Fair Work Ombudsman v Ballina Island Resort Pty Ltd
[2011] FMCA 500
•1 July 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v BALLINA ISLAND RESORT PTY LTD & ANOR | [2011] FMCA 500 |
| INDUSTRIAL LAW – Employee complaint to Fair Work Ombudsman concerning the provision of payslips – Notice to Produce issued – notice not complied with – failure to make available records which were the subject of a written request – issue of liability and penalty. |
| Fair Work Act 2009 (Cth), ss.3, 12, 14, 15, 169, 536, 539, 563, 570, 675, 681, 682, 687, 701, 709, 712, 713, 714 Acts Interpretation Act 1901(Cth), s.25A Corporations Act 2001 (Cth) Federal Magistrates’ Act 1999 (Cth), s.16 Trade Practices Act 1974 (Cth), s.155 Workplace Relations Act 1996 (Cth), ss.169(2)(c), 169(4), 819(2) |
| A &L Silvestri Pty Ltd v CFMEU [2008] FCA 466 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 Avondale Motors (Parts) Pty Ltd v Federal Commissioner of Taxation (1971) 45 ALJR 280 Bank of Valletta Plc v National Crime Authority (1999) 90 FCR 565; (1999) 164 ALR 45 Bitumen and Oil Refineries (Aust) Ltd v Commissioner of Government Transport (1955) 92 CLR 200 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 Commonwealth v Baume (1905) 2 CLR 405 CPSU v Telstra Corporation Ltd (2001) 108 IR 228 Fair Work Ombudsman v Aussie Little Auction Houses Pty Ltd [2010] FMCA 806 Jones v Dunkel (1959) 101 CLR 298 Kelly v Fitzpatrick (2007) 166 IR 14 M Collins & Sons Pty Ltd v Bankstown Municipal Council (1958) 3 LGRA 216 Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Ogden Industries Pty Ltd v Lucas [1978] AC 113 Pyneboard Pty Ltd v TPC & Bannerman (1982) 57 FLR 368 Pyneboard Pty Ltd v TPC [1983] HCA 9 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 R v Peters (1886) 16 QBD 636 Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 Riley McKay Pty Ltd v Bannerman (1977) 31 FLR 129 Scott v Moses (1957) 75 WN (NSW) 101 Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 Taikato v R (1996) 186 CLR 454 Vanit v R (1997) 190 CLR 378 Whittaker v Comcare (1998) 86 FCR 532 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent : | BALLINA ISLAND RESORT PTY LTD (ACN 126 923 117) T/AS BALLINA ISLAND MOTOR INN |
| Second Respondent: | MATTHEW ROBERT LAURIE |
| File Number: | SYG 3059 of 2009 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 17 June 2010 |
| Delivered at: | Sydney |
| Delivered on: | 1 July 2011 |
REPRESENTATION
| Counsel for the Applicant: | Ms E. Raper |
| Solicitors for the Applicant: | D. Dinnen of Australian Government Solicitor |
| Solicitors for the Respondents: | Sean Radburn of Somerville Laundry Lomax |
DECLARATION
Pursuant to s.16 of the Federal Magistrates Act 1999 (Cth) the First Respondent has contravened s.712(3) of the Fair Work Act2009.
ORDERS
The First Respondent pay a pecuniary penalty of $500.00 pursuant to s.539(2) of the Fair Work Act 2009 in respect of its contravention of s.712(3) of the Fair Work Act 2009.
No order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3059 of 2009
| FAIR WORK OMBUDSMAN |
Applicant
And
| BALLINA ISLAND RESORT PTY LTD (ACN 126 923 117) T/AS BALLINA ISLAND MOTOR INN |
First Respondent
| MATTHEW ROBERT LAURIE |
Second Respondent
REASONS FOR JUDGMENT
The proceedings
This is an application filed on 16 December 2009, commenced under s.539(2) of the Fair Work Act 2009 (Cth) (“the Act”) seeking an order that the Respondent pay a pecuniary penalty for failure to make available records which were the subject of a written request.
The application of 16 December 2009 is supported by a Statement of Claim of the same date, seeks the following orders:
18. The Applicant claims the following relief against the First Respondent:
a. A declaration pursuant to section 16 of the Federal Magistrates’ Act 1999 (Cth) that the First Respondent has contravened Section 712(3) of the Act.
b. An order that the First Respondent pay a pecuniary penalty pursuant to section 539(2) of the Act in respect of its contravention of section 712(3) of the Act.
c. A declaration pursuant to section 16 of the Federal Magistrates’ Act 1999 (Cth) that the First Respondent has contravened section 536 of the Act.
d. An order that the First Respondent pay a pecuniary penalty pursuant to section 539(2) of the Act in respect of its contravention of section 536 of the Act.
