Dimkovski v Majorsite Property Group Pty Ltd
[2024] FedCFamC2G 683
•1 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Dimkovski v Majorsite Property Group Pty Ltd [2024] FedCFamC2G 683
File number(s): MLG 2284 of 2023 Judgment of: JUDGE J YOUNG Date of judgment: 1 August 2024 Catchwords: INDUSTRIAL LAW – application for review of a registrar’s decision – small claims – application seeking order for compliance with order of the Fair Work Commission – consideration of underpayment claims – consideration of accessorial liability of the second respondent Legislation: Fair Work Act 2009 (Cth) ss 12, 44, 45, 90, 117, 323, 392, 405, 539, 545, 548, 550, 675
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 256(1)
Superannuation Guarantee (Administration) Act 1992 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 rr 13.06(e), 21.02, 21.04
Cases cited: Allesch v Maunz (2003) 203 CLR 172
Alvarez Nino v Kuksal [2022] FedCFamC2G 401
Devonshire v Magellan Powertronics Pty Ltd [2013] FMCA 207
EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134
Fair Work Ombudsman & Foot & Thai Massage [2021] FCA 1241
Fair Work Ombudsman v Devine Marine Group Ltd [2014] FCA 1365
Fair Work Ombudsman v Hu [2019] FCAFC 133
Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174
Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456
Meadley v Sort Worx Pty Ltd [2013] FCA 1012
Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705
Division: Division 2 General Federal Law Number of paragraphs: 75 Date of hearing: 14 May 2024 Place of hearing: Melbourne Solicitor for the Applicant: Mr Oski of United Workers Union Solicitor for the Respondents: Did not participate ORDERS
MLG 2284 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: DIMCE DIMKOVSKI
Applicant
AND: MAJORSITE PROPERTY GROUP PTY LTD
First Respondent
YAHYA ATAY
Second Respondent
ORDER MADE BY:
JUDGE J YOUNG
DATE OF ORDER:
1 AUGUST 2024
THE COURT ORDERS THAT:
1.Pursuant to r 13.06(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Rules) the hearing proceeded in the absence of the First and Second Respondent.
2.Pursuant to s 545 of the Fair Work Act 2009 (Cth), the First and Second Respondents are to jointly and severally pay to the Applicant compensation in the following amounts:
(a)$2,312.81, less applicable taxation, to be paid to the Applicant's nominated bank account;
(b)$76.03, to be paid to the Applicant’s nominated superannuation account; and
(c)$3,907.24, less applicable taxation, to be paid to the Applicant's nominated bank account.
3.Pursuant to s 547 of the Fair Work Act 2009 (Cth), the First and Second Respondents are to jointly and severally pay to the Applicant pre-judgment interest in the following amounts:
(a)$296.47 in respect of the amount the subject of Order 2(a) above, to be paid to the Applicant's nominated bank account;
(b)$9.75 in respect of the amount the subject of Order 2(b) above, to be paid to Applicant’s nominated superannuation account; and
(c)$414.15 in respect of the amount the subject of Order 2(c) above, to be paid to the Applicant's nominated bank account.
4.Compensation, as set out in Order 2 and Order 3 above, be paid to the Applicant within 28 days of the date of these Orders.
5.Pursuant to r 7.03(2) of the Rules, leave is granted for the Applicant's name in these proceedings to be corrected to Dimce Dimkovski.
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 J YOUNG
INTRODUCTION
Before the Court is an Application under s 256(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act) seeking review of a decision of a Judicial Registrar of this Court (Review Application).
On 13 December 2023 the applicant lodged an Application in this Court pursuant to the small claims procedure under s 548 of the Fair Work Act 2009 (FW Act) which sought orders for payment by the respondents to the applicant of alleged underpayments and entitlements and for payment of an amount ordered by the Fair Work Commission (Commission) on 27 March 2023 under s 392 of the FW Act (Substantive Application).
