Eaton v Sell Lease Property Pty Ltd and Ors (No.2)
[2018] FCCA 558
•9 March 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| EATON v SELL LEASE PROPERTY PTY LTD & ORS (No.2) | [2018] FCCA 558 |
| Catchwords: INDUSTRIAL LAW – Employee in real estate industry – alleged contravention of general protections – alleged adverse action for prohibited reason or reasons – alleged coercion and undue influence or pressure – alleged contraventions of National Employment Standards – alleged contraventions of award. |
| Legislation: Building and Construction Industry Improvement Act 2005 (Cth) Federal Circuit Court Rules 2001 (Cth), r.21.01 |
| Australian Competition and Consumer Commission v Black on White Pty Ltd & Ors [2001] FCA 187; (2001) 110 FCR 1; [2001] ATPR 41-820 Cadbury Schweppes Pty Ltd v Australian Liquor Hospitality and Miscellaneous Workers’ Union & Anor [2000] FCA 1793; (2000) 106 FCR 148; (2000) 185 ALR 480; (2000) 49 AILR 4-382 Fair Work Ombudsman v Devine Marine Group Pty Ltd [2013] FCA 1135 Maslen v Core Drilling Services Pty Ltd & Anor [2013] FCCA 460 Torpia v Empire Printing (Australia) Pty Ltd [2009] FMCA 853; (2009) 188 IR 306; (2009) 234 FLR 103; (2009) 61 AILR 101-040 The Macquarie Dictionary (2nd Edn) (Macquarie University: The Macquarie Library Pty Ltd, 1991) |
| Applicant: | SIMONE EATON |
| First Respondent: | SELL LEASE PROPERTY PTY LTD |
| Second Respondent: | BRETT QUINN |
| Third Respondent: | BRIAN MCKIERNAN |
| Fourth Respondent: | GRAEME MACEWAN |
| File Number: | PEG 127 of 2015 |
| Judgment of: | Judge Antoni Lucev |
| Hearing dates: | 4, 5 and 6 April 2016 and 22 April 2016 (by video-link to Sydney) |
| Date of Last Submission: | 22 April 2016 |
| Delivered at: | Perth |
| Delivered on: | 9 March 2018 |
REPRESENTATION
| For the Applicant: | In person |
| Counsel for the Respondent: | Mr RJS French |
| Solicitors for the Respondent: | DLA Piper Australia |
ORDERS
The parties are to confer with a view to reaching agreement on a minute of proposed consent orders, and if agreement is reached the minute of proposed consent orders is to be filed by the applicant by 23 March 2018.
If agreement as to a minute of proposed consent orders cannot be reached between the parties by 23 March 2018, then each party is to file and serve a minute of proposed orders by 4.00pm on 29 March 2018.
Otherwise, the matter is adjourned to 10.15am on 9 April 2018 for mention and further directions.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 127 of 2015
| SIMONE EATON |
Applicant
And
| SELL LEASE PROPERTY PTY LTD |
First Respondent
BRETT QUINN
Second Respondent
BRIAN MCKIERNAN
Third Respondent
GRAEME MACEWAN
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court is a Further Amended Application filed on 18 December 2015 by the applicant, Simone Eaton (“Ms Eaton”) alleging various contraventions of the Fair Work Act 2009 (Cth) (“FW Act”) by her former employer the first respondent, Sell Lease Property Pty Ltd (“Sell Lease Property”), and the second, third and fourth respondents - Brett Quinn (“Mr Quinn”), Brian McKiernan (“Mr McKiernan”) and Graeme MacEwan (“Mr MacEwan”) respectively who all had senior roles with Sell Lease Property.
Claims made in the Further Amended Application
Ms Eaton alleges the following contraventions:
a)under s.340 of the FW Act in relation to adverse action in relation to the exercise of workplace rights;
b)under s.344 of the FW Act in relation to the exertion of undue influence or undue pressure on her by Sell Lease Property;
c)under s.355 of the FW Act in relation to the organising or taking, or the threatening to organise or take, action against her within intent to coerce her in relation to the allocation of particular duties or responsibilities; and
d)of various provisions of the Real Estate Industry Award 2010 (WA) (“Award”).
Ms Eaton also alleges that Mr Quinn, Mr McKiernan and Mr MacEwan are all accessorially liable under s.550 of the FW Act in relation to the alleged contraventions.
By way of remedy Ms Eaton seeks:
a)compensation (details of which are set out below);
b)the imposition of pecuniary penalties;
c)damages for breach of contract; and
d)an order for Sell Lease Property to be “fined”.
Ms Eaton provided a schedule of amounts claimed as follows (copied verbatim):
| Economic loss | Amount | Comments | |
| 1 | Outstanding wages @ $16.50 per hour to 30/6/14 (20 weeks = 160 hours) | $2,640 | |
| 2 | Outstanding wages @ $17.88 per hour from 1/7/14 to 9/2/15 (32 weeks = 256 hours | $4,577 | |
| 3 | Outstanding overtime @ $16.50 per hour (109 hours) | $1,799 | |
| 4 | Underpayment of wages for final pay slip | $22 | |
| 5 | Outstanding commission | $1,300 | Sale of 93 Garrett Road bayswater. $13700 (total commission) less $2000 admin fee less GST = $11583. 50% split with other agent = $5791.50 less tax. SLP paid me @4469.82 less tax (total $3189.82) therefore balance to be paid is $1300 |
| 6 | Unpaid superannuation on unpaid commission | $128 | |
| 7 | Unpaid superannuation on unpaid wages | $2,905 | |
| 8 | Redundancy payment | $783 | 4 weeks redundancy pay |
| 9 | Mobile Phone | $252 | Current monthly phone bill is fixed at $130 per month (total over 12 months is $1560). Plus a percentage of wifi costs (current account is $80 per months = total over 12 months is $960) as work related expenses which are reimbursible by the employer as I am required to have access to email and SLP documentation away from the office. I am claiming 110% of total account from commencement of employment. |
| 10 | Vehicle allowance (lump sum) | $80 | Calculated 1/5 of the standing charge ($79.60) for each day worked in accordance with REA [the Award] (since Jan 1, 2015 = 5 days) |
| 11 | Marketing costs | $9,596 | Includes SLP requires marketing, setp up charges, business cards, scanner I had to purchase as a part of SLP start up charges etc. |
| 12 | Delivery costs for SLP marketing1 | $4,856 | |
| 13 | Equipment for marketing (folding machine) | $888 | Purchased to reduce marketing costs |
| 14 | Interest on outstanding money | $4,105 | Maximum of 6% claimable |
| 15 | Loss of future income and benefits | $26,293 | Amount is based upon previous 12 months commission income in accordance with group certificate for 2014/2015 tax year. Inability to work for another agency since working for SLP due to ongoing stresses with continued bullying as a part of non-payment of wages and entitlements and depression. My real estate licence is in jeopardy because of this, given that I have not been able to complete my training for this year to maintain my licence as I am not registered with another agency. Potential requirements to re-sit licencing at a cost in excess of $2000 or payment of fines to reinstate licencing status. |
| 16 | Legal Fees | $4,000 | Costs to date for legal advice on PEG 127/2015 |
| Non-economic loss | Comments | ||
| 17 | Pain and suffering compensation | Medical costs Undue stress and anxiety attacks Loss of personal enjoyment for the things I would typically find enjoyable (such as meeting with friends, going out, enjoying life – changes to my quality of life). Depression and the impacts of such (insomnia, muscle stress and tension, headaches, having to start medication) Impact of the bullying that SLP has had on me Humiliation resulting from SLP using my face in their website, without my permission. Not removing my name and image from their marketing on request. Not removing my image and graphics from the SLP internal webiste and allowing other sales representatives to use the marketing I have paid for. |
Ms Eaton also seeks further orders for:
a)removal of her name and image from any marketing material used by Sell Lease Property; and
b)maximum pecuniary penalties to be imposed on Sell Lease Property.
