Donnola v Silverleaf Constructions Co Pty Ltd
[2024] FedCFamC2G 223
•8 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Donnola v Silverleaf Constructions Co Pty Ltd [2024] FedCFamC2G 223
File number(s): SYG 2006 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 8 March 2024 Catchwords: INDUSTRIAL LAW – application for the recovery of wages and other entitlements – whether applicant earned wages for the last seven weeks of his employment – whether first respondent employer was justified in summarily dismissing applicant from his employment for misconduct – whether first respondent employer liable to pay superannuation contribution – whether first respondent employer failed to pay accrued but untaken annual leave at time it terminated applicant’s employment – whether applicant engaged in misconduct thus relieving the first respondent from giving applicant two weeks’ notice or two weeks’ pay in lieu – declarations made and matter set down for directions to make further orders and to set the matter down for hearing on penalties. Legislation: Fair Work Act 2009 (Cth) ss 12, 44, 61, 87, 90, 96, 97, 99, 117, 123(1)(b), 139(1), 323(1), 542, 543, 545, 550(1)
Superannuation Guarantee (Administration) Act 1992 (Cth) ss 16, 19, 22, 23, 27
Superannuation Guarantee Charge Act 1992 (Cth) s 6
Environmental Planning and Assessment Act 1979 (NSW) s 4.55(1)
Fair Work Regulations 2009 (Cth) Pt 3-6
Cases cited: Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25
Coote v Mainline Access Pty Ltd(No.3) [2019] FCCA 383
Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337
Ex parte Halliday and Sullivan (1938) 60 CLR
Miles v Wakefield Metropolitan District Council [1987] ICR 368
Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35
Sunrise Brokers LLP v Rodgers [2015] ICR 272
Division: General Number of paragraphs: 119 Date of last submission/s: 7 November 2022 Date of hearing: 17 and 18 October 2022 Place: Sydney Solicitor for the Applicant: Mr K Kutasi and Mr C Shamsabad of Solve Legal Pty Ltd Counsel for the Respondents: Mr S Puttick Solicitor for the Respondents: Blands Law ORDERS
SYG 2006 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ANDREW DONNOLA
Applicant
AND: SILVERLEAF CONSTRUCTIONS CO PTY LTD (ACN 610 569 045)
First Respondent
JOSHUA MCKENZIE
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
8 MARCH 2024
THE COURT DECLARES THAT:
1.The first respondent, in breach of the employment contract it made with the applicant in about December 2019, failed to:
(a)pay to the applicant wages from Monday 28 June 2021 to Friday 13 August 2021, those wages being $14,807.69; and
(b)make superannuation contributions from 3 February 2020 to 19 August 2021 in the amount of $16,164.
2.The first respondent contravened s 44(1) of the Fair Work Act 2009 (Cth) (FW Act) by failing, contrary to s 90(2) of the FW Act, to pay to the applicant at the time the first respondent purported to terminate the applicant’s employment on 19 August 2021, accrued but untaken annual leave in the amount of $8,476.84.
3.The first respondent contravened s 44(1) of the FW Act by failing, contrary to s 117(2) of the FW Act, to provide to the applicant two weeks’ notice, or two weeks’ wages in lieu of the two weeks’ notice, at the time the first respondent purported to terminate the applicant employment on 19 August 2021.
4.The second respondent was involved in the applicant’s contraventions of s 44(1) of the FW Act referred to in declarations 2 and 3.
THE COURT ORDERS THAT:
5.The matter is listed for directions at 9:30 am on 22 March 2024 to make orders for compensation and specific performance, and to set the matter down for hearing on the question of penalties.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
The basic facts out of which this proceeding arises are largely not in dispute. On 3 February 2020 the applicant, Mr Donnola, commenced employment with the first respondent (SCC) as a site manager. Mr Donnola did so pursuant to a written employment contract, which included a term that SCC would make superannuation contributions on Mr Donnola’s behalf. In early July 2021 SCC stopped paying Mr Donnola his weekly wages; on 13 August 2021 Mr Donnola suffered an injury on site, which rendered him unfit to work for two weeks; and, on 19 August 2021, SCC purported to terminate Mr Donnola’s employment without notice or payment in lieu of notice. SCC did not, at the time it purported to terminate Mr Donnola’s employment, pay him any money for accrued but untaken annual leave; and SCC did not make any superannuation contributions on behalf of Mr Donnola while he was an employee of SCC.
In this proceeding, therefore, Mr Donnola claims that:
(a)SCC was required, but failed, to pay his wages from Monday 28 June 2021 to Friday 13 August 2021, and, by so failing, contravened s 323(1) of the Fair Work Act 2009 (Cth) (FW Act);
(b)SCC was required, but failed, to pay to Mr Donnola personal leave from 16 August to 19 August 2021, as it was required to do pursuant to s 99 of the FW Act, and by failing to do so, contravened s 44(1) of the FW Act;
(c)SCC was required under s 117 of the FW Act to give, but in contravention of that provision failed to give, Mr Donnola two weeks’ notice;
(d)when SCC terminated his employment, Mr Donnola had accrued but untaken annual leave which SCC was obliged under s 90(2) of the FW Act to pay; but in breach of that obligation, it failed to pay to Mr Donnola an amount that reflected his accrued but untaken annual leave; and, for that reason, SCC contravened s 44 of the FW Act;
(e)SCC breached Mr Donnola’s contract of employment by not making superannuation contributions on behalf of Mr Donnola; and
(f)the second respondent, Mr McKenzie, being the sole director and shareholder of SCC, was, within the meaning of s 550(1) of the FW Act, a person “involved in” SCC’s contraventions of s 323(1), s 117, and s 44 of the FW Act and, for that reason, is himself taken to have contravened those provisions.
SCC, on the other hand, contends it ceased paying wages to Mr Donnola, and it terminated Mr Donnola’s employment, because Mr Donnola ceased performing the work he had undertaken to perform as an employee. SCC accepts, however, that it did not make any superannuation contributions, and it did not pay to Mr Donnola accrued but unpaid annual leave. SCC claims, however, that it had overpaid Mr Donnola $7,033.30 for overtime which SCC is entitled to set off against any amount SCC is found liable to pay to Mr Donnola.
I begin with setting out the evidence and some findings. Unless the context suggests otherwise, unqualified statements of fact are to be taken to reflect my findings of the fact stated.
EVIDENCE AND SOME FINDINGS
For some 20 years before December 2020 Mr Donnola operated his own business consisting of buying, renovating, and selling residential properties; landscaping; and building residential homes.[1]
[1] Affidavit A Donnola 18.07.2022, [3]
December 2019 – Mr Donnola commences employment
In 2019 Mr Donnola applied for a number of construction project management roles. In December 2019 Mr Donnola was contacted by a recruiter who arranged for Mr Donnola to be interviewed for a position with SCC.[2] SCC was incorporated on 20 April 2017, and carries on the business of residential building and construction services.[3]
[2] Affidavit A Donnola 18.07.2022, [5]
[3] Affidavit of J McKenzie 17.08.2022, [4]
Mr Donnola attended an interview with Mr Ian Hill, SCC’s business manager, during which Mr Donnola and Mr Hill discussed the terms and conditions of the role Mr Donnola would perform if engaged by SCC. Mr Donnola expressed interest in coming on board.[4] About one week later, Mr Donnola met Mr McKenzie, who confirmed SCC would engage Mr Donnola as an employee.
[4] Affidavit A Donnola 18.07.2022, [7]
After this meeting, the recruiter sent to Mr Donnola a “letter of offer” dated “11 December 2020” (should be 2019) by which SCC offered to employ Mr Donnola as a “site manager” on the terms set out in a document that was attached to the letter of offer (Employment Contract).[5] The Employment Contract contained terms that included the following:
(a)Mr Donnola would commence his employment on 3 February 2020, and he would be employed full time.
(b)Mr Donnola would be required to perform his duties on various sites around Sydney.
(c)Mr Donnola’s ordinary hours of work were 38 hours per week, plus any reasonable additional hours that are necessary to fulfil his duties.
(d)Mr Donnola would be paid a base salary of $110,000 per annum, together with a car allowance of $15,000 per annum to cover travel costs.
(e)SCC would make superannuation contributions on Mr Donnola’s behalf in accordance with the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act).
(f)Mr Donnola was entitled to annual leave in accordance with the National Employment Standards, and notice of termination of employment as provided for by the FW Act.
[5] Exhibit AD-1, pages 2-5
Work Mr Donnola performed
Mr Donnola commenced his employment with SCC on 3 February 2020;[6] and, at different times, Mr Donnola was assigned to manage two construction projects on behalf of SCC, the first in Haberfield (Haberfield project), and the second in Kensington (Kensington project). Mr Donnola says he was responsible for the overall planning, managing, and execution of these projects;[7] and that his role was “highly autonomous”.[8] Mr Donnola further says:[9]
I was not provided with any real supervision in my role nor was there any real effort to monitor the work that I was doing. I developed the impression that Mr McKenzie would allow me to work on my own so long as the clients were making their scheduled payments. The vast majority of my communication regarding my work was with the clients and the contractors.