On 15 February 2024 the Judicial Registrar made the following orders in the Substantive Application:
1.Pursuant to rule 13.06(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 the hearing proceed in the absence of the respondents.
2.The Respondents pay the Applicant $2,649.96, comprising:
(a) $2,364.02 (unpaid wages and entitlements);
(b)$76.03 (unpaid superannuation, to be paid to the Applicant’s nominated superannuation account); and
(c) Prejudgment interest of $209.91
The Judicial Registrar did not order payment of the amount ordered by the Commission pursuant to s 392 of the FW Act.
Rule 21.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Rules) provides that a review of the exercise of power by a Registrar under s 256 of the FCFCOA Act must proceed by way of a hearing de novo. Accordingly, the Substantive Application is to be considered afresh.
CONTEXT
The applicant was employed by the first respondent on a part-time basis between 15 January 2022 until his dismissal on or around 17 November 2022.
The second respondent was the sole director and secretary of the first respondent.
On 8 December 2022, the applicant filed an application to the Commission for a remedy for unfair dismissal under s 394 of the FW Act.
The unfair dismissal application proceeded to an arbitration hearing before the Commission on 23 March 2023.
On 27 March 2023, the Commission found that the applicant’s dismissal was unfair and ordered the first respondent to pay the applicant $3,907.24, less taxation before 8 April 2023 (Commission Order).
In contravention of the Commission Order, the first respondent did not pay $3,907.24 less taxation to the applicant before 8 April 2023. The evidence before the Court is that as at the date of hearing the first respondent has still not paid to the applicant the amount stipulated in the Commission Order.
PROCEEDINGS IN THIS COURT
Substantive Application
The Substantive Application sought orders in relation to amounts of money that the first respondent was required to pay the applicant pursuant to ss 44, 45, 90, 117, 323 and 405 of the FW Act and cls 15, 18, 20 and 21.3(b) of the Cleaning Services Award 2020 (Award). The amounts of money sought by the applicant can be separated into the following two categories:
(1)the amounts that arose from the first respondent underpaying the applicant’s wages and entitlements during his employment (Underpayment Amount); and
(2)the amount that arose from the first respondent’s failure to comply with the Commission Order (FWC Amount).
The Substantive Application also sought that pursuant to s 550 of the FW Act that the second respondent be found to be a person “involved in” the contraventions and be liable as an accessory. Compensatory orders against the second respondent are sought in respect of that accessorial liability.
No material was filed by the first or second respondent in relation to the Substantive Application and there was no appearance by either the first or second respondent at the hearing of the Substantive Application.
On 15 February 2024 the Registrar made orders requiring the respondents to pay the Underpayment Amount to the applicant. The Registrar did not make orders that either of the respondents pay the FWC Amount.
Review Application
As already set out, the Application presently before the Court is an Application for Review of a Registrar’s Decision, which was lodged by the applicant on 21 February 2024 and accepted for filing on 27 February 2024. The Review Application is to be conducted as a hearing de novo.
In the Review Application, the applicant sought orders in the following terms:
1. The Respondents pay the Applicant $6,772.26, comprising:
a.$2,312.81 (unpaid wages and entitlements);
b.$76.03 (unpaid superannuation, to be paid to the Applicant’s nominated superannuation account);
c.$3,907.24 (unfair dismissal order); and
d.Prejudgment interest of $476.18
2.The applicant’s name in these proceedings be substituted with Dimce Dimkovski.
Prior to the hearing the applicant provided a minute of orders in the following terms:
THE COURT DECLARES THAT:
1. The first respondent contravened the following civil remedy provisions:
(a)ss 45 and 323 of the Fair Work Act 2009 (Cth) (Fair Work Act) by failing to pay the applicant the required weekend penalty rate in accordance with cl 20 of the Cleaning Services Award 2020 (Award);
(b)s 44 of the Fair Work Act by failing to pay the applicant his untaken paid annual leave when his employment ended as required in accordance with s 90(2) of the Fair Work Act;
(c)s 44 of the Fair Work Act by failing to provide the applicant the required notice of termination or pay in lieu of notice in accordance with s 117 of the Fair Work Act;
(d)s 45 of the Fair Work Act by failing to pay the required superannuation contributions to a superannuation fund for the benefit of the applicant in accordance with cl 18.2 of the Award; and
(e)s 405 of the Fair Work Act by failing to pay the required compensation to the applicant in accordance with the order of Deputy President Clancy of the Fair Work Commission on 23 March 2023.
