Construction, Forestry, Mining and Energy Union v RGN Mining Services Pty Ltd
[2017] FCCA 1546
•5 July 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION & ORS v RGN MINING SERVICES PTY LTD & ANOR | [2017] FCCA 1546 |
| Catchwords: INDUSTRIAL LAW – Contraventions of Fair Work Act 2009 (Cth) in relation to statutory and award entitlements of employees by corporate employer now in liquidation – liability of director – declaratory and other relief. |
| Legislation: Fair Work Act 2009 (Cth), ss.44, 45, 50, 117, 119, 323, 539, 545, 550, 567(c) Federal Circuit Court of Australia Act 1999 (Cth), s.16 |
| Cases cited: Amcor Limited v Construction, Forestry, Mining and Energy Union & Ors (2005) 222 CLR 241; [2005] HCA 10 Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878 Australian Building and Construction Commissioner v Parker [2017] FCA 564 |
| First Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Applicant: | BRADLEY PAUL BOYLING |
| Third Applicant: | JASON SYDNEY BRETT |
| First Respondent: | RGN MINING SERVICES PTY LTD |
| Second Respondent: | RONALD GODFREY NIELSEN |
| File Number: | SYG 1566 of 2016 |
| Judgment of: | Judge Barnes |
| Hearing date: | 14 December 2016 |
| Date of Last Submission: | 15 June 2017 |
| Delivered at: | Sydney |
| Delivered on: | 5 July 2017 |
REPRESENTATION
| Solicitors for the Applicants: | Mr Walkaden |
| The Respondents: | No Appearance |
ORDERS
IT IS DECLARED THAT:
The First Respondent contravened s.323 of the Fair Work Act 2009 (Cth) (the Act) by failing to meet the Second Applicant’s contractual entitlement to two months written notice of termination of his employment or payment in lieu thereof.
The First Respondent contravened s.45 of the Act by failing to pay the Second Applicant redundancy pay as required by clause 14 of the Black Coal Mining Industry Award 2010 (the Award).
The First Respondent contravened s.45 of the Act in that it failed to credit the Second Applicant with personal/carer’s leave as required by clause 26.2 of the Award.
The First Respondent contravened s.45 of the Act in that it contravened clause 13.5(b)(i) of the Award by failing to pay to the Second Applicant his untaken personal/carer’s leave on termination of his employment.
The First Respondent contravened s.50 of the Act in that it contravened clause 9.12 of the RGN Mining Services Pty Ltd and Western District Contractors Enterprise Agreement 2012 by failing to provide the Third Applicant with 5 weeks’ notice of termination of his employment or payment in lieu thereof.
The Second Respondent was involved in each of the contraventions of the Act referred to in declarations 1 to 5 within the meaning of s.550 of the Act.
IT IS ORDERED THAT:
The Applicants have leave to file and serve a Further Amended Statement of Claim on or before 21 July 2017.
Pursuant to s.545 of the Act the Second Respondent pay compensation in the amount of $55,861.01 to the Second Applicant for loss arising from the contraventions of the Act referred to in declarations 1 to 4 above and interest thereon.
Pursuant to s.545 of the Act the Second Respondent pay compensation in the amount of $1,393.12 to the Third Applicant for loss arising from the contravention of the Act referred to in declaration 5 above and interest thereon.
The application for orders that penalties be imposed on the Second Respondent to be paid to the First Applicant be listed for hearing on a date to be fixed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1566 of 2016
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
First Applicant
| BRADLEY PAUL BOYLING |
Second Applicant
| JASON SYDNEY BRETT |
Third Applicant
And
| RGN MINING SERVICES PTY LTD |
First Respondent
| RONALD GODFREY NIELSEN |
Second Respondent
REASONS FOR JUDGMENT
A hearing in default of any appearance by either Respondent
On 21 June 2016 the Construction, Forestry, Mining and Energy Union (the CFMEU), Mr Boyling and Mr Brett commenced proceedings under the Fair Work Act 2009 (the FW Act) against RGN Mining Services Pty Ltd (RGN) and Ronald Godfrey Nielsen (Mr Nielsen). In the Statement of Claim filed in support of the application the Applicants sought various declarations that the First Respondent had contravened provisions of the FW Act and that the Second Respondent was involved in such contraventions. Orders were sought that the First and Second Respondents pay compensation to the Second and Third Applicants and that penalties should be imposed on each of the Respondents, to be paid to the CFMEU.
It subsequently emerged that the First Respondent had gone into liquidation on 19 March 2016. A copy of the Australian Securities and Investments Commission Form 505 evidencing the appointment of a liquidator is in evidence.
In these circumstances the Applicants maintain their application under s.545 of the FW Act for declarations in relation to contraventions of the FW Act by RGN on the basis that they seek declarations that Mr Nielsen was involved in such contraventions within s.550 of the FW Act (as detailed in an Amended Statement of Claim and clarified in post-hearing submissions) and orders for compensation and that penalties be imposed on him under s.546 of the FW Act.
There is evidence, in an affidavit sworn by Gavin Bellamy on 1 August 2016, as to personal service on Mr Nielsen of the Statement of Claim and application on 14 July 2016 in accordance with r.6.06 of the Federal Circuit Court Rules 1999 (Cth) (the FCCA Rules). Mr Nielsen did not attend the first scheduled directions hearing on 19 July 2016. The matter was adjourned until 9 August 2016. On that date I made orders that Mr Nielsen file a response and a defence by 30 August 2016 and for the filing of affidavit evidence. The matter was listed for hearing on 16 November 2016. I noted in those orders that if Mr Nielsen did not comply with the orders and/or failed to appear on 16 November 2016 the hearing may proceed in his absence.
As attested to in the affidavit of Gavin Bellamy sworn on 21 September 2016, on 19 September 2016 Mr Nielsen was also served personally with a copy of the orders made on 9 August 2016. As attested to in the affidavit of Katrina Cutajar sworn on 15 November 2016 on 27 September 2016 Mr Nielsen was served by mail with copies of the affidavits on which the Applicants rely in these proceedings.
There was no appearance by or on behalf of Mr Nielsen on 16 November 2016, the date on which the hearing commenced.
Mr Nielsen did not file any documents in these proceedings. He failed to appear on any of the dates the matter was listed, including when the matter was heard. He was served personally with the application and subsequent orders. He is in default under the FCCA Rules, as he has not filed a notice of address for service, response or defence as required.
The Applicants sought to proceed under r.13.03C(1)(e) of the FCCA Rules which provides that if a party to a proceeding is absent from a hearing the Court may proceed with the hearing generally or in relation to any claim for relief in the proceeding. It was proposed that if Mr Nielsen was found to have been involved in any contravention of the FW Act, the hearing of the application for penalties to be imposed on him would be listed at a later date.
I was satisfied that Mr Nielsen was aware of the proceedings and of the hearing date. He has taken no part in the proceedings at all. In these circumstances I was satisfied that it was appropriate to proceed with the hearing in his absence, as proposed by the Applicants and as provided for in r.13.03C(1)(e) of the FCCA Rules.
Declaratory Relief
The Applicants now seek several declarations in relation to RGN and Mr Nielsen, as well as orders for compensation and the imposition of penalties on Mr Nielsen. The Court has power (in particular under s.16 of the Federal Circuit Court of Australia Act 1999 (Cth) and s.567(c) of the FW Act) to make declarations that particular persons have engaged in conduct that contravenes the FW Act. I have borne in mind that a declaration is a discretionary remedy and have had regard to all the circumstances, including utility and public interest considerations and whether the circumstances call for the marking of the Court’s disapproval of the contravening conduct (as discussed in Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) [1993] FCA 83; (1993) 41 FCR 89 at 99-100 and Australian Competition and Consumer Commission v Powerballwin.com.au Pty Ltd [2010] FCA 378 at [40]-[43]).