[6] Statement of claim, [1]; Defence, [1]
[7] Affidavit A Donnola 18.07.2022, [18]
[8] Affidavit A Donnola 18.07.2022, [19]
[9] Affidavit A Donnola 18.07.2022, [20]
Mr Donnola also says that in the first few weeks of his employment, Mr McKenzie scheduled regular meetings, which were typically between Mr McKenzie, Mr Hill, and Mr Donnola. Mr Donnola prepared minutes of those meetings, according to which meetings were held on 6, 21, and 28 April 2020, and on 12 May 2020.[10] Mr Donnola says that, after approximately the fourth meeting, Mr McKenzie ceased scheduling meetings.[11]
[10] Affidavit A Donnola 18.07.2022, [21]; exhibit AD-1, tab 2
[11] Affidavit A Donnola 18.07.2022, [21]
The Haberfield project
The Haberfield project consisted of a $500,000 (plus GST) renovation of a residential property.[12] According to Mr Donnola, he and Mr McKenzie turned up at the site; Mr McKenzie said that Mr Donnola was responsible for delivering the project; and Mr McKenzie left Mr Donnola with nothing more than a set of plans, a sledgehammer, and access to an account at Hardware & General for material.[13] Mr Donnola completed the Haberfield project in January 2021; he says that in the period during which he managed the Haberfield project Mr McKenzie visited the site three times; and Mr Hill also occasionally visited the site.[14]
[12] Affidavit A Donnola 18.07.2022, [22]
[13] Affidavit A Donnola 18.07.2022, [23]
[14] Affidavit A Donnola 18.07.2022, [24], [25]
The Kensington project
The Kensington project consisted of a partial demolition and refurbishment of a heritage residence, and structural works to an adjoining new duplex construction.[15] The project began in November 2019 but, from around June 2020, Mr Donnola was asked “to get increasingly involved at Kensington and from 12 January 2021 the project was tasked to” Mr Donnola.[16]
[15] Affidavit A Donnola 18.07.2022, [30]
[16] Affidavit A Donnola 18.07.2022, [32]
According to Mr Donnola, he was left in sole control of the Kensington project, and he worked full-time on the project. Mr Donnola was handed a copy of the plans, and access to SCC’s hardware account. Mr Donnola spent “[a] lot of time” on his own “dealing with quotes and overall building process”. Mr Donnola further says that, although Mr McKenzie occasionally responded to emails Mr Donnola sent to him, “by and large” Mr Donnola “was left to ensure everything was in order”.[17]
[17] Affidavit A Donnola 18.07.2022, [34]
Mr Donnola has exhibited to his affidavit a large volume of documents, most of which are emails he sent and received or was copied in. Those documents consist of the following:
(a)Documents Mr Donnola says records his involvement in the Kensington project in 2021.[18]
(b)Communications between the client and the architect which, Mr Donnola says, were conducted through him.[19]
(c)Documents that relate to the estimation and request of quotes.[20]
(d)Documents Mr Donnola says were generated in relation to issues that arose on Mr Donnola’s becoming aware in January 2021 that the works did not comply with the original development consent.[21]
[18] Affidavit A Donnola 18.07.2022, [34]; exhibit AD-1, tab 10 (pages 653-1980)
[19] Affidavit A Donnola 18.07.2022, [37]; exhibit AD-1, tab 12 (pages 1986-2331)
[20] Affidavit A Donnola 18.07.2022, [38]; exhibit AD-1, tab 13 (pages 2333-2364)
[21] Affidavit A Donnola 18.07.2022, [40]-[45]; exhibit AD-1, tabs 14 -21 (pages 2366-3619)
Mr Donnola says that, when he was given responsibility for the Kensington project in January 2021, he became aware that the works did not comply with the development consent after he read reports prepared by heritage architects and fire engineers; and he brought these matters to the attention of the architect. The architect “requested we engage the services of the Private Certifiers to conduct a preliminary on-site assessment of Mr McKenzie’s completed works at the time”.[22]
[22] Affidavit A Donnola 18.07.2022, [40]
Mr Donnola says he began to work as efficiently as possible to remedy the situation, one issue at a time. One of his first steps was to ensure the property had adequate fire safety protocols, and engineering in a manner that complied with fire protection standards. Mr Donnola says that the steps he took are reflected in the documents behind tab 15 of exhibit AD-1.[23] The documents include the following:
[23] Affidavit A Donnola 18.07.2022, [41]
(a)An email Mr Tieppo, a certifier, sent on 11 February 2021 to Mr Donnola and others responding to “your question regarding the louvres privacy”.[24]
(b)Two emails exchanged between Mr Donnola and Mr Tieppo on 12 February 2021.[25]
(c)Emails exchanged on 12, 22, and 24 February 2021 between Mr Donnola, Mr Chant, and Mr Sunjaya, a consulting engineer, in relation to window protection.[26]
(d)An email Mr Hill sent to Mr Donnola on 24 February 2021 referring to an email which attaches “fire engineering details”.[27]
(e)An email Mr Marven, the architect, sent on 14 July 2021 to a number of persons, including Mr Donnola, noting that the “file is updated”.[28] Mr Donnola responded by email sent at 7:57 am on 14 July 2020 identifying six items to be included “[b]efore submitting final drawings for 4.55”.[29] Mr Marvin responded by email in which he said: “You and Michael are coordinating this so please provide detailed instructions and sketches of what you need us to do”.[30]
(f)An email Mr Donnola sent at 12:44 pm on 5 August 2021 to MD&A Administration.[31] It consists of an email MD&A had sent to Mr Donnola asking detailed questions in relation to the six items Mr Donnola, in his email of 14 July 2021, said should be included “[b]efore submitting final drawings for 4.55”, and Mr Donnola’s responses.
(g)An email Mr James Sunjana sent at 1:55 pm on 5 August 2021 to Mr Donnola.[32]
(h)An email Mr Donnola sent at 5:32 am on 6 August 2021 to Mr James Sunjana, a consultant engineer.[33]
(i)An email Mr James Sunjana sent at 8:33 am on 6 August 2021 to Mr Donnola.[34]
(j)An email Mr JD (the client) sent to “Michael @415ups.com” on 17 August 2021, but copied to a number of persons, including Mr Donnola.[35]
[24] Exhibit AD-1, tab 15, page 2591
[25] Exhibit AD-1, tab 15, page 2589-2590
[26] Exhibit AD-1, tab 15, page 2580-2583
[27] Exhibit AD-1, tab 15, page 2542
[28] Exhibit AD-1, tab 15, page 2578-2579
[29] Exhibit AD-1, tab 15, page 2578
[30] Exhibit AD-1, tab 15, page 2577
[31] Exhibit AD-1, tab 15, page 2549
[32] Exhibit AD-1, tab 15, page 2547
[33] Exhibit AD-1, tab 15, page 2546
[34] Exhibit AD-1, tab 15, page 2546
[35] Exhibit AD-1, tab 15, page 2592
I infer that “4.55” in these emails is a reference to an application the client was proposing to make to Randwick City Council (Council) under s 4.55(1) of the Environmental Planning and Assessment Act 1979 (NSW) to modify the development consent that had been granted in relation to the Kensington project.
Mr Donnola says that on 1 April 2021 private certifiers, Mr Tieppo and Mr Treble conducted a 3 hour inspection of the building work that had been completed; and Mr Donnola “was responsible for ensuring that the works were able to continue as we had planned”.[36] Mr Donnola exhibits a large volume of documents which, he says, record his involvement in the certifying process.[37] The documents include emails sent in July and August 2021, one of which is an email Mr Donnola sent on 9 August 2021 in response to questions raised by the architect, Mr Marvin in an email sent on 7 August 2021.[38] Mr Marvin’s email asked a number of questions in relation to the “4.55 set” which, I have inferred, is a modification application the proprietor intended to lodge with the Council.
[36] Affidavit A Donnola 18.07.2022, [42]
[37] Affidavit A Donnola 18.07.2022, [42]; Exhibit AD-1, tab 16
[38] Exhibit AD-1, tab 16, page 3247
By letter dated 28 April 2021 the Council issued a notice of intention to give an order in relation to unauthorised works the notice alleged had been carried out on the Kensington property.[39] Mr Donnola says that the proprietor was required to contact Mr Brewer of Urban Planning Solutions, and “Heritage 21” “to remedy the situation”. Mr Donnola has exhibited what he describes as the “entirety of the email correspondence, including [Mr Donnola’s] day-to-day operations in liaising generally with Mr Brewer”.[40] It is unnecessary to refer to any of that correspondence other than to note that there is correspondence that occurs over July and August 2021, being the period for which Mr Donnola has not been paid.[41]
[39] Affidavit A Donnola 18.07.2022, [46]; Exhibit AD-1, tab 18, page 3274
[40] Affidavit A Donnola 18.07.2022, [48]; Exhibit AD-1, tab 19
[41] See, for example, Exhibit AD-1, tab 19, pages 3322, 3327, 3348, 3356, 3438, 3564
Mr Donnola says that from on or about 8 July 2021 he “sought to consult Mr McKenzie of the unapproved works to no avail”; and Mr Donnola exhibits what he says is the correspondence that shows his attempts.[42] The documents include an email Mr Donnola sent to Mr McKenzie on 8 July 2021, in which he said:[43]
I’ve been closely working the PCA, private planner and heritage architects to resolve all the non-compliant works onsite, which will need to be demolished and rebuilt.
[42] Affidavit A Donnola 18.07.2022, [50]; exhibit AD-1, tab 21
[43] Exhibit AD-1, tab 21, page 3608
In his lawyer’s written submissions, Mr Donnola submits that the documents he has exhibited to his affidavit provide evidence of Mr Donnola’s “consistent work . . . all the way up until the date of his termination”.[44] In their counsel’s written submissions, on the other hand, the respondents submit that the documents do not support that contention.[45] The respondents submit:[46]
This is not least because a considerable volume of the exhibit comprises duplicates of other documents and documents that bear no rational connection to any of the issues in this proceeding. For example, tab 7 comprises 375 pages of email chains between Mr Donnola and Heritage 21. Tab 10 comprises 1,328 pages of a miscellany of emails. Tab 16 runs for 640 pages. Tab 28 is 57 pages of a contract of sale for a property in Normanhurst. So too, it appears that Mr Donnola was only copied into much, if not most, of the email correspondence which has been exhibited.
[44] Applicant’s Final Written Submissions, [6], [33]
[45] Respondents’ Outline of Closing Submissions, [9]
[46] Respondents’ Outline of Closing Submissions, [9]
For reasons that I will discuss later, the question is not whether Mr Donnola worked consistently throughout the period of his employment. The question is whether, during the period of his employment for which SCC did not pay him wages (28 June 2021 to 13 August 2021), Mr Donnola performed or was willing to perform the services SCC had engaged him as an employee to perform.
Mr McKenzie’s evidence
In his affidavit Mr McKenzie deposes, in a general way, to matters that are broadly consistent with parts of Mr Donnola’s evidence. Mr McKenzie says he directed Mr Donnola to manage construction work on behalf of SCC “at various sites”, the “first site” being in Haberfield, and the “second site” being in Kensington;[47] and that at some time in 2020 the work on the Haberfield site was completed, and Mr Donnola “became solely responsible for the Kensington site”.[48]
[47] Affidavit of J McKenzie 17.08.2022, [31]
[48] Affidavit of J McKenzie 17.08.2022, [32]
Mr McKenzie, however, deposes to matters, some of which are additional to, and some of which conflict with, Mr Donnola’s evidence about the work Mr Donnola performed in relation to the Kensington project. First, Mr McKenzie deposes that:[49]
From the commencement of his employment until around May 2021, I received regular reports from Donnola on the work he had performed and progress on-site. Donnola would provide this information by email, sending photographs from on-site, text message or by phone.
