Cooper v Naismith Truck Movers Pty Ltd
[2021] FedCFamC2G 221
•4 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cooper v Naismith Truck Movers Pty Ltd [2021] FedCFamC2G 221
File number: SYG 450 of 2021 Judgment of: JUDGE CAMERON Date of judgment: 4 November 2021 Catchwords: INDUSTRIAL LAW – breaches of civil remedy provisions of the Fair Work Act 2009 (Cth) – imposition of pecuniary penalties – relevant considerations.
INDUSTRIAL LAW – costs of compromised civil proceeding – applicability of s.167 of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
Legislation: Crimes Act 1919 (Cth) s.4AA
Fair Work Act 2009 (Cth) s.45, 293, 539, 557A
Federal Circuit and Family Court of Australia Act 2021 (Cth) s.167
Cases cited: Kelly v Fitzpatrick (2007) 166 IR 14
Gibbs v Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216
Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Division: Fair Work Number of paragraphs: 26 Date of last submission: 24 September 2021 Date of hearing: On the papers Solicitor for the Applicant: Bartier Perry Lawyers Solicitor for the Respondents: FCW Lawyers ORDERS
SYG 450 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: WAYNE EDWARD COOPER
Applicant
AND: NAISMITH TRUCK MOVERS PTY LTD
First Respondent
DARYL JAMES NAISMITH
Second Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
4 NOVEMBER 2021
THE COURT DECLARES THAT:
1.The first respondent contravened s.45 of the Fair Work Act 2009 (Cth) by reason of its breaches of clauses 12.5, 15, 27 and 28.1 of the Road Transport and Distribution Award 2010 in respect of the applicant’s employment between 1 July 2018 and 10 November 2019 by not paying the applicant his minimum pay, overtime and weekend loading entitlements.
BY CONSENT, THE COURT ORDERS THAT:
1.The first respondent pay the applicant compensation in the sum of $12,003.92 for the contraventions identified in the declaration made in this proceeding on 4 November 2021 (“Declaration”).
2.The first respondent pay a penalty in the amount of $20,000.00 for the contraventions identified in the Declaration.
3.The penalty be paid to the applicant.
4.The first respondent pay the applicant’s costs in the sum of $10,000.
5.The proceeding be otherwise dismissed.
6.To the extent that the amounts ordered are not paid by the first respondent to the applicant within 28 days of the date of this order, the second respondent is to pay those amounts, or any balance owing, to the applicant forthwith.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
INTRODUCTION
The first respondent (“Naismith Truck Movers”) operates a business that distributes and relocates vehicles. The second respondent, Mr Naismith, was a director of Naismith Truck Movers and its sole shareholder. The applicant, Mr Cooper, was employed as a casual drivers during the period 20 September 2016 to 10 November 2019 and was covered by the Road Transport and Distribution Award 2010 (“Award”) from 1 July 2018 to 10 November 2019.
Mr Cooper commenced this proceeding on 22 March 2021 alleging that Naismith Truck Movers had:
(a)failed to pay him an overnight allowance in breach of his contract; and
(b)contravened the Fair Work Act 2009 (“FW Act”) by failing to pay him:
(i)in contravention of s.293 of the FW Act, the national minimum wage and casual loading in the period 20 September 2016 to 30 June 2018, when he had been an award/agreement free employee; and
(ii)in contravention of s.45 of the FW Act, the minimum hourly rates, casual loading, overtime rates, weekend penalty rates and his full, related superannuation entitlements in the period 1 July 2018 to 10 November 2019, as prescribed by the Award.
Mr Cooper alleged that through his actions or omissions Mr Naismith had been knowingly concerned in and a party to the contraventions alleged and so is taken to have also contravened ss.45 and 293 of the FW Act.
In a statement of agreed facts (“SOAF”) filed on 10 September 2021, the respondents admitted the contraventions of the Award alleged by Mr Cooper.
These reasons concern the penalties to be imposed on the respondents for those contraventions.
The parties filed joint written submissions on 24 September 2021 and agreed to have the matter determined without an oral hearing. Annexed to the submissions were proposed consent orders which noted that the applicant agreed not to press the s.293 FW Act underpayment claim.
