Director of Fair Work Building Industry Inspectorate v SERDAR Tunc

[2013] FCCA 438

FEDERAL CIRCUIT COURT OF AUSTRALIA

DIRECTOR OF FAIR WORK BUILDING INDUSTRY INSPECTORATE v SERDAR TUNC & ANOR [2013] FCCA 438

Catchwords:
INDUSTRIAL LAW – Penalty hearing – agreed facts.

Legislation:  

Fair Work Act 2009, ss.545(1), 546(1), (3)

Fair Work Ombudsman v Australian Workers Union, New South Wales [2010] FMCA 744

Applicant: DIRECTOR OF FAIR WORK BUILDING INDUSTRY INSPECTORATE

First Respondent: SERDAR TUNC

Second Respondent: CHRISTOPHER JARRETT

File Number: SYG 81 of 2013

Judgment of: Judge Raphael

Hearing date: 24 April 2013

Date of Last Submission: 24 April 2013

Delivered at: Sydney

Delivered on: 24 April 2013

REPRESENTATION

Counsel for the Applicant: Mr E Young

Solicitors for the Applicant: Bartier Perry

For the Second Respondent: Mr Jarrett in person

ORDERS

The Court makes the following orders:

1. Pursuant to s.546(1) of the Fair Work Act 2009[1] a total pecuniary penalty of $10,000.00 is imposed on the Second Respondent in respect of all of his contraventions of the FW Act set out in the application to be paid within 28 days of this order being made.

   [1] “FW Act”

2. Pursuant to ss.545(1) and 546(3) of the FW Act the penalty shall be paid to the Applicant’s solicitors trust account on behalf of the Workers, and within 7 days of receipt, the penalty be distributed proportionately to the Workers as follows:

   Mr Basile Alex Scarfogliere   $1,217.55

   
   

   Mr Carl Andrew Warburton    $1,590.30

   
   

   Mr Gene Carlos Fischer         $2,407.39

   
   

   Mr Liam Sean Graye               $749.67

   
   

   Mr Michael Ellis  $881.98

   
   

   Mr Shane Joseph O’Riordan  $516.22

   
   

   Mr David Charles Naughton   $225.47

   
   

   Mr Necdet Ozbilen                  $2,411.42

3. In the event that any of the above workers cannot be located to make the payment, or the payment is not accepted by them within 2 months, the amount is to be paid into the Consolidated Revenue Fund.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYG 81 of 2013

DIRECTOR OF FAIR WORK BUILDING INDUSTRY INSPECTORATE

Applicant

And

SERDAR TUNC

First Respondent

CHRISTOPHER JARRETT

Second Respondent

REASONS FOR JUDGMENT

1. This matter comes before me today for hearing on penalty. I have been provided with an agreed statement of facts signed by the second respondent and the applicant. The first respondent has not appeared in these proceedings and it is understood that he has returned to Turkey. The nature of the infringements of the Fair Work Act detailed in the agreed statement of facts is the employment of a number of persons in Australia on temporary visas as labourers in the building industry. When I say “employment” I use that term loosely because, in fact, the eight individuals were told that they had to be taken on as independent contractors. The gravamen of the agreed statement of facts is that, in fact, they were employees and as such were entitled to various benefits by way of pay, rostered days off and annual leave.

2. At [94] of the agreed statement of facts there is set out the amount of losses suffered by each of the eight workers who were so employed.  It should be noted that the person responsible for making arrangements with these eight was the first respondent rather than the second.  The second respondent authorised and arranged for the payments to the workers and he was a director of the company which “employed” them and which paid them.  As such he accepts that he did have responsibility under the Act as a person concerned with the contraventions.

3. The agreed statement of facts will be kept with the papers and sets out in detail the representations made to each of the employees and the grounds upon which it has been agreed that they should properly have been treated as employees and not as independent contractors.

