Director of the Fair Work Building Industry Inspectorate v Vic Metro Brick and Blocklaying Pty Ltd
[2015] FCCA 2266
•21 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE v VIC METRO BRICK AND BLOCKLAYING PTY LTD & ORS | [2015] FCCA 2266 |
| Catchwords: INDUSTRIAL LAW – Liability – failure to pay minimum rates of pay, travel allowance and accrued but untaken annual leave upon termination – failure to make superannuation contributions – failure to provide pay slips – being knowingly concerned in contraventions by principal. |
| Legislation: Corporations Act 2001 ss.50AAA, 131 Fair Work Act 2009 ss.12, 22, 44, 45, 86, 87, 90, 323, 536, 550 Building and Construction General On-Site Award 2010 cls.10, 14, 19.1, 19.3, 21, 25.2, 32.2 Federal Circuit Court of Australia Act 1999 s.64 |
| Cases cited: Aztech Science Pty Ltd v Atlanta Aerospace (Woy Woy) Pty Ltd (2005) NSWCA 319 Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 New Image Photographics Pty Ltd v Fair Work Ombudsman [2013] FCA 1385 Potter v Fair Work Ombudsman [2014] FCA 187 Scotto v Scala Bros Pty Ltd and Anor [2014] FCCA 2374 |
| Applicant: | DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
| First respondent: | VIC METRO BRICK AND BLOCKLAYING PTY LTD (IN LIQ) (ACN 151 293 453) |
| Second respondent: | VIC METRO BRICK AND BLOCKLAYING AUSTRALIA PTY LTD (ACN 160 943 199) |
| Third respondent: | MEL BONNICI |
| File number: | MLG 2272 of 2013 |
| Judgment of: | Judge Riley |
| Hearing dates: | 30 June 2015, 1 and 2 July 2015 |
| Date of last submission: | 23 July 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 21 August 2015 |
REPRESENTATION
| Counsel for the applicant: | Cathy Dowsett |
| Solicitors for the applicant: | Fair Work Building and Construction |
| Counsel for the first respondent: | The first respondent did not appear |
| Solicitors for the first respondent: | The first respondent was not represented |
| Advocate for the second respondent: | Mr Jesse Bonnici |
| Solicitors for the second respondent: | The second respondent was represented by Mr Jesse Bonnici |
| Counsel for the third respondent: | The third respondent appeared in person |
| Solicitors for the third respondent: | The third respondent was not represented |
DECLARATIONS
The second respondent breached:
(a)s.45 of the Fair Work Act 2009 (“the Act”) by failing to pay correct entitlements, and, in particular:
(i)minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Building and Construction General On-Site Award 2010 (“the Award”) to David Sheridan, Wesley Keenan and Thomas McKeown;
(ii)the metropolitan radial areas allowance in accordance with clause 25.2 of the Award to Brett Stielow, David Sheridan, Wesley Keenan and Thomas McKeown; and
(iii)superannuation contributions in accordance with clause 32.2 of the Award on behalf of Brett Stielow, Benjamin Eichner, David Sheridan, Wesley Keenan and Thomas McKeown;
(b)s.44 of the Act by contravening the National Employment Standards by failing to pay Brett Stielow, David Sheridan, Wesley Keenan and Thomas McKeown accrued but untaken annual leave upon termination in accordance with s.90(2) of the Act;
(c)s.323(1) of the Act by failing to pay David Sheridan, Wesley Keenan and Thomas McKeown amounts payable in relation to the performance of work in full and at least monthly; and
(d)s.536(1) of the Act by failing to provide payslips to Benjamin Eichner and Thomas McKeown within one working day of paying them.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2272 of 2013
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
Applicant
And
| VIC METRO BRICK AND BLOCKLAYING PTY LTD (IN LIQ) (ACN 151 293 453) |
First respondent
| VIC METRO BRICK AND BLOCKLAYING AUSTRALIA PTY LTD (ACN 160 943 199) |
Second respondent
| MEL BONNICI |
Third respondent
REASONS FOR JUDGMENT
Introduction
This is an application for orders and declarations in respect of certain alleged contraventions of the Fair Work Act 2009 (“the Act”). At this stage, only issues of liability have been addressed at trial. Penalties, if any, will be dealt with separately. The alleged contraventions are:
a)breaches of s.45 of the Act by failing to pay correct entitlements, and, in particular:
i)minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Building and Construction General On-Site Award 2010 (“the Award”);
ii)the metropolitan radial areas allowance (also known as travel allowance) in accordance with clause 25.2 of the Award; and
iii)superannuation contributions in accordance with clause 32.2 of the Award;
b)breaches of s.44 of the Act by contravening the National Employment Standards by failing to pay employees accrued but untaken annual leave upon termination in accordance with s.90(2) of the Act;
c)breaches of s.323(1) of the Act by failing to pay employees amounts payable in relation to the performance of work in full and at least monthly; and
d)breaches of s.536(1) of the Act by failing to provide payslips to employees within one working day of paying them.
Various alleged contraventions were in respect of various workers (“the workers”), namely:
a)Benjamin Eichner;
b)Brett Stielow;
c)Thomas O’Donnell;
d)David Sheridan;
e)Wesley Keenan;
f)Issay Kagan; and
g)Thomas McKeown.
It was initially alleged that the contraventions were perpetrated by both the first and second respondents. It was also initially alleged that the third respondent was knowingly concerned in the contraventions by both the first and second respondents in breach of s.550(2)(c) of the Act.
However, since the commencement of the proceedings, the first respondent has gone into liquidation. The applicant did not seek an order pursuant to s.417B of the Corporations Act 2001 to proceed against the first respondent. Therefore, the proceedings against the first respondent have been stayed. The applicant did not seek any orders against the first respondent.
Also, the applicant did not pursue the allegations that the third respondent was knowingly concerned in the breaches by the first respondent. (See particularly paragraphs 38, 42, 43 and 56 of the applicant’s written submissions.) That is perhaps surprising, given that there is authority that a person can found accessorily liable for the contraventions of a company that has gone into liquidation. (See, for example, Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [10]).
Mr Jesse Bonnici was the sole director and shareholder of the first and second respondents. He has applied to the Australian Securities and Investment Commission for the second respondent to be deregistered. However, on the application of the applicant, the deregistration has been deferred and is expected to be further deferred pending judgment in this proceeding.
Mr Mel Bonnici is the third respondent. He is also the father of Mr Jesse Bonnici. Mr Mel Bonnici worked for both the first and second respondents as a manager. The applicant seeks orders against Mr Mel Bonnici for being knowingly concerned in the alleged contraventions by the second respondent.
The first and second respondents were represented by a solicitor until 10 June 2015. The solicitor acted for the second and third respondents when they filed their joint response and their affidavits. However, the solicitor withdrew prior to the trial. Mr Jesse Bonnici, as the sole director and shareholder of the second respondent, was given leave to appear for that company. Mr Mel Bonnici appeared for himself.
Background
The first respondent, Vic Metro Brick and Blocklaying Pty Ltd (“VM”), was registered on 3 June 2011 and went into external administration on 7 August 2013. The Deputy Commissioner of Taxation lodged an application to wind up VM on 12 July 2014. Vic Metro Brick and Blocklaying Australia Pty Ltd (“VMA”) was registered on 25 October 2012.
Both VM and VMA operated a workforce of brick and block layers. On 10 October 2012, VM entered into an agreement with Pirovich Pty Ltd whereby VM agreed to provide certain brick and block laying work at 428 Tooronga Road, Hawthorn East (“Tooronga Road”).
Also on 10 October 2012, VM entered into a deed of assignment with VMA whereby VMA acquired all of VM’s debtors and contracts. In answer to a question from his father, Mr Jesse Bonnici explained to the court that he entered into the deed of assignment because VM had a tax debt that was more than the business was worth and he was advised by a solicitor, Mr Peter Dimas, to sell VM’s name, equipment and contracts. In its written submissions, VMA said that the only reason VMA opened was because VM was trading while insolvent with a large tax debt and had to close. In his affidavit, Mr Jesse Bonnici explained that he was approached by Mr Dimas because VM had a default judgment debt to WorkCover.
Although the deed of assignment was dated 10 October 2012, VMA was not registered until 25 October 2012. Subsection 131(1) of the Corporations Act 2001 provides that:
If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract:
(a) within the time agreed to by the parties to the contract; or
(b)if there is no agreed time--within a reasonable time after the contract is entered into.
I consider that the VMA became registered within a reasonable time after the deed of assignment was entered into. In his affidavit, Mr Jesse Bonnici said that he did not believe the deed of assignment was ever acted upon. However, in his oral evidence, he said that VMA was responsible for the job at Tooronga Road and that all invoices for the job at Tooronga Road were in the name of VMA. He claimed that the original contract between VM and Pirovich was an administrative error, and that there was another contract signed later between VMA and Pirovich. However, he did not put into evidence the alleged contract between VMA and Pirovich.
In the absence of at least a copy of the supposed contract between Pirovich and VMA, I do not accept that it existed. I consider that VMA did the work at Tooronga Road pursuant to the deed of assignment. I consider that by doing that work pursuant to the deed of assignment, VMA impliedly ratified the deed of assignment. That work commenced within a reasonable time after the execution of the deed of assignment. Therefore, I consider that s.131(1) of the Corporations Act 2001 was satisfied. See Aztech Science Pty Ltd v Atlanta Aerospace (Woy Woy) Pty Ltd (2005) NSWCA 319.
Mr Jesse Bonnici said in his affidavit that he had given all of the records relating to VM to Mr Dimas to give to the liquidator. None of the parties subpoenaed those records. In his cross-examination of Mr Stielow, Mr Jesse Bonnici produced one record of VM, being the payer copy of Mr Stielow’s tax file number declaration. This document is discussed below.
Mr Jesse Bonnici also said in his affidavit that all of the records relating to VMA were destroyed in a fire at his former home. He was cross-examined about the fire. However, it was not put to him that his evidence about the fire was a fabrication and the fact of the fire was not disputed in any of the material filed by the applicant.[1] Consequently, I accept that the records of VMA were destroyed in a fire at Mr Jesse Bonnici’s home.
[1] T 119 – 120.
Casual or daily hire
The applicant maintained that the workers were all employed by VM and VMA on a daily hire basis. VMA and Mr Mel Bonnici maintained that the workers were employed on either a casual or a daily hire basis.
VMA and Mr Mel Bonnici accepted that the Award applied to the workers that VM and VMA engaged. Clause 10 of the Award at all relevant times provided that people employed under it are employed as:
a)daily hire employees;
b)full-time weekly hire employees;
c)part-time weekly hire employees; or
d)casual employees.