2.The second respondent was involved in, pursuant to s 550 of the Fair Work Act, each of the first respondent’s contraventions set out in declarations 1(a) to (e) above.
THE COURT ORDERS THAT:
1.Pursuant to r rule 13.06(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 the hearing proceeded in the absence of the respondents.
2. The respondents pay the applicant the following sums:
(a)$2,312.81, less applicable taxation in respect of the contraventions the subject of declarations 1(a) to (c) above, to be paid to the applicant's nominated bank account;
(b)$76.03 in respect of the contravention the subject of declaration 1(d) above, to be paid to the Applicant’s nominated superannuation account;
(c)$3,907.24, less applicable taxation, in respect of the contravention the subject of declaration 1(e) above, to be paid to the applicant's nominated bank account; and
(d)Prejudgment interest of $606.89, to be paid to the applicant's nominated bank account.
3.The respondents pay compensation to the applicant within 28 days of the date of the final orders.
4.The applicant’s name in these proceedings be substituted with Dimce Dimkovski.
The Review Application was listed for hearing on 14 May 2024 (Review Hearing).
At the Review Hearing the applicant did not press the declarations sought above.
REVIEW HEARING
Non-appearance by the respondents
The respondents did not file any material in relation to the Substantive Application or the Review Application, nor did they attend the Review Hearing.
On the material before the Court, I am satisfied that the respondents were properly on notice of the Review Hearing and had a full opportunity to file material in relation to it and attend the Review Hearing. They did not do so. A court cannot force a party to take advantage of an opportunity to be heard: Allesch v Maunz (2003) 203 CLR 172, [38]-[40]. Accordingly, pursuant to r 13.06(e) of the Rules I consider it appropriate to proceed in the absence of the respondents.
The applicant was represented by the United Workers’ Union.
Late filing of the Review Application
Before turning to the Substantive Application, I address the preliminary issue of the late filing of the Review Application.
Rule 21.02(1) of the Rules provides that an Application for Review of a Registrar’s Decision must be made within 7 days. Rule 21.02(2) provides that time may be extended in a proceeding by the Court “on any terms that the Court … thinks fit”.
The Registrar’s Decision was made on 15 February 2024. An Application for Review of that decision in this Court was therefore required to be made no later than 21 February 2024. The Review Application was not lodged until 27 February 2024 and was therefore lodged 6 days outside the statutory time frame.
A review of the Court file indicates that the Review Application was lodged with the Court on 21 February 2024 but due to certain documents being attached, it was not accepted for filing on that date. For reasons not readily apparent from the Court file, the Review Application was ultimately not accepted for filing until 27 February 2024. In the circumstances where the Review Application was initially sought to be filed within time, I am satisfied it is appropriate to extend the time for filing to 27 February 2024.
CONSIDERATION
UNDER PAYMENT CLAIMS
The applicant’s uncontested evidence is that he was employed by the first respondent on a permanent part-time basis from 15 January 2022 until his dismissal on or around 17 November 2022. During his employment with the first respondent the applicant’s employment was covered by the Award.
Penalty rates underpayment
The applicant’s uncontested evidence is that from October 2022 until 13 November 2022 he worked from 11.00 am to 2.00 pm on Saturday and Sunday at the Union Square Brunswick Shopping Centre but was not paid the applicable hourly penalty rates provided for in clause 20 and Schedule B.1.2 of the Award.