In the circumstances of this case I am satisfied that it is appropriate to grant declaratory relief in relation to contraventions of the FW Act by the RGN and Mr Nielsen despite the fact that RGN is in liquidation and the absence of Mr Nielsen from these proceedings. Mr Nielsen had an interest in opposing the declaratory and other relief sought, but must be seen as having chosen not to do so (see Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56). For the reasons that follow, I am satisfied as to various contraventions of the FW Act by RGN in which Mr Nielsen was knowingly involved under s.550 of the FW Act. It is appropriate to make declarations setting out the basis of the liability of Mr Nielsen for contraventions giving rise to his liability to compensate the Second and Third Applicants and the potential imposition of penalties on him. There is also a wider public interest in the making of such declarations by the Court marking disapproval of contraventions of legislation such as the FW Act.
The Claims and Evidence
During the hearing an issue arose as to whether a failure to meet a safety net contractual entitlement as defined in the FW Act amounted to a contravention of a civil remedy provision under that Act. The original Statement of Claim had sought a declaration that Mr Nielsen was involved in contraventions by RGN of various safety net contractual entitlements. After an adjournment and the preparation of written submissions, the Applicants acknowledged that s.550 of the FW Act applied only to involvement in a contravention of a civil remedy provision and that a breach of a safety net contractual entitlement did not, in itself, amount to contravention of a civil remedy provision (see Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878 at [23]).
The Applicants sought, and were granted, leave to amend the Statement of Claim to, in effect, reformulate the asserted contraventions of safety net contractual entitlements as asserted contraventions of s.323 of the FW Act (which is a civil remedy provision). The hearing then proceeded on the basis that an Amended Statement of Claim would be filed and served. An Amended Statement of Claim was filed on 12 April 2017. At my request, the Applicants subsequently provided further written submissions addressing the basis on which declarations were sought in relation to a failure to pay the Second Applicant redundancy pay.
In addition to the Amended Statement of Claim, the Applicants rely on affidavits of the Second Applicant, Mr Boyling, and the Third Applicant, Mr Brett, each sworn on 26 September 2016 and an affidavit of Graeme Keith Osborne, a District Vice President in the CFMEU Mining and Energy Division, South Western District Branch, sworn on 23 September 2016. Also tendered and relied upon was a copy of the Black Coal Mining Industry Award 2010. The Applicants filed written submissions, elaborated on in oral submissions.
Background Findings
For the reasons that follow, I am satisfied on the evidence before the Court that RGN contravened the FW Act in several respects and that Mr Nielsen was involved in those contraventions. With one exception, I am satisfied that it is appropriate to make the orders sought by the Applicants, including orders for payment of compensation by Mr Nielsen. The exception relates to a claim raised in post-hearing written submissions as to a contravention of s.323 of the FW Act in relation to the failure to pay the Mr Boyling redundancy pay. As discussed below, I propose to give the Applicants the opportunity to address my concerns in that respect before determining whether the declaration sought should also be made. It is appropriate to consider the application for the imposition of penalties on Mr Nielsen at a later date.
I am satisfied on the unchallenged evidence before the Court of the factual matters described below.
The First Applicant (CFMEU) was at all relevant times an organisation registered pursuant to the Fair Work (Registered Organisation) Act 2009 (Cth) and an employee organisation within the meaning of the FW Act entitled to represent the industrial interests of the Second and Third Applicants (who were at all relevant times members of the CFMEU).
RGN was at all material times when the events in issue in these proceedings occurred a company duly incorporated in Australia and a national system employer within the meaning of the FW Act.
RGN was a labour hire company which supplied labour to a number of coal mines to supplement the workforce of the mine owner/operator. Mr Nielsen was the sole director of RGN at all relevant times. Both Mr Boyling and Mr Brett were employed by RGN.
Prior to his employment with RGN, Mr Boyling had been employed for 10 years as site supervisor by another labour hire company operating in the coal mining industry at the Angus Place mine. In about late December 2011 Mr Nielsen told Mr Boyling that he had tendered for the secondary support work at the Angus Place mine and also another mine site and that if he won the work he would like Mr Boyling to “come on board” as site supervisor at the Angus Place mine. In about February 2012 Mr Nielsen told Mr Boyling that he had “won the work” and “would like to offer [him] the job.” Mr Nielsen orally offered Mr Boyling the position, to start on 16 April 2012, on the same terms and conditions as his previous employment. Mr Nielsen also stated that he would have a contract prepared and sent to Mr Boyling.
Mr Boyling commenced employment with RGN on 16 April 2012. I accept his evidence in relation to the basis on which he was employed. He was employed in the position of a site supervisor working at the Angus Place mine which was owned and operated by Centennial Coal Pty Ltd. The role he performed was the same as the role he had performed for his previous employer. Mr Boyling was the most senior RGN employee working at the Angus Place mine on a day-to-day basis.
On about 27 April 2012 Mr Boyling received a copy of a document described as an Employment Agreement in which RGN and Mr Boyling were named as the parties. It included terms and conditions specific to Mr Boyling, including his role, place of work, days and hours of work, and salary and benefits. It was dated 16 April 2012. As Mr Boyling explained in his affidavit, while neither party ever signed the contract “[d]uring the course of my employment, I worked to, and was paid as per the terms of the Contract”. At the foot of each page the Agreement was described as having been “approved” by Ron Nielsen.
Other than these discussions between Mr Nielsen and Mr Boyling and the provision of the unsigned contract to Mr Boyling, there was no further discussion with, or information provided to, Mr Boyling about the terms of his employment, by Mr Nielsen or by anyone else on behalf of RGN. Mr Boyling gave evidence that specified aspects of his employment were in accordance with particular terms of the Employment Agreement. The duties he performed were as set out at Item 4 in Schedule 1 to the Employment Agreement. As discussed below, the Black Coal Mining Industry Award 2010 (the Award) also applied to Mr Boyling’s employment by RGN.
Mr Boyling also gave unchallenged evidence, which I accept, as to the circumstances in which his employment with RGN ended. He explained that by 1 May 2014 he had been made aware that RGN would shortly cease to perform the secondary support work at the Angus Place mine. On 1 May 2014 he approached his immediate supervisor, Mr Carl Day, a manager employed by RGN, and asked what was going to happen to him when RGN finished up at Angus Place. Mr Day told Mr Boyling that he would be “finishing up with RGN”.
At that point in the conversation of 1 May 2014 Mr Day handed Mr Boyling a letter on RGN letterhead dated 26 March (sic) 2014 signed by Mr Nielsen as the General Manager for RGN. It stated that Mr Boyling’s employment would be terminated due to redundancy, that on the basis that he was entitled to 2 weeks’ notice of termination his “end date” would be 9 April 2014 and that he would also be entitled to three weeks’ redundancy pay for his one completed year of service.
Mr Boyling pointed out to Mr Day that the date on the letter was wrong and said that he would not accept the letter. He was told by Mr Day:
Ron wanted to put you off earlier. I managed to keep you in work for a few extra weeks. Ron has always done the right thing by you.