The Award at all relevant times provided as follows:
14. Casual employment
14.1A casual employee is one engaged and paid in accordance with the provisions of this clause.
14.2A casual employee is entitled to all of the applicable rates and conditions of employment prescribed by this award except annual leave, paid personal/carer’s leave, paid community service leave, notice of termination and redundancy benefits.
14.3An employer, when engaging a person for casual employment, must inform the employee, in writing, that the employee is to be employed as a casual, stating by whom the employee is employed, the job to be performed, the classification level, the actual or likely number of hours to be worked, and the relevant rate of pay.
14.4 ...
14.5A casual employee must be paid a casual loading of 25% for ordinary hours as provided for in this award. The casual loading is paid as compensation for annual leave, personal/carer’s leave, community service leave, notice of termination and redundancy benefits and public holidays not worked.
It was not alleged that either VM or VMA gave any of the workers the notice required by clause 14.3 of the Award. Therefore, it follows that the workers were not employed as casuals. The only remaining option advanced by the parties is that the workers were employed as daily hire employees. In the circumstances, I accept that the workers were employed on that basis by VM and VMA.
VM assigned all of its contracts to VMA with effect from 25 October 2012. However, the applicant conceded that the assignment could not have included the daily hire agreements, as they were contracted one day at a time. Nevertheless, Mr Jesse Bonnici’s evidence was that VMA was opened because VM was trading while insolvent and had to close. As VM could not properly have continued trading while it was insolvent and probably “closed” in accordance with Mr Jesse Bonnici’s evidence when VMA “opened”, I conclude that any work that any of the workers did for “Vic Metro” on or after 25 October 2012 was done for VMA as a daily hire employee, and any work that was done before that date for Vic Metro was done as a daily hire employee for VM.
The tables
The applicant attached to the statement of claim a long and complicated table in respect of each employee. The tables set out various matters in relation to each employee including:
a)each employee’s hourly rates of pay under the Award;
b)the dates and times worked;
c)the amounts to which each worker was entitled under the Award for ordinary hours worked;
d)the amounts received by the individual workers from VM and VMA;
e)the amount payable to each worker for travel allowance; and
f)the number of hours of accrued but untaken annual leave owing to each worker at termination.
Attaching the tables to the statement of claim did not make them evidence. Unfortunately, there was no evidence to the effect that the tables corresponded with the affidavit evidence and the Award. Consequently, it was necessary for me to check the details. As foreshadowed at the end of the hearing, I had difficulty following the tables, calculating the rates asserted by the applicant in the tables and checking the accuracy of the other information included in the tables.
As a result, after the hearing, I instructed my associate to email the applicant, with copies to the second and third respondents, asking for the workings for the calculations of the rates alleged under the Award. As requested, the applicant provided the workings for the relevant categories of workers, being bricklayers and labourers (described as CW-3 and CW1(a) respectively in the Award). The workings are attached to these reasons as attachments A and B respectively. I have checked the workings, with a great deal of assistance from Rose Hopkins, my extremely talented associate. I accept that the minimum rates of pay set out in the tables do correspond with the Award.
When checking the payments shown in the tables as having been received by individual workers against the affidavit evidence, it became apparent that the amounts said in the tables to have been received were based almost entirely on deposits from VM or VMA shown in the bank statements of the relevant workers. That did not seem to allow for the possibility that tax had been deducted by the employer from the wages before the payments had been deposited in the bank accounts.
Following the hearing, on my instructions, my associate asked the applicant by email copied to the respondents to advise whether the figures in the tables were net of tax or gross figures. The applicant’s legal advisers said that they were not sure. This is very unsatisfactory. Clearly, the amount that an employee is paid includes the amount of tax that is withheld from his or her wages. Consequently, the amounts that are deposited in an employee’s bank account may not be the entirety of the amounts paid to that employee.
A worker can cross a box in his or her tax file number declaration to claim the tax free threshold from a particular employer (see the exhibit to the affidavit of Sarah Matheson sworn on 1 July 2015). If a worker claims the tax free threshold from a particular employer, the employer withholds no tax or a reduced amount of tax from that worker’s pay.
In the absence of any evidence that any of the workers claimed the tax free threshold from VM or VMA, I proceed on the basis that VM and VMA, as the case may be, acted in accordance with the taxation laws and deducted the appropriate amount for tax before depositing any payments in the relevant bank account. Obviously, in the absence of a claim for the tax free threshold, the Commissioner of Taxation would hold VM and VMA liable for the appropriate amount of PAYG tax in respect of each worker. Consequently, the applicant’s approach reflected in the tables of basing the wages and entitlements received on deposits in bank accounts fails to include the whole of the payments made to each worker. The tables are inaccurate in that respect. There is no material before the court that would permit the court to work out what each worker was actually paid, when tax is taken into account.
I am fortified in this conclusion by the fact that Mr Stielow exhibited to his affidavit a PAYG summary showing that VM had taken tax from his wages. I would infer that VM and VMA treated its payments to other employees in the same way. I also note that Mr Stielow in his tax file number declaration form did not cross the box indicating that he claimed the tax free threshold. None of the other workers provided copies of their tax file number declarations.
Additionally, my associate identified various other deficiencies with the figures in the tables. The applicant acknowledged some of those deficiencies by emailing to chambers an updated set of tables, with various corrections. Except where otherwise stated, I accept that the updated tables are correct.
Basis of the claim
As is explained in more detail below, the applicant alleged that some of the workers were not paid at all. Except for them, the applicant did not allege that the workers were not paid the correct amounts under the Award for their ordinary hours. Rather, based on the workers’ evidence, the applicant alleged that the workers were not paid their travel allowance and were not paid for their accrued but untaken annual leave upon termination.
Mr Jesse Bonnici said that Mr Eichner and Mr Stielow did not get any personal leave or other entitlements because they were paid as casuals. As discussed above, they were not casuals, because they were not given the appropriate written notice. They were daily hire employees. As such, they were entitled under the Award to travel allowance and annual leave. However, the statement quoted above is a clear concession on the part of Mr Jesse Bonnici that Mr Eichner and Mr Stielow were not paid by VM or VMA travel allowance or for accrued but untaken annual leave.
Mr Jesse Bonnici did not suggest at any stage that any of the other workers were paid travel allowance or were paid for accrued but untaken annual leave. I conclude that they were not.
A number of the workers said that they were paid $25 or $35 per hour for their ordinary hours. For example, Mr Stielow claimed that, initially, he was paid $25 per hour, but shortly after 4 June 2012, he was promoted to a leading hand, and paid $35 per hour. Mr Stielow exhibited some of his payslips to his affidavit. They indicated that Mr Stielow was paid $25 per hour until late June 2012, and then $35 per hour.
However, the applicant did not run its case on the basis that any of the workers were entitled to receive $35 per hour. The applicant ran its case on the basis that the workers were entitled to be paid at the Award rate. Those rates were used as the basis of the applicant’s calculations in the tables of the amounts each worker was entitled to receive for his ordinary hours. Those rates were also used by the applicant to calculate the amount that the workers were each entitled to be paid for accrued but untaken annual leave (with some slight arithmetic errors that the applicant acknowledged in his email of 23 July 2015 to chambers.)
As I read the Award, the applicant should not have used the Award rates to calculate a worker’s annual leave entitlement, unless the worker’s ordinary time hours were being paid at the Award rates. That is because clause 38 of the Award provides that:
Instead of the base rate of pay as referred to in s.90(1) of the Act, an employee under this award, before going on annual leave, must be paid, in advance, the amount which they would have received for ordinary time hours if they had not been on leave.
A worker’s rate for ordinary time hours would have been $25 or $35 per hour, if that is what he and VM and VMA had agreed he would be paid. Some of the workers said that is what was agreed. However, the workers were not parties to the proceeding. As explained previously, the applicant did not run the case on the basis that the workers and VM and VMA had agreed to a pay rate of $25 of $35 per hour. The respondents did not claim that any of the workers were paid $25 or $35 per hour for their ordinary time hours. Mr Jesse Bonnici claimed that, those workers who were paid anything at all were paid the rates advised by the Fair Work Ombudsman, without specifying what those rates were.
Because the applicant did not run the case on the basis that any of the workers were entitled to be paid $25 or $35 per hour, and because there was no claim to that effect by the respondents, I am not able to find that there was an agreement to pay any of the workers $25 or $35 per hour. The only conclusion I can draw is that the workers were entitled to Award wages.
I note that, generally speaking, an employer is not able to offset an overpayment for ordinary hours against an underpayment for allowances, unless the parties have made an agreement permitting that course. For example, in New Image Photographics Pty Ltd v Fair Work Ombudsman [2013] FCA 1385, Collier J said:
41.At the hearing of the appeal and in written submissions the appellants submitted, in summary:
· Mr Bedington believed that he was paying an amount to Ms Keen in satisfaction of legal obligations for a casual employee who did not work overtime.
· The amounts paid to Ms Keen should be applied to legal obligations including payment of casual loading.
· The only evidence before his Honour was that amounts were paid to satisfy obligations to Ms Keen as a casual employee.
· The investigator took the proper view that it was appropriate and permissible to apply the overpayment of Ms Keen against the gross sum of the basic ordinary rate and what should have been the loading so as to give credit for that.
· It would not be seen in any objective sense that the employer meant to make the overpayment as a volunteer.
42.At the hearing Ms Doyle SC for the respondent submitted in summary that:
· Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd[2002] FCA 1406 and Foster v Faulkhead and Faulkhead Nominees Pty Ltd [2005] SAIRC 86 are authorities for the proposition that where there is an excess payment made in respect of ordinary hours of work, the excess cannot be set off against a claim for underpayment of overtime unless at the time of the payment of the excess the employer designates that excess over the amount of the award obligation is paid for the purpose of satisfying any entitlement to overtime payments.
· Although the appellants referred the Court to Poletti v Ecob (No 2) (1989) 31 IR 321, that case was distinguishable because the offsetting there arose following an agreement between employer and employee as to additional cash amounts to be paid with respect to some of the hours worked, and the Court gave effect to that explicit agreement.
43.In my view the submissions of the respondent are correct. In this case there was no designation by the employer of any overpayment being referable to the underpayments which had been made, and certainly no agreement to that effect. …
44.… I accept the submissions of Counsel for the respondent that, for a “set off” of payments to take effect, there must be mutuality in respect of the overpayment and underpayment, designation by the employer of the overpayment as being referable to the underpayment, and consent by the employee to receive the overpayment as setting off such underpayment. None of those factors were present here.