Response
In a further Response filed on 15 January 2016 the respondents opposed the making of the orders sought by Ms Eaton, save that Sell Lease Property consented to the making of orders that:
a)Sell Lease Property pay Ms Eaton $7,239 in unpaid wages owing; and
b)Sell Lease Property pay Ms Eaton $1,119.71 in unpaid superannuation, allowances and reimbursable expenses owing under the Award and the FW Act,
but otherwise deny Ms Eaton’s claims for unpaid wages, overtime, commission, superannuation, allowances and reasonable expenses.
Sell Lease Property also seeks an order that Ms Eaton pay its costs in accordance with s.570 of the FW Act.
Sell Lease Property admits that it dismissed Ms Eaton and also that Ms Eaton made various complaints to Sell Lease Property during the course of her employment as set out at paragraphs 1(a)-1(i) of the Further Amended Application. Sell Lease Property says, however, that it did not dismiss Ms Eaton, or otherwise alter her position to her prejudice, by reason of anything to do with the exercise or proposed exercise or the prevention of the exercise of a workplace right, nor did it dismiss or threaten to dismiss or take any adverse action against Ms Eaton because she had made complaints or threatened to make complaints during the course of her employment with Sell Lease Property. Sell Lease Property says that Ms Eaton’s employment was terminated only because her position was redundant.
In relation to Ms Eaton’s attendance at monthly meetings Sell Lease Property and Mr Quinn say that they did not threaten Ms Eaton’s employment because she raised an issue in relation to her attendance at monthly meetings, but did inform her that non-compliance with her contractual duty to attend monthly meetings might result in the end of her employment, but further say that that was lawful and did not contravene s.340 of the FW Act.
In relation to the issue of a part-time employment contract Sell Lease Property says that it did offer Ms Eaton a new part-time employment contract in January 2015 to ensure that her terms and conditions complied with the law, but the contract was not signed by Ms Eaton, and that all part-time roles with Sell Lease Property were made redundant on 9 February 2015.
Sell Lease Property denies any adverse action was taken against Ms Eaton by reason of her bullying claims or claims that she had been bullied during the course of her employment with Sell Lease Property.
Sell Lease Property admits that it did not provide a Fair Work Information Statement to Ms Eaton as required by s.125(1) of the FW Act.
In relation to alleged contraventions of the undue influence provisions of s.344 of the FW Act Sell Lease Property denies Ms Eaton’s claims and further says that it is not a party to nor attempted to make any arrangement or agreement referred to in s.344 of the FW Act.
In relation to the claims of coercion in contravention of s.355 of the FW Act Sell Lease Property denies those claims in relation to the allegation of coercion concerning particular duties or responsibilities.
Evidence
Ms Eaton relies upon the following affidavits:
a)her affidavits of:
i)2 October 2015 (“Eaton October 2015 Affidavit”);
ii)29 January 2016 (“Eaton January 2016 Affidavit”); and
iii)4 March 2016 (“Eaton March 2016 Affidavit”); and
b)the affidavit of Lee Andrew Zehnder of 29 September 2015 (“Zehnder Affidavit”).
Sell Lease Property and the other respondents rely upon the following affidavits:
a)the affidavit of Brett Richard Quinn of 19 February 2016 (“Quinn Affidavit”);
b)the affidavit of Brian Hugh McKiernan of 19 February 2016 (“McKiernan Affidavit”); and
c)the affidavit of Graeme John MacEwan of 19 February 2016 (“MacEwan Affidavit”).
The Court has had regard to the admissible evidence in each of the above affidavits.
The Court has also had regard to the evidence as it appears in the transcript of the proceedings over four days. The transcript of days one, two and three, being 4, 5 and 6 April 2016 are numbered consecutively from page 1 through to page 166, but the transcript of the final day, 22 April 2016, being day four, re-commences at page 1 to page 29. The Court has read the transcript in its entirety, and re-read several parts of it, during preparation of the Reasons for Judgment.
A number of Exhibits were tendered during the proceedings, and the Court has had regard to those Exhibits, they being:
a)Exhibit 1 – an exchange of emails between Mr Zehnder and Mr Quinn from 18 January 2015 to 2 February 2015, under cover of an email of 2 February 2015 from Mr Zehnder to himself;
b)Exhibit 2 – an email exchange between Mr Zehnder and Mr Quinn between 29 January 2015 and 31 January 2015 under cover of email from Mr Zehnder to himself dated 2 February 2015;
c)Exhibit 3 – being Ms Eng’s Employment Agreement;
d)Exhibit 4 – being Mr Beka’s Employment Agreement;
e)Exhibit 5 – being the Award;
f)Exhibit 6 – being the Code of Conduct for Agents and Real Estate Representatives 2011 (WA) (“Code of Conduct”);
g)Exhibit 7 – being a document headed 7% Property Consultant showing commissions for Mr Beka for 2014 and early 2015;
h)Exhibit 8 – being a document headed 7% Property Consultant showing commissions for Ms Eng; and
i)Exhibit 9 – being a document headed 7% Property Consultant showing commissions for Ms Eaton.
Factual background
The business of Sell Lease Property is that of a real estate agent and property manager, operating in both commercial and residential real estate sales. In order to effect sales and run its business Sell Lease Property engages sales representatives (or Property Consultants as it appears to call them): McKiernan Affidavit at [3]; MacEwan Affidavit at [2]-[3].
The operations structure of Sell Lease Property was that:
a)Mr Quinn was the Chief Executive Officer responsible for running the business;
b)Mr McKiernan was the Operations Manager who assisted Mr Quinn; and
c)Mr MacEwan was a Director and Licensee involved in the overall management of Sell Lease Property.
MacEwan Affidavit at [2].
Decisions in relation to Ms Eaton’s employment, and in particular decisions relating to engagement, status and termination were decisions for which Mr Quinn was primarily responsible: Quinn Affidavit at [5].
Ms Eaton’s employment
Ms Eaton commenced employment with Sell Lease Property on 10 February 2014, and was employed as a part-time sales representative: Eaton October 2015 Affidavit at [1] and Annexure A; McKiernan Affidavit at [10]-[11].
Ms Eaton’s contract of employment (“Contract”) was comprised of:
a)a signed letter of offer; and
b)a schedule of remuneration, benefits and employment conditions, and some other documents: Eaton October 2015 Affidavit at Annexure A.