RELEVANT LEGISLATION
Fair Work Act
Section 45 of the FW Act provides that a person must not contravene a term of a modern award. The Award is a modern award.
Section 539 of the FW Act provides that s.45 is a civil remedy provision and s.539(2) provides that the maximum pecuniary penalty for a contravention of s.45 that was not a serious contravention under s.557A of the FW Act is 60 penalty units for individuals and 300 penalty units for corporations. It was not suggested that the contraventions met the test for serious contravention in s.557A of the FW Act.
In the period 1 July 2018 to 10 November 2019 a penalty unit was worth $210: s.4AA Crimes Act 1914 (Cth).
Road Transport and Distribution Award
Clause 15 of the Award relevantly set out the Award’s minimum weekly and hourly wage rates as they stood from time to time.
The Award also provided as follows:
12. Types of employment
…
12.5 Casual Employment
…
(c)A casual employee while working ordinary hours, must be paid on an hourly basis 1/38th of the minimum weekly rate for their classification in clause 15 – Classifications and minimum wage rates, plus a loading of 25%. A minimum payment of four hours is to be paid.
…
27. Overtime
27.1For all work done outside the ordinary hours the rate of pay will be time and a half for the first two hours and double time thereafter, such double time to continue until the completion of the overtime work.
…
28. Penalty rates
28.1 Weekend Work
(a)For any ordinary time hours worked between midnight on Friday and midnight on Saturday an employee must be paid at the rate of time and a half.
(b)For any ordinary time hours worked between midnight on Saturday and midnight Sunday an employee must be paid at the rate of double time.
(c) An employee required to work on a Saturday or Sunday will be paid for a minimum of four hours work.
(d)All time worked on Sunday will stand alone.
AGREED FACTS
The SOAF is reproduced in Annexure A to these reasons. In summary, the following facts were agreed:
(a)during the period 20 September 2016 to 1 November 2019, Naismith Truck Movers employed Mr Cooper on a casual basis to drive vehicles in order to deliver or relocate them;
(b)Mr Cooper was paid fixed rates for regular interstate routes, various trip rates for driving irregular interstate routes and an overnight allowance of $50 when required to stay overnight;
(c)Mr Cooper performed work for Naismith Truck Movers when he:
(i)waited to receive or drop off a vehicle at a client’s premises;
(ii)inspected and documented the condition of the vehicle for compliance and safety;
(iii)maintained the vehicle, including refuelling;
(iv)drove the vehicle; and
(v)time spent travelling to the next location to collect and deliver any other vehicles;
(d)by being paid fixed trip rates, Mr Cooper was underpaid because he was not paid for all time worked; and
(e)from 1 July 2018 to 10 November 2019, in breach of clauses 12.5, 15, 27 and 28.1 of the Award, Naismith Truck Movers did not pay Mr Cooper the applicable minimum hourly rates and casual loading, Saturday and Sunday loadings or overtime rates prescribed by the Award and therefore contravened s.45 of the FW Act. The parties agreed the compensation amount to be $12,003.92;
Although the Court had referred the matter to mediation, the parties resolved their differences before then and reached the agreement that is embodied in the consent orders resolving the proceeding.
JOINT SUBMISSIONS
In their joint submissions on penalty, the parties submitted that from 1 July 2018 to 10 November 2019, Naismith Truck Movers paid the applicant a flat rate which had no regard to time worked and resulted in Mr Cooper being paid underpaid a total of $12,003.92 (inclusive of superannuation), which they submitted would be appropriate to award as compensation. The parties submitted this amount was not an insignificant underpayment in circumstances where Mr Cooper is an older worker and the gross wages that were paid to and the superannuation contributions that were made for him in that period had totalled $12,250.86.
The parties submitted that Naismith Truck Movers’ failure to pay minimum rates of pay, casual loading, weekend loadings and overtime deprived Mr Cooper of the timely financial benefit of his minimum pay entitlements under the Award.
The parties submitted that this was Naismith Truck Movers’ first recorded contravention of the FW Act and it had filed a defence early in the proceeding admitting to the contraventions albeit disputing quantum. As the parties had agreed to consent orders before mediation had occurred, it was submitted that this should entitle Naismith Truck Movers to a discount on penalty.