The same applies in the present case. There was no evidence that the workers were paid more for ordinary hours than the Award required because there was an agreement that all of their entitlements would be covered in a rolled up payment.
None of this alters the basic finding above that the workers in this proceeding were employed on a daily hire basis. However, it might affect the question of the total of any underpayment, and whether any part of any penalty that might ultimately be ordered should be payable to the workers. In a slightly different context, see Scotto v Scala Bros Pty Ltd and Anor [2014] FCCA 2374 at [41].
Consequence of failure to cross-examine
The court explained to Messrs Bonnici that they needed to challenge each witness about anything in that witness’s affidavit that they disagreed with and they needed to put to each witness their own version of events. The court also explained that, if Messrs Bonnici did not challenge any aspect of a witness’s evidence, the court might accept it.
Brett Stielow
a. was Mr Stielow employed by VMA?
The applicant maintained that Mr Stielow was employed by:
a)VM from 7 May 2012 to 24 October 2012; and
b)VMA from 25 October 2012 to 13 December 2012.
VMA and Mr Mel Bonnici maintained that Mr Stielow was only ever employed by VM and was never employed by VMA.
Mr Stielow gave evidence that he worked for “Vic Metro” from 7 May 2012 until 31 October 2012. He supported that claim with diaries that were exhibited to his affidavit. The period of his employment with Vic Metro was not challenged in cross-examination. Moreover, I found Mr Stielow to be a credible witness.
Consequently, and in accordance with the reasoning set out previously, I accept that Mr Stielow worked for VM from 7 May 2012 until 24 October 2012 and for VMA from 25 October until 31 October 2012 inclusive.
b. alleged loan from VMA
Mr Jesse Bonnici said in his affidavit that, if VMA paid any money to Mr Stielow, it was a loan, rather than a payment of wages, because the first respondent would not have had any money at the time.
The claim that VM or VMA gave Mr Stielow a loan was not put to Mr Stielow in cross-examination. Nor was there any evidence that VM or VMA had sought recovery of such a loan. Mr Stielow did not concede that he was given any money by VM or VMA as a loan. I consider the claim that VM or VMA gave Mr Stielow a loan to be completely implausible and reject it.
c. the tax file number declaration form
Mr Jesse Bonnici cross examined Mr Stielow about a tax file number declaration Mr Stielow had exhibited to his first affidavit as exhibit BS-3. The exhibit is a photocopy. It is dated 8 May 2012. (Although the “2012” was cut off in the photocopying, there was no dispute that 8 May 2012 was the correct date.) It has a barcode in the top right corner. It says, in question 6:
On what basis are you paid? (Select only one)
Full-time employment ☐
Part-time employment ☐
Labour hire ☐
Superannuation income stream ☐
Casual employment ☐
In the photocopy provided by Mr Stielow, the full-time employment box had a cross in it. However, Mr Jesse Bonnici produced the Payer’s Copy of Mr Stielow’s tax file number declaration. That is, he produced a carbon copy of the original. It had a cross in the casual employment box and the cross in the full time employment box had been crossed out.
Mr Jesse Bonnici put to Mr Stielow that he had crossed out the cross in the full time box and had put the cross in the casual box. Mr Stielow denied that. He said that, after completing the form at home, he had photocopied it and given it to Mr Mel Bonnici as requested.
Mr Mel Bonnici also cross-examined Mr Stielow about the form. Mr Mel Bonnici put to Mr Stielow that he had kept the top copy, which Mr Mel Bonnici said from the bar table had been completed in biro and was the employee’s copy. Mr Stielow said that he did not recall any such copy and did not recall how many sheets were in the form. He reiterated that he had photocopied the form after completing it.
Later, the applicant produced an affidavit sworn by Sarah Kate Matheson on 1 July 2015. There was no objection to that affidavit and no cross examination on it. The affidavit had exhibited to it a current tax file number declaration form. It was not suggested that the form in use in 2012 was materially different and I infer that it was not.
The first two pages of the form consist of instructions. The next page has in the top right corner the words, “Original – ATO copy”, above a barcode. The next and final page has in the top right corner the words, “Payer’s copy” and no barcode.
The photocopy Mr Stielow exhibited appears to be a photocopy of the original ATO copy of the form because it has the barcode on it. While it is possible that Mr Stielow put a cross in the full time box, photocopied the form and then altered the form, Mr Stielow denied having done that. I found him to be a credible witness. I accept Mr Stielow’s evidence about the form. That is, I accept that he put a cross in the full time box and did not cross it out and did not put a cross in the casual box. I accept that he gave the completed form to Mr Mel Bonnici, as requested by him.
It seems to me to be more likely that one of the Messrs Bonnici crossed out the cross in the full-time box and added a cross in the casual box than that Mr Stielow made that alteration. Certainly, someone at VM added the details of the employer, being VM, to the original form. The form instructed the payer to do that. It would not have been hard, at the same time, to cross out the cross in the full-time box and put a cross in the casual box. However, it was not put to Mr Jesse Bonnici or to Mr Mel Bonnici that either of them had done that, nor was that alleged in any of the applicant’s material. Consequently, I am not in a position to find that either of the Messrs Bonnici had altered the form.
Ultimately, the position is that Mr Stielow did not alter the form. He did not indicate on the form that he was a casual employee. He indicated that he was a full-time employee. He appears to have been mistaken about that. Certainly, the applicant did not maintain that position at the hearing. As stated above, based on the evidence and the way the proceeding was conducted, Mr Stielow was a daily hire employee.
The tax file number declaration is significant because Mr Stielow did not put a cross in the box indicating that he wanted to claim a tax-free threshold from VM. Consequently, the payments Mr Stielow received from VM should have been after-tax payments. In the absence of any evidence of Mr Stielow claiming a tax free threshold in his employment with VMA, payments from VMA to Mr Stielow should also have been exclusive of tax.
d. the letter
Mr Mel Bonnici cross examined Mr Stielow about a letter Mr Mel Bonnici had written and signed for Mr Stielow. It is on VM letterhead and is dated 25 July 2012. It states:
To whom it may concern
Brett Stielow is employed by Vic Metro Brick & Block Layers Pty Ltd as a leading hand, He is a Valued member of our organization and his employment is permanent.
His hours are 75 hours per fortnight and his pay is $35.00 per hour, $2,625.00 gross per fortnight.
Mr Stielow said in cross examination that he had asked Mr Mel Bonnici for the letter because he was applying for a loan and the bank had noticed that his bank statements did not match up with his payslips.
In his cross examination[2], Mr Mel Bonnici confirmed that he had written and signed the letter but said that the letter was not true. Mr Mel Bonnici said that it was a lie that Mr Stielow received $35 per hour and it was a lie that he was a permanent employee. He said that it was difficult for subcontractors to get loans. He said that, consequently, if someone asked him for a letter of that type he would give it to him.
[2] Transcript page 182
This practice is clearly dishonest. It is intended to enable people to borrow from banks in circumstances where the banks’ lending criteria have not been met. Mr Mel Bonnici clearly regarded his practice as right and proper. It reflects badly on his credibility in this proceeding.
Nevertheless, I accept that the letter was not accurate in relation to the basis of Mr Stielow’s employment. As discussed above, he was employed as a daily hire employee and not as a full-time employee.
The issue about the pay rate has been discussed above. For the reasons there expressed, I do not accept that Mr Stielow was entitled to be paid $35 per hour.
e. The role of Mr Mel Bonnici
Mr Stielow was also cross-examined about his understanding of Mr Mel Bonnici’s role. Mr Stielow confirmed that he had never overheard a conversation involving Mr Mel Bonnici about the pricing of jobs or the financial aspects of the business. Mr Stielow was asked what made him think that Mr Mel Bonnici was the “supreme commander”. Mr Stielow said that:
You were the person I spoke to when I applied for the job. You were the person I was told to speak to [about] anything in regard to the job. There was no one else that you could speak to about your position there.
Mr Stielow also said that, prior to starting work with Vic Metro, he had had two telephone conversations with Mr Mel Bonnici but no interview in person. He said that, before starting, no one had told him his rate of pay or work status.
Mr Stielow denied that Mr Mel Bonnici had told him in early October 2012 that a new job was being started by VMA at Tooronga Road where people would be paid monthly.
f. The unchallenged evidence of Mr Stielow
Except as discussed above, Mr Stielow’s evidence was not challenged in cross examination. As stated above, I found Mr Stielow to be a credible witness. Consequently, I accept that evidence, which is discussed further below, except where otherwise stated.
g. working days and hours
Mr Stielow kept a diary of the days and hours that he worked for VM and VMA. The diary is exhibited to his first affidavit as BS-7. It records that Mr Stielow worked various hours on various days, but not every day. The diary has been summarised in the tables. In respect of three days, the tables did not accurately reflect the diaries. Those days were 25, 26 and 27 October 2012, when 3.5, 5 and 8 hours respectively were omitted from the tables. Those additional hours were not pursued by the applicant. Mr Stielow was not cross-examined on his diaries. I found him to be a credible witness. Consequently, I accept that his diaries were accurate.
h. rates of pay
Mr Stielow said in his affidavit that, as of 2012, he had worked as a bricklayer for six years. Consequently, he was entitled to be paid under clause 19 of the Award as a CW-3. The tables indicate that Mr Stielow’s hourly rate for the year commencing on 1 July 2011 was $19.97 and his hourly rate for the year commencing on 1 July 2012 was $20.57.
wages for ordinary hours
Mr Stielow also provided in exhibit BS-8 to his affidavit a copy of his bank statements, showing the amounts he had been paid by VM and VMA. Mr Stielow’s bank statements show payments from both VM and VMA as “Vic Metro Brick” but distinguish between them by account number.
The tables indicate that Mr Stielow was entitled to receive $14,369.98 for his ordinary hours worked for VM. The tables also indicate that Mr Stielow actually received more than that from VM, namely, $16,335.50.
The figure of $16,335.50 in the tables includes a payment of $400 on 22 October 2012 that does not appear in Mr Stielow’s bank statements. However, that is offset by a payment of $400 that does not appear in the tables, being $400 in cash that Mr Stielow said in his affidavit that he had received from Mr Mel Bonnici on 12 July 2012.
Mr Stielow’s bank records showed that he received a payment of $677.50 on 18 July 2012 from VM. However, that payment is not included in the tables.
Consequently, Mr Stielow was paid $2,643.02 more by VM than the minimum payable under the Award for his ordinary hours. That is not surprising, in view of Mr Stielow’s evidence that he was to be paid above minimum Award wages. However, as stated, the applicant did not run the case on that basis.
