Cooper v William Sonnet Trading As v People
[2023] FedCFamC2G 772
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cooper v William Sonnet Trading As V People [2023] FedCFamC2G 772
File number(s): BRG 382 of 2022 Judgment of: JUDGE VASTA Date of judgment: 7 August 2023 Catchwords: FAIR WORK – small claim – where parties entered into a cash payment employment arrangement – where applicant now claims full wages under Award – where respondent rectified underpayment but remitted 47 per cent to ATO because applicant refused to give respondent her TFN – where applicant disputes that respondent has remitted money to the ATO but has not submitted a tax return attaching yearly payment summary – application dismissed Division: Division 2 General Federal Law Number of paragraphs: 47 Date of last submission/s: 7 August 2023 Date of hearing: 7 August 2023 Place: Brisbane Counsel for the Applicant: The Applicant appearing on her own behalf Counsel for the Respondent: The Respondent appearing on his own behalf ORDERS
BRG 382 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CAROLYN COOPER
Applicant
AND: WILLIAM SONNET TRADING AS V PEOPLE ABN 66 626 993 231
Respondent
order made by:
JUDGE VASTA
DATE OF ORDER:
7 AUGUST 2023
THE COURT ORDERS THAT:
1.The application filed on 12 September 2022 be dismissed.
IT IS NOTED THAT:
A.The Court will not provide a written version of the reasons for judgment delivered today, unless an appeal has been lodged or the Court has received a request in writing from either party seeking that written reasons be produced.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE VASTA
On 7 August 2023, I heard and determined the above matter giving short ex tempore reasons. I have been asked to give my comprehensive reasons and have done so as follows.
On 12 September 2022 the applicant, Caroline Cooper, filed an originating application in this Court seeking the payment of unpaid wages.
The background to this matter is somewhat convoluted. The respondent, Mr Sonnet, operated a business in an area of the Cairns region in which he has landlords, the Ngoonbi People. Mr Sonnet gave evidence that the business was starting to expand and he wanted to have another person work there.
The applicant was recommended to him by other persons and he eventually got around to asking the applicant if she would work for him. There is a very large dispute as to what happened next.
The applicant said that Mr Sonnet told her that he would pay her $80 cash for her time and that she could have a commission of $10 after she sold $300 worth of stock and $10 further commission for every $100 of sales that were made after that.
The respondent says that that particular arrangement was something that the applicant herself suggested to him, saying that she did not want to be paid, other than in cash, so that there would be no record. This was because, if she were paid (as it were) “on the books”, it would end up being deleterious to her Centrelink payments.
Such an arrangement should never have been contemplated. It defeats the purposes of the industrial relations regime in this country. It also has the potential to undermine the purposes of both the income tax regime and the social security regime of the Commonwealth. Whether it was the applicant, respondent or both of them who concocted this arrangement, they both knew it was wrong (as will be seen from the evidence).
Nevertheless, whichever version is correct, the fact is that this is what occurred; that is, that the applicant would work, it would seem, usually six-hour shifts, and be paid $80 plus the commission.
What is also not in dispute is that the applicant was an extremely trustworthy, honest and upright employee. She had the key to the shop, she would open up the shop and she would stay there and perform her duties.
At the end of the day, she would tally up all the sales; that is, the EFTPOS sales and the cash sales. She would send that tally to the respondent, and she would take her $80 out of the cash amounts there, as well as any commission that she had earned. If it were that the sales did not have sufficient cash, she had an emergency float from which she could take her wages. This arrangement lasted from 1 September 2019 to 31 October 2021.
The applicant claimed that the arrangement, between the two of them, started to sour around October 2021. She does not know the true reason as to why it soured other than to say that it did. The respondent gives another reason as to why it soured. But in any event, why it soured is really quite irrelevant.
The applicant said that the respondent simply wasn’t texting her and giving her work and, eventually, as it were, the relationship somehow fizzled in that there weren’t any offers of employment.
The applicant said that she, just by chance, happened to speak to another person, a friend or an acquaintance, who informed her that, as a retail worker, the going rate was something in the order of $28 an hour. The applicant realised that her $80 over six hours equated to about $13 an hour. This caused her to then give the respondent a letter, on 10 February 2022, saying that she should have been paid a lot more than what she was paid and that she wanted the respondent to pay her properly.