The applicant submits that as a consequence of the above:
(a)he was underpaid in the amount of $464.64;
(b)the first respondent contravened s 45 of the FW Act; and
(c)the first respondent contravened s 323 of the FW Act.
Annual leave and annual leave loading
The applicant’s uncontested evidence is that at the time of his termination of employment he had 43.61537 hours of accrued but unused annual leave. His evidence is that he was not paid for this accrued but unused annual leave.
The applicant submits that pursuant to clause 21.3.b of the Award he was entitled to 17.5% annual leave loading on accrued but untaken annual leave. On the evidence before the Court no annual leave loading was paid to the applicant upon termination of employment.
The applicant submits that as a consequence of the above:
(a)he was underpaid in the amount of $1395.69 for accrued but untaken annual leave;
(b)he was underpaid in the amount of $244.45 for annual leave loading;
(c)the first respondent contravened s 90(2) of the FW Act and thereby contravened s 44 of the FW Act; and
(d)the first respondent contravened s 323 of the FW Act.
Notice of termination
The applicant’s uncontested evidence is that has was not provided with written notice of termination of employment or payment in lieu of notice of termination.
The applicant submits that as a consequence of the above:
(a)he was underpaid in the amount of $259.44;
(b)the first respondent contravened s 117 of the FW Act and thereby contravened s 44 of the FW Act.
Superannuation
The applicant submits that pursuant to clause 18 of the Award and the Superannuation Guarantee (Administration) Act 1992 (Cth) he was entitled to superannuation contributions of 10.5% on all ordinary time earnings. The applicant’s uncontested evidence is that no superannuation contributions were made on behalf of the applicant by the first respondent.
The applicant submits that as a consequence of the above:
(a)he is owed $76.03 in superannuation contributions;
(b)the first respondent contravened s 45 of the FW Act.
Consideration of underpayment claims
On the evidence before the Court, I am satisfied that:
(a)the first respondent has contravened ss 44 and 45 of the FW Act as contended by the applicant; and
(b)the loss suffered by the applicant because of those contraventions is in the amount of $2,440.05.
As to s 323, there is divergent authority as to the application of that section. It was most recently considered by Colvin J in Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705 (Wilkinson). In Wilkinson his Honour said at [100-103]:
… Section 323(1) is expressed as an obligation concerning the manner in which an employer “must pay” the amounts described… in effect its operative prescription concerns the way in which payment should be made of particular types of payment obligations …although the section refers to amounts payable to an employee the operative requirement concerns the ways in which an employer “must pay”…it concerns how payments in the category of payment as described are to be made…
I respectfully adopt his Honour’s reasoning. Accordingly, I am not satisfied that a contravention of s 323 has been established. However, in the present circumstances nothing turns on that.
Pursuant to s 539 of the FW Act, ss 44 and 45 of the FW Act are civil remedy provisions. Section 539(2) provides, relevantly, that an employee may apply to Division 2 of this Court for orders in relation to a contravention of a civil remedy provision.
Pursuant to s 545(1) of the FW Act the Court may make “any order the court thinks appropriate” if it is satisfied that a person has contravened a civil remedy provision. Pursuant to s 545(2) the orders that the Court may make include an order awarding compensation for the loss the person has suffered because of the contravention. Section 545 of the FW Act confers broad remedial powers on this Court to grant relief to persons who have suffered as a result of a contravention of a civil penalty provision: Meadley v Sort Worx Pty Ltd [2013] FCA 1012 at [33].
Section 548 of the FW Act provides that an applicant may elect to have the application for orders be dealt with as a small claim proceeding if, relevantly, the order relates to an amount that an employer was required to pay to, or on behalf of, an employee under the FW Act or a fair work instrument: s 548(1)(b), s 548(1A)(a)(i) FW Act. A fair work instrument includes a modern award: s 12 FW Act. There are other limitations on access to the small claims procedure which are not presently relevant.
I consider it clear that the orders sought in relation to the Underpayment Amounts relate to an amount that the first respondent was required to pay to, or in the case of the superannuation contribution, on behalf of, the applicant under the FW Act or a fair work instrument.