The tables also indicate that Mr Stielow was entitled to be paid $699.38 for his ordinary hours worked for VMA. The tables indicate that he actually received $3,569.00 from VMA. However, the tables do not include a payment of $1,050 that Mr Stielow said in his affidavit he received from Mr Mel Bonnici on 3 November 2012 in cash. However, that is offset because the tables do include a payment of $1,050 on 15 November 2012, which does not appear in the bank account. This appears to reflect the same payment, albeit that there is a difference in the dates.
The tables indicate that Mr Stielow was paid $2,869.62 more than the minimum payable under the Award by VMA for ordinary hours. However, Mr Stielow’s diaries also indicated that he worked some hours for VMA that were not reflected in the tables. Those hours were three and a half hours on 25 October 2012, five hours on 26 October 2012 and eight hours on 27 October 2012. 27 October 2012 was a Saturday so the applicable rate was time and a half ($20.57 x 1.5 = $30.86). Therefore, there were eight and a half hours at $20.57 per hour making a total of $174.84 and eight hours at $30.86 per hour making a total of $246.88, and a grand total of $421.72. Taking that figure from $2,869.62 means that Mr Stielow was paid $2,447.90 more than the minimum payable under the Award by VMA for ordinary hours. However, as stated above, the applicant did not claim the extra hours. In addition, Mr Stielow was paid an unknown amount consisting of the tax that was taken from his wages.
j. travel allowance
The applicant initially asserted that VM failed to pay Mr Stielow $1,702.32 for travel allowance. That figure was reflected in the tables. Clause 25.2 of the Award provided for a Metropolitan radial areas allowance, also known as travel allowance, of $16.50 per day commencing on 1 July 2011 and $16.78 per day commencing on 1 July 2012. As discussed above, following the hearing, the applicant emailed to the court and the respondents some updated tables. The updated tables acknowledged that Mr Stielow should have received $1,685.82 travel allowance and not $1,702.32 as originally claimed. I have checked the figures in the updated tables and I am satisfied that they are correct. Consequently, I am satisfied that VM breached the Award by failing to pay Mr Stielow travel allowance of $1,685.92. However, as the applicant seeks no orders against VM, I take this matter no further.
The applicant also asserts that VMA failed to pay Mr Stielow $83.90 for travel allowance. However, that figure does not include an allowance for 27 October 2012 of $16.78. Adding $16.78 to $83.90 makes $100.68. I am satisfied that VMA breached the Award by failing to pay Mr Stielow travel allowance of $100.68.
k. annual leave
Mr Stielow said in his affidavit that he was not paid for his accrued annual leave upon termination. As mentioned elsewhere, Mr Stielow did not distinguish between VM and VMA.
The statement of claim asserts that VMA owed Mr Stielow $1,384.38 for accrued annual leave upon termination of his employment. Mr Stielow only worked for VMA for five days. Neither the statement of claim nor the applicant’s outline of submissions alleged that VM owed Mr Stielow any money for accrued but untaken annual leave. The applicant did not say so, but the claim against VMA for $1,384.38 for Mr Stielow’s accrued but untaken annual leave appears to be based on Mr Stielow’s transfer of employment between VM and VMA.
The deed of assignment did not operate to transfer Mr Stielow’s employment contract from VM to VMA, because Mr Stielow was a daily hire employee. Nevertheless, s.22 of the Act provides that:
…
(5)If there is a transfer of employment (see subsection (7)) in relation to a national system employee:
(a)any period of service of the employee with the first employer counts as service of the employee with the second employer; and
…
Meaning of transfer of employment etc.
(7)There is a transfer of employment of a national system employee from one national system employer (the first employer ) to another national system employer (the second employer ) if:
(a) the following conditions are satisfied:
(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee's employment with the first employer;
(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or
(b) …
(8) A transfer of employment:
(a)is a transfer of employment between associated entities if paragraph (7)(a) applies . …
The dictionary in s.12 of the Act provides that:
"associated entity" has the meaning given by section 50AAA of the Corporations Act 2001.
84.Section 50AAA of the Corporations Act 2001 provides that:
(1)One entity (the associate ) is an associated entity of another entity (the principal ) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
…
(7) This subsection is satisfied if:
(a)an entity (the third entity) controls both the principal and the associate; and
(b)the operations, resources or affairs of the principal and the associate are both material to the third entity.
…
“Material” does not appear to be defined in the Corporations Act 2001. Nevertheless, it seems to me that VM and VMA were associated entities as defined because a third entity, Mr Jesse Bonnici, controlled both of them, as the sole director and shareholder of each of them, and because the operations, resources and affairs of both VM and VMA were material to Mr Jesse Bonnici, as “material” is normally understood. Consequently, there was a transfer of employment, as defined, between VM and VMA, in respect of Mr Stielow, because there was not more than three months between the time he was employed by VM and the time he was employed by VMA. As a result, VMA was responsible for any accrued but untaken annual leave owing to Mr Stielow by VM and VMA when his employment with VMA ended.
Annual leave is provided for in the National Employment Standards in Division 6 of Part 2-2 of the Act. Section 86 of the Act provides that the annual leave entitlement applies to all but casual employees. Consequently, Mr Stielow, and the other workers, as daily hire employees, were entitled to annual leave.
Section 87 of the Act relevantly provides that:
(1)For each year of service with his or her employer, an employee is entitled to:
(a) 4 weeks of paid annual leave … .
(2)An employee's entitlement to paid annual leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year.
Subsection 90(2) of the Act provides that:
If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
The applicant calculated that, including the time worked for VM, VMA owed Mr Stielow 56.9038 hours of annual leave. The applicant said that should have been paid at a rate of $24.33 per hour, resulting in an underpayment of $1,384.38 for accrued but untaken annual leave. Following the trial, on my instructions, my associate asked the applicant by email copied to the respondents to provide its workings of the calculation of both the number of hours of annual leave owing and the rate at which that leave should have been paid. The applicant then conceded that the calculations in the tables were based on an incorrect rate, being a rate nine cents less than the correct rate. However, the applicant conceded in his email dated 23 July 2015 that the lower figure should be used in these proceedings. Consequently, I am satisfied that VMA breached its obligation to pay Mr Stielow accrued but untaken annual leave in the sum of $1,384.38.
l. superannuation
Clause 32.2 of the Award provides that:
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
Section 45 of the Act provides that:
A person must not contravene a term of a modern award.
Mr Stielow said in his affidavit that he did not receive any employer superannuation contributions from “Vic Metro” while he worked there. Mr Stielow did not distinguish between VM and VMA. Mr Stielow was not challenged on this evidence. Mr Stielow exhibited to his affidavit some payslips from VM showing amounts paid for superannuation. However, there was no evidence to support the assertion in the payslips that VM actually made superannuation contributions on Mr Stielow’s behalf.
Mr Jesse Bonnici conceded in cross examination that he had not paid superannuation (transcript page 152). He said that he had been chased up by the Australian Taxation Office. He said that he made two payments to the ATO of $17,000, one in September 2014 and one in October 2014. Mr Jesse Bonnici was not clear whether he was referring to VM or VMA not paying superannuation. However, a letter dated 26 November 2014 from the ATO to Mr Stielow indicated that the ATO had put the sum of $1,850 into a superannuation account for him and the employer was VM.
The applicant asserts that VM failed to pay $1,293.30 in superannuation on Mr Stielow’s behalf and VMA failed to pay $62.94 in superannuation on Mr Stielow’s behalf. There must be significant doubt about those figures. At the time, employers were required to pay superannuation of 9% of ordinary earnings. As Mr Stielow’s gross ordinary earnings have not been made known to the court, it is not possible to calculate that amount of superannuation should have been paid on his behalf.
However, it does seem clear that both VM and VMA failed to pay superannuation for Mr Stielow before VM and VMA were required to pay the superannuation guarantee charge. Regardless of the figures, that constituted a breach of the Award and a breach of s.45 of the Act by both VM and VMA. As the applicant does not seek any orders against VM, I take that matter no further.
Nevertheless, it now seems that, through the ATO’s recovery of the superannuation guarantee charge, Mr Stielow has been paid more than the amount the applicant claimed was payable by VM and VMA for his superannuation and that nothing is presently outstanding.
m. payslips
Subsection 536(1) of the Act provides that:
An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
Mr Stielow said in his affidavit that the first time he received payslips from VM was on or about 23 July 2012, when, following his request, he received seven payslips by email. His affidavit was not entirely clear, but I understand that the seven payslips that he received on
23 July 2012 were the first seven in Exhibit BS-10. Those payslips cover the period from the commencement of his employment with VM on 7 May 2012 until 22 June 2012.
Mr Stielow said that, in relation to that period, he was paid by VM on 18 and 27 May and 21 June 2012. Consequently, VM did not give a payslip to Mr Stielow within one working day of the payments made on 18 and 27 May 2012. It would appear that VM breached s.536(1) on both occasions in relation to Mr Stielow. A payslip was given within time in relation to the payment of 21 June 2012. In any event, as the applicant does not seek any orders against VM, I take that matter no further.
Mr Stielow also said paragraph 93 of his affidavit that:
On occasions, I recall receiving five payslips at once and on another occasion three.
This strongly suggests that VM and VMA failed to provide payslips to Mr Stielow on other occasions within one day of paying him. However, except as set out above, there is no evidence that would allow the provision of particular payslips to be matched up with particular payments. Nor does Mr Stielow say that the only pay slips that he received from either VM or VMA are contained in exhibit BS-10. Consequently, it is not possible to make any other findings about VM and VMA not providing payslips within one working day of payment.
There may also be a significant issue concerning the payslips provided by VM and VMA being inaccurate. However, this was not pursued by the applicant and I take it no further.
n. summary
In summary, I am satisfied that VMA breached its obligations by failing to pay Mr Stielow, or on his behalf:
a)travel allowance of $100.68;
b)accrued but untaken annual leave in the sum of $1,384.38; and
c)superannuation contributions.
Benjamin Eichner
a. was Mr Eichner employed by VM and VMA?
The applicant maintained that Mr Eichner was employed by:
a)VM from 11 October 2012 to 24 October 2012; and
b)VMA from 25 October 2012 to 14 December 2012.
VMA and Mr Mel Bonnici maintained that Mr Eichner was only ever employed by VM and was never employed by VMA. They also said that Mr Eichner’s real name was Ben Oswald and his work was substandard. Regardless of the quality of his work, VM and VMA were obliged to pay him correctly for any hours that he worked.