The Contract interestingly describes Sell Lease Property, the employer as “the Supplier”, and Ms Eaton, the employee as “the Customer”. Bearing that somewhat quirky description in mind, the Contract relevantly provides as follows:
a)that Ms Eaton was engaged as a “Property Consultant”, and was required to work in accordance with the Contract, and the Real Estate and Business Agents Act 1978 (WA) (“REBA Act”), and any regulations thereto, the Real Estate Institute of Western Australia (“REIWA”) Code of Practice, the REIWA Code of Ethics, the REIWA Auction Code of Conduct, the Department of Commerce Code of Conduct and any policies of “the Agent” (a term not defined but presumably intended to include Sell Lease Property ) “as amended from time to time”: Contract, at page 1;
b)it was agreed that “in the event of termination, the Customer shall be required to pay to the company, upon invoice, all outstanding personal profile marketing expenses and immediately return all equipment supplied by the company … unless already paid for by the Customer”, noting that “the company” is also a term not defined in the Contract, but presumably intended to mean Sell Lease Property;
c)obliged the Customer to comply with all reasonable and lawful directions given by the Supplier from time to time and to adhere to the terms of the Supplier’s Policy Procedure Manual;
d)provided that the “… customer shall not without the consent of the supplier be engaged or interested in either directly or indirectly in any capacity, in any trade, business or occupation which may interfere with the performance of his or her duties”: Contract at page 2;
e)that the supplier was to provide to the customer, within 7 days of each pay period expiring, a statement detailing all income and expenses for that pay period for which the customer was responsible: Contract at page 2;
f)that the customer was to provide and maintain their own vehicle;
g)that the customer was required to provide and maintain a mobile phone at the customer’s own cost as required;
h)provided for any penalty, fine, or both imposed pursuant to the provisions of the REBA Act (and Regulations thereto), and the various Codes of Practice, Ethics and Conduct, as a result of some wrongful act or negligence or default of the customer, to pay to “the Agent” the full amount of any penalty or “fee” unless such “costs” were covered by the supplier’s Professional Indemnity Insurance Policy: Contract at page 2; and
i)the customer agreed to work “8 hours per week to be averaged over a 12-month period”, and that the “customer’s hours shall be worked as agreed between the customer and the supplier, to suit the operational requirements of the business”: Contract at page 2.
Under the heading “Costs Incurred Upon Commencing Employment”, “Remuneration” and “Superannuation” the Contract provided as follows:
Costs Incurred Upon Commencing Employment
All customers will be required upon commencing employment to incur the items indicated below:
• Company Photos At cost
• 500 Business Cards At cost
• Mobile Scanner $410
• Marketing Material Designs $200
• Corflute Home Open Pointers
($40 each incl spike & GST) x _____ = $
TOTAL $
A minimum of $450 must be paid within 5 business days of signing this contract as part payment towards the above costs. The remainder will be deducted from your first settled commission. Any additional costs that have been mutually agreed will be deducted from the customer's first commission.
Customers will be responsible for maintaining the above equipment. If the equipment is lost, stolen or damaged it will be the customer's responsibility to replace.
In the event that the customer ceases employment with Sell Lease Property all Standard home open signs must be returned to Sell Lease Property.
Remuneration
The customer is employed on a part time basis for 8 hours per week at a rate of $16.50 per hour, as required by the minimum Federal Award.
Sell Lease Property provides two (2) sources of remuneration. These are:
1. Commission = 100%Gross Commission - GST - $2000 SLP Support Fee - Insurance & Payroll tax. For Example Only:
Gross Commission $12,500
GST -$1136
SLP Support Fee -$2000
Insurance -$140
Payroll Tax -This will only be deducted IF it is a statutory requirement
To Employee $9224.00
2. Property Management Authority Equity = As per SLP Agreement
3. The customer will be required to incur a 20% mentoring fee from each gross settled commission for a minimum of six settlements. This fee covers the training and mentoring costs.
All remuneration will be assessed and paid fortnightly into your nominated bank account. All remuneration paid will be based on settled sales accrued during the previous fortnight.
Superannuation
You are entitled to be a member of the AMP Superleader Fund, or nominate an approved superfund of your choice. Sell Lease Property Pty Ltd will make Superannuation contributions to the fund on your behalf. These contributions are currently equivalent to 9.25%. and are included in your gross commission as indicated above.
Subject to the rules of the fund and the requirements of the Australian Tax Office, permanent customers may contribute an additional amount to the fund by way of salary sacrifice or after-tax contributions.
The Contract went on to provide:
a)a Fair Treatment System whereby any issues of customer disagreement with decisions of the supplier are to be attempted to be resolved by addressing them with the Licensee, but if they remain unresolved are to “be dealt with by the Sell Lease Property Fair Treatment Procedure” with work continuing normally as directed by the Licensee whilst issues are being addressed: Contract at page 4;
b)for a “Sell Lease Property Equal Employment Opportunity Procedure” (“EEO Procedure”) to define the supplier’s obligations and assist in achieving a harassment free workplace, with any complaint or dispute concerning equal opportunity or discrimination to be dealt with in accordance with the EEO Procedure: Contract at page 4;
c)for attendance at meetings in the following terms:
To maintain a cohesive team Sell Lease Property requires EVERY customer of the su[p]plier to attend as a minimum ONE team meeting each month. If you are absent from the SLP Mandatory Team Meeting more than twice in any given year without approval from the general manager this employment contract will be terminated. You may also be required to attend other meetings as requested by Sell Lease Property from time to time for the purposes of keeping you updated with organizational and industry changes.
Contract at page 4; and
d)in relation to “All profile (Personal) marketing activities” the Contract provides that they are only to be “implemented/produced once full payment is received in advance from the customer” and that it is the customer who is “responsible for all expenses associated with the design, production and distribution of all personal marketing activities”: Contract at page 6.
In relation to termination of the Contract (whether by dismissal or resignation) the Contract provided as follows:
This Employment Agreement may be terminated immediately by the supplier in the event of serious misconduct or for any conduct on the customer's part, which would justify summary dismissal.
Upon termination or resignation, if the customer owes the supplier money either from profile marketing, property marketing, costs incurred upon commencing employment or any other expense, this sum will be recovered by the supplier from any accrued entitlements owing to the customer. The customer authorises the supplier to make any such deductions for the purposes of this clause and the supplier will issue written advice of the amounts owed and debited. If insufficient funds are available from accrued entitlements then the customer hereby agrees to pay all outstanding funds within 7 days of receipt of invoice for these amounts.
Should the contract of employment between the supplier and the customer cease due to the customer's death, a person nominated as the next of kin on the customer's Personal Details Form shall be paid all monies due.
After the completion of the probationary term, the contract of the employment shall be terminable as follows:
Period of Service:
Less than 1year...........................At least 1week notice period
More than 1year........................At least 2 weeks notice period
All books of accounts, records, papers, correspondence and other documents of the supplier's business and any other property of the supplier that is in the possession or under the control of the customer shall be returned to the supplier whenever requested by the supplier and in any event immediately upon termination of employment. This will include signs, keys and any electronic equipment originally supplied by Sell Lease Property.
Upon termination all listings shall remain the property of Sell Lease Property Pty Ltd, however, in the event the customer wishes to terminate Sell Lease Property is happy to negotiate a mutually beneficial arrangement. Any outstanding remuneration owed to the customer as at the time of termination will be paid taking into account any monies due to the supplier. The supplier will provide an itemized account.
