Freehills