I accept that Mr Day’s references to “Ron” were references to Mr Nielsen, who was described as Ron Nielsen in the Employment Agreement and the letter handed to Mr Boyling on 1 May 2014.
Contrary to the statement in the letter dated 26 March 2014 that Mr Boyling’s employment would cease on 9 April 2014 (which would have meant that his period of employment with RGN was a week less than two years), Mr Boyling worked at his usual duties for RGN until first advised of his dismissal on 1 May 2014. Prior to that time he was not paid any redundancy pay or other termination entitlements. He was in fact paid on the basis that his employment ended on 1 May 2014. In the pay period ending on 4 May 2014 Mr Boyling was paid his usual wages for work performed up to and including 1 May 2014, his accumulated annual leave as at 1 May 2014 and also four weeks’ payment described as “ETP Tax Free” which Mr Boyling understood was payment in lieu of notice of termination. He did not receive any redundancy pay. Copies of Mr Boyling’s payslip for the pay periods ending 14 April 2013 to 4 May 2014 are in evidence. The payslip for the period ending 4 May 2014 was the final payslip Mr Boyling received from RGN. He received no further moneys from RGN thereafter.
The Applicants claim that RGN contravened s.323 of the FW Act by failing to provide Mr Boyling with written notice of termination or payment in lieu of notice in accordance with his contract; that in contravention of s.45 of the FW Act it failed to pay him redundancy pay as required by the Award and that it also contravened s.323 of the FW Act by failing to pay him his redundancy pay entitlement derived from his safety net contractual entitlement and the FW Act; that it failed to credit him with personal/carer’s leave in accordance with cl.26.2 of the Award and hence contravened s.45 of the FW Act; and that it also contravened s.45 of the FW Act by failing to pay him his untaken personal/carer’s leave on termination as required by cl.13.5(b)(i) of the Award. It was alleged that Mr Nielsen was involved in each of these contraventions.
The Third Applicant, Mr Brett, commenced employment with RGN on 2 April 2012 as an Operator/Fitter at the Angus Place mine. Initially he was employed as a casual employee, but “a few weeks” after starting work he was offered and accepted permanent employment. At all relevant times he was a member of the CFMEU. As discussed further below the RGN Mining Services Pty Ltd and Western District Contractors Enterprise Agreement 2012 (the Enterprise Agreement) applied to his employment with RGN.
Mr Brett’s unchallenged evidence as to the termination of his employment (which I accept) was that after work on 17 April 2014 he received a telephone call from Mr Day who told him that he (Mr Brett) had not been successful in obtaining work with Centennial Coal (the mine operator) and that:
That means we are going to have to make you redundant and terminate your employment. You will work out the notice period. Your last day will be 22 May 2014.
This was the first occasion on which Mr Brett was informed by RGN that his employment would cease. Mr Day also said he would give Mr Brett formal notice when he was “next in”.
Mr Brett was absent from work for the 2014 Easter break. He returned to work on Wednesday 23 April 2014. On that day he was handed an envelope by Mr Day which contained a letter from RGN dated 17 April 2014 that was signed by Mr Nielsen as General Manager. This was the first and only occasion on which Mr Brett was provided with written notification that his employment with RGN would cease. This letter stated that Mr Brett’s employment with RGN “will be terminated due to redundancy” as RGN had completed its contract at Angus Place and was unable to offer him an alternative position within the company. It stated that due to his redundancy Mr Brett was entitled to 4 weeks’ notice of termination, with his end date being 15 May 2014. It advised that on termination he would be paid any accrued leave entitlements and any outstanding pay and superannuation up to and including his last day of employment. It advised that he was also entitled to a redundancy payment of 3 weeks’ ordinary hours for his 1 year of completed full time service.
Mr Brett worked as usual for the pay period ending Sunday, 27 April 2014. He was paid correctly for work performed that week. He also worked in the week from 28 April to 4 May 2014 and was paid correctly for work performed that week. He has provided payslips for those periods. However, at the end of Mr Brett’s shift on 1 May 2014 Mr Boyling told him that Centennial Coal had told them that they could no longer work on the site and that he (Mr Brett) would not be working out his notice period, but would be paid out, although it was agreed that Mr Brett would attend the Angus Place mine site on Friday 2 May 2014 to pack up RGN’s gear.
Mr Brett was not required to attend work from Monday 5 May on. His evidence is that he understood from his earlier discussion with Mr Day that his employment with RGN had been terminated effective Thursday 22 May 2014. He was paid for the period up to 4 May 2014 and received payment in lieu of notice of termination for the period up to 22 May 2014 as evidenced by his payslips. However Mr Brett claimed that he was in fact entitled to five weeks’ written notice of termination from 23 April 2014 (that is, until 28 May 2014) or payment in lieu of such notice of termination under cl.9.12 of the Enterprise Agreement and hence that RGN contravened s.50 of the FW Act.
As indicated, RGN is in liquidation. Orders are sought in relation to Mr Nielsen on the basis that he was involved in contraventions of the FW Act by RGN. It is necessary to consider first whether RGN contravened the FW Act as alleged.
Mr Boyling’s notice claim
The Applicants assert a contravention of s.323 of the FW Act on the basis that RGN did not meet Mr Boyling’s safety contractual entitlement to two months’ written notice of termination or payment in lieu of notice. It was submitted that there was a contract between Mr Boyling and RGN that was reflected in the written terms of the unsigned Employment Agreement. This included a term (cl.14.1(a) of the Employment Agreement) which required RGN to provide Mr Boyling with two months’ written notice of termination or to make payment to him in lieu of notice.
| 38. On the evidence provided by Mr Boyling, the terms of his employment were negotiated orally with Mr Nielsen, with both parties being content to be bound immediately and exclusively by the terms which they agreed upon, whilst expecting to later reduce the employment agreement to writing (see Sinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310; [1929] ALR 336). The terms in the contract expressed those already orally agreed on between RGN and Mr Boyling, and it was intended to reflect this existing agreement, rather than supplant it (see Concut Pty Ltd v Worrell (2000) 176 ALR 693; [2000] HCA 64). Mr Boyling provided unchallenged evidence that, despite the written “Employment Agreement” not being signed, both he and the Respondents continued to act in line with the terms it set out (which were the terms of their original oral agreement). It is therefore reasonable to regard the conduct of the parties as signalling that the contract had been accepted (see Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 535). Even were this not the case, the terms of an unsigned contract can nevertheless be binding (see Streat v Fantastic Holdings [2011] NSWSC 1097). |
On the unchallenged evidence before the Court, including Mr Boyling’s evidence as to the terms of the contract and the fact that his duties, responsibilities and remuneration were consistent with the provisions in the Employment Agreement, I am satisfied that there was a contract of employment between RGN and Mr Boyling on the terms referred to in the February 2012 conversation between Mr Nielsen and Mr Boyling and as set out in the unsigned document sent to Mr Boyling which is described (including on the cover page and page 1) as an Employment Agreement between RGN Mining Services Pty Ltd and Bradley Boyling.
The manner of termination was as specified in cl.14 of the Employment Agreement. Paragraph 14.1 provided that the employment may be terminated by written notice by either Mr Boyling or RGN “as specified in Item 8 of Schedule 1 (Termination Notice)”.
Item 8 in Schedule 1 to the Agreement stated that either the Company (defined as RGN) or Mr Boyling may terminate the Agreement by giving to the other written notice:
If during the Term: the remainder of the Term
If subsequent to the Term: 2 Months.