Sell Lease Property invests considerable time and money into the recruitment, training and development of its highly skilled customers and support staff. Upon termination or resignation of employment with Sell Lease Property, all customers including property consultants agree that for a period of two years after ceasing employment with Sell Lease Property, they will not hire or work directly with any Sell Lease Property customer in a business of which either is a director or shareholder. If in the event an ex Sell Lease Property customer wishes to hire or work directly with another Sell Lease Property customer in a business other than Sell Lease Property, that ex customer must make a formal request in writing to the general manager of Sell Lease Property to request to directly hire or work with the Sell Lease Property Customer. In the event Sell Lease Property mutually agrees to allow the ex customer to directly hire or work with another Sell Lease Property customer then the ex customer understands and accepts that a $50,000 Recruitment and Training Fee will be paid to Sell Lease Property as compensation. The ex customer understands that this fee is not a penalty fee but rather a fee to be used to recruit, train and develop another customer of similar capability. This fee will be payable within 7 days of the Sell Lease Property customer commencing employment with the ex customer who has terminated their employment from Sell Lease Property.
Contract at pages 6-7.
The Contract also provided that any amendments to the Contract might be made “as and when required to meet the ongoing needs of the Company. No changes will be made without consulting the relevant customer first.”: Contract at page 7.
The Contract is signed by Mr MacEwan in his capacity as “Licensee/Director”: Contract at page 7.
Ms Eaton had no prior work experience within the real estate industry before she was employed by Sell Lease Property: Eaton October 2015 Affidavit at [1]; and as such she was referred to (as were other sales representatives without prior real estate experience) as a “rookie”: Quinn Affidavit at [16].
The mode of payment of Ms Eaton under the Contract was by way of commission payment only: Eaton October 2015 Affidavit at [3]; McKiernan Affidavit at [22].
The course of Ms Eaton’s employment to November 2014
On 17 March 2014 Ms Eaton raised issues around home owner data she had purchased from Sell Lease Property, asserting that it was “massively inaccurate”, and that although she was unhappy with the home owner data she paid for it in any event: Eaton October 2015 Affidavit at [2].
In April and May of 2014 Ms Eaton called REIWA to query rookie wages, and alleges that she was provided with incorrect information by REIWA, whom she asserts advised her that rookies were not necessarily entitled to a wage and that it would depend upon their contract: Eaton October 2015 Affidavit at [3].
In June and July of 2014 Ms Eaton raised queries with Sell Lease Property concerning alleged unauthorised deductions from commission payments, unapproved charges, the cost of marketing which she asserted was ineffective, and the costs that she was charged for mandatory training: Eaton October 2015 Affidavit at [4] and Annexure B.
On 16 June 2014 Ms Eaton asked for a break-down of her costs in relation to sales commissions. The reply from “Charlene” at Sell Lease Property indicated that prior to Ms Eaton’s query she had a balance of $7,313, but that that balance was now nil, as Ms Eaton had requested a payment of $5,078.60 be taken from her credit card, and that Mr Quinn had requested that all unpaid personal marketing balances be paid from commission payments, and that a deduction of $2,234.40 was subsequently made in that regard.
On 3 July 2014 Ms Eaton wrote back to Charlene, copying Mr Quinn in on the email, querying particular invoices and the amounts and payments therein. Various correspondence follows with Ms Eaton making the point in an email to Mr Quinn on 7 July 2014 that she needed to approve invoices before they were paid, and before they were taken from any money earned: a comment relating to, as Ms Eaton puts it “charges taken from commissions without approval”.
On 8 July 2014 Mr Quinn responded indicating that there was a particular system in place and that he would investigate the issue fully and fix immediately what was capable of being fixed. It is not apparent from the documents (which are at Annexure B to the Eaton October 2015 Affidavit) what, if any, resolution resulted in relation to these particular payments and deductions, or indeed, what, if any, charges were taken from what commission either with our without Ms Eaton’s approval
In September 2014 Ms Eaton complained about printer costs of over $2,000 accrued on the office printer at Sell Lease Property: Eaton April 2015 Affidavit at [5] and Annexure C. It would appear that Mr Quinn had some form of investigation conducted in relation to printing of documents in the office as a consequence of which he concluded that Ms Eaton had printed various documents in the Sell Lease Property offices: Mr Quinn’s email of 10 September 2014. Ms Eaton disagreed with his analysis, but in order to resolve the dispute it appears that Ms Eaton paid $1,000, and the other $1,000 was written off. The context in which that occurred is an email from Mr Quinn in which he said that there was sufficient evidence to substantiate that Ms Eaton owed the amount claimed by Sell Lease Property for the printing but he proposed options to “ensure you and I stay on the same page”, those options being:
1.Pay the amount for now
2.Pay $1,000 immediately and i will be prepared to write off the other $1,000 to close this issue as this is wasting too much of my and your time.
3.Don’t pay anything now and we will deduct the full amount from any future commissions.
4.Don’t pay anything now and when and if you resign from SLP we will ask for the full amount outstanding to be paid as per your employment contract.
I think option 2 is a good one. Let me know if you agree?
Ms Eaton agreed, but said that she was “disappointed at being threatened over a legitimate query”, to which Mr Quinn responded that he “really don’t see how you have been threatened??”, and describes his offer as a generous one. It suffices to observe that Ms Eaton’s description of Mr Quinn’s response as a “threat” is a gross exaggeration.
It would therefore appear that the matter was resolved by Ms Eaton paying $1,000 of the $2,000 of printing costs. It follows that the remaining $1,000 was seemingly written off by Sell Lease Property.
In relation to marketing costs Mr Quinn asserts that soon after Ms Eaton began employment with Sell Lease Property he had a meeting with her during which they discussed the various marketing options offered by Sell Lease Property, and that he indicated that the general rule was that the employee had to pay before Sell Lease Property went ahead with a marketing option, but if there was an impending settlement then the cost would be put on the profile marketing account and deducted from future commission. The profile marketing account being an account that recorded Sell Lease Property’s charges and the sales representatives’ payments in relation to profile marketing: Quinn Affidavit at [22]-[23]. Mr Quinn asserts that Ms Eaton implemented lots of profile marketing options offered by Sell Lease Property during her employment but that the only marketing related costs that she was requested to incur by Sell Lease Property were the start-up costs at the beginning of her employment being those costs listed under the heading “Costs Incurred Upon Commencing Employment” in the Contract and amounting to $989.80 in total, and that save for those costs all of the profile marketing options were carried out voluntarily by Ms Eaton without any request from Sell Lease Property to incur the costs associated with them: Quinn Affidavit at [24]-[25].
Commission payments
It would appear that Sell Lease Property engaged the majority, if not all, of its sales representatives on a commission only basis, and did so because:
a)this was perceived to offer greater incentive to perform; and
b)Sell Lease Property financial and managerial resources were not sufficiently large to support a large inexperienced salary based workforce of sales representatives: Quinn Affidavit at [18].
Concerns with respect to the commission only method of payment of sales representatives arose during the latter half of 2014 when an employee of Sell Lease Property raised concerns as to whether or not he had been properly paid: Quinn Affidavit at [26].