Annexed to the parties’ joint written submissions were the following proposed consent orders:
THE COURT DECLARES THAT:
A.The First Respondent contravened s 45 of the Fair Work Act 2009 (Cth) by reason of its breaches of clauses 12.5, 15, 27 and 28.1 of the Road Transport and Distribution Award 2010 in respect of the Applicant’s employment between 1 July 2018 and 10 November 2019 by not paying Mr Cooper his entitlements to minimum pay, overtime and weekend loadings.
THE COURT ORDERS THAT:
1)The First Respondent pay the Applicant compensation in the sum of $12,003.92 for the contraventions identified at Declaration A.
2)The Court make an award for a pecuniary penalty against the First Respondent for the contravention identified at Declaration A in the amount of $20,000.00.
3)The penalty imposed in Order 2 be payable to the Applicant.
4)The First Respondent pay the Applicant’s legal costs in the sum of $10,000.00.
5)The proceeding is otherwise dismissed.
6)To the extent the amounts above are not paid by the First Respondent to the Applicant within 28 days of the date of this Order, the Second Respondent is to pay those amounts, or any balance owing, to the Applicant forthwith.
THE COURT NOTES THAT the parties have agreed:
7)On a without admission basis, the First Respondent pay the Applicant compensation in the sum of $9,720.46 for the period the national minimum wage orders applied to his employment between 20 September 2016 and 30 June 2018.
8)To the extent any penalty imposed by the Court on the First Respondent is less than $20,000.00, the First Respondent agrees to pay the difference by way of additional compensation to the Applicant.
9)To the extent any penalty imposed by the Court on the First Respondent is more than $20,000.00, the Applicant agrees to reduce the compensation at Note 7 and or legal costs at Order 4 payable by the First Respondent, by the penalty amount exceeding $20,000.00.
10)To the extent the amounts above are not paid by the First Respondent to the Applicant within 28 days of the date of this Order, the Second Respondent is to pay those amounts, or any balance owing, to the Applicant forthwith.
CONSIDERATION
I agree that, in the circumstances, it is appropriate to make the declaration sought by the parties as it records contraventions of the Award and of the FW Act which I accept occurred.
When determining an appropriate penalty to impose, regard should be had to all of the circumstances of the case, guided by the various discretionary considerations discussed in authorities such as Kelly v Fitzpatrick (2007) 166 IR 14, in order to arrive at a single result that is an instinctive synthesis of those various factors.
The underpayments can be taken to have been a series of individual underpayments over a period of time in contravention of cls.12.5, 15, 27 and 28.1 of the Award. Each contravention of a provision of the Award is a separate contravention of s.45 of the FW Act: Gibbs v Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216 at 223. In the circumstances, the breaches of each of those Award provisions, and so of s.45 of the FW Act, are to be treated as courses of conduct in relation to s.45 of the FW Act: s.557 of the FW Act. On that basis there have been four contraventions of the FW Act which, not being treated as s.557A serious contraventions, could attract a total maximum penalty of $252,000 for Naismith Truck Movers and $50,400 for Mr Naismith.
It has been agreed that Mr Cooper has suffered a loss of $12,003.92 and that this is the result of underpayments over nearly a year and a half which almost halved his wages. As the parties agreed, the underpayments were not insignificant. It was put in the joint submissions that the applicability of the Award from 1 July 2018 onwards was publicised within the vehicle distribution and relocation industry but Naismith Truck Movers’ application of a flat rate of pay has not been explained. It is to be inferred from the joint submissions that Naismith Truck Movers is not a large operation, noting that Mr Naismith is its sole director and was and still is responsible for the direction, supervision and day to day management of the company’s operations and its employees, but it has not been suggested that the size of the business provided some explanation of the company’s payment practices.
No evidence of contrition has been filed but it is to be noted that the matter was resolved at a very early point. The parties submitted:
Prior to mediation listed on 5 August 2021, the First and Second Respondent agreed to consent orders (and an outcome) that meant the Applicant was successful in his claim, saving time and cost of an extended hearing. The agreement includes paying the Applicant’s s 293 FW Act claim, contributing towards the Applicant’s legal costs and agreeing to the penalty imposed by the Court being paid to the Applicant as well as an order assuring payment by the Second Respondent. The First Respondent is entitled to a discount on penalty by reason of the utilitarian value of these admissions.