I am satisfied that in all the circumstances it is appropriate to order that the first respondent pay to the applicant compensation in the amount of the claimed underpayments.
I address the question of the second respondent’s accessorial liability below.
FWC AMOUNT
The applicant’s uncontested evidence is that on 27 March 2023 the Commission found that the applicant’s dismissal from the employment of the first respondent was unfair and ordered the first respondent to pay to the applicant the FWC Amount, being compensation in the sum of $3,907.24, less taxation, by 8 April 2023.
The applicant’s uncontested evidence is that the first respondent has not paid the FWC Amount.
In relation to the FWC Amount, the applicant submits that:
(a)the order for payment of the FWC Amount was made pursuant to s 392 of the FW Act;
(b)s 392 of the FW Act is found in Part 3-2 of the FW Act;
(c)s 405 of the FW Act provides that a person to whom an order under Part 3-2 applies must not contravene a term of the order; and
(d)s 405 is a civil remedy provision.
Those submissions are, in my view, plainly correct. The applicant further submits, again correctly in my view, that by failing to comply with the order for payment of the FW Amount the first respondent has contravened a civil remedy provision, being s 405 of the FW Act.
As set out above, s 539(2) of the FW Act provides, relevantly, that an employee may apply to Division 2 of this Court for orders in relation to a contravention of a civil remedy provision. Pursuant to s 545(1) of the FW Act the Court may make “any order the court thinks appropriate” if it is satisfied that a person has contravened a civil remedy provision, including, pursuant to s 545(2), an order awarding compensation for the loss the person has suffered because of the contravention. Accordingly, I consider that pursuant to the powers in ss 539 and 545 of the FW Act the Court may, if it considers it appropriate to do so, order compensation for the first respondent’s contravention of s 405 of the FW Act.
The applicant has elected for the application for orders in relation to this contravention to be dealt with under the small claims procedure. In Alvarez Nino v Kuksal [2022] FedCFamC2G 401 (Nino) Forbes J said at [84]:
… section 548 is procedural. It is not a source of jurisdiction. There is no mechanism under Division 3/ section 548 for a person to apply to a Court for an order in relation to a civil remedy. Any application seeking to engage the jurisdiction of the Court is made under section 539.
I respectfully agree with those comments. The Court’s power to make compensatory orders pursuant to s 545 is constrained by the provisions of sub-ss 548(1) and (2) which, relevantly, presently require that the order sought relates to an amount that an employer was required to pay to, or on behalf of, an employee under the FW Act or a fair work instrument: s 548(1)(b), s 548(1A)(a)(i). The order sought is compensation for contravention of s 405, arising from a failure to comply with an order made pursuant to s 392 of the FW Act for payment to the applicant of the FW Amount. It is, in my view, an order sought which relates to an amount the employer was required to pay to the employee under the FW Act as required by s 548(1A)(a)(i).
Accordingly, the Court has power to make the compensatory order sought against the first respondent in relation to the FW Amount. Further, I consider such an order to be appropriate in all the circumstances.
I address the question of the second respondent’s accessorial liability below.
ACCESSORIAL LIABILITY OF THE SECOND RESPONDENT
Section 550 of the FW Act
Section 550 of the FW Act states as follows:
Involvement in contravention treated in the same way as actual contravention
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
Section 550 of the FW Act therefore has the effect of deeming a person involved in a contravention (often referred to as an accessory) to be a contravenor. That is, where a person has been “involved in” the contravention (as defined in section 550(2)) that person is taken to have contravened the civil remedy provision. Section 550 is not a civil remedy provision itself and it does not establish a separate contravention. Rather, it deems an accessory to a contravention to be a contravenor and operates to enables that person’s involvement in the contravention to be “treated in the same way as actual contravention”: Devonshire v Magellan Powertronics Pty Ltd [2013] FMCA 207 at [81], [84].