The effect of the legality of the commission only payments for the sales representatives’ workforce being raised was that Sell Lease Property sought legal advice as to whether it could employ “rookies” on employment contracts which provided for payments on a commission only basis: Quinn Affidavit at [26].
The legal advice received by Sell Lease Property, on or about 21 November 2014, was that:
a)“rookie” sales representatives could not be employed on contracts which provided for commission only payments as that did not satisfy the requirements of the Award; and
b)Sell Lease Property ought to terminate the contracts of employment for sales representatives which provided for payment on the basis of commission only, as those contracts did not meet the minimum requirements of the Award: Quinn Affidavit at [27]-[28] and Annexure BRQ-3.
Commission and casual contracts
The consequence of the receipt of advice that commission only contracts may not meet the requirements under the Award for “rookie” employees was that Sell Lease Property determined that commission only contracts would only be offered to its more experienced sales representatives in accordance with the requirements of the Award, and that those who did not meet the Award requirements for commission only contracts would be asked to enter into casual wage based contracts: Quinn Affidavit at [29].
A spreadsheet was created by Mr Quinn in which he identified employees by name, and where those employees were to be on commission only contracts the number “4” appeared next to their name: Quinn Affidavit at [32] and Annexure BRQ 4.
In relation to Ms Eaton, and two other part-time employees, Mr Quinn’s initial belief was that they were sufficiently experienced to be eligible for a commission only contract, and consequently the spreadsheet, in which Ms Eaton is identified by her email address and mobile telephone number, identifies Ms Eaton as a commission only contract employee: the numeral “4” appears next to her email and telephone number on the spreadsheet: Quinn Affidavit at [32]-[34] and Annexure BRQ-4. Mr Quinn determined to deal firstly with those employees who were to be offered a replacement casual contract, and then to roll out new commission only contracts to employees who met the relevant Award requirements: Quinn Affidavit at [34].
The offer of casual contracts
Employees who were to be offered casual contracts were emailed by Mr Quinn on 9 December 2014: Quinn Affidavit at [35] and Annexure BRQ-5. The terms of an email sent by Mr Quinn to those being offered casual contracts indicated that:
a)as a result of a recent event Sell Lease Property had been required to seek independent legal advice concerning employment contracts;
b)the lawyers had advised Sell Lease Property that current employment contracts were “problematic and should be cancelled asap”;
c)the present contract needed to be replaced with one that was more appropriate;
d)included the relevant Award provision, that being cl.16; and
e)included some analysis of the possible upside to being employed on a casual basis: Quinn Affidavit at Annexure BRQ-5.
The actual casual employment letter of offer sent to employees was in the following terms:
We are pleased to offer you the Casual Employment Position of Sales Representative.
You will be employed on a casual basis. Your direct supervisor, Brian McKiernan, must make a written request of you for all hours worked. All hours worked must also be approved in writing on the time sheet provided to you and submitted to your direct supervisor, Brian McKiernan, no later than the close of business Monday each week. You will not be paid for any hours worked that are not requested or approved in writing by your direct supervisor.
According to the Relevant Real Estate Industry Award, you will be paid not less than $22.35 Per Hour which includes a 25% loading to cover all Leave Entitlements.
As a condition of remaining eligible as a casual employee, you must attend a monthly update event, which is charged at $100. This update event is to ensure you remain current in SLP's Practices, Procedures and Policies so that you can conduct the work as a casual SLP real estate Sales Representative safely and effectively as and when required by SLP.
Please indicate your acceptance of this offer by signing below and returning this letter via Australia post or scanned on email to [email protected]
We look forward to working with you to create a world-class real estate organisation.
The letter was sent from Mr Quinn, seemingly in his capacity as the “Owner” of Sell Lease Property: Quinn Affidavit at Annexure BRQ-5
No email offer of a casual contract was sent to Ms Eaton on 9 December 2014 as at that stage Mr Quinn believed that Ms Eaton was eligible for a commission only contract, and was to be offered a commission only contract: Quinn Affidavit at [32] and [35].
In December 2014 Ms Eaton advised Mr MacEwan that she had obtained full-time employment as she was not earning enough money at Sell Lease Property, but also advised that she intended to continue working for Sell Lease Property in the same part-time capacity as she had done previously: Eaton October 2015 Affidavit at [7]. Ms Eaton also advised that because of her new role she would not be able to attend monthly meetings: Eaton October 2015 Affidavit at [7].
Monthly meetings and donations
Ms Eaton says that all employees received an email from Mr Quinn on 17 January 2015 by way of a monthly newsletter update in which they were advised that they would be “fined” for not attending the monthly meeting. The quantum of the fine was $100 in the first instance, increasing by $50 per month thereafter.
Mr Quinn had earlier written to Ms Eaton and in that email on 18 January 2015 said that:
a)Sell Lease Property could not force Ms Eaton to pay the donation, but that they were appealing to the type of people they wanted in their business who would help build relationships to support the local community;
b)attendance at the monthly meetings was mandatory for property consultants to continue to operate safely and effectively, and that if Ms Eaton could not commit to the monthly meetings then Sell Lease Property probably would not be able to accommodate her going forward;
c)set out the details of planned events that year and the amount which Ms Eaton would be able to claim as a tax deduction; and
d)Sell Lease Property would be releasing a new business model early in the year which would allow Ms Eaton to start her own entity and be completely supported by Sell Lease Property on a transaction basis.
Ms Eaton emailed Mr Quinn indicating:
a)that he was aware that she was not attending future meetings because of her full-time employment, and she asserted that this had not been an issue with him as they had discussed it whilst he was in the Philippines;
b)that she had a couple of agencies that she could work with if this was the best way forward for her, and that she thought the business of Sell Lease Property was about building relationships not tearing them down;
c)that she had already donated a lot of money to charity and would choose the charities to which she wished to donate, and that she could not afford another tax deduction; and
d)to advise if Mr Quinn wished her to move her current listings and to take others elsewhere.
Ms Eaton’s response of 18 January 2015 at 6.40pm to Mr Quinn elicited the following response:
Simone,
I don’t want you to take your listings elsewhere, however, if you can’t attend the monthly meetings we will need to ask for your resignation.
I’ll leave the decision in your hands.
Brett
The above emails are set out at Annexure C to the Eaton October 2015 Affidavit.
It does not appear that the issue was resolved. Later the same evening of 18 January 2015 Ms Eaton sent an email to Mr Quinn in which she said “This bullying has got to stop …”: Eaton October 2015 Affidavit at Annexure D.
Mr Quinn responded indicating that he didn’t see how what had been done could be interpreted as bullying and that he was asking Ms Eaton to meet the same expectations that Sell Lease Property had of all of their staff, and that he was not forcing/asking her “to stay or go” but rather “making a lawful request of you to attend our meetings and asking you to comply with the values of our company”.
Mr Quinn went on to acknowledge that Ms Eaton had accepted a full-time role which impacted upon her ability to meet Sell Lease Property’s expectations, but that if she did not attend any further meetings or comply with the values of the company she would still receive the same level of support and performance management as every other employee, and that Mr Quinn looked forward to seeing her at the meeting in February 2015: Eaton October 2015 Affidavit at Annexure D.