The Company may, rather than giving the required notice, elect to make a payment to [Mr Boyling] in lieu of notice.
I am satisfied that the initial “term” of Mr Boyling’s contract of employment was 2 years from 16 April 2012 as attested to in his affidavit. This was the starting date discussed with Mr Nielsen. It is also referred to in Schedule 1 of the Employment Agreement. As provided for in cl.17.2, at the expiration of this “term” Mr Boyling’s employment became an ongoing employment contract terminable by two months’ notice or payment in lieu thereof as specified in Item 8 in Schedule 1.
Paragraph 14.3(a) of the Employment Agreement reflected the terms of the contract in relation to payment in lieu of notice. It relevantly provided:
Termination payment: If the Employment is terminated:
(a) By notice given by you or the Company terminating the Employment. By serving a written notice under Clause 14.1(a), the Company may waive the requirement for you to work out all or part of the notice period (and may instead provide pay in lieu of notice), and you (in addition to any pay in lieu of notice) will be entitled to payment of your remuneration up to and including the date of termination of employment and any accrued statutory entitlements as at that date.
Mr Boyling’s employment with RGN commenced on 16 April 2012. It was terminated by written notice served on 1 May 2014. This was after the initial 2 year “term” of his contract had expired. At that time his employment was under an ongoing employment contract terminable by 2 months’ notice or payment in lieu of such notice. I accept Mr Boyling’s unchallenged evidence that he did not receive the letter from RGN dated 26 March 2014 until 1 May 2014 and that, contrary to the suggestion in that letter that his employment would cease on 9 April 2014, as evidenced by his payslips he continued to work (and was paid on that basis) until 1 May 2014. Mr Boyling was then paid 4 weeks’ payment in lieu of notice as indicated on his pay slip for the period ending 4 May 2014.
In other words, while Mr Boyling was paid up to and including 1 May 2014 (the date on which his employment was terminated), he was then paid only four weeks’ payment in lieu of notice of termination, rather than the requisite eight weeks’ (or two months’) payment in lieu of notice of termination.
No issue was taken as to whether there was a distinction between “two months’” or “eight weeks’” written notice of termination or payment in lieu of notice. The Applicants seek an order that an additional four weeks’ payment in lieu of notice be paid to Mr Boyling by Mr Nielsen to compensate Mr Boyling for his loss, said to be suffered because of a contravention of s.323 of the FW Act by RGN in which Mr Nielsen was involved under s.550(2) of the Act.
The underlying basis for this claim is to be found in the contract between Mr Boyling and RGN as described above. Initially this was said to be a safety net contractual entitlement. “Safety net contractual entitlement” is defined in s.12 of the FW Act to mean:
an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:
(a) subsection 61(2) (which deals with the National Employment Standards); or
(b) subsection 139(1) (which deals with modern awards).
Section 61(2) of the FW Act sets out matters to which the statutory minimum employment standards apply. It relevantly includes “notice of termination and redundancy pay” (s.61(2)(i)). Mr Boyling had a contractual entitlement relating to this subject matter, being his entitlement to two months’ written notice of termination or payment in lieu of such notice and RGN did not satisfy that entitlement. However, while s.542 of the FW Act provides for enforcement of a safety net contractual entitlement by a national system employee (see ss.543 and 544) against an employer, the present proceedings are not of that nature. As RGN is in liquidation no orders are sought against it in relation to asserted breaches of contract. Rather, Mr Boyling seeks orders for compensation from, and the imposition of a penalty on, Mr Nielsen. The Court’s powers to make such orders under the FW Act arise only in relation to a contravention of a civil remedy provision. In other words, there must be shown to be a contravention of a civil remedy provision by RGN in which Mr Nielsen was involved in the sense provided for in s.550 of the FW Act.
The Applicants contended that RGN’s failure to satisfy Mr Boyling’s safety net contractual entitlement to two months written notice of termination or payment in lieu of such notice was not only a breach of contract but also, relevantly for present purposes, meant that RGN had contravened s.323 of the FW Act and that as Mr Nielsen was involved in this contravention he was also taken to have contravened s.323 by virtue of s.550(1) of the FW Act.
As indicated, the Applicants’ original contention that breach of a safety net contractual entitlement in itself constituted a contravention of the FW Act was not pursued. This concession was consistent with the approach taken by Buchanan J in Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Ltd at [23] (Professional Engineers).
Section 323(1) of the FW Act is as follows:
(1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:
(a) in full (except as provided by section 324); and
(b) in money by one, or a combination, of the methods referred to in subsection (2); and
(c) at least monthly.
Under s.539(1) of the FW Act, s.323(1) is a civil remedy provision. The CFMEU (the First Applicant) is an employee organisation within the meaning of the FW Act entitled to represent the industrial interests of the Second and Third Applicants and to seek orders in relation to a contravention of a civil remedy provision (see s.539(2)).
The Applicants contended that in circumstances where Mr Boyling was given only four weeks’ payment in lieu of notice, RGN’s failure to pay him the requisite two months payment in lieu of notice gave rise to a contravention of s.323 of the Act as a failure by RGN to pay Mr Boyling “amounts payable to the employee in relation to the performance of work … in full”. The “permitted deductions” exception in s.324 of the FW Act is not applicable.
The submission that s.323 of the FW Act applies in such circumstances is consistent with the approach taken to that provision by Jessup J in Murrihy v Betezy.com.au Pty Ltd (2013) 238 IR 307; [2013] FCA 908 and by Buchanan J in Professional Engineers.
In Murrihy Jessup J found (at [119]) that an employer’s failure to pay contractual commission entitlements to an employee constituted a contravention of s.323 of the FW Act. His Honour also accepted (at [161]) that underpayments of salary would constitute contraventions of s.323.
Relevantly, Jessup J stated in Murrihy at [142]:
…A significant innovation introduced by the FW Act was the imposition of an obligation upon a “national system employer”… to pay its employees amounts payable to them and in relation to the performance of work in full at least monthly: s323(1) of the FW Act. Thus the legislation picks up, amongst other things, entitlements arising under contracts of employment and gives statutory consequences to an employer's failure to make good on them. In this respect, s323(1) is a civil remedy provision. There is - and there would have been at the time of the introduction of this provision - no reason to assume that the employees for whose benefit s323(1) was enacted would be confined to those in unionised sections and occupations. Perhaps more than ever before, it must realistically be accepted that individual employees, without the benefit of union representation, will often need to seek their own advice and representation in relation to rights arising under federal legislation. (emphasis added)
While Jessup J acknowledged that the employer in Murrihy did not dispute that its failure to pay the applicant’s commission entitlements involved a contravention of s.323(1) of the FW Act, his Honour also found that “it clearly was such a contravention” (at [119]).
In Professional Engineers an employer sought summary dismissal under s.31A of the Federal Court of Australia Act 1976 (Cth) of proceedings under the FW Act. In that context Buchanan J addressed the scope of s.323 of the Act in considering whether there was an arguable case of a contravention of that provision in relation to various non-payments of bonuses in accordance with an employee’s contractual entitlement. The contract of employment provided for a bonus to be paid as a percentage of the first deposit made by each client introduced by agents working under the employee’s control.
The respondent in Professional Engineers contended that allegations of failure to pay an employee promised bonuses of various kinds were not ones to which s.323 of the FW Act applied. The applicant pointed to the fact that in Murrihy Jessup J had upheld claims that s.323 of the FW Act had been breached by a failure to pay commissions due to an employee under written commission agreements.