She made an oblique reference that the applicant had committed wage theft. The respondent took that letter to his lawyers and there began quite a deal of correspondence between the lawyer for the respondent, the accountant for the respondent and the applicant herself.
The applicant has given evidence, to me today, that she had been out of the workforce for such a long time, and had only been paid the widow’s pension, which was her only source of income, that she was pleased to be able to get a job. She said that she had no idea of what the going rates really were and she was just grateful to have the position. She said that this was why she just took what the respondent said, with no questions asked, and agreed to that arrangement. That arrangement then lasted for well over two years.
The applicant said that she did not realise that the respondent was required to get the applicant’s tax file number (“TFN”) so that he could report her income to the Australian Taxation Office (“ATO”) and withhold whatever it was that should have had withheld, and remit that sum to the ATO.
The applicant said she had no idea that the respondent should have been paying her superannuation. That evidence is somewhat hard to accept, because the applicant herself admitted that she knew that she was not an employee that was “on the books”.
As far as she recalls, she even had a conversation with the respondent during the COVID-19 crises where he actually asked her if she would go “on the books” so that he could get JobKeeper payments. She said there was a conversation as to whether this would increase her wages and she was not given any reply.
Nevertheless, this was evidence where the applicant acknowledged that she knew that she was not “on the books”, and that, obviously, something was not being done, as far as her employment was concerned, in “the proper way”. This is evidence from the applicant herself which illustrates that she knew that this arrangement was wrong.
Notwithstanding that she knew that she was not “on the books”, during the height of the COVID-19 crises, she continued in this employment and stayed with that particular manner of payment, despite knowing that it was wrong because she was not “on the books”..
Be that as it may, this does not mean that this arrangement then became something that excused the respondent from his obligation to pay the applicant in accordance with the General Retail Industry Award (“the Award”).
The respondent, when he was given the letter by the applicant saying that she wanted to be paid her proper wages and accusing the respondent of the crime of wage theft, gave the letter to his lawyer. His lawyer wrote to the applicant saying that they would resolve the matter, but they wanted the applicant to complete her TFN and tax file declaration form. The applicant was dogmatic that she wasn’t going to give the TFN to the accountant.
During her evidence today, I asked her that, if it were that she knew that she had to give the TFN as part of her employment, would she have done so; and she said yes; but then explained that the reason that she did not give the TFN to the accountants, and the lawyers, was that she did not want to give that to them until they had agreed on the amounts of money to be given to her.
The respondent could not wait to haggle over the very few dollars (around $100) with which the two of them were in disagreement. The respondent instructed his accountant and lawyer to go through all of the hours that the applicant had worked, to calculate what it is that the applicant should have been paid, according to the Award employee level 3.
The lawyer and the accountant went through all of the figures of the applicant and worked out how many hours she had worked, and what it was that she should have been paid. They sought to rectify those underpayments.
However, because the applicant would not give the respondent her TFN, the regulations of the ATO, in such circumstances, are that the employer is to withhold 47 per cent of the wages, and remit that amount to the ATO. That money can be sorted out when the applicant makes a tax return.
According to the documentation that the respondent has filed, this task was done and was completed on 1 April 2022. The accountant had calculated what amount the applicant should have been paid, and remitted 47 per cent of that amount to the ATO. The respondent’s accountant then calculated that the applicant had been paid in cash the sum of $8560, plus $1870 which was what the applicant had earned on commission.
Quite rightly, there is no mechanism under the Award for commission to be paid and that amount of $1870 had to be treated as wages paid. So when it was that the accountant added up the amount that the applicant should have been paid, the accountant remitted 47 per cent of that amount to the ATO. That amount was $10,416. The remaining 53 per cent was calculated as being $12,104.57. What had been already paid to the applicant was the sum of $8560 and $1870 which was a total of $10,630. The respondent was still short and had not paid the full amount owed.
The respondent then paid the applicant a sum of $1474.57 in unpaid wages. This then, according to the respondent, was the total of what the applicant was owed for the work that she had done for the respondent from the period 1 September 2019 to 31 October 2021.
The applicant is still aggrieved. She says that she has not received any of the money. On the scenario that I have just recounted, the only money that the applicant should have received was the sum of $1474.57. The applicant agrees that she had received that.