Mr Eichner denied in cross examination that his name was Ben Oswald or that he had ever used that name. He produced four payslips which he said he was given on 11 December 2012 by email in response to his request to Mr Mel Bonnici. The payslips were from VM. They were made out to Ben Oswald. I found Mr Eichner’s evidence about his name to be credible and find accordingly. It appears that VM was simply under a misapprehension about his name. I find that the payslips given to Mr Eichner on 11 December 2012 were intended for him, although they were in the name of Ben Oswald.
Mr Eichner gave evidence that he worked for “Vic Metro” from
11 October 2012 until 14 December 2012. That evidence was not effectively challenged in cross examination. I found Mr Eichner to be a credible witness. Consequently, for the same reasons as those given in relation to Mr Stielow, I accept that Mr Eichner worked for VM between 11 and 24 October 2012 and for VMA between 25 and 14 December 2012 inclusive.
b. the role of Mr Mel Bonnici
Mr Eichner was cross-examined about the role of Mr Mel Bonnici. Mr Eichner said that he assumed that Mr Mel Bonnici was a director of the company. He agreed that Mr Mel Bonnici’s job involved interviewing people, organising people for work, quoting jobs and “things like that”. Mr Eichner agreed that he had never been privy to any managerial or pricing discussions. Mr Eichner said that he believed that Mr Mel Bonnici was “in charge of the whole thing” because Mr Eichner “dealt with” Mr Mel Bonnici. Mr Eichner agreed that he went to Mr Mel Bonnici if he had a problem with his pay, but he did not know whether Mr Mel Bonnici was making wage payments or merely passing on information to the wage office.
c. alleged loan to Mr Eichner
Mr Jesse Bonnici said in his affidavit that, if VMA paid any money to Mr Eichner, it was a loan, rather than a payment of wages, because the first respondent would not have had any money at the time.
The claim that VM or VMA gave Mr Eichner a loan was not put to Mr Eichner in cross-examination. Nor was there any evidence that VM or VMA had sought recovery of such a loan. Mr Eichner did not concede that he was given any money by VM or VMA as a loan. I consider the claim that VM or VMA gave Mr Eichner a loan to be completely implausible and reject it.
d. the unchallenged evidence of Mr Eichner
Except as set out above, Mr Eichner’s evidence was not effectively challenged in cross-examination or by other evidence. I found him to be a credible witness. Consequently, I accepted the evidence as set out below.
e. rates of pay
Mr Eichner said in his first affidavit that he had been working as a bricklayer for 12 years and that he received his trade qualifications in 2005. Consequently, he was entitled to be paid under clause 19 of the Award as a bricklayer, also known as a CW-3.
The tables indicate that Mr Eichner’s hourly rate was $20.57. Mr Eichner said that in his interview with Mr Mel Bonnici that Mr Mel Bonnici told him he was looking for a leading hand and that he would be paid $35 per hour fortnightly. However, as explained above, the applicant ran the case on the basis that Mr Eichner should have been paid minimum Award wages.
f. working days and hours
Mr Eichner said in his first affidavit affirmed on 21 November 2014 that he kept a record of the hours that he worked in a diary. However, he did not exhibit his diary to his affidavit. Nor did he provide a summary of the days he worked. His affidavits suggest but do not specifically say whether he worked every week day for VM and then VMA. The tables set out certain figures for certain days. It is possible that Mr Eichner worked on those days. However, the tables are not evidence. There is no evidence positively linking what is stated in the tables to Mr Eichner’s actual hours and days of work. The only day about which Mr Eichner gave clear evidence that he worked was his first day, 11 October 2012. He also said that, in his first week, he worked from 7.30am until 4pm. I accept that evidence.
The applicant, in the tables, said that Mr Eichner was underpaid $538.25 by VM and $3,178.68 by VMA for ordinary hours. However, in the absence of clear evidence about when Mr Eichner actually worked, I am not able to reach a state of satisfaction that there was any underpayment at all in relation to ordinary wages.
In addition, there is the question of whether the amounts appearing in Mr Eichner’s bank account were after-tax payments. I can only assume that they were, because there is no evidence that Mr Eichner claimed the tax-free threshold from VM or VMA. This further clouds the issue of whether Mr Eichner was given the correct pay for ordinary hours.
g. payments and payslips
Mr Eichner also provided in his first affidavit a copy of his bank statements at exhibits BE-3, BE-4 and BE-5 showing the amounts that he had been paid by VM and VMA. These payments are accurately reflected in the tables.
Mr Eichner said in his affidavit, and the bank statements which he exhibited confirm, that he was paid:
a)$1,513.50 by VMA[3] on 5 November 2012;
b)$1,004.50 by VM[4] on 9 November 2012; and
c)$1,016.00 by VMA[5] on 16 November 2012.
[3] The bank statement indicates that the payment was from “VIC Metro Brick and Blocklaying Aust”.
[4] The bank statement indicates that the payment was from “VIC Metro Brick”, account number 301500, which appears from Mr Stielow’s bank account to be the account of VM.
[5] The bank statement indicates that the payment was from “VIC Metro” account number 141000, which appears from Mr Stielow’s bank account to be the account of VMA.
Mr Eichner said in his first affidavit that he received no other payments from “Vic Metro”. None of that evidence was challenged and I accept it. The payments certainly indicate that Mr Eichner worked a number of days for VM and VMA. However, in the absence of clear evidence, I am not able to determine which days or for how many hours.
Mr Eichner said that he was not initially given payslips. He said that he asked Mr Mel Bonnici on several occasions for payslips, and Mr Mel Bonnici said that he would get back to him. However, Mr Eichner said that Mr Mel Bonnici emailed him four payslips on 11 December 2012. That evidence was not challenged and I accept it.
Consequently, Mr Eichner was not given a payslip within one working day of being paid by VMA on 5 and 16 November 2012 or by VM on 9 November 2012. Consequently, VM and VMA breached s.536(1) of the Act in relation to Mr Eichner. As the applicant seeks no orders against VM, I take that matter no further.
h. travel allowance and annual leave
Mr Eichner said in his affidavit that he did not receive travel allowance or paid holidays. That evidence was not challenged and I accept that, in respect of 11 October 2012, he did not receive travel allowance or paid leave. At that time, he was working for VM. As no orders are sought in relation to VM, I take those matters no further.
h. superannuation
The applicant asserts and Mr Eichner said in his affidavit that he was not paid any superannuation. The payslips provided to Mr Eichner indicate that amounts of $45.68, $133.88, $114.98 and $116.55 were paid to the Vic Super Scheme on behalf of Mr Eichner. Mr Eichner said in his affidavit that he has a CBUS account and that he does not hold an account with the Vic Super Scheme. Mr Eichner said that he contacted the Vic Super Scheme and that they had no record of an account in his name.
None of that evidence was challenged nor was any other evidence provided which calls it into question. The payments into Mr Eichner’s bank account by VM and VMA indicate that both of those companies paid Mr Eichner and should have paid superannuation contributions on his behalf, even though I have no way of knowing how much should have been paid. Consequently, I find that neither VM nor VMA paid superannuation as required on behalf of Mr Eichner. As such, VM and VMA breached s.45 of the Act in relation to superannuation for Mr Eichner. However, as the applicant does not seek any orders against VM, I take that matter no further.
summary
In summary, in relation to Mr Eichner, I am satisfied that VMA breached:
a)s.45 of the Act by failing to pay superannuation contributions on his behalf in accordance with clause 32.2 of the Award; and
b)s.536(1) of the Act by failing to give Mr Eichner a payslip within one working day of paying him on 5 and 16 November 2012.
Wesley Keenan
a. working days and hours
Mr Keenan said in his affidavit sworn or affirmed on 21 November 2012 that he was employed by VMA for a period of two days, being
13 and 14 November 2012. The Messrs Bonnici said that he worked for VM and never worked for VMA.
Mr Keenan said that he worked on 12 November 2012 from 7.30am to 4.30pm with a one hour lunch break and on 13 November 2012 from 7.30am to 10.30am. Mr Keenan said that he worked a total of 11 hours for VMA. He said he had to leave early on the second day to attend an appointment.
The tables indicate that Mr Keenan worked a total of 10.5 hours, being from 7.30am to 3.30pm on 12 November 2012 with a half hour lunch break and from 7.30am to 10.30am on 13 November 2012. The tables are clearly wrong in that respect.
In any event, Mr Mel Bonnici put it to Mr Keenan that he worked for only half of one day at the most. Mr Keenan denied that. I found him to be a credible witness. I accept his evidence about when he worked. I also find that, because of the timing, that work was done for VMA.
b. rates of pay
Mr Keenan said in his affidavit that he has held a bricklaying qualification for 13 years and undertook a three year apprenticeship. Consequently, he was entitled to be paid under clause 19 of the Award as a CW-3. The tables indicate that Mr Keenan’s hourly rate was $20.57. I accept that the tables are accurate in that respect.
Mr Keenan said in notes that were exhibit WK-1 to his affidavit that:
We didn’t talk about money, so I just expected to be paid at least $30 ph on the ABN or $25 ph working on the books.
This suggests that Mr Keenan might have thought he was an independent contractor. However, as that was not one of the options the parties to this proceeding advanced, I conclude for the reasons previously mentioned that Mr Keenan was employed by VMA as a daily hire employee.
c. wages for ordinary hours
The tables indicate that Mr Keenan was entitled to be paid $215.99 for 10.5 hours of work. I have accepted Mr Keenan’s evidence that he worked for 11 hours for VMA. Therefore, Mr Keenan was entitled to be paid $226.27. However, as the applicant did not press the higher figure, I will use the lower figure.
Mr Keenan said in his affidavit that he did not receive any payment for the time that he worked. That evidence was not challenged (except in relation to the number of hours worked) and I accept it. This is a breach of both s.45 of the Act (which prohibits contravention of a term of a modern award) and s.323 of the Act (which requires payment of employees in full and at least monthly).
d. travel allowance
Mr Keenan said in his affidavit that he was not paid any travel allowance. The applicant said that Mr Keenan was entitled to be paid $16.78 per day pursuant to clause 25.2 of the Award, totalling $33.56 for travel allowance. That evidence was not challenged and I accept it. Consequently, I accept that VMA breached clause 25.2 of the Award in relation to Mr Keenan.
e. annual leave
Mr Keenan said in his affidavit that he was not paid for his accrued annual leave upon finishing with VMA on 13 November 2012. The applicant calculated that Mr Keenan accrued 0.8077 hours of annual leave. The applicant said in the tables that the annual leave should have been paid at $24.33 per hour, resulting in an underpayment of $19.65. I accept that those figures are accurate. The evidence on this issue was not challenged and I accept it. Consequently, I accept that VMA breached s.44 of the Act in relation to Mr Keenan.
f. superannuation
Mr Keenan said in his affidavit that he was not paid any superannuation. That evidence was not challenged and I accept it. Consequently, I accept that VMA breached clause 32.2 of the Award in relation to Mr Keenan.
g. summary
In summary, I accept that, in relation to Mr Keenan, VMA breached:
a)s.45 of the Act by failing to pay correct entitlements, and, in particular:
i)minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Award;
ii)the travel allowance in accordance with clause 25.2 of the Award; and
iii)superannuation contributions in accordance with clause 32.2 of the Award;
b)s.44 of the Act by contravening the National Employment Standards by failing to pay accrued but untaken annual leave upon termination in accordance with s.90(2) of the Act; and
c)s.323(1) of the Act by failing to pay employees amounts payable in relation to the performance of work in full and at least monthly.