In dismissing the application for summary dismissal in Professional Engineers Buchanan J described the manner in which federal industrial legislation, such as the FW Act, had moved into the area of contractual entitlements, including in relation to the incentive-based payments and bonuses in issue in that case. His Honour observed that such entitlements seemed to be safety net contractual entitlements within the s.12 definition, on the basis that there may be contractual entitlements in relation to matters referred to in s.61 of the FW Act that go beyond the minimum standards prescribed in the Act. It was also said to be clear that there may be contractual entitlements that were not inconsistent with, but were in addition to entitlements under modern awards in relation to matters the subject of the National Employment Standards (see s.139 of the FW Act and Professional Engineers at [17]-[21]).
Buchanan J pointed out that the statutory obligations on an employer under the FW Act to observe the terms of safety net contractual obligation (which could be enforced under ss.541 to 543 of the FW Act) did not depend on the particular terms of a statutory minimum standard or a provision in an Award, although his Honour found that, as the Applicants now acknowledge, breach of a safety net contractual entitlement is not in itself a breach of a civil remedy provision under the FW Act (at [23]).
However, in considering the possible application of s.323 of the FW Act to a failure to meet a contractual entitlement, Buchanan J did not accept the employer’s submission that the existence of provisions in the FW Act for the enforcement of safety net contractual obligations and for the direct enforcement of modern awards, enterprise agreements and national employment standards in (ss.44, 45 and 50 of the FW Act) indicated that there was a legislative intent that monetary claims under an award, enterprise agreement or contract were not enforceable under s.323 of the Act (Professional Engineers at [27]).
Nor did his Honour accept the employer’s argument that ss.323 and 324 of the FW Act were intended to provide only for matters that had been dealt with in former “Truck Acts” in relation to requirements of payment in money (not in kind) without unauthorised deductions and with specific and reasonable periodicity. Rather Buchanan J found (at [28]-[29]) that while those sections did intend to provide for such matters (see Construction Forestry Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619; [2013] HCA 36 at [45]), that did not exclude the possibility that s.323 had an additional role to play.
Relevantly, Buchanan J stated (at [30]):
The ordinary language of s 323 is apt to identify, and provide for the enforcement of, an obligation to pay amounts which have become payable, as well as the more specific obligation to pay such amounts in full, in money and at least monthly (subject to the statutory exemptions which accompany the obligation). It does so by permitting the imposition of a civil penalty for contravention of the obligation.
Buchanan J found that reliance on s.323 of the FW Act to establish breach of a civil remedy provision in this context had direct support in the judgment of Jessup J in Murrihy and made the point (at [33]) that although the construction of s.323 argued for by the applicant appeared not to have been contested in Murrihy: “it appears clear that Jessup J also subscribed to it”. His Honour referred to the acceptance at [119] in Murrihy that the failure to pay commission entitlements clearly was a contravention of s.323(1) of the Act and to the remarks in Murrihy at [142] (set out at [56] above), emphasising that (as Jessup J stated):
… the legislation picks up, amongst other things, entitlements arising under contracts of employment and gives statutory consequences to an employer’s failure to make good on them.
In Professional Engineers Buchanan J was of the view (at [36]) that he should approach the question of the construction of s.323 of the FW Act in conformity with the views expressed by Jessup J in Murrihy as a matter of judicial comity. In any event, he also considered that the language of s.323 was sufficiently wide to accommodate the allegedly unpaid entitlements in issue in Professional Engineers and did not accept the more confined construction advanced by the respondents.
Hence Buchanan J accepted that the applicant had standing to bring the proceedings in Professional Engineers and to seek a finding that there had been breaches of s.323 of the FW Act through the employer’s failure to pay “contractually obligated amounts” and that in the event that a breach of s.323 was established the court would have power to order payment of compensation to employees.
In this case Mr Boyling had a contractual entitlement to two months’ payment in lieu of two months’ notice of termination of his employment. The reasoning in Murrihy and Professional Engineers does not limit the application of s.323 to contractual entitlements to periodic payments. While his payment in lieu of notice entitlement is not of exactly the same nature as the particular entitlements considered in either Murrihy or Professional Engineers, I accept the Applicants’ contention that a payment in lieu of notice was payable to Mr Boyling as an employee of RGN on termination of his employment and that it was in relation to the performance of work. It was an amount that had “become payable” in the sense considered in Professional Engineers at [30] and it was payable “in full” under Mr Boyling’s contract of employment. RGN had failed to “make good” on this entitlement.
Both Murrihy and Professional Engineers are decisions of the Federal Court. Principles of precedent and judicial comity require this court to follow the reasoning in those cases (see Minister for Immigration and Multicultural and Indigenous Affairs v SZANS (2005) 141 FCR 586; [2005] FCAFC 41 at [38] and Suh v Minister for Immigration and Citizenship (2009) 175 FCR 515; [2009] FCAFC 42 at [29]).
While RGN paid Mr Boyling one month’s payment in lieu of notice, his contractual entitlement was to two months’ notice or payment in lieu thereof. I am satisfied that RGN contravened s.323 of the FW Act on one occasion by failing to pay Mr Boyling his contractual entitlement to two months’ payment in lieu of two months’ written notice of termination. A declaration should be made to this effect.
I accept the evidence that the amount of this underpayment was $11,997.16 gross. This was calculated on the basis of four times Mr Boyling’s gross weekly pay of $2,999.29 at termination.
Mr Boyling’s Redundancy Pay
It was contended that RGN (and Mr Nielsen) contravened the FW Act in failing to pay Mr Boyling redundancy pay, although the precise basis for the asserted contravention changed during the course of these proceedings. In the original Statement of Claim it was claimed that RGN contravened Mr Boyling’s safety net contractual entitlement “derived from” s.119 of the FW Act. In the Amended Statement of Claim it was claimed that RGN had failed to comply with s.119 of the FW Act and hence contravened s.44(1) of the FW Act. It was subsequently claimed in written submissions, and at the hearing, that the non-payment of redundancy pay was also a failure to meet Mr Boyling’s safety net contractual entitlement which amounted to a contravention of s.323 of the FW Act.
However, in post-hearing submissions filed on 15 June 2017 the Applicants conceded that cl.14.1 of the Black Coal Mining Industry Award which, as discussed below, covered Mr Boyling’s employment by RGN, had the effect that s.119 of the FW Act (and the remainder of Subdivision B of Division 11 of Part 2-2 of the FW Act) did not directly apply to Mr Boyling. The claim of contravention of s.44 of the Act was abandoned. It was submitted that Mr Boyling had an Award entitlement to redundancy pay which was not met and also that s.119 of the FW Act applied in an “indirect” way to Mr Boyling’s employment. On this basis declarations were sought that RGN contravened s.45 of the FW Act in that it failed to pay Mr Boyling redundancy pay as required by cl.14 of the Award and also that it contravened s.323 of the FW Act by failing to pay him redundancy pay said to be derived from both his safety net contractual entitlement and cl.14 of the Award. Leave was sought to further amend the Amended Statement of Claim to reflect these submissions. The proposed amendments would have no bearing on the quantum or amount of redundancy pay which has, consistently, said to have been owed to Mr Boyling or on other claims for relief. Such leave should be granted.