The applicant submits that the Court should find that the second respondent, Mr Atay, was “involved in” the contraventions of the first respondent within the meaning of s 550(1) of the FW Act, as that term is defined in s 550(2)(c) of the FW Act, and is therefore taken to have contravened the civil remedy sections set out above. The applicant seeks compensatory orders against Mr Atay in respect of that accessorial liability.
The question of whether, in the small claims procedure under s 548 of the FWA Act, the Court has jurisdiction to make a compensatory order against a person who was involved in a contravention of a civil remedy provision within the meaning of s 550 was also considered by Judge Forbes in Nino.
In Nino, Judges Forbes said:
[87]The Court’s power to make orders under section 545 is not limited to making orders against employers and there is no reason why such an order cannot be made against a person who has been involved in an employer’s contravention if the Court considers it appropriate to do so. An application for an order against an accessory who was involved in an employer’s underpayment is on any view an application for an order in relation to a contravention for the purposes of s 539(2) and which relates to an amount the employer was required to pay for the purposes of s 548(1)(b).
…
[89]In Scotto v Scala Bros Pty Ltd [2014] FCCA 2375 (“Scotto”), Judge Cameron held that the Court’s power to make orders under section 545 of the FW Act 2009 (Cth) was materially different to predecessor provisions in the Workplace Relations Act 1996 (Cth) which did “not accommodate the idea that anybody other than the employer in question will be liable for underpayments”.
[90]Subsequent to Scotto the nature and extent of the Court’s power to order an accessory to pay compensation has been considered in a number of decisions, including the issue of whether paragraphs 2176-2177 of the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) expressed a legislative intention to constrain the Court’s power to make compensatory orders against accessories.
[91]The proper meaning of section 545 was considered in Veeraragoo v Goldbreak Holdings Pty Ltd (No 2) [2018] FCA 1448, where at [47] Colvin J observed that the task of statutory construction begins with a consideration of the text and extrinsic materials cannot be relied upon to displace the clear meaning of the text. In terms of statutory construction, his Honour held that section 545, 546 and 550 of the FW Act are to be construed, not the terms of the Explanatory Memorandum. His Honour held that, “having regard to the purposes of the Fair Work Act, the meaning of s 545 is that where a court has determined that there has been a contravention then before any person (including a person involved in a contravention) may be ordered to pay compensation, the court must have formed the view that such an order is appropriate in the particular circumstances”
I respectfully also adopt those comments.
I am satisfied that pursuant to s 545 of the FW Act, the Court has power to make any order it considers appropriate, including compensatory orders for unpaid wages and the FWC Amount, if it is satisfied that a person has contravened a civil remedy provision, including by reason of that person being a deemed contravenor.
Legal principles regarding accessorial liability
The relevant principles as to “involvement” and accessorial liability were discussed by White J in Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [227]-[234]. In summary, the central principles are:
(1)to be knowingly concerned in a statutory contravention, the person must have been an intentional participant with knowledge, at the time of contravention, of the essential elements constituting it: Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [229];
(2)constructive or imputed knowledge is not enough; actual knowledge is required. But actual knowledge may be inferred from “exposure to the obvious”. It is not necessary that the person also knows that the elements amount to a contravention. Put another way, a person may be an accessory without knowing that the conduct in which he or she is involved is unlawful: Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [233]; and
(3)the person must have engaged in conduct which implicates or involves her or him in the contravention, so that there is a “practical connection” between the person and the contravention: Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [227].
Subsequently, the relevant principles were discussed by the Full Court in Fair Work Ombudsman v Hu [2019] FCAFC 133 (Hu), including the decisions regarding the requirement that the accessory have actual knowledge of the essential elements of the contravention as discussed in Fair Work Ombudsman v Devine Marine Group Ltd [2014] FCA 1365 (Devine Marine) and EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134.
It is settled law (as per the Full Court in Hu, applying Devine Marine) that accessorial liability:
(1)requires actual knowledge of the essential elements of the contravention and not imputed knowledge; and
(2)does not require knowledge that the essential elements constitute a contravention.