Tommy O’Donnell
a. working days and hours
Mr O’Donnell said in his first affidavit sworn on 8 December 2014 that he commenced working for Vic Metro on or around 28 October 2011 and that the last day he worked for Vic Metro was 19 July 2012. In view of VMA not having commenced business at that stage, I take the reference to Vic Metro to be a reference to VM. I accept Mr O’Donnell’s evidence on this matter. It is also consistent with the position of the Messrs Bonnici that Mr O’Donnell only ever worked for VM.
The applicant does not seek any orders against VM, and does not allege in his written submissions that Mr Mel Bonnici was involved in the contraventions by VM: see page 11 and following. Therefore, the actions of VM are largely irrelevant. However, as the parties dealt with the issues relating to Mr O’Donnell at the trial, I will also address them.
Mr O’Donnell said in his first affidavit that he “generally” worked five days per week and for “approximately” seven and a half hours per day. However, he said that from around June 2012, his hours became less. At that stage, Mr O’Donnell said that he worked “approximately” five hours a day and four days per week. From 19 March 2012, Mr O’Donnell said that he started keeping a handwritten record of the hours that he worked which is exhibited to his first affidavit as TO-2. It is in an unusual form and is very difficult to follow. However, the record was not challenged and I accept that it accurately reflects the hours that Mr O’Donnell worked.
b. rates of pay
Mr O’Donnell said in his first affidavit that he has a degree in Business Information Systems and had some experience working as a labourer for bricklayers. Consequently, he was entitled to be paid under clause 19 of the Award as a CW-1(a).
The tables indicate that Mr O’Donnell’s hourly rate for the year commencing 1 July 2011 was $17.71 and his hourly rate for the year commencing on 1 July 2012 was $18.22. I have checked those figures and they appear to be accurate.
Mr O’Donnell said in his first affidavit that he was paid $25 per hour. He said that VM consistently paid him that amount, though sometimes late, until around June 2012. However, as mentioned previously, the applicant did not run the case on the basis that any of the workers should have been paid $25 per hour.
Mr Jesse Bonnici said in relation to Mr O’Donnell specifically that the rates he was paid were supplied by the Fair Work Ombudsman. Even if Mr Bonnici was given the wrong pay rates by a government instrumentality, that does not relieve him of the legal obligation to pay the correct rates in accordance with law.
c. payments
Mr O’Donnell swore a second affidavit on 23 April 2015 and provided a copy of his bank statements at exhibit TO-10. The payments that appear in Mr O’Donnell’s bank statements are reflected to some extent in the tables. However, there are significant inconsistencies. Following the hearing, on my instructions, my associate sent an email to the applicant which was copied to the respondents raising various concerns about the figures in the tables in respect of the payments acknowledged by Mr O’Donnell.
The applicant sent to the court and the respondents the updated tables which have been mentioned previously and placed on the court file. The updated tables show some quite different figures for Mr O’Donnell’s payments compared with the tables appended to the statement of claim. It is unnecessary to go into the detail.
However, I do note at this point that, in calculating the amounts received by Mr O’Donnell, the applicant has used after tax figures. There was no evidence about what the before tax figures might have been. Of course, it is the before tax figures that constitute the amount that VM paid Mr O’Donnell.
In any event, in his first affidavit, Mr O’Donnell said that, after April 2012 and before June 2012:
I think I was paid twice for monies owed.
Mr O’Donnell then said that he was not paid for the period from 22 July 2012 to 28 July 2012. However, the new tables indicate (if I understand them correctly) that VM paid him (in the sense of putting money into his bank account) the sum of $22,377. The new tables also indicate that Mr O’Donnell was entitled to be paid $20,764.42. That means that VM overpaid Mr O’Donnell $1,612.58 for ordinary wages.
He was probably overpaid more than that because the payments into his bank account would have been after tax was deducted.
d. travel allowance
The applicant asserts, and Mr O’Donnell gave evidence, that he did not receive travel allowance. The applicant asserts in the updated tables that Mr O’Donnell should have been paid $2,692.02 in travel allowance. I accept that evidence.
e. annual leave
The applicant asserts, and Mr O’Donnell gives evidence, that he did not receive any payment from VM for accrued but untaken annual leave. The applicant, according to the new tables, asserts that VM should have paid Mr O’Donnell $1,947.74 for accrued but untaken annual leave. I accept that evidence.
f. superannuation
The applicant asserted that VM should have paid $2,159.19 in superannuation on Mr O’Donnell’s behalf. I accept that figure is accurate, based on the hours that Mr O’Donnell worked and his rate of pay.
The applicant in his affidavit said that, when he commenced employment with VM, he had elected to use VM’s usual superannuation fund, namely, the Vic Super Scheme. He said that, on 23 July 2012, Mr Mel Bonnici told him that superannuation had been paid into that fund by VM on Mr O’Donnell’s behalf. Mr O’Donnell said that he subsequently checked, and no superannuation had been paid on his behalf by VM. He said that he engaged a superannuation consultant.
Eventually, on 19 November 2012, Mr O’Donnell said that the consultant sent him an email which stated that $425.24 was paid into his Vic Super account as an ATO Superannuation Holdings Account Reserve (SHAR) voucher. The email said:
SHAR vouchers are generally payable to a Superannuation Fund via the ATO when an employer has not met their obligations for paying mandatory Superannuation contributions.
None of that evidence was challenged and I accept it. Consequently, I accept that VM did not pay superannuation contributions as required on behalf of Mr O’Donnell. As they must be made every three months, and were not paid at all, I accept that VM breached s.45 of the Act by failing to pay superannuation contributions on behalf of Mr O’Donnell in accordance with clause 32.2 of the Award.
g. payslips
Mr Mel Bonnici was asked in cross-examination about an email apparently sent by him to Mr O’Donnell enclosing payslips. Mr Mel Bonnici denied sending that email. I found his denial to be entirely implausible, not least because of his dishonesty discussed elsewhere in these reasons.
Mr O’Donnell set out a spreadsheet as exhibit TO-2 to his first affidavit which he said is a summary prepared by him of when he was paid and when VM gave him the corresponding payslip. That evidence was not challenged and I accept it. The spreadsheet shows that, on some occasions, VM gave Mr O’Donnell a payslip well before paying him. That does not comply with the requirement to give a payslip within one day of the payment. In summary, the spreadsheet indicates that VM did not give Mr O’Donnell a payslip:
a)at all for 10 payments that it made to him; and
b)within one working day of the payment on 22 occasions.
Each of these failures was a contravention by VM of s.536(1) of the Act.
h. summary
In summary, I am satisfied that on the evidence before me that VM breached various provisions in relation to Mr O’Donnell. However, the applicant does not seek any orders against VM or Mr Mel Bonnici in respect of the breaches by VM. Consequently, I take the matter no further.
David Sheridan
a. working days and rates
Mr Sheridan said that he worked as a labourer for Vic Metro from
5 November 2012 until 16 November 2012. Based on the dates, I take it that he worked for VMA. Mr Sheridan said he stopped working for VMA after two weeks because he had not been paid. Mr Mel Bonnici suggested that Mr Sheridan was a poor worker. However, even if that is true, he was still entitled to be paid for the days he worked.
Mr Sheridan exhibited a diary to his affidavit, and said he worked the days and hours indicated in the diary. Mr Sheridan was not cross-examined about that evidence. However, Mr Jesse Bonnici said in his affidavit that Mr Sheridan that he thought Mr Sheridan only worked for three hours for the first respondent. I do not accept that evidence. I found Mr Sheridan to be a credible witness and I accept his evidence.
I am satisfied that the updated tables accurately reflect the days and hours specified in Mr Sheridan’s diary, and the rate at which he should have been paid. He was a labourer so should have been paid at the CW-1(a) rate. The updated tables show that VMA should have paid Mr Sheridan $1,366.50 for ordinary hours, $167.60 for travel allowance and $123.29 for accrued but untaken annual leave. I am satisfied that those figures were accurately calculated and are correct.
b. failure to pay wages and entitlements
The Messrs Bonnici did not suggest that Mr Sheridan was paid by VMA. I found Mr Sheridan to be a credible witness. Consequently, I accept Mr Sheridan’s evidence that he was not paid at all by VMA.
It is apparent that Mr Sheridan was entitled to be paid by VMA for the ordinary hours that he worked, as well as travel allowance and accrued and untaken annual leave. As VMA paid Mr Sheridan nothing, VMA was in breach of the relevant provisions in respect of each of those matters, as well as the requirement under s.323 of the Act to pay wages in full and at least monthly.
c. failure to pay superannuation
Additionally, Mr Sheridan said that VMA never asked him for details of his superannuation fund and VMA never paid any money into a superannuation fund on his behalf. Mr Sheridan substantiated his claims with his superannuation records, which are exhibit DS-4 to his affidavit. The evidence in relation to Mr Sheridan’s superannuation was not challenged and I accept it. Therefore, I find that VMA breached the relevant provisions in relation to Mr Sheridan’s superannuation.
d. summary
In summary, I accept that, in relation to Mr Sheridan, VMA breached:
a)s.45 of the Act by failing to pay correct entitlements, and, in particular:
i)minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Award;
ii)the travel allowance in accordance with clause 25.2 of the Award; and
iii)superannuation contributions in accordance with clause 32.2 of the Award;
b)s.44 of the Act by contravening the National Employment Standards by failing to pay accrued but untaken annual leave upon termination in accordance with s.90(2) of the Act; and
c)s.323(1) of the Act by failing to pay employees amounts payable in relation to the performance of work in full and at least monthly.