Clause 4 of the Award addresses coverage. I have had regard to the evidence of Mr Boyling and to Mr Osborne’s overview of the work performed by RGN. As required by cl.4.1(a) of the Award, at all relevant times RGN was an employer of coal mining employees as defined in cl.4.1(b) of the Award. Mr Boyling’s evidence is that while he was called a site supervisor, the tasks that he performed were those tasks set out in Item 4 of Schedule 1 to the Employment Agreement, as follows:
Duties and responsibilities Your role as Site Supervisor will include but not be limited to:
· Prepare weekly work plan.
· Effectively organise manning levels including covering for absenteeism.
· Ensuring productivity is maintained at acceptable levels.
· Communicate with workforce.
· Responsible for ensuring accurate records are kept for each shift.
· Inspect and audit underground jobs on at least a weekly basis.
· Ensure site compliance to set KPSs.
· Conduct accurate monthly bolt count and supply for invoicing.
· Report weekly to the Operations Manager to discuss any issues.
· Liaise with Mine Site Representatives.
· Actively pursue new work leads.
· Attend weekly management meetings.
· In conjunction with the Health, Safety & Training Manager;
oDevelop and deliver tool box talks on site
Review existing SWPs and training documentsoDevelop SWPs and training documents for any new task or equipment introduced
oInvolvement in risk assessments
oCo-ordinate training and assessment of personnel on site as required
oConduct regular site inspections and safety audits underground
oBe involved in accident/incident investigations where required
oOrganise mine site inductions for RGN employees
· Be part of OHS committee.
· Be involved in site safety meetings.
I am satisfied that Mr Boyling was a coal mining employee within cl.4(b)(ii) of the Award, being a person employed in the black coal mining industry whose duties were carried out at or about a place where black coal was mined (the Angus Place mine) and were directly connected with the day-to-day operation of a black coal mine (having regard to the evidence about the nature of secondary support work and Mr Boyling’s duties). I accept that, as submitted for the Applicants, Mr Boyling’s duties were such that he was employed in a classification or class of work (“foreperson”) in Schedule B to the Award.
The classification of foreperson is not defined in the Award. However on the evidence before me it is apparent that the principle purpose of Mr Boyling’s employment was supervisory work in relation to workers and their performance of secondary support work at a black coal mine. The exclusions in relation to coverage in clauses 4.3 to 4.7 of the Award are not applicable. I am satisfied that, as contended for by the Applicants, at all material times the Award covered Mr Boyling’s employment by RGN (and see s.46 of the FW Act).
Clause 14 of the Award deals with “Redundancy”. It is relevantly as follows:
14.1 The redundancy arrangements in this award are an industry-specific redundancy scheme and, as such, Subdivision B of Division 11 the (sic) NES does not apply.
14.2Definition of redundancy
(a) An employee is made redundant where an employee’s employment is terminated at the employer’s initiative:
(i) because the employer no longer requires the job done by the employee to be done by anyone except where this is due to the ordinary and customary turnover of labour; or
(ii) because of insolvency or bankruptcy of the employer.
(b) This clause does not apply to employees engaged for a fixed term or a specified task.
14.3Severance payment
Except where clause 14.5 applies, when terminations occur due to redundancy the employees terminated are entitled to severance pay equal to one ordinary week’s pay for each completed year of employment.
14.4 Retrenchment payment
(a) Except where clause 14.5 applies, where redundancies occur due to:
(i) technological change;
(ii) market forces; or
(iii) diminution of reserves,
the employees terminated are entitled to retrenchment pay equal to two ordinary weeks’ pay for each completed year of employment. This payment is additional to the payment prescribed in clause 14.3. This makes a total of three ordinary weeks’ pay for each completed year of employment.
(b) Regardless of length of employment, the minimum payment due to employees under clause 14.4(a) is two ordinary weeks’ pay.
14.5 Exemption
An employer is not liable for the payment in clauses 14.3 and 14.4 if the employer obtains, or causes to be made available for the employee, work:
(a) that the employee is competent to perform;
(b) in a position that carries the same or a higher classification rate of pay than the employee’s previous position;
(c) that can reasonably be regarded as permanent; and
(d) allows the employee to reside in the same general locality as the employee’s previous residence.
As conceded for the Applicants, the effect of cl.14.1 of the Award is that s.119 of the FW Act (which confers a statutory entitlement to redundancy pay in certain circumstances) does not directly apply to Mr Boyling’s employment by RGN. Clause 14 of the Award is an “industry-specific redundancy scheme”. Section 141 of the FW Act permits the inclusion of such a scheme in a modern award such as this Award. Section 123(4)(b) of the FW Act provides that Subdivision B of Division 11 of Part 2-2 of the FW Act (which includes s.119) does not apply to an employee to whom an industry-specific redundancy scheme in a modern award applies.
Hence, Mr Boyling’s direct entitlement to redundancy pay is pursuant to cl.14 of the Award, not s.119 of the FW Act. His employment was terminated at RGN’s initiative because RGN’s contract with the mine operator had come to an end. The termination was not due to the ordinary and customary turnover of labour. The termination letter provided to Mr Boyling on 1 May 2014 was headed “Re Notice of Termination of your Employment – Redundancy” and stated that his employment with RGN “will be terminated due to redundancy”. The letter went on to explain that RGN had completed its contract to install secondary support at Angus Place Colliery and that RGN was unable to offer Mr Boyling an alternative position with the company, so his position had been made redundant. It stated that this was not a reflection on Mr Boyling’s performance. The termination letter also advised Mr Boyling that due to his redundancy he was entitled to a redundancy payment of three weeks’ ordinary hours for what was said to be one year of completed full-time service. He did not, however, receive any redundancy payment. There is also evidence from Mr Brett and Mr Osborne that RGN’s contract to provide secondary support work at the Angus Place mine had come to an end.
I am satisfied on the evidence before the Court that Mr Boyling’s employment was terminated at RGN’s initiative because RGN no longer required the job done by Mr Boyling (that is, site supervisor at the Angus Place mine) to be done by anyone and that this was not due to the ordinary and customary turnover of labour. Mr Boyling was made redundant within cl.14.2(a)(i) of the Award.
While Mr Boyling was engaged for an initial two year “term”, under his contract with RGN that was followed by employment on an ongoing basis. This was the nature of his employment at the time he was made redundant. Hence he was not engaged for a fixed term or a specified task as provided for in cl.14.2(b) of the Award.
RGN was unsuccessful in obtaining a contract for further secondary support work at the Angus Place mine (as attested to in the evidence of Mr Boyling and as explained in the letter of termination given to him on 1 May 2014) and could not obtain an alternative position for Mr Boyling elsewhere. Consistent with this, Mr Brett attested that at the time of his redundancy there were about 16 or 18 RGN employees performing the secondary support work at the Angus Place mine, and that RGN’s loss of the secondary support contract in about April 2014 had resulted in those employees either being redeployed to another mine or made redundant. Mr Boyling was such an employee. He was not redeployed. RGN informed him it was unable to offer him an alternative position. The exemption in cl.14.5 does not apply.
There are two relevant aspects of the redundancy arrangements in cl.14 of the Award.
First, under cl.14.3, as Mr Boyling’s employment was terminated due to redundancy he was entitled to severance pay equal to one ordinary week’s pay for each completed year of employment.
In addition, I am satisfied that Mr Boyling was entitled to retrenchment pay under cl.14.4 on the basis that his redundancy occurred due to market forces, having regard to the fact that RGN was unable to obtain a contract to provide further secondary support work at a mine. As attested to by Mr Boyling, secondary support work is a task that must be performed at an underground coal mine (such as the Angus Place mine) and is directly connected to its day to day operation. Hence Mr Boyling was also entitled to retrenchment pay equal to two ordinary weeks’ pay for each completed year of employment.