[49] Affidavit of J McKenzie 17.08.2022, [34]
Mr McKenzie does not annex to his affidavit any of the reports he says he regularly received from Mr Donnola; and Mr McKenzie has given no evidence to explain why he has not annexed or otherwise tendered these documents into evidence. In those circumstances, I am not prepared to accept this part of Mr McKenzie’s evidence.
Second, Mr McKenzie says:[50]
From the commencement of Donnola’s employment, I had regular conversations and contact with him via email, text and phone calls, on a daily basis, until around January 2021. My communications with Donnola slowly broke down from around 11 January 2021. From that time, I would try to call and text Donnola daily, however he would not pick up my phone calls. Often I would be forced to use Ian Hill’s (former business manager) phone to contact Donnola as he would not pick up my phone calls. From around January 2021 until Donnola's termination there was a gradual decrease in communications with him. Communications with Donnola continued to decrease until by around May 2021, I had no communications with Donnola at all. It became increasingly difficult for me to contact Donnola by phone, and many of my calls to him were ignored and not returned. Donnola repeatedly refused to meet me onsite for meetings and he refused to attend regular team meetings. The only correspondence I continued to receive from Donnola were in relation to requests for payment. I became increasingly concerned due to the absence of communication, that I had made attempts to meet him on site on a number of occasions.
[50] Affidavit of J McKenzie 17.08.2022, [35]
I also do not accept this evidence:
(a)Mr McKenzie refers to communications or attempted communications with Mr Donnola by email and text messages, but Mr McKenzie does not annex copies of these communications, or otherwise give evidence to explain why he has not done so.
(b)Although Mr McKenzie says he attempted to contact Mr Donnola, and that Mr Donnola repeatedly refused to meet Mr McKenzie on site, Mr McKenzie does not attempt to identify when and how he attempted to contact Mr Donnola, or when and how Mr Donnola manifested his refusal to meet with Mr McKenzie, or identify the purpose or purposes for which Mr McKenzie wanted to meet with Mr Donnola.
(c)If, as Mr McKenzie says, he was unable to contact Mr Donnola from May 2021, it is implausible that Mr McKenzie would have tolerated this state of affairs until 12 August 2021 when (as I will discuss later) Mr McKenzie sent an email to Mr Donnola requiring Mr Donnola to attend a meeting on site.
(d)In his email of 12 August 2021 to Mr Donnola (which I set out later), Mr McKenzie purported to direct Mr Donnola to attend the site on Monday morning on 16 August 2021. Mr McKenzie does not say in that email that he had previously requested Mr Donnola to appear on site and provide Mr McKenzie with information, something it is reasonable to expect Mr McKenzie would have noted in his email if Mr McKenzie, as he says, did on many previous occasions unsuccessfully request Mr Donnola to meet with him. If anything, Mr McKenzie’s email of 12 August 2021 suggests that his email was the first occasion on which Mr McKenzie had directed Mr Donnola to appear onsite to discuss the status of the Kensington project.
(e)As I show later, commencing on 8 July 2021, Mr Donnola sent emails to Mr McKenzie demanding that SCC pay the wages to Mr Donnola for the period commencing 28 June 2021; but Mr McKenzie did not respond. If, as Mr McKenzie asserts, since May 2021 Mr Donnola had been refusing Mr McKenzie’s requests to meet with him, it is reasonable to expect that Mr McKenzie would have sent an email or emails to Mr Donnola stating that he was not paying Mr Donnola because Mr Donnola had ignored or refused to comply with Mr McKenzie’s requests that Mr Donnola meet with Mr McKenzie.
Third, Mr McKenzie says Mr Donnola refused to provide him with “requested reports on scheduled works”; Mr Donnola refused to attend team meetings where “we would report on progress”, and that Mr Donnola would only copy Mr McKenzie into relevant email correspondence with third parties.[51] Mr McKenzie annexes “a copy of text messages” between Mr McKenzie and Mr Donnola, in apparent support of Mr McKenzie’s assertion that Mr Donnola had refused to provide Mr McKenzie reports, and to attend meetings.[52] The text message, appears to be one Mr McKenzie sent to Mr Donnola on 8 April 2020 in which Mr McKenzie suggested that it would be good if they could meet a couple of times a week just for half an hour. This text message is consistent with Mr Donnola’s evidence I have set out above where he says that in April and May 2020 he met with Mr McKenzie and Mr Hill. Mr McKenzie’s text, however, goes no further.
[51] Affidavit of J McKenzie 17.08.2022, [36]
[52] Affidavit of J McKenzie 17.08.2022, [36], annexure “H”
This part of Mr McKenzie’s “evidence” is also lacking in particularity and, for that reason, I do not accept it. Mr McKenzie does not identify when or how he requested Mr Donnola to provide “reports on scheduled works”; he does not identify when or how Mr Donnola manifested his refusal to provide such reports; and Mr McKenzie does not identify the “team meetings” for the purposes of which Mr McKenzie asserts he had requested Mr Donnola to provide the “reports on scheduled works”. Further, Mr Donnola’s supposed failure to provide “reports on scheduled works” is not a matter that Mr McKenzie considered bringing to Mr Donnola’s attention, when Mr Donnola demanded payment of his wages, as a reason for not paying Ms Donnola’s wages.
Fourth, Mr McKenzie deposed as follows:[53]
I made a number of attempts to contact Donnola from around May 2021 onwards.
I received no responses to my attempts to contact Donnola.
I had no information from him about what was happening on the site at Kensington. I visited the Kensington site on a number of occasions but Donnola was not on site when I went there. I was concerned Donnola was no longer working onsite. I had reason to believe that Donnola had commenced working for another employer, as whenever I tried to meet on site he was busy or unavailable. I visited the site unannounced more than 5 times from around 15 May until the time of his termination. Donnola was not onsite on any of the occasions I visited, and the site appeared to be abandoned.
I spoke to a neighbour at the property next door to the site who told me that they had not seen Donnola at the site, and that there had been no activity at the site for some months.
I was aware that there were issues with the Kensington site which forced a stoppage of work for a while in around May 2021. It was part of Donnola’s responsibility to manage these problems at the site and to keep me informed. But any stoppage of work which was ordered by Council was lifted on or around 19 May 2021, so work could continue again from that date. A copy of a communication from the planner about this is attached to this Affidavit as Annexure I.
Donnola was employed to manage the site on behalf of the company. In these circumstances, I think it is reasonable to expect Donnola to continue to send information and reports to me, even if he had trouble telephoning me, as he has claimed.
[53] Affidavit of J McKenzie 17.08.2022, [38]-[43]
Annexure “I” is an email Mr Brewer, a director of Urban Planning Solutions, sent to a number of persons at 2:34 pm on 19 May 2021, which states as follows:
Further to my previous email, I have now spoken with Karl Gray at Council and he has advised that he no longer requires all work on the Site to be stopped
The only elements that works is not to proceed on at present are those in relation to the two retaining walls and the nib wall that are referenced in the Notice of Intent to Serve an Order. I am Just waiting on the survey and the heritage consultant’s scope of works.
This part of Mr McKenzie’s evidence, too, is lacking in particularity; and, for that reason, I do not accept it. Moreover, although Mr Brewer’s email stated that the Council did not require all work on the site to be stopped, that does not mean that all other work on the project was ready to proceed. Mr Brewer’s email suggests that a number of matters had to be attended to before work could proceed. One was the “heritage consultant’s scope of works”. Mr McKenzie, however, does not say anything about the necessity of obtaining a heritage consultant’s scope of works, or about whether he knows what steps were taken to obtain such scope of works, when such scope of works was obtained, the relevance of those scope of works to the completion of the Kensington project, and what, if any relationship, existed between the completion of the Kensington project and the Council’s prohibition on the continuation of work on the two retaining walls. Further, Mr McKenzie says nothing about who was responsible for paying for the work. If, for example, SCC was responsible for engaging the various trades to complete the work, Mr McKenzie says nothing about whether SCC had the financial capacity to engage those trades.
Fifth, Mr McKenzie refers to the voluminous documents that are exhibited to Mr Donnola’s affidavit, but he asserts that this “does not evidence that [Mr Donnola] performed any work on site, or any work at all”.[54] This is not evidence, but an assertion which, moreover, must be assessed against Mr McKenzie not giving any evidence about the contract into which SCC entered in relation to the Kensington project; the scope of work SCC undertook to perform in connection with that project; the work that had been performed up to the time he purported to terminate Mr Donnola’s employment, and the financial capacity of SCC to complete the work it had undertaken to complete. Further, Mr McKenzie does not identify the work he says Mr Donnola ought to have performed, and was in a position to perform in relation to the Kensington project, but which he had failed to perform.
[54] Affidavit of J McKenzie 17.08.2022, [44]
In any event, Mr Donnola annexes to his affidavit an email it appears Mr Donnola sent to the client of the Kensington project on 2 August 2021, and the email the client sent to Mr Donnola on 3 August 2021, to which I refer later. It is apparent from the email the client sent to Mr Donnola, that the client was of the view that Mr Donnola had indeed been working on the Kensington project and, for that reason, was willing to pay Mr Donnola the wages SCC had failed to pay Mr Donnola.
Mr Donnola is not paid his wages
At 5:43 am on 8 July 2021 Mr Donnola sent an email to Mr McKenzie in which he said that it had come to his attention that he had not been paid the salary that was due to be paid on 1 July 2021. Mr Donnola requested that Mr McKenzie attend to this by 5 pm as the next salary payment is due tomorrow into my account”.[55] Mr Donnola repeated his demands for payment of wages by emails sent to Mr McKenzie on 13 July, 15 July, 23 July, 30 July, 6 August, and 13 August 2021.[56] Mr McKenzie did not respond to these emails.
[55] Exhibit AD-1, tab 26, page 4088
[56] Exhibit AD-1, tab 26, pages 4085-4087
In addition to these emails, on 16 July 2021 Mr Donnola sent to Mr McKenzie the following email (copied to the client of the Kensington project):[57]
[57] Affidavit of J McKenzie 17.08.2022, [48]; annexure J
I am writing to you as I have not received a response from the numerous emails sent which commenced 08.07.21 regarding the titled subject matter.