Thomas McKeown
a. days and hours worked
Mr McKeown said in a statement attached to his affidavit that he said was true that he worked as a labourer for Vic Metro from 21 November 2012 until “around the Christmas break, maybe around the 20 December 2012.” Mr Jesse Bonnici said in his affidavit that he believed Mr McKeown worked for VMA for one week only. However, in the updated tables, the calculations were based on Mr McKeown finishing work on 14 December 2012. Accordingly, I will treat that as the outer limit of the time that Mr McKeown worked for Vic Metro. Based on the dates, I consider that he worked for VMA.
Mr McKeown said that he “generally” started work at 7.30am and finished at around 4pm with a 30 minute lunch break. He said he worked Mondays through to Fridays. That evidence was not specifically challenged in cross-examination. I found Mr McKeown to be a credible witness and I accept his evidence.
b. amounts payable
The updated tables make some corrections in relation to the calculation of annual leave. I accept that the amended figures are correct.
All in all, the applicant asserts that the amounts that VMA should have paid Mr McKeown were:
a)$2,623.68 for ordinary hours;
b)$302.04 for travel allowance; and
c)$227.43 for annual leave,
making a total of $3,153.15.
Mr McKeown said that VMA paid him $604 on 3 December 2012 and nothing else. He provided copies of his bank statements that support those claims. That evidence was not challenged and I accept it.
There was no suggestion that Mr McKeown claimed the tax-free threshold in relation to his work with VMA. Therefore, I conclude that the amount paid into his bank account was an after-tax payment and that the amount VMA paid him was actually somewhat higher.
However, on any view, VMA did not pay Mr McKeown all that he was entitled to for his ordinary hours, or his travel allowance or his accrued but untaken annual leave. VMA was in breach in respect of the provisions relating to each of those matters.
c. superannuation
Mr McKeown said that he had a superannuation fund but VMA never asked him for its details and never paid any money into it. That evidence was not challenged in cross-examination and I accept it. Consequently, I accept that VMA breached the relevant provisions in relation to Mr McKeown’s superannuation entitlements.
d. payslips
Mr McKeown said that he did not receive a payslip for the payment that he received from VMA on 3 December 2012. That evidence was not challenged in cross-examination and I accept it. Consequently, VMA breached the relevant provisions in relation to a payslip for Mr McKeown.
e. summary
In summary, I accept that, in relation to Mr McKeown, VMA breached:
a)s.45 of the Act by failing to pay correct entitlements, and, in particular:
i)minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Award;
ii)the travel allowance in accordance with clause 25.2 of the Award; and
iii)superannuation contributions in accordance with clause 32.2 of the Award;
b)s.44 of the Act by contravening the National Employment Standards by failing to pay accrued but untaken annual leave upon termination in accordance with s.90(2) of the Act;
c)s.323(1) of the Act by failing to pay employees amounts payable in relation to the performance of work; and
d)s.536(1) of the Act by failing to give Mr McKeown a payslip within one working day of paying him on 3 December 2012.
Issay Kagan
Issay Kagan affirmed an affidavit in this proceeding on 20 November 2014 on behalf of the applicant. He claimed to have worked for Vic Metro in November and December 2012. However, he did not make himself available for cross-examination.
The applicant tendered to the court a statutory declaration made by Mr Kagan on 26 June 2015 (exhibit 5). He said in his statutory declaration that his front teeth had broken two months previously and he was embarrassed to be seen in public. He asked that the court take into account his affidavit.
In response to the statutory declaration, I raised the possibility of Mr Kagan being cross-examined over the telephone. I also indicated that if a witness did not attend for cross-examination, I might give their evidence no weight. The applicant did not pursue the possibility of telephone evidence or explain why it would not be a viable option.
The applicant argued that the court should give weight to Mr Kagan’s affidavit, because it was consistent with the other evidence given on behalf of the applicant in the proceeding. The applicant noted that s.64(6) of the Federal Circuit Court of Australia Act 1999 provides that, if a person who has made an affidavit is required to attend for cross-examination but does not attend:
the Federal Circuit Court of Australia is to give the matters in the affidavit such weight as the Federal Circuit Court of Australia thinks fit in the circumstances.
Mr Jesse Bonnici said in his affidavit that he agreed with his father’s description of his role in his affidavit and then said:
5. Either myself or wife Lauren Bonnici –
5.1 made payments of invoices or wages;
5.2 determined the pay rates;
5.3 determined working conditions;
5.4 determined contractor’s rates;
5.5 keep time and wages records;
5.6made payments of PAYG, superannuation and any other payment; and
5.7spoke to the Fair Work Commission or the Fair Work Ombudsman about correct pay rates.
6.My wife Lauren Bonnici completed the administrative tasks of paying contractors, paying employees and keeping other employment related records. Supervisors on sites gave timesheets to Lauren for processing. I assisted her in that process.
7.I telephoned the Fair Work Ombudsman to obtain the appropriate pay rates for employees and an offer in that organisation told me what those rates were. Those were the rates that I may have passed on to the Third Defendant and the pay rates that I passed on to Lauren Bonnici.
8.The Third Defendant was never in a position to determined pay rates or influence pay or conditions in the way suggested by this claim.
9.The Third Defendant was never in control or effective control or in a general management role for the First or Second Defendant. I undertook that role as Director.
10. The Third Defendant never -
10.1advised or counselled the First or Second Respondent’s officers or directors on what employment related records to keep or what to pay rates to pay;
10.2threatened or made promises to any party to induce any contravention of the Fair Work Act;
10.3 be concerned or a party to any such contravention; or
10.4conspire with others to effect the contravention – within the meaning of Section 550 of the Fair Work Act.
Mr Mel Bonnici and Mr Jesse Bonnici were not squarely challenged in cross examination about their claims that it was Mr Jesse Bonnici who was in charge of payments to the workers and not Mr Mel Bonnici.
Mr Mel Bonnici said in cross-examination, among other things, that:
a)he was responsible for hiring and firing for VMA;
b)he hired each of the workers;
c)he told them the rates of pay they would receive;
d)he told the workers where to work by text messages, although others also sent such text messages;
e)he told the workers that the company “tries” to pay fortnightly but pay is often late because of the nature of the industry;
f)Mr Jesse Bonnici told him on occasion to tell the workers that they would get paid when the company got paid;
g)the pays were often late for everyone, including Mr Mel Bonnici;
h)he once paid Mr Stielow in cash;
i)Mr Mel Bonnici did not know why the payment was in cash but it was on an occasion when Mr Jesse Bonnici was unable to meet Mr Stielow;
j)Mr Mel Bonnici was the first and only point of contact for the workers if they had concerns about pay;
k)Mr Mel Bonnici was the point of contact for the Fair Work Ombudsman when Mr O’Donnell made a complaint about wages;
l)the FWO rang and emailed Mr Mel Bonnici;
m)Mr Mel Bonnici dealt with those calls and did not put them through to Mr Jesse Bonnici;
n)he was aware that there was an award that set minimum terms and conditions that applied to the workers;
o)he sent a text message to Mr Stielow on 26 November 2012 saying that:
… we all get paid every week.
p)Mr Mel Bonnici did not recall telephoning the applicant’s office on 29 September 2012 in response to a telephone message and speaking to Leah Fowler as follows:
Phone call from the employer – Malcolm [also known as Mel] advised that he will be able to set up a payment arrangement and will have this information to me by Thursday. I advised that I would need the amounts and dates for the payment so I can put this in writing, the employer agreed to have this to me by Thursday.
I put little weight on the record of the telephone call to Leah Fowler because Mr Mel Bonnici said he did not recall it, Ms Fowler did not give evidence about it herself (it appears to be a business record and is exhibited to the affidavit of Simon Caruana), and because it did not in terms indicate that Mr Mel Bonnici was intending to work out the payment arrangement himself as opposed to just passing on information he had had been told. Moreover, Mr Mel Bonnici was patently not the employer, VM was. This causes some concern that the record of the telephone conversation may be imprecise in other relevant respects. Also, as stated elsewhere, the applicant is not pursuing any claims against Me Mel Bonnici relating to VM.
It was put to Mr Mel Bonnici in cross-examination that Mr McKeown sent Mr Mel Bonnici Mr McKeown’s bank and tax file number details. Mr Mel Bonnici accepted that, but said he would have just passed them on to the relevant person. It was also put to Mr Mel Bonnici that Mr MeKeown received a payment of $604. Mr Mel Bonnici said that he had no idea what Mr McKeown received a payment of. It was put to Mr Mel Bonnici that Mr McKeown complained to him about outstanding wages. Mr Mel Bonnici said that he would have passed that information on to the relevant person. It was not put to Mr Mel Bonnici that that his evidence in relation to these matters was not true. Having observed Mr Mel Bonnici giving evidence on this matter, he seemed to me to be telling the truth and I accept that his evidence was true on this point.
It was put to Mr Mel Bonnici in cross-examination that an email to “benthebricky” with Mr Mel Bonnici’s signature block and enclosing pay slips was sent by Mr Mel Bonnici. He denied that. He said it could have been sent by Ms Bonnici from his computer. He persisted with that explanation even when shown another email from Ms Bonnici with her own signature block on it. I do not accept Mr Bonnici’s claim in this regard. It strikes me as implausible, and, for reasons previously discussed, I do not consider Mr Mel Bonnici to be an entirely credible witness. However, enclosing payslips in an email does not make Mr Mel Bonnici responsible for the content of the payslips, or indicate that he calculated any payments that the payslips described.
It was put to Mr Mel Bonnici that he knew that the workers were not receiving their payslips regularly. He denied that. He said that was not his department and he only knew they were not receiving their payslips when they told him. That evidence strikes me as plausible. Having observed Mr Mel Bonnici giving evidence on this matter, he seemed to me to be telling the truth and I accept that his evidence was true on this point.
I found all of the workers to be credible and, in broad terms, accept their evidence. All of the workers said that they were engaged by Mr Mel Bonnici, in the sense that he was the one who spoke to them and emailed them about starting work with Vic Metro. Most of the workers said that they were told to speak to Mr Mel Bonnici if they had any concerns about pay. A number gave evidence that they did speak to Mr Mel Bonnici when they had concerns about pay. Mr Mel Bonnici did not dispute that, but said, in effect, that he was a mere conduit.