I note that RGN’s termination letter appeared to reflect these entitlements, but on the basis of one year’s service. In fact, Mr Boyling had completed two years of employment when made redundant. He was thus entitled to a total of 6 weeks’ redundancy pay derived from cl.14 of the Award. As indicated, the termination letter given to Mr Boyling on 1 May 2014 did refer to an entitlement to three weeks’ redundancy pay (in addition to two weeks’ pay in lieu of notice). However the evidence before the Court is that Mr Boyling was in fact paid only what amounted to four weeks’ (or one months’) payment in lieu of notice of termination and that he received no redundancy payment. I am satisfied that under the Award Mr Boyling was entitled to six weeks’ redundancy pay amounting to $17,995.74 gross. RGN failed to satisfy this entitlement and accordingly contravened s.45 of the FW Act (which provides that a person must not contravene a terms of a modern award) by contravening cl.14 of the Award. Section 45 is a civil remedy provision. A declaration should be made to this effect.
In post-hearing submissions the Applicants submitted that there was another source of Mr Boyling’s entitlement to redundancy pay such as to support a declaration as to a further separate contravention of the FW Act by RGN in which Mr Nielsen was involved.
It was submitted that under his contract of employment Mr Boyling had a safety net contractual entitlement to redundancy pay described in cl.14.5 of the Employment Agreement as follows:
Redundancy: If the Employment is terminated due to Redundancy, your entitlement to severance payments or redundancy pay, if any, shall be dealt with in accordance with the Act.
Schedule 2 of the Agreement defines “the Act” as the FW Act.
The Applicants submitted that the effect of these provisions was that Mr Boyling’s contract of employment “incorporated” the redundancy pay provisions in the FW Act and hence that he had a safety net contractual entitlement to redundancy pay determined by reference to s.119 of the FW Act (which would have the effect that, having regard to his period of service, Mr Boyling would be entitled to six weeks’ redundancy pay). There was no suggestion that this gave rise to an additional entitlement to compensation. Rather, it was submitted that RGN’s obligation to pay redundancy pay to Mr Boyling derived not only from the Award but also from his safety net contractual entitlement and hence that the non-payment amounted to a contravention of s.323 of the FW Act as well as a contravention of s.45 of the Act. An additional declaration was sought in relation to redundancy pay to the effect that RGN contravened s.323 of the FW Act by failing to pay Mr Boyling redundancy pay derived from both his safety net contractual entitlement and cl.14 of the Award.
This suggestion was made in post-hearing submissions. Hence there was no opportunity to address issues of potential concern to me in this respect.
The Applicants relied on the fact that the contract between RGN and Mr Boyling provided that his entitlement to redundancy pay should be “dealt with in accordance with” the FW Act. However s.123(4)(b) of the FW Act provides that Subdivision B of Division 11 in Part 2-2 of the Act (which contains s.119) does not apply to an employee to whom an industry-specific redundancy scheme in a modern award applies and Mr Boyling’s contract of employment also provided (see cl.19.1) that if his employment was or became regulated by an award or industrial instrument (as it did) then the contract must be read in conjunction with and subject to such award to the extent required by law. There is no evidence that the employment of Mr Boyling was regulated by any contracting out instrument (as contemplated in cl.19.2 of the Employment Agreement). This would seem to suggest that Mr Boyling’s redundancy pay entitlements were limited to those arising under the Award, as described above. The interaction of these provisions was not addressed by the Applicants.
In these circumstances I am not presently persuaded that the declaration sought by the Applicants should be made. However, as this claim was first raised in post-hearing written submissions, before I deal with the question of penalties I propose to give the Applicants the opportunity to further address the issue.
Personal/Carer’s Leave Claim by Mr Boyling
The Applicants also assert that RGN contravened cl.26.2 of the Award in relation to Mr Boyling’s personal/carer’s leave entitlement and hence contravened s.45 of the FW Act in this respect.
For the reasons set out above I am satisfied the Award applied to Mr Boyling’s employment by RGN.
Clause 26 of the Award addresses personal/carer’s leave. Clause 26.1 makes it clear that the Award entitlements to personal/carer’s leave supplement the national employment standards (the NES) entitlement under the FW Act. Under the heading “Entitlement” cl.26.2 provides:
A full-time employee is entitled to 105 ordinary hours of personal/carer’s leave (inclusive of the employee’s NES entitlement) on commencing employment and on each anniversary of commencement. Any personal leave which is not taken by an employee must accumulate without limitation.
At all material times Mr Boyling was a full-time employee of RGN. As set out above, he commenced employment with RGN on 16 April 2012. Hence, under cl.26.2 of the Award RGN was required to credit Mr Boyling with 105 hours of personal/carer’s leave on the commencement of his employment and on each anniversary of commencement. Mr Boyling’s anniversary of commencing employment with RGN was on 16 April of each year. I am satisfied that on 16 April 2014 RGN failed to credit Mr Boyling with 105 hours of personal/carer’s leave in addition to the hours that he had previously accrued. The evidence before the Court, including Mr Boyling’s pay slips for the relevant period up to 27 April 2014, makes it clear that he was not credited with any personal/carer’s leave on that anniversary of his employment or thereafter. By engaging in such conduct RGN contravened cl.26.2 of the Award. This amounted to a contravention of s.45 of the FW Act.
Mr Brett’s evidence is that Mr Nielsen and Mr Day conducted the interview for his position with RGN. However while Mr Brett raised employment issues with Mr Day, I accept his evidence that other than in relation to trivial issues, it appeared that Mr Day was unable or unwilling to resolve such issues and needed to seek advice or approval from Mr Nielsen.
Mr Nielsen made the decision to terminate the employment of both Mr Boyling and Mr Brett. He signed their letters of termination which addressed their entitlements on termination. I am satisfied it can be inferred from all the circumstances that he was an intentional participant with knowledge of the entitlements RGN afforded to Mr Boyling and Mr Brett.
The evidence of Mr Osborne supports the finding that Mr Nielsen was involved in the contraventions by RGN. Mr Osborne had a long involvement in the coal mining industry in the Lithgow area, having worked as a miner at the Angus Place mine until commencing in his current role within the CFMEU. He gave detailed evidence of his dealings with the companies controlled by Mr Nielsen from time to time, including RGN. He attested to negotiation of enterprise agreements over several years between himself on behalf of the union and Mr Nielsen on behalf of the company. His evidence is that while the name of the company controlled by Mr Nielsen changed, the controlling mind or the person who negotiated terms and conditions and therefore had knowledge of what those terms and conditions were continued to be Mr Nielsen.
In particular, Mr Osborne gave evidence as to the formation of RGN and his subsequent dealings with Mr Nielsen. While Mr Nielsen had the capacity to refer and delegate some tasks to subordinate employees, he had primary involvement. He was owner of, at the very least, a majority of the shares of RGN (as also revealed in company searches in evidence). He was the sole director. Mr Nielsen referred to RGN as “my business” in discussions with Mr Osborne. Indeed, Mr Osborne’s understanding is that “RGN” stands for Ronald Godfrey Nielsen.