On 24 January 2015 Mr McKiernan wrote to Ms Eaton to ask whether there was a particular reason why she did not attend the January 2015 team meeting, to which Ms Eaton responded on 25 January 2015 as follows:
You were cc’d as was Graeme regarding correspondence to Brett last week so you were aware, as was Brett and Graeme that I would not be attending the meeting and the reasons why due to a change in my work status. Brett agreed verbally that I would not attend further meetings when he was contacted by phone prior to Xmas. His subsequent aggressive emails did not acknowledge this after I objected to donating money (fined) for not attending and subsequently he was asking for my resignation.
I am not going to re-live the content of these emails as I know you received a copy as did Graeme.
But, there is something more here and relates to Brett’s bullying, which you are also now aware of. It is because of this behaviour that I will not be discussing anything with Brett further due to him being the primary source of my reason for not wanting to attend the office or any place where he might be as it is not comfortable for me. He is a narcissist and will do anything to belittle power play and win at all costs.
I hope this helps clarify my absence.
Part-time contracts
In January 2015 Mr Quinn decided that Sell Lease Property would create a new salaried part-time contract that was compliant with the Award after one of the part-time commission only contract employees refused to sign a casual contract: Quinn Affidavit at [37], and consequently Mr Quinn subsequently, during late January and early February of 2015, re-evaluated which employees were to be offered commission only contracts: Quinn Affidavit at [38]. It was during this process that Mr Quinn determined that Ms Eaton was not eligible for a commission only contract as she did not meet the Award requirements for a commission only contract, and he therefore determined that she should be offered a casual contract: Quinn Affidavit at [38].
As a consequence of the allegation of bullying Mr Quinn asked Mr McKiernan to be the contact point for Ms Eaton, and to offer Ms Eaton a casual contract: Quinn Affidavit at [39].
Mr McKiernan sent Ms Eaton a casual contract on 26 January 2015, offering her employment on a casual basis.
The email sent by Mr McKiernan to Ms Eaton on 26 January 2015 was in the following terms:
Hi Simone
Thanks for your email. I have suggested to Brett that I take over the discussions for now regarding your employment status as that may be in the best interests of moving forward.
There are a few points we need to address. I will start with the most important one first:
Your Employment Status
When we hired you we employed you on the basis that you would be working full time in real estate. You started off well and showed signs of continuing ·your initial success with further listings and sales. I was disappointed to hear from Brett that you were going back into alternative employment because I really thought you were going to continue to do well.
However, now that you have accepted an alternative position, we can no longer employ you as a sales rep on your current employment contract.
We do, however, have an alternative which Is to employ you on a casual basis. This would facilitate you continuing to work in your current role and still do real estate on a casual basis. I have attached the casual contract here for your review. We have issued this exact casual contract to several people in SLP who are in similar circumstances to you.
To ensure we resolve this matter immediately, I will need to have this casual contract signed by you and returned no later than 5.00pm on Friday the 30th of Jan. In the mean time please don't hesitate to email me with any questions you may have.
Attending Monthly Meetings
Simone, as you are aware, all of our full time and casual employees are required ·to attend our monthly team training meeting to remain current as an employee. However, as a casual employee, you will not have to attend our social charity events.
Finally, if you want to remain a casual employee at SLP, we must address the concerns you have around your perception of Brett's bullying. This cannot be left unaddressed. Therefore, we will need to address this immediately through either a third party mediator or, if you are comfortable, with Graeme and me present.
To facilitate this, I would like to ask you to attend a preliminary discussion around your concerns regarding Brett with Graeme and me on Thursday 29th Jan at. 9.00am at our support centre at 4/24 Parkland Rd, Osb. Pk.
Simone, l hope we can resolve this quickly so that we can all move forward.
Looking forward to your reply.
Kind regards
Brian
Eaton October 2015 Affidavit at Annexure E; McKiernan Affidavit at page 46.
Ms Eaton responded on 27 January 2015 as follows:
Hi Brian
You may want to check my contract as it is already casual and you will recall that I had my own business when I joined so it was always meant to be part time. You may also recall you had me cross out 16 hours per week and reduce it to 8 per week.
There is no requirement for me to change my contract without mutual agreement. I will contact the appropriate government departments when back in Perth as I believe there are issues with the existing contracts which I will be investigating In the event SLP continue to be heavy handed.
I have already explained the monthly meeting attendance.
Regarding Thursday, as I work full time this will have to be out of hours and given the inaccuracies so far I don’t believe it will be a fair meeting therefore I will be bringing a third party representative and request that the meeting is done through third party mediation Can you please advise the company you use for this.
Thank you
Simone
The above two emails appear at Annexure E of Ms Eaton’s October 2015 Affidavit.
Subsequently, Mr McKiernan, operating on instructions from Mr Quinn (who was effectively overseeing the process, unbeknown to Ms Eaton: Transcript, 6 April 2016, page 145), sent Ms Eaton an email on 28 January 2015 offering Ms Eaton a new part-time contract: Eaton October 2015 Affidavit at [12] and Annexure H; Quinn Affidavit at [43]; McKiernan Affidavit at page 49. The email of 28 January 2015 from Mr McKiernan, including the offer of a new part-time contract, was in the following terms:
Hi Simone
Thanks for your email and for reminding me about your contract conditions.
Further to your points, I would like to clarify that you are not on a casual contract. You are on a part time contract, so we will need to treat it as such. Our offer of a casual contract is now no longer available. You are correct, your employment contract can only be changed by mutual agreement.
As a result of reviewing this issue, we have identified an oversight on our part by not managing you during this part time period, an oversight which we now need to rectify.
We also made an error with regard to the frequency we were due to pay you, which l will also have corrected as of our next pay period.
We have been informed by our lawyers that our previous contracts were problematic, potentially not valid and should be amended ASAP. We have followed their Instructions with all of our employees. I have attached a few things to this email that require your attention:
1. A new part time contract that we will require you to review and sign in order to ensure we meet the requirements of the law. I am happy to discuss any part of this with you.
2. Your Part Time Roster so that we can get things back on track.
3. A “Part Time” Role Description with KPI's that you will need to meet.
4. A Summary time log for you to record the tasks you do in the Part Time Hours (This needs to be updated at the end of each working day)
5. A Hard Copy Time log that will need to be submitted after each working day
6. A Prospecting Record that needs to be updated after each working day
7. I will invite you to fortnightly performance reviews In your calendar which you will need to accept.
You have also been invited to a dropbox folder where I've put the applicable documents.
I expect that you will be working your first rostered day tomorrow as scheduled.
Please let me know if you are unable to meet any of our expectations. With regard to the our mandatory team meetings, if you do not attend the meeting in February we will need to have a discussion and review your performance.
Regards
Brian
Annexed to the offer of a part-time contract was a copy of the new part-time contract, a new position description, a new roster, time log and prospective record. Ms Eaton says that she was now required to submit weekly timesheets and felt that she was being performance managed and felt that there was undue pressure to change her contract and that she was not being given any other option, and that it was “sign or resign”: Eaton October 2015 Affidavit at [12]. Ms Eaton says she was given less than 24 hours’ notice of her first rostered day, which was the day following the making of the offer, and was advised that if she could not attend monthly meetings then her performance would be reviewed. She says that she considers the position description requirements were excessive for a part-time 8 hour per week role, and that there had been no consultation on set hours of work (other than the 8 hours per week) or the location of work: Eaton October 2015 Affidavit at [12].