Mr Keenan said that Mr Mel Bonnici described the business of VMA as his when they had an argument about Mr Keenan leaving early on his second day. Mr Keenan in his affidavit evidence said that said he sent Mr Mel Bonnici a text message about having to leave early and continued:
… A couple of minutes after I sent the text message, Mel rang me up and basically told me that if I didn’t get back to work then I didn’t have a job. He said words to the effect, “… You can’t dictate what you do in my business…if you don’t get back to work, then you don’t have a job anymore…Don’t tell me how to run my business. You work for me. You don’t work for anyone else.” … Mel also said words to the effect, “I am sick of bricklayers turning up and just doing what they want…If you don’t come back to work then you’ve got no job.” …
Mr Mel Bonnici agreed in cross-examination that Mr Keenan’s account of the conversation was basically accurate. However, I consider that Mr Mel Bonnici describing VMA as “his” business was no more than loose language, reflecting that he was general manager of VMA and in charge of organising bricklayers and labourers. It was not put to Mr Mel Bonnici that he owned VMA, contrary to the shareholding that appears on the company search, or that he was its de facto director, or that Mr Jesse Bonnici customarily did what Mr Mel Bonnici told him to do.
Mr Mel Bonnici acknowledged in cross-examination that, on 22 February 2013, he made the statutory declaration that is exhibit SC-9 to the first affidavit of Simon Caruana. That statutory declaration said:
All employees or subcontractors working for Vicmetro Brick and Blocklaying Australia Pty Ltd prior to January 14th 2013 that worked on the site at 428 Tooronga Road, Hawthorn East have been paid for time worked at this site or on invoices provided involving work performed on this site.
Mr Mel Bonnici denied in cross-examination that it was part of his role to make that statutory declaration. He said he was in the office and the statutory declaration was required to “get a payment”. He said Mr Jesse Bonnici asked him to do the statutory declaration. Mr Mel Bonnici said that he rang Ms Bonnici and asked if everyone had been paid and she said yes so he did the statutory declaration. Mr Mel Bonnici made another statutory declaration in similar terms on 28 March 2013 that is exhibit SC-10 to the first affidavit of Simon Caruana.
The statutory declarations do not say that Mr Mel Bonnici has been informed that the workers had been paid. They confirm categorically and without qualification that the workers had been paid. Statutory declarations are serious documents. The first was made before a Justice of the Peace and the second before a police sergeant. Both documents state in bold writing that “a person who makes a false declaration is liable to the penalties of perjury.”
Obviously, the purpose of the requirement for such statutory declarations before builders are paid is to ensure that their workers are being paid in full and in a timely manner. However, as described previously, the workers had not been paid in full, at least in relation to the first statutory declaration. Consequently, that statutory declaration was false.
In the context of the statutory declarations, Mr Mel Bonnici asked the court to take into account that there is not a person amongst us who has not told a little white lie at times. I hope Mr Mel Bonnici understands that a false statutory declaration is not, on any view, a little white lie.
In any event, I accept Mr Mel Bonnici’s claim that, in making the statutory declaration, he relied on information he was given. That strikes me as plausible. Moreover, it was not put to Mr Mel Bonnici that his evidence that he relied on information that he was given was false. Having observed Mr Mel Bonnici giving evidence about this matter, he seemed to me to be telling the truth and I accept that he was.
There was also evidence about pay being late, and Mr Mel Bonnici knowing about that. For example, Mr Mel Bonnici sent the text message at CB176, which is part of exhibit BS-1 to the first affidavit of Brett Stielow, saying:
Im disappointed to here some talk about pays being late, you were all told pay is fortnightly a week in arrears, and sometimes if money doesn’t come in can be a little late. From there first day not one person has waited the first three weeks for there pay. A number of you think its acceptable to continuously not make targets, or take every Monday off or simply not put in. I know who you are so pick up or your out. I repeat, if jobs don’t get finished no money comes in then pays are late. I no some of you are legit but to the others it’s your fault. So every day now quoters will be met and if you take a cheap day off, the others will cover your work then we all get paid every week (errors in original)
However, nothing in that text suggests that Mr Mel Bonnici was aware that payments were not made at least monthly, which is the essence of the relevant contravention by VMA. On the contrary, the text asserts that no one has waited more than three weeks for his pay.
Both Mr Jesse Bonnici and Mr Mel Bonnici said in their affidavit evidence that the solicitor who contacted VM about its financial difficulties made the first contact with Mr Mel Bonnici, rather than with Mr Jesse Bonnici. Both confirmed that Mr Mel Bonnici attended one meeting with the solicitor and Mr Jesse Bonnici. Mr Jesse Bonnici said that he attended meetings with the solicitor that Mr Mel Bonnici did not attend. Neither Mr Jesse Bonnici nor Mr Mel Bonnici were challenged about this claim.
Mr Mel Bonnici said that the solicitor contacted him in 2012, rather than Mr Jesse Bonnici, because Mr Mel Bonnici had the company telephone. However, Mr Mel Bonnici conceded in cross-examination that the only telephone number for VM and VMA which appeared on their website was his telephone number. He also conceded that it had been his telephone number before he commenced at VM and it was still his telephone number. Consequently, Mr Mel Bonnici was the contact point for VM and VMA for every purpose. However, this does not establish that Mr Mel Bonnici was in control of all aspects of the business of VM and VMA, or, more relevantly, that he was in control of matters relating to the payment of workers.
I turn now to the particular contraventions that VMA has been found to have committed.
In relation to the payslip contraventions, the gravamen is that VMA did not give the employees a payslip within one working day of paying them. Mr Mel Bonnici acknowledged that he knew that payslips were sometimes late, when the workers told him that. Clearly, on that evidence, he discovered the payslips were late after the event. He also said that he did not “do payslips”. He was not challenged on that evidence. I found his evidence on these matters to be plausible. Having seen Mr Mel Bonnici give that evidence, I consider that he was telling the truth about this matter and I accept his evidence in this regard.
The fact that Mr Mel Bonnici was instrumental in emailing payslips to employees when the payslips were late does not mean that he knew when payslips were due and does not mean that he was involved in not giving the workers payslips when they were due. These matters were not put to Mr Mel Bonnici. I find that he did not have the relevant knowledge or involvement in relation to the payslip contraventions.
The contraventions under s.323 of the Act concern the failure to pay workers in full and at least monthly. It was not put to Mr Mel Bonnici that he knew that any particular workers were not paid in full and at least monthly. Except for occasional cash payments that Mr Mel Bonnici delivered, there was no evidence that he knew when anyone was paid, how often they were paid or how much they were paid in total. Except for those who were not paid at all, there was no evidence that the workers were not paid at least monthly. There was no evidence that Mr Mel Bonnici knew that any workers were not paid at all. The fact that Mr Mel Bonnici delivered occasional cash payments does not indicate that he knew how much any particular worker was paid overall. In the absence of evidence about those matters, I am not satisfied that Mr Mel Bonnici knew that workers were not paid in full and at least monthly.
The contraventions in relation to accrued but untaken annual leave can be dealt with in a similar way. It was not put to Mr Mel Bonnici that he knew that any workers were not paid accrued but untaken annual leave upon termination. There was no evidence that Mr Mel Bonnici was in any way involved in calculating pays or processing pays or gave instructions on how or when to calculate or process pays. In fact, the evidence was to the contrary and was to the effect that only Mr Jesse Bonnici and Ms Bonnici attended to those matters.
The evidence of Mr Jesse Bonnici was that he or Ms Bonnici determined the pay rates of the workers and paid them, based on timesheets provided by supervisors. It was not put to Mr Jesse Bonnici that that evidence was not true. Mr Jesse Bonnici’s credibility was not effectively challenged. His evidence on this matter strikes me as plausible. Having observed him give evidence in relation to these matters, I consider that he was telling the truth and I accept his evidence in relation to these matters. Consequently, I am not satisfied that Mr Mel Bonnici was knowingly concerned in VMA’s annual leave contraventions.
It was not put to Mr Mel Bonnici that he had any knowledge of or involvement in VMA’s contraventions concerning superannuation or travel allowance. The evidence did not establish that Mr Mel Bonnici had any knowledge of or involvement in the calculation or processing of the workers’ payments. I am not satisfied that Mr Mel Bonnici was knowingly involved in VMA’s contraventions in these regards.
Similarly, in relation to the minimum rates of pay under the Award, it was not put squarely to Mr Mel Bonnici that he knew that the workers were not being paid their full wages. When Mr Mel Bonnici said that he was the point of contact in relation to pays, it was put to him that he was “responsible for then feeding back the answer”. Mr Mel Bonnici basically agreed with that proposition, saying that:
I would pass it back to whoever was relevant for that and give them an answer as soon as I got one back.
It is possible that the information that was passed back and forth would have been sufficient to establish that Mr Mel Bonnici was knowingly involved in VMA’s minimum pay contraventions. However, it is not known what that information was. In the absence of any specific evidence about what Mr Bonnici conveyed and when, I am not satisfied that he was knowingly involved in VMA’s minimum pay contraventions.
All in all, the evidence against Mr Mel Bonnici creates good grounds for suspicion. However, in many respects, that evidence was vague and lacked specific details. It is insufficient to establish that he was knowingly involved in any of VMA’s specific contraventions.
It is not clear why the applicant did not allege that Mr Jesse Bonnici, as the sole director of VMA, was knowingly concerned in the various breaches. Mr Jesse Bonnici actually affirmed an affidavit saying that he was responsible for calculating and making payments to the workers. However, as nothing was alleged against Mr Jesse Bonnici, I take that matter no further.
Conclusion
No orders are sought in relation to VM and none will be made. There will be declarations in accordance with these reasons. The question of any penalties will be dealt with separately. I will hear the parties on the directions to be made for the separate penalty hearing.
I certify that the preceding two hundred and thirty-three (233) paragraphs are a true copy of the reasons for judgment of Judge Riley.
Associate:
Date: 21 August 2015
Eichner affidavit affirmed 21 November 2014, paragraph [8] to [18];
Kennan affidavit affirmed 21 November 2014, paragraph [7];
Stielow affidavit affirmed 23 November 2014, paragraphs [7] to [12], [21] to [22];
Sheridan affidavit affirmed 24 November 2014, paragraphs affidavit [6] to [8];
McKeown affidavit sworn 24 February 2015, exhibit TM-1 paragraphs [8] and [10];
O’Donnell affidavit sworn 8 December 2014, paragraphs [7] to [8] and [10];
Mel Bonnici affidavit affirmed 7 April 2015, paragraph [9.3] to [9.4] and [10].Stielow affidavit paragraphs [13], [26] and exhibit BS-1;
O’Donnell affidavit paragraphs [20-21] and exhibit TO-1;
McKeown affidavit sworn 24 February 2015, exhibit TM-1 paragraph [9];
Sheridan affidavit affirmed 24 November 2014, paragraphs [6], [12] and exhibit DS-1;
Kagan affidavit affirmed 20 November 2014, paragraph [10];
Keene affidavit affirmed 21 November 2014, paragraph [9].
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