I am currently owed 3 weeks’ pay with the gross amount being $7211.55
I am still formally employed by Silverleaf Constructions, this amount will remain outstanding and weekly wages will still accrue on top of the current outstanding balance until employment is terminated by means of redundancy which includes 32 days holiday pay under contract
I am owed over $19.000.00 plus 10% interest in superannuation payments
I know that you are in the process of selling you house
By you not responding to my emails, I see this as a blatant refusal to perform your responsibilities as a Director of Silverleaf Constructions and an employer with complete disrespect.
I have spoken to a Liquidator. I am now proceeding with the needed items in moving forward with notification of insolvency with the Australian Securities and Investments Commission along with the Australian Taxation Office and Fair Work Commission.
The Fair Work Ombudsman has appointed a case manager regarding this matter, so I imagine you will be hearing from them soon
I shall give you 5pm COB today 16th July 2021. If I have not received a response from you, of how you plan to manage and fore [sic] fill all your payment obligations to me, you leave me no other option but to proceed with all the above.
Josh’ its time man up and not behave like coward, it just makes things worse.
Mr McKenzie did not respond to this email.
There is in evidence a document titled “payroll advice report”, for the period 1 July 2019 to 30 June 2021, in relation to Mr Donnola that is annexed to Mr McKenzie’s affidavit. It records the payment weekly of a base salary of $2,115.38 (net) and a car allowance of $288.47. The document records the last payment as having been made on 25 June 2021, which was a Friday.
3 August 2021 – Mr Donnola makes arrangements with client
At 9:27 am on 2 August 2021, Mr Brent Marvin, the architect on the Kensington project, sent to Mr Donnola a copy of the following email Mr Marvin had sent to the client:[58]
[58] Exhibit AD-1, tab 12, page 2025
. . . . I am happy to assist you to complete the project but I am in a precarious financial position due to my loyalty to the project and to Josh’s incompetence.
At this stage I am owed from Josh 5 weeks paying being the amount of $12,019.25. Could you please confirm what was agreed on the 4th Feb 2021 onsite in the presence of Architect Brent that if I continued to work on the project you would ensure I was paid any wages owing? . . . . I would have stopped working at that point without your assurance. I will however continue to pursue from Josh the proceeds of his house sale.
Moving forward
NSW company industry rate for site managers $135 per hour + GST
this covers taxes, loading, super
My Proposal at this stage is 2 hr day for 5 days a week, assist at present until the S455 approved. This covers whatever is required onsite and offsite
This would amount to $1,350 per week + GST
. . . .Once the S4.55 has been approved we can assess the body of works left and required and I can then send you a lump sum fee proposal for my services in order to complete the project for Occupation Certificate.
Please advise this is acceptable or call me to discuss.
At 2:40 pm on 3 August 2021 the client sent the following email to Mr Brent Marvin and Mr Donnola (errors in original):[59]
[59] Affidavit of J McKenzie 17.08.2022, [62]; annexure N
Thank you for phone conversation today.
Below the summary :
1. Andrew agreed to continue working to finish the job until completion.
2. Andrew will seek payment for the past salary from Silver Leaf, Josh Mck Kenzie.
3. If Silver Leaf does not pay Andrew salary, ($12,019.25) [client] will pay with the condition that Andrew will work for free to answer questions and other work required for preparation S.455 for above property. Andrew need to provide legal documents indicating that Silver Leaf does not pay Andrew salary prior asking [client] to pay.
4. Andrew will start to get information gathering tradesmen to complete the job at [the Kensington property]. Targeted to start working by next week by 9th August 2021.
5. Brent will inform Michael to discuss what work can be done while waiting for the process of S.455. Andrew will contact Michael and discuss details of work that can be started during the process S.455.
6. Once Andrew start to commence working [the client] need to pay Andrew salary, This will be proposed by Andrew.
7. [The client] need to call Adrian Fong, the lawyer explaining what will happen if Josh do not continue his work at above property. This include completion of occupancy certificate home warranty insurance and other things, including appointing Andrew to finish the job at Todman Avenue Kensington.
8. Andrew will email Jud ha for detail proposal to finish the job at [the Kensington property].
Kindly make correction when required for above summary.
Mr McKenzie’s email of 12 August 2021
At 12:39 pm on 12 August 2021 Mr McKenzie sent the following email to Mr Donnola:[60]
I would like to set up a meeting immediately on site at ( . . . ) to assess what’s been done and what’s left to complete.
I will require all correspondence over the last 4 months and site diary showing your daily on-site presence at Kensington. Please include a schedule of the works you have completed and works outstanding.
Please outline in your schedule any outstanding issues that need addressing and or solutions required to finalise project to completion.
I am proposing we meet to have an initial discussion first thing Monday morning 16 August at 9:00am. Please let me know if this time is suitable.
[60] Affidavit of J McKenzie 17.08.2022, [51]; annexure K
13 August 2021 – Mr Donnola suffers a workplace injury
According to Mr Donnola, on 13 August 2021 (being a Friday), while on the Kensington site, he lost his footing and fell on his back. On 14 August 2021 Mr Donnola consulted his general practitioner, and was issued medication and a certificate stating that Mr Donnola was unfit to work for two weeks. Mr Donnola reported the incident to Mr McKenzie by an email sent at 11:24 am on 16 August 2021. Mr Donnola attached a doctor’s certificate, and he stated he would be taking “the required paid sick leave to recover from” his injuries in accordance with the National Employment Standards.[61]
[61] Affidavit A Donnola 18.07.2022, [66]- [69]; Exhibit AD-1, tab 29, page 4151
I am satisfied on the basis of Mr Donnola’s evidence, and the doctor’s certificate, that Mr Donnola suffered an injury at the Kensington project site on 13 August 2021.
19 August 2021 – Mr Donnola responds to Mr McKenzie’s email of 12 August 2021
At 9:53 am on 19 August 2021 Mr Donnola sent the following email to Mr McKenzie:[62]
Apologies for the delayed reply, I just found your email below in my junk box.
As you are aware I am in the painful process of recovering from back and wrist injuries that occurred onsite at [the Kensington property]. I notified you of this, Monday morning 16th August 2021, via email with doctors’ certificate attached, but as expected no response or acknowledgment from you.
Let it be noted that you have not replied to any of my 23-email requests regarding the following:
Annual leave payslip updates, 9 weeks salary payments, superannuation + interest payments.
I will be more than happy to assist once all payments and requests are completed.
[62] Affidavit A Donnola 18.07.2022, [71]; Exhibit AD-1, tab 30, pages 4154-4155
19 August 2021 – Mr McKenzie purports to terminate Mr Donnola’s employment
On 19 August 2021 Mr McKenzie sent the following letter to Mr Donnola:[63]
Let this email and letter serve notice for the immediate termination of your employment with Silverleaf Constructions Pty Ltd. Your appointment to manage and supervise the project at [the Kensington property] is hereby terminated.
Under the terms of your contracted employment, you have been employed as a full time employee, and it is expected that you are to be onsite 5 days a week between the hours of 7:00am -3:30pm. I have reason to believe you have not been working on this site and are in a serious breach of your employment obligations.
Please be advised, that on Monday 16 August I conducted a site visit to check on the progress of works under your supervision and management. I am extremely disappointed in the progress to date. It appears you have abandoned this site and have not performed the assigned duties to you whilst employed t in this role.
You have failed to keep me appropriately updated on progress, and following detailed site reviews and discussions with neighbours, it is clear that little to no work has been completed for months now. I have tried multiple times to contact you and initiate communications regarding this project and all attempts have been unsuccessful.
The locks on the front gate to the site property have been changed without my consent, and it appears the property has been abandoned without adequate security measures put in place. This is completely unacceptable. All payments have ceased, and I reserve my legal rights to pursue you for breaching your work duties.
Please refrain from entering the premise at [the Kensington property]. If you would like to arrange a time to access the site to remove your belongings, please provide written communications seeking permissions to enter this site. This will require a minimum of 24 -48hours notice to arrange for access.
Please be advised, I am now working to arrange any outstanding pay and entitlements owed to you and will confirm the details of this arrangement in a follow up letter immediately.
You may seek information about minimum terms and conditions of employment from the Fair Work Ombudsman. If you wish to contact them, you can call 13 13 94 or visit their website at Exhibit AD-1, pages 4158-4159
This letter merits three observations.
(a)First, it implies that Mr McKenzie had no or little idea of the state of progress of the Kensington project until he visited the site on 16 August 2021. I am not prepared to find that Mr McKenzie had no or little idea of the progress of the Kensington project in the absence of evidence, it is reasonable to suppose it was in Mr McKenzie’s power to give, about the contract SCC entered into with the client in relation to the project, the scope of the works SCC had undertaken to perform, and the system by which Mr McKenzie arranged to pay for the trades SCC had engaged or had proposed to engage to perform the work.
(b)Second, the letter implies that there was further work to be done on the Kensington project, that work was ready to proceed, and that SCC would have been in the position to carry out that further work, but for Mr Donnola’s asserted abandonment of the site. If this implication were correct, it was within Mr McKenzie’s power to give evidence that was capable of proving the correctness of the implication; but he has not given any such evidence. I therefore do not accept the implication Mr McKenzie intended to convey by his letter.
(c)Third, it may be accepted that Mr McKenzie attended the Kensington project site on 16 August 2021, and there was no person working on the site. Given I have found Mr Donnola suffered an injury on the Kensington project site on 13 August 2021, and Mr McKenzie has not provided evidence on the matters I have identified in (b), there being no person present at the site on 16 August 2021 is not a basis for finding that Mr Donnola had abandoned the Kensington project.
(d)Fourth, Mr McKenzie’s statement that “[a]ll payments have ceased” implies that he had made the decision to cease making payments to Mr Donnola because of the matters stated in the letter. In actual fact, SCC had ceased paying Mr Donnola since early July 2021.
Communications between Mr Donnola and client after 19 August 2021
At 8:47 am on 22 August 2021 Mr Donnola sent the following email to the client:[64]
Regarding our conversation yesterday I will need to consult my lawyer.
In the meantime, if you could please ask Josh if he would agree and comply to me being in charge with complete authority, over seeing him on site as the building consultant.