The next morning, 30 January 2015 Ms Eaton emailed Mr McKiernan and:
a)indicated that her current hours of work were 8 per week averaged over a 12 month period;
b)indicated that her scheduled roster periods during which she was required to be in the office were periods where she would be at work or conducting home opens and other work for Sell Lease Property, and enquired as to whether there was supposed to consultation concerning hours, and said that if not it was a form of bullying;
c)queried why it was that she had to work from the office and asked how she could do a home open from the office of Sell Lease Property;
d)queried whether Sell Lease Property had a position concerning payment for prior work which for many months was in excess of 40 hours per week;
e)asked whether there was any affect on her superannuation;
f)requested details of the Sell Lease Property human resources team and the fair treatment procedure which she said she had never seen; and
g)asked what happens to any listings should there be an unfair dismissal prior to a property being sold.
Eaton October 2015 Affidavit at Annexure K.
During the remainder of that day, 30 January 2015, there were further email exchanges between Ms Eaton and Mr McKiernan, with Mr McKiernan querying why Ms Eaton had not worked her new roster the previous day, and advised Ms Eaton that she was rostered on on the next Saturday. Ms Eaton raised issues as to non-payment of wages and superannuation, receipt of a Fair Work Information Statement, and what was happening with her listings and reimbursement for marketing expenses, as well as advising Sell Lease Property that she had contacted the Fair Work Ombudsman. Ms Eaton suggested that Sell Lease Property had been deceptive and misled her in relation to covering costs of training, marketing, printing, advertising, equipment and running costs for a rookie employee, and that that had been done in contravention of the Award, and that she wanted her money back. In the evening of 30 January 2015 Ms Eaton re-sent the email sent earlier that day (at 6.44am) and referred to allegations of bullying by Mr Quinn, and now asserted that Mr McKiernan was bullying her and discriminating against her given that she was suddenly required to work a roster and being micro managed and performance managed. Ms Eaton provided an email to Mr McKiernan about the duties of employers under the Occupational Safety and Health Act 1984 (WA) (“OSH Act”) and advised that wilful breaches were subject to prosecution, and advised that she had contacted the Fair Work Ombudsman and her lawyer and confirmed that Sell Lease Property had been breaching the Award.
Reconsideration of part-time contracts
Having offered Ms Eaton a part-time contract it appears that at the same time, or very soon thereafter, Mr Quinn was reconsidering the viability of part-time contracts at Sell Lease Property, and having done so, decided to abolish all of the part-time contract positions: Quinn Affidavit at [46]-[48]. Mr Quinn said that the decision to abolish all of the part-time contract positions was made because he had decided that the costs of managing part-time salaried employees, and paying their salaries, was too great for the business to bear, and that consequently he had decided to abolish all of the part-time contract positions: Quinn Affidavit at [46]-[48]. See also Transcript, 4 April 2016, page 53.
Abolition of part-time contracts
On 31 January 2015 Mr Quinn sent a letter to each of the sales representatives on part-time contracts. Mr Quinn informed them that the sales representatives’ positions on part-time contracts were being abolished. There were four sales representatives to whom the letter was sent. Mr Quinn’s letter advised as follows:
In recent weeks we have been considering the utility to our business of engaging sales representatives on a part-time basis. We concluded that, for a variety of commercial and logistical reasons, we no longer want any part-time representative positions in our business and we plan to make each of them redundant.
We accept that there may be a range of opinions about whether we've reached the right conclusion, and we respect the right of those with different opinions to disagree with us. Nevertheless, that is the judgment we've made and, accordingly, from 09 February 2015, we will make each of those part-time sales representative positions redundant.
We're conscious that our decision will have consequences for you and that some of those consequences may be disadvantageous. Unless we find another role for you in our business, one of the likely consequences of our decision is the termination of your employment.
We would like to discuss our decision with you in person, and give you the opportunity to raise with us any measures that we might take that could avert or mitigate the adverse consequences of our decision on you. We would like to hold our discussion with you in the course of this week. Please let us know when you are available to do that.
Alternatively, if you don't want to discuss the matter with us, please let us know. If we haven’t heard from you by Friday, 06 February 2015, we will assume that you don't want to discuss the matter with us, and we will implement the change we described above.
We look forward to discussing this matter with you.
Quinn Affidavit at Annexure BRQ 11; McKiernan Affidavit at [106] and Annexure BHM-7.
On 1 February 2015 Ms Eaton wrote to Mr McKiernan concerning her Contract and other matters in the following terms:
Dear Brian
I’m still waiting on a response from you regarding my previous questions. Please respond.
Given that I won’t be attending the office without a mediator and you have not provided any other option with regards to protecting me from further bullying, all communications will continue in writing.
Regarding your letter, it appears ambiguous. Are you making me redundant from SLP, making all part time roles redundant within SLP, or are you terminating my employment with SLP?
You also mention there will be consequences and disadvantages for me. This sounds like a threat so please explain what you mean by this.
Looking forward to your reply.
Thank you
Simone
Ms Eaton’s email of 1 February 2015 elicited a response, not from Sell Lease Property, but from its lawyer, one Steve Heathcote. Mr Heathcote wrote to Ms Eaton as follows on 2 February 2015:
Simone,
I act for SLP.
Brett Quinn has provided me with a copy of your email below and has asked me to respond to it.
The position is this. SLP intends to abolish all part-time sales representative roles. It has invited you to confer about the impact on you of its decision to make those part-time roles redundant. Your participation in the consultation process is not compulsory. If, however, you opt not to confer with SLP, it will have to implement its decision without the benefit of your input.
SLP hasn’t yet terminated your employment. However the letter that it gave you makes it clear that, unless some redeployment arrangement is reached, it is likely that your employment will be terminated as a consequence of your position becoming redundant. That is not a threat – it is an appropriate disclosure of at least one of the potential outcomes of SLP’s decision to abolish the part-time roles.
Hopefully that provides you with the necessary clarity. If you have any questions about it, please feel free to call me.
Regards
Stave HeathcoteBarrister & Solicitor
Sell Lease Property further says in respect of Mr MacEwan that:
a)Ms Eaton has not pleaded any facts that demonstrate the involvement or knowledge of Mr MacEwan in any of the contraventions alleged;
b)although Mr MacEwan signed Ms Eaton’s employment documents on behalf of Sell Lease Property there are no alleged contraventions relating to the terms of those documents; and
c)Mr MacEwan’s evidence was that he was not involved in any way in the decision to abolish part-time roles or terminate Ms Eaton’s employment: MacEwan Affidavit at [18]-[20].
Legal principles
Section 550 of the FW Act provides as follows:
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
Section 550 of the FW Act provides for accessorial liability for a breach of civil remedy provisions. Sections 340 and 352 of the FW Act are civil remedy provisions. Section 550 of the FW Act provides that involvement in a contravention of the FW Act shall be treated in the same way as an actual contravention.