Given the very practical steps taken by the respondents to resolve the matter as quickly as they did, the lack of a statement of contrition will not weigh heavily in the balance. A discount on penalty will be applied because of the respondents’ prompt acceptance of responsibility.
Nonetheless, underpayments of the relative magnitude seen in this case must attract the Court’s disapproval and its wish to discourage similar conduct in the future, whether by the respondents or by others. In that regard, it was noted in the joint written submissions that the respondents remain in the same business as before and accept that there is a need to send a message to employers in the vehicle relocation industry that contravention of workplace laws will be taken seriously. Consequently, the penalty to be imposed will include components for specific and general deterrence.
Taking all these matters into consideration and also having regard to what is just and appropriate I accept the parties’ proposal that a penalty of $20,000 be imposed on Naismith Truck Movers and that, should some or all of that penalty not be paid by the company, Mr Naismith is to pay the shortfall: Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482. The penalty is to be paid to Mr Cooper, who took it upon himself to pursue this matter.
As a final note, the parties have agreed that the respondents are to pay Mr Cooper’s costs. Although it was not submitted that the Court’s power to award costs under s.570 of the FW Act is engaged, the Court has power under s.167 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) to made orders reflecting parties’ settlement of a proceeding. The consent order for costs is made pursuant to that power.
CONCLUSION
There will be a declaration and orders to the effect of the declaration and orders proposed by the parties in their joint written submissions. For the purposes of this proceeding, it is not necessary to include the notations that the parties suggested.
I certify that the preceding twenty-six (26) numbered paragraphs is a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 4 November 2021
ANNEXURE A
STATEMENT OF AGREED FACTS
The Applicant’s employment with the First Respondent
1.The Applicant was engaged by the First Respondent as a casual employee: SOC [1]; Defence [1].
2.The Applicant was employed by the First Respondent during the period from 20 September 2016 to 10 November 2019: SOC [2]; Defence [2].
3.The Applicant was a national system employee within the meaning of s 13 of the Fair Work Act 2009 (Cth) (FW Act): SOC [1]; Defence [1].
4.During his employment with the First Respondent, the Applicant drove new and used vehicles from one location to another for the purpose of delivering and or relocating the vehicle: SOC [1]; Defence [1].
5.The Applicant has standing to bring these proceedings: SOC [1], Defence [1].
6.The First Respondent was a national system employer for the purpose of s 14 of the FW Act: SOC [2]; Defence [2].
7.The First Respondent operates a business that distributes and or relocates by road new and used vehicles in circumstances where the vehicle itself was required to be driven from one location to another for the purposes of delivery and or relocation of the vehicle: SOC [2]; Defence [2].
8.The Road Transport and Distribution Award (2010) (Award) applied to the Applicant’s employment with the First Respondent from 1 July 2018 to 10 November 2019: SOC [23], [24]; Defence [23], [24].
9.The First Respondent was required to comply with the Award: s 45 of the FW Act.
How the Applicant was paid
10.During his employment with the First Respondent, the Applicant was paid:
10.1.fixed trip rates for driving regular interstate routes;
10.2.various trip rates for driving irregular interstate routes; and
10.3.an overnight allowance of $50.00 when required to stay overnight. SOC [8], Defence [8].
11.The Applicant performed work for the First Respondent when undertaking the following:
11.1.time spent waiting at client premises to receive a vehicle;
11.2.time spent checking the vehicle’s condition, compliance and safety;
11.3.time spent maintaining the vehicle, including refuelling;
11.4.time taken driving the vehicle from one location to another (including any breakdowns, traffic delays and other events);
11.5.time spent documenting the condition of the vehicle at delivery;
11.6.time spent waiting at the client’s premises to hand over the vehicle; and
11.7.time spent travelling to the next location to collect and deliver any other vehicles (including time spent on planes and other automobiles): SOC [13]; Defence [13].