[64] Exhibit AD-1, tab 24, pages 4071-4072
The client responded by email sent at 12:08 pm on 22 August 2021. The client said he would call Mr McKenzie if the client were to agree to work with Mr Donnola.[65] The client asked Mr Donnola what his charges will be after the “S 4.55 [is] approved”. After Mr Donnola responded to this email, the client asked him to provide “a fixed number of weeks to complete the work”, or to suggest “a lump sum amount until I got an OC from Silverleaf”.[66] Mr Donnola responded as follows on 24 August 2021:[67]
Regarding time frame for commencement to OC, I'm estimating 20-26 weeks , considering the amount of demolishing work and rebuilding , but this is subject to the builder to manage this.
My position is to act on your behalf as the building consultant, project managing Silverleaf.
Essentially, I am the client, the term used in the construction industry is ( CLIENT SIDE )
CLAIM FOR WAGES
[65] Exhibit AD-1, tab 24, page 4071
[66] Exhibit AD-1, tab 24, page 4070
[67] Exhibit AD-1, tab 24, pages 4070
Parties’ submissions
Mr Donnola submits that SCC failed to pay his wages from 28 June 2021 to 13 August 2021, but that during that period Mr Donnola was available to provide and he did provide the service he was bound to provide to SCC under the Employment Contract. Mr Donnola submits that by failing to pay his wages, SCC contravened s 44 and s 323(1) of the FW Act. The apparent basis of Mr Donnola’s submission that SCC contravened s 44 by failing to pay Mr Donnola’s wages is the submission that an employee’s entitlement to wages is a “safety net contractual entitlement” within the meaning of s 12 of the FW Act.
The respondents, on the other hand, submit Mr Donnola was not at work for long periods of time, and he was unable to be contacted. In short, the respondents submit that Mr Donnola had failed to perform the service SCC had engaged him to perform as an employee and, for that reason, is not entitled to be paid wages from Monday 28 June 2021 to 13 August 2021. The respondents principally rely on Mr McKenzie’s evidence.[68]
[68] Respondent’s Outline of Closing Submissions, [20]
Before I consider the parties’ competing submissions, it would be convenient if I set out some principles that are relevant to this part of Mr Donnola’s case. The first relate to the circumstances in which an employee is entitled to claim, and therefore take action to recover, wages; the second relates to whether an employee’s entitlement to wages under a contract of employment is a “safety net contractual entitlement” within the meaning of s 12 of the FW Act and, for that reason, an employer’s failure to pay wages in breach of a contract constitutes a contravention of s 44 of the FW Act; and the third is whether an employer’s failure to pay wages by itself constitutes a contravention of s 323(1) of the FW Act.
Recovery of wages
Subject to any contrary express term, an employee’s entitlement to be paid wages depends on the employee performing the service he has undertaken to perform under his or her contract of employment. That is made clear in the following passage from the judgment of Dixon J in Automatic Fire Sprinklers Pty Ltd v Watson:[69]
A contract for the establishment of the relation of master and servant falls into the same general category of agreements to pay in respect of the consideration when and so often as it is executed, and is, therefore, commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master's wrongful act.
It is, of course, possible for the parties to make a contract for the payment of periodical sums by the master to the servant independently of his service. . . . But, to say the least, it is not usual. The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach. . . .
. . . .
Some difficulty has been felt in saying what is the service which carries wages. The wages are incident to the subsisting relationship of master and servant. A master who sends his servant upon a holiday upon full pay can be sued for wages under the contract, although not on a common count for work and labour done. They also serve who only stand and wait. Difficulties, too, arise from the fact that a refusal to work on the part of a servant, who neither leaves his master’s service nor is discharged, may disentitle him to wages for the period of the refusal. That is for non-fulfilment of the conditions by which wages are earned. But, broadly speaking, it is enough to say that wages are for the service reasonably demanded under a subsisting relationship of master and servant. That relationship may be ended by the servant forsaking the master or the master discharging the servant, although the act of the one or of the other amounts to a breach of contract.
[69] Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435, at pages 465-466 (Dixon J)
“Service”, in the context of a contract of employment, does not necessarily mean the actual performance of work. That is apparent from Dixon J’s reference to an employer being liable to pay wages to an employee whom the employer has sent on a holiday on full pay, and to his Honour’s repeating John Milton words: “They also serve who only stand and wait”.[70] These observations reflect an important incident of a contract of employment, namely, an employee’s being obliged to obey his or her employer’s lawful and reasonable directions that fall within the scope of the employee’s employment, which may include a direction not to work, or to work in particular ways;[71] and the observations also reflects the general rule of the common law that, subject to any contrary express term, an employer does not generally have a duty to provide actual work for an employee to perform.[72]
[70] John Milton, Sonnet 19: When I consider how my light is spent
[71] R v Darling Island Stevedore & Lighterage Co Ltd ; Ex parte Halliday and Sullivan (1938) 60 CLR, at pages 620-621
[72] Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337, at page 341: “Ordinarily an employee cannot demand to be given work and the obligation of the employer is limited to payment of the agreed remuneration” (Meagher, Handley, Cripps JJA). The common law itself provides a number of exceptions to the general rule.
The principle that governs an employee’s right to remuneration, as Underhill J noted in Sunrise Brokers LLP v Rodgers,[73] is succinctly stated in the headnote to Miles v Wakefield Metropolitan District Council, as follows:[74]
[A]n employee’s right to remuneration depended on his doing or being willing to do the work that he was employed to do and if he declined to do that work the employer need not pay him.
[73] Sunrise Brokers LLP v Rodgers [2015] ICR 272, at page 278 ([18])
[74] Miles v Wakefield Metropolitan District Council[1987] ICR 368; [1987] AC 539
“Safety net contractual entitlement”
As I have already noted, Mr Donnola appears to submit that his entitlement to wages under the Employment Contract constitutes a “safety net contractual entitlement” within the meaning of s 12 of the FW Act and, for that reason, a failure by SCC to pay Mr Donnola’s wages constitutes a contravention of s 44 of the FW Act. I do not accept that submission.
The expression “safety net contractual entitlement” is defined in s 12 of the FW Act to mean:
an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:
(a) subsection 61(2) (which deals with the National Employment Standards); or
(b) subsection 139(1) (which deals with modern awards).
The expression “National Employment Standards” (NES) is given meaning by s 61(3) of the FW Act, which provides that “Divisions 3 to 12 [of Part 2.2 of the FW Act] constitute the National Employment Standards”.
That definition is relevant to the operation of s 542 and s 543 of the FW Act, which provide:
542 Entitlements under contracts
(1) For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force from time to time, also has effect as an entitlement of the employer or employee under this Act.
(2) The entitlement has effect under this Act subject to any modifications, by a law of the Commonwealth (including this Act or a fair work instrument), a State or a Territory, of the safety net contractual entitlement.
543 Applications for orders in relation to statutory entitlements derived from contracts
A national system employer or a national system employee may apply to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) to enforce an entitlement of the employer or employee arising under subsection 542(1).
None of the subject matters described in the NES, being the subjects identified in s 61(2) of the FW Act, concerns wages, but many of the subjects contained in s 139(1) of the FW Act concerns wages. Thus, contractual entitlements to wages may be enforced by application to this Court or to the Federal Court of Australia. The FW Act does not, however, provide that a provision of a contract of employment that is a “safety net contractual entitlement” is a civil remedy provision and, therefore, enforceable under s 545 of the FW Act; a “safety net contractual entitlement” is enforceable under s 543 of the FW Act. In other words, s 543 of the FW Act does nothing more than confer jurisdiction on the Federal Court of Australia and on this Court to hear and determine applications for the recovery of entitlements provided for by a contract of employment that replicates or improves on entitlements under the NES or modern awards. Thus, in the absence of an employer being covered by a modern award, his or her failure to pay wages provided for by the contract of employment does not constitute a contravention of s 44, or any other provision of the FW Act.
Section 323 FW Act
In Coote v Mainline Access Pty Ltd (No.3) I considered whether s 323(1) of the FW Act is contravened only because an employer fails to pay an amount under a contract of employment for the performance of work.[75] I concluded there was no settled authority that held s 323(1) of the FW Act is contravened only because an employer fails to pay an amount payable under a contract of employment for the performance of work; and, on my construction of s 323(1) of the FW Act, I concluded as follows:[76]
On this analysis, s 323(1) of the FW Act does not per se require an employer to pay amounts an employer is otherwise liable to pay under a term of a contract to an employee for work the employee performs. Paragraphs (a) and (b) of s 323(1) require an employer to do things at the point at which the employer tenders money or some other thing to an employee on or purportedly on account of work the employee has performed; and paragraph (c) of s 323(1) requires that the employer pay at least monthly whatever amounts the employer owes or may come to owe the employee for work performed.
[75] Coote v Mainline Access Pty Ltd (No.3) [2019] FCCA 383, at [42]-[57]
[76] Coote v Mainline Access Pty Ltd (No.3) [2019] FCCA 383, at [45]
Although in his statement of claim Mr Donnola alleges that SCC’s not paying his wages constituted a contravention of s 323(1) of the VFW Act, the parties have not made any submissions on whether s 323(1) of the FW Act applies only because an employer has failed to pay wages, contrary to the terms of an employment contract. I have been unable to find any authority is that has held that s 323(1) of the FW Act is contravened, only because an employer has not paid an employee wages or any other amount payable under the contract of employment.
Determination
The first task is to identify the service Mr Donnola agreed to render to SCC. The Employment Contract provided that Mr Donnola would be employed as a “site manager”. On the basis of that brief description, it is open to find, and I do find, that the service Mr Donnola undertook to provide to SCC, by entering into the Employment Contract, was to work as a site manager at such site or sites as SCC may direct, and be subject to instructions SCC was minded to give to him that related to his functioning as a site manager. Mr Donnola and Mr McKenzie give consistent evidence that Mr McKenzie directed Mr Donnola to undertake on behalf of SCC the work SCC had contracted to carry out in connection with the Kensington project, and that Mr McKenzie had given Mr Donnola a wide discretion to manage the Kensington project on behalf of SCC.
The next question is whether, as the respondents submit, Mr Donnola was not at work for long periods of time, and was unable to be contacted. The respondents rely almost entirely on Mr McKenzie’s evidence. Given I have not accepted Mr McKenzie’s evidence, I do not accept the respondents’ submission. That, however, does not necessarily mean that Mr Donnola is entitled to his wages. Mr Donnola bears the onus of proving that, for the period from Monday 28 June 2021 to Friday 13 August 2021 he did render, or was willing to render, the service SCC had engaged him to provide. I find that Mr Donnola has discharged that burden.