Mr Osborne gave evidence about discussion of an Enterprise Agreement made in 2010 which applied to RGN employees. This was the product of negotiations primarily between himself on behalf of the CFMEU and Mr Nielsen on behalf of RGN. While Mr Osborne acknowledged that another employee of RGN may have accompanied Mr Nielsen to one or two meetings, the other person said little and did not advance any claim or accept any claims advanced by the union on behalf of RGN. I am satisfied that the principal actor for RGN during the 2010 negotiations was Mr Nielsen. He signed the agreement on behalf of RGN.
The notice of employee representational rights issued in this context stated that Mr Nielsen was the key contact on behalf of RGN in employment related matters with knowledge of employees’ terms and conditions. The forms and declarations required in connection with the 2010 agreement were completed by Mr Nielsen on behalf of RGN.
Importantly, the 2012 Enterprise Agreement applicable to Mr Brett was negotiated by Mr Nielsen on behalf of RGN and Mr Osborne on behalf of the union (and signed by Mr Nielsen on behalf of RGN).
Mr Nielsen’s responsibility continued thereafter. Mr Osborne’s evidence in relation to a 2015 SES agreement that was extended and varied by the Fair Work Commission with the consent of both RGN and the union, is that the negotiations of the extension variation application involved only Mr Nielsen on behalf of RGN. Mr Nielsen signed the statement submitted to the Fair Work Commission on behalf of RGN for the purposes of the application.
Mr Osborne also gave evidence that over the years he had cause to interact with RGN and Mr Nielsen in relation to various employment related issues that were periodically brought to his attention by union members. If members were unable to resolve issues with RGN themselves, Mr Osborne would intervene and discuss the matters directly with Mr Nielsen. Mr Nielsen was responsible for resolution of such issues. Where matters were raised with other persons employed by RGN, Mr Nielsen’s approval was sought before a decision could be made. Mr Osborne’s view, which I accept, was that Mr Nielsen was the primary decision-maker for RGN and that decisions such as the amount to be paid by RGN to satisfy employee entitlements or rectification of any underpayment of wages were decisions made by Mr Nielsen. I accept that Mr Nielsen had responsibility to determine the amounts to be paid to Mr Boyling and Mr Brett by RGN to satisfy their employee entitlements.
Mr Osborne also deposed, and I accept, that from mid-2013 on a significant number of issues were raised with him by union members about RGN’s compliance with its employment-related obligations. He described these issues in his affidavit. His evidence is that he experienced some difficulty in obtaining responses to his attempts to resolve such issues. As a result the union made a number of applications to the Fair Work Commission. On each occasion such a matter was listed before the Commission, Mr Nielsen and a lawyer in private practice would be the only representatives for RGN. This evidence is also supportive of the conclusion that Mr Nielsen had knowledge of the essential elements of the various contraventions in the requisite sense (and see in that respect the recent discussion in Australian Building and Construction Commissioner v Parker [2017] FCA 564 at [127]-[128] in relation to knowledge where the contravention in question is of an award or enterprise agreement). The evidence of Mr Osborne also establishes that Mr Nielsen had responsibility for fixing employment related issues, particularly in relation to wages and conditions, on behalf of RGN.
There is also evidence of relevant correspondence between the CFMEU and Mr Nielsen. In an email from Mr Nielsen to Mr Osborne on 10 June 2014 (not long after the terminations of employment in question) Mr Nielsen said (errors in original):
Mate, I busy try to get work to save the company I will give you a call I the morning
This indicates that the primary natural person who continued to act on behalf of RGN was Mr Nielsen. Other emails between Mr Osborne and Mr Nielsen are supportive of this conclusion, including, in particular, an email of 24 June 2015 from Mr Nielsen to Mr Osborne in relation to Mr Boyling, asking:
Do you have what we work (sic) out was owing to Brad I can’t find it Thanks Ron
Mr Nielsen was clearly aware that moneys were owing to Mr Boyling at a date after his employment had ceased. While this was after the event, such email is further support for the proposition that Mr Nielsen had knowledge of the essential facts constituting the contraventions in issue. Similarly, on 1 February 2016, Mr Nielsen emailed Mr Osborne under the heading “Re Outstanding Employee Entitlements”, stating (errors in original):
On Brad Boyling i have try to contact him but do not have a current phone number for him
I thought Jason Brett had been fix up
I note that in an email of 11 January 2016 to the solicitor for CFMEU Mr Nielsen provided his email address as [email protected], notwithstanding that this was well after RGN had ceased to trade. Mr Osborne understood that Mr Nielsen’s wife was sole director of another company which worked at the Springvale mine performing exactly the same work that RGN had previously been performing. Mr Nielsen’s email related to this later company, but he continued to use the RGN email address and to address outstanding long service leave and superannuation issues in relation to former employees of RGN. This supports the conclusion that at all times he had responsibility for entitlements of RGN employees.
In other words, during the relevant period Mr Nielsen was the sole director of RGN and its general manager. He was involved in negotiation of Enterprise Agreements. Mr Nielsen was the person to set terms and conditions for RGN employees with responsibility for RGN meeting its contractual award and statutory obligations to those employees. The union raised industrial issues with Mr Nielsen, irrespective of whether he was trading under the name of RGN or some other company. Determination and rectification of industrial issues, such as employee entitlements, were matters that fell squarely on Mr Nielsen’s shoulders.
Mr Nielsen directly negotiated Mr Boyling’s employment. He had active day to day management and control in relation to the employment of both Mr Boyling and Mr Brett. He was responsible for determining and setting the terms and conditions of their employment. He was involved in, and can be inferred to be aware of, the application of the Award to Mr Boyling (as referred to in the Employment Agreement Mr Nielsen provided to Mr Boyling) and the application of the Enterprise Agreement to Mr Brett (having been involved in negotiations in relation to that Agreement). Mr Nielsen signed the termination letters in relation to both Mr Boyling and Mr Brett which addressed their entitlements. I am satisfied that Mr Nielsen was aware of the provisions of the Award and the Enterprise Agreement and the contracts of employment of Mr Boyling and Mr Brett and that he was involved in determining their entitlements on termination. I am satisfied that actual knowledge on the part of Mr Nielsen of the essential elements making up each contravention by RGN can be inferred on the evidence before the Court, including the fact that he was the controlling mind of RGN with day to day responsibility for employment matters including terms and conditions, as well as for the employment and termination of the employment of Mr Boyling and Mr Brett.
There was a “practical connection” between Mr Nielsen and the contraventions of the FW Act by RGN described above. He engaged in conduct which involved him in the contraventions. The evidence demonstrates that Mr Nielsen had knowledge of the essential elements constituting the contraventions and was an intentional participant such as to be knowingly concerned in the contraventions within s.550(2)(c) of the FW Act.
It is appropriate to make declarations that Mr Nielsen was involved in each of the contraventions by RGN within the meaning of s.550 of the FW Act. As he was involved in such contraventions he is taken to have contravened the civil remedy provisions in question.
Each of Mr Boyling and Mr Brett suffered loss by reason of the contraventions in issue as described above. I am satisfied that orders should be made pursuant to s.545 of the FW Act that Mr Nielsen pay compensation for the loss arising from these contraventions of the FW Act, in the amount of $55,861.01 to Mr Boyling and $1,392.12 to Mr Brett and also interest thereon under s547 of the Act. I will hear from the Applicants as to quantification of such interest.
Penalties in relation to Mr Nielsen’s contraventions of the FW Act will be determined on a date to be fixed and notified to him.
I certify that the preceding one hundred and fifty-two (152) paragraphs are a true copy of the reasons for judgment of Judge Barnes
Date: 5 July 2017
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