12.The method of payment of paying fixed trip rates for the driving meant that the Applicant was underpaid including because he was not paid for all time worked.
The Applicant’s Award underpayment claim
13.The First Respondent did not pay the Applicant in accordance with the following entitlements under the Award from 1 July 2018 (being the date the Award commenced covering the First Respondent) to 10 November 2019:
13.1.applicable minimum hourly rate and casual loading for each hour worked by the Applicant: SOC [43]; Defence [43];
13.2.applicable Saturday and Sunday loading for each hour worked by the Applicant on Saturdays and Sundays: SOC [44]; Defence [44]; and
13.3.overtime rates for each hour of overtime worked by the Applicant: SOC [45]; Defence [45].
14.By reason of these failings, the First Respondent contravened s 45 of the FW Act by breaching clauses 12.5, 15, 27 and 28.1 of the Award in respect of the Applicant’s employment between 1 July 2018 and 10 November 2019: SOC [46]; Defence [46]; Consent Orders dated 4 August 2021.
15.The compensation amount is agreed as $12,003.92.
Federal Circuit Court proceedings
16. On 22 March 2021, the Applicant commenced these proceedings.
17.The First and Second Respondent filed a defence that admitted some of the claims made by the Applicant.
18.Prior to mediation, an agreement was reached between the parties to resolve the matter before further time and cost would be incurred. The parties agreed that:
18.1.The First Respondent contravened s 45 of the FW Act by reason of its breaches of clauses 12.5, 15, 27 and 28.1 of the Award;
18.2.The First Respondent pay the Applicant compensation of $12,003.92;
18.3.The appropriate penalty to be imposed on the First Respondent is $20,000 and it should be paid to the Applicant;
18.4.The First Respondent pay the Applicant’s legal costs of $10,000 to finalise this matter;
18.5.The proceeding is otherwise dismissed; and
18.6.In return for the Applicant not pressing the other claims, and to avoid further litigation costs, the following was also agreed:
18.6.1.The First Respondent would also pay the Applicant $9,720.46 in respect of his claim during the period 20 September 2016 to 30 June 2018; and
18.6.2.The Second Respondent would ensure payment is made, if it is not made by the First Respondent within 28 days of the court’s order
19.The mediation listed for 5 August 2021 was subsequently vacated.
20.The parties sent the proposed consent orders reflecting the agreed position to the Court on 4 August 2021.
21.On 13 August 2021, the Court made orders for the filing of this agreed statement of facts and submissions to allow the resolution reached to be determined on the papers.
Penalty
22.The First Respondent has breached three (3) terms of the Award (minimum pay, overtime and weekend loadings), each being a separate contravention: Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62 at [26] to [27].
23.The maximum civil penalty the First Respondent may receive from the Court for each contravention was $63,000.00 or $189,000 in total.
The nature and extent of the conduct
24.The contraventions arose out of the same incorrect method of payment being the paying of fixed trip rates without regard to the hours worked.
The size of the business enterprise involved
25.The First Respondent is a small business, it does not have any internal Human Resources or any employees with experience in navigating the Modern Award system.
26.The First Respondent continues to operate as a business employing professional truck drivers to relocate vehicles.
Co-operation
27.As said above:
27.1.The Applicant was required to commence these proceedings;
27.2.The First Respondent made admissions at the earliest opportunity through their defence;
27.3.The principal issue in dispute was the question of quantum;
27.4.The parties were required to file and serve evidence;
27.5.Prior to mediation, the First and Second Respondent agreed to consent orders; and
27.6.In agreeing to consent orders, the Applicant does not press (a) the underpayment claim under s 293 of the FW Act in respect of the NMW period; and (b) the claim under s 550 against the Second Respondent.
28.The First Respondent agreed to the resolution of the proceedings on the terms described above saving the time and cost of an extended hearing, including agreeing to pay a portion of the Applicant’s legal costs. The admissions are of utilitarian value and warrant discount on any penalty to be imposed. The agreement includes paying the claim in respect of the NMW period and agreeing to the penalty imposed by the Court being paid to the Applicant.
Previous contraventions
29.The First Respondent has operated for over ten years. The breaches of the Award are the first recorded contraventions of the First Respondent under the FW Act.