First, I have already identified emails Mr Donnola received and sent in July and early August 2021. These emails indicate Mr Donnola was performing work in relation to the Kensington project at that time. Second, Mr McKenzie did not respond to the emails Mr Donnola sent after 8 July 2021 demanding payment of his wages. In particular, Mr McKenzie did not respond to Mr Donnola’s emails by asserting that Mr Donnola had failed to provide, or was unwilling to provide the service for which he had been engaged to render as an employee of SCC, or that Mr Donnola had been refusing to receive calls from Mr McKenzie, or that Mr Donnola had abandoned the Kensington project – matters which it is reasonable to expect Mr McKenzie would have raised in response to Mr Donnola’s demands for the payment of wages if these matters were true. Third, the email the client sent to Mr Donnola on 3 August 2021, in which the client agreed to pay to Mr Donnola the wages SCC had failed to pay to him, implies the client believed that Mr Donnola had been carrying out work in relation to the Kensington project which, in turn, supports a finding that Mr Donnola had been working on the Kensington project at least up to 3 August 2021, and that Mr Donnola was willing to continue to work on the project.
It is probable that, from around May 2021, progress on the Kensington project stalled because the works did not comply with the original development consent, and work on the projects was halted, at least to some extent, pending the preparation of an application to modify the original development consent. That is apparent in the email Mr Donnola sent to the client on 2 August 2021 in which he said that, once the “S4.55 is approved we can assess the body of works left”; and in the email the client sent on 3 August 2021 in which the client stated “Brent will inform Michael to discuss what work can be done while waiting for the process of S.455. Andrew will contact Michael and discuss details of work that can be started during the process S.455”.
It is therefore possible that the time Mr Donnola was required to devote on the Kensington property was less than the 38 hours a week for which SCC had engaged him to work. That, however, does not mean that Mr Donnola did not provide the service for which SCC had engaged him to provide. Mr Donnola remained at the disposal of SCC to perform the tasks of a site manager, not only in relation to the Kensington project, but in relation to any other project; and I am satisfied Mr Donnola was willing to perform such work at the Kensington site and on any other site as SCC was minded to direct Mr Donnola to perform. Mr Donnola, therefore, fitted the position of a person who served SCC, not only by performing the work SCC made available for him to perform, but also by standing and waiting to serve.
The respondents also make the following submissions:[77]
In cross-examination, Mr Donnola was an evasive witness generally unwilling to make any concessions, at least until taken to a contemporaneous record which falsified his account at which point he would respond only that he “did not recall” . Tellingly, key aspects of his evidence in cross-examination were entirely inconsistent with that in his own affidavit (which he had affirmed only around three months prior). And, when taken to those contradictory passages, his evidence was again simply, in effect, that he could not recall. There was also the rather extraordinary evidence about an email — which, in the events which have happened, is a rather crucial email — from Mr McKenzie in August 2021 about his concerns with Mr Donnola’s performance and absence which, Mr Donnola says, happened to go into his “Spam” folder. Submissions in relation to this evidence are set out at paragraph 39 below.
[77] Respondent’s Outline of Closing Submissions, [11]
I do not accept these submissions. The matters to which the respondents refer in paragraph 39 of their written submissions relate to Mr Donnola’s evidence about the workplace injury he says he sustained on 13 August 2021. Paragraph 39 of the respondents’ submissions does not identify the contemporaneous evidence the respondents’ submit “falsified” evidence Mr Donnola gave, or the basis on which the respondents submit the documents “falsified” Mr Donnola’s evidence. I will return to paragraph 39 of the respondents’ closing submissions later.
I am satisfied that Mr Donnola earned wages at the rate provided for by the Employment Contract from Monday 28 June 2021 to Friday 13 August 2021 (when Mr Donnola says he suffered an injury). I am satisfied that the amount of the wages SCC earned for this period is $14,807.69.[78] I am also satisfied that Mr Donnola earned a car allowance of $2,019.23 for that period.[79]
[78] $110,000/52 x 7 = $14,807.69
[79] $15,000/52 x 7 = $2,019.23
OVERTIME
In the statement of claim Mr Donnola claims an amount of $4,008 for “rostered days off in lieu of weekend work”. In his closing written submissions, Mr Donnola repeats the claim, but in MFI-1 Mr Donnola claims $4,676 which represents seven eight hour days multiplied by $83.50.
The statement of claim does not identify the term or terms of the Employment Contract pursuant to which Mr Donnola says he earned overtime; or the facts on the basis of which Mr Donnola alleges he earned such overtime. In his affidavit Mr Donnola makes conflicting statements. On the one hand he says that a “typical work week entailed working from Monday to Friday, plus any reasonable overtime”, that “[i]n practice”, his “average hours worked weekly ended up being closer to 50 or 60”, which “frequently necessitated working on weekends”, and that he was “paid for the overtime work”.[80] On the other hand, Mr Donnola said “I was never paid personal leave or overtime in accordance with the award for weekend work”.[81] In cross-examination Mr Donnola accepted this statement was incorrect because he accepted he had received around $7,000 for overtime.[82]
[80] Affidavit A Donnola 18.07.2022, [12]
[81] Affidavit A Donnola 18.07.2022, [58]
[82] T42.20
In his affidavit Mr McKenzie says that before 30 August 2020 he relied on Mr Donnola to tell Mr McKenzie what hours he worked, and that Mr Donnola would provide Mr McKenzie an invoice of overtime worked at the rate of $83.50 per hour. Mr McKenzie accepted and paid these invoices. Mr McKenzie further says, however, that on 30 August 2020 he instructed Mr Donnola there would be no more overtime because Mr McKenzie was “shocked to receive an invoice for $7,389.94”, and Mr Donnola was also claiming hours for Sundays.[83] Mr McKenzie conveyed his instructions by sending the following text message to Mr Donnola on 30 August 2020:[84]
Hi Andrew from now on I don’t wish you to work any more on weekends I do not have the money to pay you this amount over the weekends strictly keep the business hours from Monday to Friday once have more work I’m sure that it will be easier for me to be able to pay these bills I do not have the resources at the moment to be able to pay you this money and I cannot afford to lose you due to not being able to pay your overtime kay thanks
[83] Affidavit of J McKenzie 17.08.2022, [14]; annexure “C”
[84] Affidavit of J McKenzie 17.08.2022, [14]; annexure “C”
In his Final Written Submissions, Mr Donnola claims SCC contravened s 44 of the FW Act “by failing to pay to [Mr Donnola] unpaid days in lieu totalling $4,008 pursuant to weekend overtime”.[85] Mr Donnola refers to “clause 5.5, Mr McKenzie’s affidavit, Annexure A, page 11, and “AD1-2” Meeting minutes dated 6 April “AD-1”, page 7”. Clause 5.5 appears to be a reference to cl 5.5 of the Employment Contract which provides that in the “unlikely event” Mr Donnola “will be required to work on A Saturday, [Mr Donnola] will be paid $60.00 per hour for every hour worked”. The reference to the minutes of meeting of 6 April 2020 appears to be a reference to the following:[86]
Overtime: Andrew is to email Ian details of any overtime performed on a Saturday. Ian is to prepare a separate payslip for Andrew for the single days work at time and a half. This will be left for Josh to make in individual payment of wages, separate to the automated weekly invoices.
[85] Applicant’s Final Written Submissions, [1(d)]
[86] Exhibit AD-1, tab 2, page 9
In his Final Written Submissions Mr Donnola submits as follows:[87]
Mr Donnola worked weekends on 28 November 2020, 5 December 2020, 12 December 2020, 19 December 2020, 27 December 2020 and 28 December 2020, as confirmed by his email to the Respondents dated 3 January 2021 (6 days).
This is also acknowledged in Mr Hill’s email to Mr Donnola dated 27 April 2021, in which he confirmed Mr Donnola’s weekend entitlement.
[87] Applicant’s Final Written Submissions, [89], [90]
Mr Donnola does not in his affidavit give evidence that he worked on the weekends of 28 November 2020, 5 December 2020, 12 December 2020, 19 December 2020, 27 December 2020, and 28 December 2020; and he does not, at least in his affidavit, identify by reference to the documents he had exhibited to his affidavit, that he had sent emails claiming overtime. Mr Hill’s email of 21 April 2021 is as follows:[88]
I have worked out that your outstanding holidays are 19 business days as of this Thursday the 29th April 2021.
You also have 6 days time in lieu for work on Saturdays at Haberfield that Josh hasn’t signed off on.
[88] Exhibit AD-1, page 4090
Mr McKenzie gave the following evidence in relation to Mr Hill’s email:[89]
Yes? --Yes. Like – like I was saying before, we had a process in place, but that’s page 9, and the payslips were never made up because I didn’t authorise those days, because earlier I – I – I – I emailed and texted Andrew saying, “No more weekend work”.
Yes. But that’s not actually what happened. You did direct him to work them, didn’t you, and then you chose not to pay him?‑‑‑No. That’s not what happened.
[89] T169.15
In his Final Written Submissions, Mr Donnola in effect submits that any inability by Mr McKenzie to provide evidence is due to there being “no objective evidence” that the respondents made or kept records as required by Part 3-6 of the Fair Work Regulations 2009 (Cth).[90] I do not accept such submission, to the extent Mr Donnola makes it in relation to his claims for overtime. It was within Mr Donnola’s power to produce evidence of the additional hours he claims he worked on Saturdays, and for which, he says, he claimed to be paid at time and a half.
[90] Applicant’s Final Written Submissions, [37], [38]
On the evidence I am not satisfied that Mr Donnola was entitled to claim time for work on the weekend without Mr McKenzie directing Mr Donnola to carry out work on the weekend; and I am not satisfied Mr McKenzie directed Mr Donnola to work on the weekends, including on the Saturdays, which Mr Donnola, in his Final Written Submissions, claims he worked.
I am therefore not satisfied that Mr Donnola has established that he is entitled to be paid any of the $4,008 he claims for overtime or for “rostered days off in lieu of weekend work”.
SUPERANNUATION CONTRIBUTIONS
In the statement of claim Mr Donnola alleges SCC, in breach of the Employment Contract, failed to make any superannuation contributions. Mr Donnola claims that the amount of the superannuation contributions SCC was required to make totalled $20,160.75. In their defence, the respondents allege that SCC has entered into a payment arrangement with the Australian Taxation Office (ATO).