The applicant says that the respondent did not pay money to the ATO. The applicant says that the ATO have told her this, yet the respondent has produced a receipt which shows that he did transmit money to the ATO. The applicant has given me no evidence of what it is that she is claiming yet refuses to accept that the receipt, put into evidence by the respondent, is genuine. The proof of the pudding would be in the eating.
The applicant did ask for an adjournment so that she could get some written material to back up what she said was told to her by the ATO.
In contemplating her request, I had regard to the history of the matter. This matter has been in the system for too long for a small claims matter. It had been the subject of a hearing by the registrar, but because the evidence disclosed that the applicant and respondent may have committed a criminal act, the registrar referred the matter to me.
I had mentioned this matter on 26 June 2023 and had specifically asked both the applicant and the respondent whether there was any more material that either of them wish to put before the court. They both, expressly, said that they were content to have the matter heard on the material that was currently before the court.
Notwithstanding that assurance, the applicant attempted to file more material shortly before the hearing.
This necessitated the Court having to list the matter for another directions hearing. At that hearing, on 24 July 2023, I explained to the parties that they had told me that there was no extra material needed on the earlier occasion. I said to the applicant that I would allow her to file that further material but there would need to now be an adjournment of the matter. The applicant did not want the matter to be adjourned and the respondent certainly did not want an adjournment because of cost implications. The applicant withdrew her attempt to file more material. The hearing was then able to take place on 7 August 2023.
When the applicant asked for an adjournment in this hearing, I asked her whether she was ready to pay security for costs in the sum of $10,000 if I were to adjourn the matter. The applicant said that she didn’t have $10,000 to put up and did not want to proceed with any adjournment application. In any event, I would not have granted an adjournment because I could not conceive that there would have been any useful purpose served by an adjournment given the state of the evidence and considering the history of the matter.
As I had earlier stated, the respondent gave to the applicant pay slips for every month for which the applicant worked, and gave payment summaries for the financial years ending 30 June 2020 and 30 June 2021. At the time of the sending of those, the financial year ending 30 June 2022 had not ended.
If what the respondent had said was correct, then, upon filing the tax return and attaching the payment summary ending 30 June 2020, the applicant would be expected to have received a tax refund. But, as it transpires, the applicant did not give to the ATO her payment summary. Nor did she do so for the 2020/2021 year.
The applicant quite bizarrely says to the Court, “Why would I put in a tax return for money I didn’t receive”. The applicant clearly has no idea as to how tax returns, and the tax system itself, work. Upon receipt of the payment summary, it is then the ATO’s responsibility to ensure that the amount on the payment summary, that was said to have been withheld, has been received by the ATO. If it were that the money had not been received by the ATO, the ATO would be the ones going after the respondent to find the money that the payslips, and yearly summaries, purport to have been remitted to the ATO.
The evidence before me, clearly, is that the respondents have remitted that money to the ATO. The applicant’s assertions that this is not so it not borne out by any evidence and certainly not borne out by the most reliable way of seeing whether that is so; and that is by attaching those payment summaries to her tax return.
It is for the applicant to prove to me that there is, or has been, an underpayment. The applicant has claimed that she has been underpaid the sum of $13,865.60. However, this is based upon the applicant not counting the $1870 which she says was her commission. When that sum is subtracted from what the applicant says that she is owed, the amount is $11,995.60.
The respondent has paid the applicant $1474.57 and paid the ATO the sum of $10,416. This is a total of $11,890.57. On what the applicant says, the respondent still owes her $105.03, however, the calculations of the respondent do not reveal any shortfall, even one as small as $105.03. I accept the calculations of the respondent.
There certainly was an underpayment, but this has now been rectified on the evidence before me.
The applicant contends that the $1870 in commissions should not be part of wages. There is no reason why that should be so. That was money that was earned and paid to the applicant as remuneration for the work that she did. It should be counted as wages. The applicant does not accept that the respondent has remitted 47 per cent of her wages to the ATO and wants the Court to order that the respondent pay the $10,416 to her. I accept that the respondent did, quite properly, remit that sum to the ATO as he was obliged to do.
It is a matter for the applicant to talk to the ATO about the remitted money giving them the payment summaries. It is no longer a matter for this Court.
Given the state of the evidence that I have outlined, I am of the view that the underpayments have been rectified. I therefore dismiss the application.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta. Associate:
Dated: 23 August 2023
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