For liability to be found the accessory must be shown to have engaged in conduct which implicates him in the contraventions so as to demonstrate that there is some practical connection between him and the contravention: Fair Work Ombudsman & Foot & Thai Massage [2021] FCA 1241 at [781].
Was Mr Atay knowingly concerned in the contravention of the civil remedy provisions relating to underpayment claims?
The applicant submits that the second respondent, Mr Atay, was and is the sole director and secretary of the first respondent and was therefore the “guiding mind” of the first respondent. The applicant submits that Mr Atay had the capacity to control, direct and influence the conduct of the accountant engaged by the first respondent in relation to the applicant’s rates of pay and terms and conditions of employment. As such, the applicant submits that the second respondent had actual knowledge of the essential elements of the contraventions in relation to the underpayment claims. I accept those submissions.
A corporate entity can only act through individuals. When a company acts through a particular person, then that person will be, in the absence of contrary evidence, accessorily liable. In Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 at [126] Buchanan J said:
Not only was Mr Ramsey involved in any contravention committed by Ramsey Food Processing, he was its guiding mind. He is wholly concerned in and responsible for the contraventions by Ramsey Food Processing. He is liable in his own right as an accessory.
On the evidence before the Court Mr Atay was the sole director and company secretary of the first respondent. Although an accountant was engaged by the first respondent to assist with book-keeping, on the evidence before the Court the accountant worked under the instruction and direction of Mr Atay. Mr Atay had the capacity to control, direct and influence the conduct of the accountant and did so. On the evidence before the Court it was Mr Atay who determined where and when the applicant would work and the rates of pay to be provided to the applicant for the work that he performed. Further, Mr Atay made the decision to terminate the applicant’s employment on 17 November 2022. Accordingly, on the evidence before the Court, I am satisfied that there is a practical connection between the underpayment contraventions and Mr Atay. I am therefore satisfied that Mr Atay was involved in the underpayment contraventions for the purposes of s 550(1) of the FW Act.
Was Mr Atay knowingly concerned in the contravention of the civil remedy provision relating to FWC Amount?
The applicant submits that Mr Atay had actual knowledge of the FWC Amount owed to the applicant by 8 April 2023 and knew that failing to pay the FWC Amount was contrary to law. As a result, it is submitted, Mr Atay had actual knowledge of the essential elements of the contravention of s 405 of the FW Act. I accept those submissions.
As set out above, the uncontested evidence before the Court is that on 27 March 2023 the Commission ordered the first respondent to pay to the applicant the FWC Amount, being compensation in the sum of $3,907.24, less taxation, by 8 April 2023.
The evidence before the Court is that on 3 April 2023 correspondence was sent via registered post to the first respondent’s registered business address and via email to the email address of the first respondent, putting the first respondent on notice that the FWC Amount was due to be paid to the applicant by 8 April 2023. That correspondence also informed the first respondent that failure to comply with the FWC order was a criminal offence under s 675 of the FW Act and would expose the first respondent to penalties.
As already set out, Mr Atay is the sole director and company secretary of the second respondent. As such, he is the controlling and guiding mind of the first respondent. In those circumstances, and in light of the matters set out in the preceding paragraph, I am satisfied that there is a practical connection between the failure to pay the FWC Amount and the contravention of s 405 of the FW Act and Mr Atay. I am therefore satisfied that Mr Atay was involved in the FWC Amount contravention for the purposes of s 550(1) of the FW Act.
Accordingly, for the reason set out above, I find that the second respondent is a person involved in each of the civil remedy contraventions by the first respondent set out at paragraphs [38] and [50] above and by reason of s 550(1) of the FW Act has contravened ss 44, 45 and 405 of the FW Act.
DISPOSITION
For the reasons set out above, I make the orders set out at the commencement of this judgment.
I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of Judge J Young. Associate:
Dated: 1 August 2024
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