4. When a court is required to consider a penalty for breaches of the Act it is obliged to take into account what has been described as a “non-exhaustive range of matters”.  Those considerations were set out by me in Fair Work Ombudsman v Australian Workers Union, New South Wales [2010] FMCA 744 at [4]. The circumstances which I propose to take into account in this matter are:

The circumstances in which the relevant conduct took place, including whether the conduct was undertaken in deliberate defiance or disregard of the Act

1. It is difficult for me to say that the second respondent undertook this conduct in deliberate defiance or disregard of the Act because it is clear from the agreed statement of facts that the representations, which constituted the most significant part of the infringements, were made by Mr Tunc.  Mr Jarrett has explained to me that he was, essentially, the hands on builder or carpenter at the various sites at which the company worked and I have no reason to believe that he was totally au fait with all the provisions of the Act and particularly those provisions relating to persons being deemed to be employees notwithstanding that their employment was described as that of independent contractors.

The nature and extent of any loss or damage sustained as a result of the breach

1. The eight individual workers did lose money by virtue of not being properly remunerated.  The total amount of the losses is around $33,000.00.

Whether there has been similar previous conduct by the respondent

1. It is accepted that Mr Jarrett has not had any previous breaches of the Act.

Whether the breaches were properly distinct or arose out of the one course of conduct

1. An interesting argument could be had on this but because of the agreement it is not necessary.  I would tend to the view that each employment was a separate infringement although an argument that it was one course of conduct would not be unreasonable.

The size of the business enterprise involved

1. So far as I am aware from the agreed statement of facts this was a small building company.

Whether senior management was involved in the breaches

1. Mr Tunc and Mr Jarrett were the guiding spirits of the two companies involved in the breach and were directors.

Whether the party committing the breach has exhibited contrition

1. Mr Jarrett has most certainly exhibited contrition.  He came along to the court at the first hearing date and made it quite clear that he accepted his responsibility in this matter and has assisted the applicant.

Whether the party committing the breach has taken corrective action

1. The companies are no longer continuing.  Mr Jarrett tells me that in future his employment or operations will be restricted to that of a carpenter.

Whether the party committing the breach has co-operated with the enforcement authorities

1. Mr Jarrett has co-operated.

The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements

1. This need is obvious but there is no indication here that the investigation and enforcement of the employee entitlements was hindered once the applicant became aware of the problem.

The need for specific and general deterrence

1. This is always an important consideration.  Insofar as specific deterrence is concerned I am satisfied that the imposition of the agreed penalty will act as a sufficient deterrent to Mr Jarrett.  Insofar as general deterrence is concerned I believe that the size of the agreed penalty would provide a message to other employers considering similar breaches.

Amount of penalty

1. The parties have agreed a penalty of $10,000.00 and they have also agreed the manner in which it should be distributed amongst the workers involved.  The maximum penalty for each infringement, if they can be considered as individual infringements, would be $6,600.00.  A total of $26,400.00.  An imposition of a penalty of $10,000.00 brings the penalty within the lower part of the medium range.  I think that is appropriate given the nature of the infringements and the matters which I have adumbrated.

2. The Court will make the following orders:

   1.Pursuant to s.546(1) of the Fair Work Act 2009 a total pecuniary penalty of $10,000.00 is imposed on the Second Respondent in respect of all of his contraventions of the FW Act set out in the application to be paid within 28 days of this order being made.

   2.Pursuant to ss.545(1) and 546(3) of the FW Act the penalty shall be paid to the Applicant’s solicitors trust account on behalf of the Workers, and within 7 days of receipt, the penalty be distributed proportionately to the Workers as follows:

   Mr Basile Alex Scarfogliere   $1,217.55

   
   

   Mr Carl Andrew Warburton    $1,590.30

   
   

   Mr Gene Carlos Fischer         $2,407.39

   
   

   Mr Liam Sean Graye               $749.67

   
   

   Mr Michael Ellis  $881.98

   
   

   Mr Shane Joseph O’Riordan  $516.22

   
   

   Mr David Charles Naughton   $225.47

   
   

   Mr Necdet Ozbilen                  $2,411.42

   3.In the event that any of the above workers cannot be located to make the payment, or the payment is not accepted by them within 2 months, the amount is to be paid into the Consolidated Revenue Fund.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Raphael.

Date:  3 June 2013