In his affidavit, Mr McKenzie says that SCC entered into “a payment arrangement with the ATO” which provides for “six monthly repayments of $1500 paid directly to the ATO”.[91] Mr McKenzie annexes a document to evidence the payment arrangement.[92] The document is headed “Payment plans Superannuation guarantee employer”, and was generated on 22 February 2022. It records SCC owes $42,949.58, and it provides for the payment of $1,500 on each of the 25th day of February, March, April, May, and June 2022, and a final payment of $36,589.54 on 25 July 2022. Mr McKenzie, however, does not say in his affidavit that SCC paid any part of these amounts. For that reason, I am not satisfied SCC made any of the payments.
[91] Affidavit of J McKenzie 17.08.2022, [24], [25]
[92] Affidavit of J McKenzie 17.08.2022, [45]; annexure “G”
The first question that must be addressed is whether SCC was in fact obliged under the Employment Contract to pay any superannuation contribution. That question arises because, as I will shortly show, the SG Act does not oblige an employer to make a contribution to an employee’s superannuation fund.
The SG Act
Section 16 of the SG Act requires an employer to pay a “superannuation guarantee charge imposed on an employer’s superannuation guarantee shortfall for a quarter”. The expression “superannuation guarantee charge” is defined in s 6 as the charge imposed by the Superannuation Guarantee Charge Act 1992 (Cth) (Charge Act). An “employer’s superannuation guarantee shortfall for a quarter” is the amount calculated by the formula provided for by s 19 of the SG Act. That amount is calculated by applying the “charge percentage” to the total salary or wages paid to an employee for the quarter. Section 27 of the SG Act identifies particular classes of salary or wages that are not to be taken into account for the purpose of making a calculation under s 19 of the SG Act (none of which is relevant to this proceeding). The charge percentage for each of the years commencing 1 July 2019 and 2020 is 9.5%, and the charge percentage for the year commencing 1 July 2021 is 10%. An employer, however, may avoid liability to pay the superannuation guarantee charge if the employer making contributions to superannuation funds as provided for by s 22 or s 23 of the SG Act. Payments made under those provisions reduce the “charge percentage” provided for by s 19 of the SG Act.
The effect of the scheme provided for by the SG Act and the Charge Act was explained by the plurality in Roy Morgan Research Pty Ltd v Commissioner of Taxation:[93]
Broadly speaking, the effect of the legislation under challenge is that if, as specified in the Administration Act, an employer fails to provide to all employees a prescribed minimum level of superannuation then any shortfall represented by failure to meet that minimum level in full, becomes the Charge. This impost is levied on the employer by the Charge Act. The amount of the Charge is a debt due to the Commonwealth and payable to the respondent, the Commissioner of Taxation: Taxation Administration Act 1953 (Cth), Sched 1, s 255-5. The Charge includes a component for interest and an administration cost. The result is to supply an incentive to employers to make contributions to superannuation for their employees without incurring a liability to the Commissioner for the Charge.
[93] Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35, at [3]
Heydon J also explained the effect of the SG Act and the Charge Act:[94]
There is no general duty on private employers to pay superannuation contributions to superannuation funds for the benefit of their employees. But particular obligations to pay superannuation contributions can arise in various ways. They may be created by an award or certified agreement. They may be created by contract. This appeal concerns the legislative validity of an indirect method of ensuring the payment of superannuation contributions.
. . . .
The superannuation guarantee charge provides an incentive to employers to make superannuation contributions at the rate of nine percent of employees' wages. It ensures that in relation to the employees of employers who fail to do so there will be payments into approved superannuation funds equivalent to those which the employers did not make. There are significant factors influencing employers to make superannuation contributions directly to superannuation funds for their employees' benefit rather than pay the superannuation guarantee charge. Direct superannuation contributions are tax deductible; payments of the superannuation guarantee charge are not. Payments of direct superannuation contributions avoid the nominal interest component and the administration component of the superannuation guarantee shortfall. And in other respects the superannuation guarantee charge may be higher than the corresponding direct superannuation contribution. In a perfect world, no superannuation guarantee charge would be levied at all. But it tends to persuade employers to make direct superannuation contributions. This achieves public purposes quite independently of any revenue collected through it. Those public purposes centre on the encouragement of employers to contribute to superannuation funds so as to meet the needs of aged or infirm employees and to reduce the pension burdens which would otherwise have to be funded by the government.
[94] Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35, at [53], [57
The Employment Contract
Given an employer is not obliged under the SG Act to make superannuation contributions, the question is whether SCC was obliged to do so under the Employment Contract. That turns on the proper construction of the text contained in the Employment Contract, namely, that the “employer will also make superannuation payments on your behalf in accordance with the” SG Act. I am satisfied that the effect of this text is to have obliged SCC to make such superannuation contributions as provided for by s 22 or s 23 of the SG Act as would have avoided SCC’s liability to pay the “superannuation guarantee charge” that would otherwise have accrue in relation to the wages SCC was required to pay to Mr Donnola under the Employment Contract.
Thus, SCC’s payment arrangement with ATO is no answer to Mr Donnola’s claim. Even if it were, however, SCC has not established it made any of the payments.
Calculation
The amount SCC would have had to contribute to a superannuation fund to avoid the “superannuation guarantee charge” is to be calculated by applying 9.5% to the wages Mr Donnola earned on from 3 February 2020 to 30 June 2021, and 10% on the salary Mr Donnola earned from 1 July 2021 to 19 August 2021, when Mr McKenzie purported to summarily dismiss Mr Donnola from his employment. The percentages are to be applied to Mr Donnola’s salary, exclusive of the car allowance. On these premises, I calculate that the superannuation SCC would have need to pay to avoid the in connection with Mr Donnola’s employment from 3 February 2020 to 19 August 2021 is $16,164.[95]
ANNUAL LEAVE
[95] Period 2 February 2020 to 2 February 2021 (9.5% x $110,000 = $10,450) + period 3 February 2021 to 30 June 2021 (9.5% x 147/365 x $110,000 = $4,208) plus period 1 July 2021 to 19 August 2021 (10% x 50/365 x $110,000 = $1,506) = $16,164
Statutory provisions
Subsection 87(1) of the FW Act provides that employees (other than casual employees) are entitled to the amount of paid annual leave specified in that subsection. Relevant to Mr Donnola is the annual leave provided for by s 87(1)(a), namely, 4 weeks. Subsection 87(2) of the FW Act provides:
An employee’s entitlement to be paid annual leave accrues progressively during a year of service (other than periods of employment as a casual employee of the employer) according to the employee’s ordinary hours of work, and accumulates from year to year.
Subsection 90(1) of the FW Act requires an employer to pay annual leave when an employee takes a period of paid annual leave; and s 90(2) deals with the employer’s obligation to pay annual leave that has accrued by the time the employee ends his or her employment with the employer. That subsection provides:
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.
Finally, there is s 44(1) of the FW Act, which provides that an employer “must not contravene a provision of the National Employment Standards”. As I have already noted, Divisions 3 to 12 of Part 2.2 of the FW Act constitute the NES. Sections 87 and 90 are contained in Division 6 of Part 2.2 of the FW Act. Thus, a failure by an employer to make a payment required by s 90(2) constitutes a contravention of a NES and, therefore, constitutes a contravention of s 44(1) of the FW Act.
Mr Donnola’s claims and evidence
In his statement of claim Mr Donnola alleges that at the time SCC purported to terminate his employment he had accrued but untaken annual leave in the amount of $11,575.49 which is said to represent 182.985 hours.[96] In his affidavit, Mr Donnola says nothing more about annual leave than the following:[97]
On or around 13 April 2021, I contacted Mr Hill in order to obtain the number of days in holiday leave I had remaining. Mr Hill responded on 27 April 2021, stating that I had 19 business days and 6 days in leu for work on Saturdays. Evidence of this conversation are annexed hereto and marked “AD 1-27”.
[96] Statement of claim, [23.c.]
[97] Affidavit A Donnola 18.07.2022, [63]
In his affidavit, Mr McKenzie deposes as follows:[98]
I relied on Donnola telling me when he took leave, either personal (sick) leave or annual leave.
Silverleaf had shutdown periods when no work was performed, including between Christmas and New Year. During this shutdown period, Donnola was not required to attend or perform work, and Donnola was paid annual leave. The company shut down from 25 December 2020 until 11 January 2021.
Donnola often took annual leave at his own discretion and would not seek prior approval. He did however inform me he would be taking the period of 25 December 2020 to 11 January 2021 off during the company shutdown period. A copy of the text correspondence with Donnola confirming this annual leave is attached to this Affidavit as Annexure D.
[98] Affidavit of J McKenzie 17.08.2022, [15]-[17]
Annexure “D” is an exchange of text messages between Mr McKenzie and Mr Donnola on 2 and 3 January 2021. At 1:25 pm Mr McKenzie said he wanted to see if he could get Mr Donella back “as soon as possible so we can start processing the next job we can get Kensington out of the way”. Mr Donnola responded at 8:57 am on 3 January 2021 by stating “Merry Christmas and happy new year. Hoping to start Monday 11th?”
In his Final Written Submissions Mr Donnola submits he “did not take any leave during his employment”, noting that the respondents “have provided no clear and unequivocal record of any leave”.[99] Mr Donnola submits that a “careful examination of the text demonstrates that this is not a confirmation that Mr Donnola took leave”; and that is because the exchange of email was concerned with the time at which Mr Donnola would return to work at the Kensington site.[100] This submission is not available to be accepted because Mr Donnola could have, but did not give evidence, about these matters.
[99] Applicant’s Final Written Submissions, [107]
[100] Applicant’s Final Written Submissions, [108]
The respondents accept that annual leave of $8,476.84 is owing; but they submit this must be set off against the overpayment of overtime in the amount of $7,033.30. I will consider the respondents’ claim for set off later.
The respondents do not identify how they calculated $8,476.84 to be the amount owing for accrued but untaken annual leave. It appears to be equivalent to just over four weeks wages,[101] being near the 19 days of annual leave Mr Hill, in the email he sent to Mr Donnola on 27 April 2021, told Mr Donnola he had accrued.
[101] $110,000/52 x 4 =$8,461.53
Determination
On the basis of the limited evidence before me, I am satisfied that as at 19 August 2021 Mr Donnola had accrued annual leave worth $8,476.84 which s 90(2) of the FW Act required SCC to pay but which, in breach of that provision, SCC failed to pay to Mr Donnola. For these reasons, SCC contravened s 44(1) of the FW Act.