The relevant principle in federal civil litigation in relation to legislative provisions such as s.550 of the FW Act is derived from the High Court’s judgment in Yorke & Anor v Lucas [1985] HCA 65; (1985) 158 CLR 661; (1985) 59 ALJR 776; (1985) 61 ALR 307; [1985] ATPR 40-622 (“Yorke”), and the numerous cases which have followed that judgment, which indicate that to be liable a putative accessory must intentionally participate in a contravention, and that to form the requisite intent the putative accessory must have knowledge of the essential matters going to make up the contravention, whether or not the putative accessory knows that those matters amount to a contravention. Necessary intent will be absent if the putative accessory does not know or believe that the assistance or encouragement given is something which goes to make up the facts which constitute the contravention. The principle as it applies in federal civil litigation has its origins in the criminal law: Yorke CLR at 676 per Brennan J; Giorgianni v The Queen (1985) 156 CLR 473; (1985) 16 A Crim R 163; (1985) 59 ALJR 461; (1985) 58 ALR 641; (1985) 4 IPR 97; (1985) 2 MVR 97 (“Giorgianni”); CLR at 506 per Wilson, Deane and Dawson JJ, and one of its early federal legislative manifestations is in s.75B of the Trade Practices Act 1974 (Cth). The principles concerning accessorial liability under federal workplace relations legislation are further expounded in Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299; (2007) 59 AILR 100-686 (“Clarke”) at [26] per Tamberlin, Gyles and Gilmour JJ, where the Full Court of the Federal Court observed that:
Regardless of the precise words of the accessorial provision, such liability depends upon the accessory associating himself or herself with the contravening conduct – the accessory should be linked in purpose with the perpetrators (per Gibbs CJ in Giorgianni v The Queen (1985) 156 CLR 473 at 479-480; see also Mason J at 493 and Wilson, Deane and Dawson JJ at 500). The words “party to, or concerned in” reflect that concept. The accessory must be implicated or involved in the contravention (Ashburyy v Reid [1961] WAR 49 at 51; R v Tannous (1987) 10 NSWLR 303 per Lee J at 307E- 308D (agreed with by Street CJ at 304 and Finlay J at 310)) or, as put by Kenny J in Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588; 112 IR 388 at [34], must participate in, or assent to, the contravention.
Under a provision which provides for accessorial liability for breach of civil remedy provisions action may be taken against accessories without taking action against the principal: Australian Competition and Consumer Commission v Black on White Pty Ltd & Ors [2001] FCA 187; (2001) 110 FCR 1; [2001] ATPR 41-820 at [51] per Spender J. An action may continue against an accessory when discontinued against a principal: Torpia v Empire Printing (Australia) Pty Ltd [2009] FMCA 853; (2009) 188 IR 306; (2009) 234 FLR 103; (2009) 61 AILR 101-040 at [65] per Barnes FM. An accessory may also be liable where a company has been deregistered: Fair Work Ombudsman v Proplas Industries Pty Ltd & AnorandFair Work Ombudsman v Blacklight Investments Pty Ltd & Anor [2011] FMCA 506 at [21]-[26] per Lucev FM.
Section 550 of the FW Act does not require knowledge that there has been a contravention for the purposes of imposing accessorial liability, and ignorance of the law is no excuse: Fair Work Ombudsman v Access Embroidery (Australia) Pty Ltd [2012] FMCA 835 at [41] and [50]-[54] per Turner FM. Suspicious circumstances and a wilful failure to make enquiry may result in an inference being drawn as to actual knowledge for the purposes of imposing accessorial liability: Giorgianni at 482, 487 and 507-508 per Wilson, Deane and Dawson JJ; Fair Work Ombudsman v Devine Marine Group Pty Ltd [2013] FCA 1135 (“Devine Marine”) at [43] per White J. Being knowingly concerned in a contravention requires association with, or implication in, or a practical connection with the contravening conduct: Clarke at [26] per Tamberlin, Gyles and Gilmour JJ; Qantas Airways Limited v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 211 IR 1; (2011) 280 ALR 503; (2011) 62 AILR 101-349; ALR at 324 per Moore J. A person may be involved in a contravention by act or omission: Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 at [44] and [49] per Besanko J.
Consideration – accessorial liability
There is no doubt that Mr Quinn was knowingly involved in the contraventions that have been found in relation to wages and entitlements and rosters: Mr Quinn was in day-to-day control of the management of Sell Lease Property, and was aware of the relevant employment arrangements which gave rise to these contraventions in respect of wages and entitlements, and to the conduct which gave rise to the breach in relation to rosters.
Mr McKiernan likewise was involved in the wages and entitlements contraventions by reason of his management role at Sell Lease Property, and also his role in the preparation of the relevant employment documents and their implementation, and as an assistant to Mr Quinn in a management role. Mr McKiernan was also directly involved in the contravention in relation to rosters as a result of his communications on that topic with Ms Eaton, and his communications (albeit secretly) with Mr Quinn in relation to Ms Eaton’s employment arrangements, including her rostering, in and around the end of January 2015.
Mr MacEwan was directly involved in the wages and entitlements contraventions because he was the person who signed the Contract, pursuant to which the wages and entitlements which were in contravention of the Award, were paid (or not as the case may be) to Ms Eaton. Furthermore, Mr MacEwan as Licensee had an obligation to ensure that other employees of Sell Lease Property complied with the provisions of “relevant statutes”: Code of Conduct, r.8(2) and (3). There can be no doubt that in relation to the employees of a real estate business the FW Act is a “relevant statute”, and there is no dispute in this case that it was applicable to Ms Eaton. As such, Mr MacEwan had a responsibility to ensure compliance with it, and in circumstances where he was the Licensee, signed the Contract, had been kept informed from time to time of various developments in the period from November 2014 to February 2015, at least by email, he cannot be said to not have had knowledge of the relevant facts giving rise to the contraventions.
In determining that each of Mr Quinn, Mr McKiernan and Mr MacEwan are accessorially liable for the contraventions found by the Court, the Court has also had regard to the fact that each was a member of a small, and seemingly close-knit, management team, and that Mr MacEwan had overall responsibilities for the business activities of Sell Lease Property as Licensee, that Mr Quinn had day-to-day responsibility for the management of Sell Lease Property in his capacity as Chief Executive Officer, and that Mr McKiernan assisted Mr Quinn on a day-to-day basis with that management of Sell Lease Property.
In all the above circumstances, the Court finds that each of Mr Quinn, Mr McKiernan and Mr MacEwan are accessorially liable for the contraventions found by the Court.
Orders
By reason of the number of matters to be the subject of declarations and orders in these proceedings the Court considers that it would be appropriate for the parties to confer with respect to appropriate orders and directions with a view to preparing a consent minute of proposed declarations and orders by 23 March 2018. If the parties are unable to reach agreement on a minute of proposed consent declarations and orders then each party is to file and serve a minute of proposed declarations and orders by 4.00pm on 29 March 2018, and the matter will otherwise be adjourned for mention and further directions (and in particular in relation to any penalty hearing required) at 10.15am on 9 April 2018.
On the face of it this is a no costs matter: FW Act, s.570(1). If, however, any party considers that they might be entitled to costs: see FW Act, s.570(2), that is a matter which can be raised at the mention and directions hearings on 9 April 2018.
I certify that the preceding two hundred and twenty-five (225) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Associate:
Date: 9 March 2018
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