PERSONAL LEAVE
Statutory provisions
The right to personal leave is conferred by s 96 of the FW Act which, being in Div 7 of Part 2.2, is a NES:
(1)For each year of service with an employer (other than periods of employment as a casual employee of the employer), an employee is entitled to 10 days of paid personal/carer's leave.
(2)An employee's entitlement to paid personal/carer's leave accrues progressively during a year of service (other than periods of employment as a casual employee of the employer) according to the employee's ordinary hours of work, and accumulates from year to year.
Section 97 of the FW Act specifies the circumstances in which an employee may take paid personal leave; namely, “because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee”. Section 99 of the FW Act provides that if an employee takes a period of paid personal leave, “the employer must pay the employee the employee’s base rate of pay for the employee’s ordinary hours of work in the period”.
Mr Donnola’s claim
I have set out above Mr Donnola’s evidence that he was injured at the Kensington site on Friday 13 August 2021, and that he reported his injury by email he sent to Mr McKenzie on 16 August 2021.
Mr McKenzie, in his affidavit, says that Mr Donnola made a worker’s compensation claim, and “he received weekly compensation payments starting on 13 August 2021”. Mr McKenzie annexes what he describes as “correspondence from iCare to Silverleaf evidencing the acceptance of Donnola’s claim for an injury which occurred on 13 August 2021”.[102] The correspondence consists of a confirmation that “your employee’s management plan has been updated to keep their recovery on track”. Mr Donnola does not in his affidavit refer to his having applied for workers compensation.
[102] Affidavit of J McKenzie 17.08.2022, [55]; annexure “L”
Mr Donnola also does not refer in his written submissions that he claimed workers compensation; Mr Donnola does submit, however, that he is in any event entitled to wages up to the period ending 19 August 2021 “but the court should nonetheless find that the Respondents have contravened s 99 of the FW Act in this respect”.[103] I do not accept that Mr Donnola was entitled to wages while he was injured, because he was not available to perform service. He was entitled, however, to personal leave; but I am not prepared to find that SCC failed to comply with s 99 of the FW Act. Mr Donnola has given no evidence about whether he received any workers compensation payment for the time he was unable to work; and Mr Donnola has made no submissions about the relationship, if any, between receiving worker’s compensation payments while an employee is absent from work because of injury, and an employer’s liability to pay carer’s leave.
[103] Applicant’s Final Written Submissions, [116]
This part of Mr Donnola’s claims, therefore, fails.
Before I conclude this section of my reasons, I should refer to the submissions the respondent made in paragraph 39 of their closing submissions. The respondents submit I should not accept Mr Donnola’s evidence that it was only on 16 August 2021 that Mr Donnola first noticed the email Mr McKenzie had sent on 12 August 2021. The basis of that submission is that Mr Donnola’s explanation – that Mr McKenzie’s email went into his “spam” inbox – is implausible, given that previous emails Mr Donnola received from Mr McKenzie had not been directed to Mr Donnola’s “spam” inbox. The respondents also submit that it is an “astonishing coincidence” that Mr Donnola did not notice Mr McKenzie’s email, and he fell asleep “on the day Mr McKenzie had asked finally to meet him and discuss his by then serious concerns about Mr Donnola’s performance and absences”.
I do not accept these submissions. In the morning of 16 August 2021 Mr Donnola informed Mr McKenzie of his workplace injury without referring to Mr McKenzie’s email of 12 August 2021. That suggests Mr Donnola was unaware he had received Mr McKenzie’s email. Further, and in any event, Mr Donnola responded to Ms McKenzie’s email of 16 August 2021 by email he sent to Mr McKenzie on 19 August 2021 in which Mr Donnola said he would be “more than happy to assist once all payments and requests are completed”. This is a response Mr Donnola would likely have sent on 12 August 2021, had he become aware of Mr McKenzie’s email of 12 August 2021 on that day.
TERMINATION WITHOUT NOTICE
Statutory provisions
Subsection 117(2) of the FW Act, which is in subdivision A of Div 11 of Part 2.2 of the FW Act, and therefore is a NES, provides:
The employer must not terminate the employee’s employment unless:
(a) the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or;
(b)the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
The relevant period of notice for Mr Donnola was two weeks.
Subsection 117(2) is subject to s 123(1)(b) of the FW Act, which provides that Division 8 does not apply to an “employee whose employment is terminated because of serious misconduct”. The respondents submit that s 123(1)(b) applied to Mr Donnola. The basis of this submission are the assertions Mr McKenzie made in his letter to Mr Donnola dated 19 August 2021 that Mr Donnola had abandoned the Kensington project, and the evidence Mr McKenzie has given in this proceeding that Mr Donnola failed and refused to keep Mr McKenzie informed about the progress of the Kensington project. Given I have not accepted these assertions and Mr McKenzie’s evidence, I do not accept the respondents’ submission that Mr Donnola had engaged in wilful misconduct which disentitled him from the benefit of s 117(2) of the FW Act.
I therefore find that by purporting to terminate Mr Donnola’s employment without giving him two weeks’ notice, or payment in lieu of notice, SCC failed to comply with s 117(2) of the FW Act and, for that reason, contravened s 44(1) of the FW Act. Mr Donnola, therefore, is entitled to recover two weeks wages, this being $4,230.77.
CLAIMS AGAINST MR MCKENZIE
I have concluded that SCC contravened s 44(1) of the FW Act by failing to pay to Mr Donnola accrued but untaken leave, contrary to s 90(2) of the FW Act, and by failing to provide Mr Donnola two weeks’ notice or payment of two weeks wages in lieu of notice, contrary to s 117(2) of the FW Act. The next question is whether Mr McKenzie was a person “involved” in SCC’s contraventions within the meaning of s 550(2) of the FW Act.
Mr Donnola does not in his statement of claim allege facts to support the allegation that Mr McKenzie was a person involved in SCC’s contraventions of the FW Act; but in his opening written submissions, and in his Final Written Submissions, Mr Donnola submits that Mr McKenzie was involved in SCC’s contraventions. The respondents have not objected to Mr Donnola claiming Mr McKenzie was a person involved and, for this reason, I will proceed on the basis that whether Mr McKenzie was involved in any of SCC’s contraventions of the FW Act is a question the parties have tendered to the Court for determination.
In their defence, the respondents admit Mr McKenzie: was a director of SCC; was ultimately responsible for the operations of SCC; was a person responsible for the overall management and operation of SCC; knew the FW Act applied to SCC and to Mr Donnola; and knew the amounts paid to Mr Donnola. Further, the conduct I have found SCC engaged in which contravened s 44(1) of the FW Act was engaged in by Mr McKenzie. For these reasons, I am satisfied that Mr McKenzie was involved in SCC’s contraventions of s 44(1) of the FW Act by failing to pay to Mr Donnola accrued but untaken leave, and by failing to give Mr Donnola two weeks’ notice or payment in lieu when it terminated his employment.
Mr McKenzie is not liable for SCC’s failure to pay Mr Donnola’s wages from 28 June 2021 to 13 August 2021; nor is Mr McKenzie liable in relation to SCC’s failure to make superannuation contributions because I have found that SCC’s failure to pay wages and make superannuation contributions did not constitute a contravention of any civil remedy provision of the FW Act.
SET OFF?
The respondents submit that SCC paid a claim Mr Donnola made for overtime in the amount of $7,033 which, the respondents submit, was calculated at the rate of $83.50 per hour, and which was higher than the rate provided for by the Employment Contract. The respondents submit that this constituted an overpayment, which “must now be set off against any liability here found”.[104]
[104] Respondents’ Outline of Closing Submissions, [49]
The respondents’ submissions ignore the agreement recorded in the minutes of meeting of 6 April 2021 (which I have reproduced above), which provided that Mr Donnola was to email Mr Hill details of overtime performed on a Saturday, in response to which Mr Hill was to prepare a payslip “at time and a half”. The respondents do not submit that SCC paid the $7,033 after 30 August 2020 when Mr McKenzie sent a text message to Mr Donnola instructing him not to perform any overtime on the weekends; and the respondents have not identified any evidence they submit shows Mr Donnola did not work the hours in relation to which he claimed $7,033 for overtime.
I therefore do not accept SCC has any claim against Mr Donnola based on any overpayment for overtime.
DISPOSITION
I propose to make the following declarations:
(a)SCC, in breach of the employment contract it made with Mr Donnola, failed to:
(i)pay to Mr Donnola wages from Monday 28 June 2021 to Friday 13 August 2021, those wages being $14,807.69; and
(ii)make superannuation contributions for the period from 3 February 2020 to 19 August 2021 in the amount of $16,164;
(b)SCC contravened s 44(1) of the FW Act by failing, contrary to s 90(2) of the FW Act, to pay to Mr Donnola at the time it purported to terminate his employment accrued but untaken annual leave in the amount of $8,476.84;
(c)SCC contravened s 44(1) of the FW Act by failing, contrary to s 117(2) of the FW Act, to provide to Mr Donnola two weeks’ notice, or two weeks wages in lieu of the two weeks’ notice; and
(d)Mr McKenzie was involved in SCC’s contraventions of s 44(1) of the FW Act.
I propose to set the matter down for a directions hearing at 9:30 am 22 March 2024 for the purpose of making orders to give effect to these reasons, and to set the matter down for hearing on the question of penalties. The orders that will be necessary to give effect to these reasons are as follows:
(a)An order that SCC pay to Mr Donnola $14,807.69 plus interest calculated up to and including 22 March 2024 in relation to SCC’s failure to pay wages for the period of 28 June 2021 to 13 August 2021.
(b)An order that SCC specifically perform the obligations that had accrued under the contract of employment before 19 August 2021 by paying $16,164 plus interest calculated up to and including 22 March 2024 to a superannuation fund nominated by Mr Donnola, such nomination to be communicated by Mr Donnola to SCC within 14 days of the pronouncement of orders.
(c)An order pursuant to s 545(2) of the FW Act that SCC and Mr McKenzie pay to Mr Donnola:
(i)the amount of $8,476.84 plus interest calculated up to and including 22 March 2024 in relation to SCC’s contravention of s 44(1) of the FW Act arising from SSC’s failure to comply with s 90(2); and
(ii)the amount of $4,230.77 plus interest calculated up to and including 22 March 2024 in relation to SCC’s contravention of s 44(1) of the FW Act arising from SSC’s failure to comply with s 117(2).
I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 8 March 2024
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