19. Not pressed
20. The Applicant claims the following relief against the Second Respondent:
a. A declaration pursuant to section 16 of the Federal Magistrates’ Act 1999 (Cth) that the Second Respondent was involved in a contravention of section 712(3) of the Act by the First Respondent.
b. An order that the Second Respondent pay a pecuniary penalty pursuant to section 539(2) of the Act in respect of his involvement in the contravention of section 712(3) of the Act by the First Respondent.
c. A declaration pursuant to section 16 of the Federal Magistrates’ Act 1999 (Cth) that the Second Respondent was involved in a contravention of section 536 of the Act by the First Respondent.
d. An order that the Second Respondent pay a pecuniary penalty pursuant to section 539(2) of the Act in respect of his involvement in the contravention of section 536 of the Act by the First Respondent.
21. Not pressed
22. Costs, in so far as they arise under section 570 of the Act.
23. Any other order as the Court seems fit.
The Applicant in these proceeding is, and was at all relevant times the Fair Work Ombudsman established by s.681 of the Fair Work Act 2009 (Cth) and appointed by the Governor General pursuant to s.687 of the Act. The Applicant is a Fair Work Inspector by force of s.701 of the Act and is entitled under s.539(2) of the Act to apply to this Court for an order that the Respondent pay a pecuniary penalty for failure to make available records which were the subject of a written request.
The First Respondent is and was at all relevant times a company incorporated under the provisions of the Corporations Act 2001 (Cth) and is able to be sued in and by its corporate name. The First Respondent is a constitutional corporation within the meaning of s.12 of the Act and is an employer within the meaning of s.14 and s.15 of the Act.
The Second Respondent is and was at all relevant times a director, secretary and shareholder of the First Respondent and had the active day-to-day management and control of the First Respondent. He was the person chiefly responsible for the management and control of the employees of the First Respondent on behalf of the First Respondent.
On 26 August 2009, the inspector required the Directors of the First Respondent, by Notice pursuant to s.712(1) of the Act, to produce records and documents in relation to all employees of the First Respondent (“the Notice ”).
Background
I rely upon the opening made by Ms Raper to outline the background material in this matter. The information is provided to assist in the understanding of the nature of the application and not to establish any evidentiary point.
The Applicant is the Fair Work Ombudsman and its functions including the promotion of compliance with the Fair Work Act 2009 and the Fair Work Instruments underneath it. The functions of the Fair Work Ombudsman are prescribed in s.682 which includes:
Functions of the Fair Work Ombudsman
(1) The Fair Work Ombudsman has the following functions:
(a) to promote:
(i) harmonious, productive and cooperative workplace relations; and
(ii) compliance with this Act and fair work instruments;
including by providing education, assistance and advice to employees, employers, outworkers, outworker entities and organisations and producing best practice guides to workplace relations or workplace practices;
(b) to monitor compliance with this Act and fair work instruments;
(c) to inquire into, and investigate, any act or practice that may be contrary to this Act, a fair work instrument or a safety net contractual entitlement;
(d) to commence proceedings in a court, or to make applications to FWA, to enforce this Act, fair work instruments and safety net contractual entitlements;
The parties acknowledge that the purpose of this hearing was the Court’s consideration of the issue of liability and that the imposition of penalties if they arise are to be treated separately. However, due to the outcome in respect to liability and the unfortunate and unavoidable delay in the preparation and delivery of this judgment, I have addressed the issues of penalty to avoid any further delay in the matter.
The Complaint
This case arose out of a complaint by a former employee, Ms Kerrie Elizabeth Eddy of the First Respondent, Ballina Island Resort when she made a complaint to the Fair Work Ombudsman about her terms and conditions of employment. Ms Eddy was employed by Ballina Island Resort since 11 November 2007.
On 14 August 2009, the Fair Work Ombudsman received a claim from Ms Kerrie Eddy in relation to employment with Ballina Island Resort. Ms Eddy’s claim was allocated to Fair Work Inspector Jason Rhodes for investigation (Rhodes’ first affidavit at [4]). Mr Laurie (Second Respondent) was the director of Ballina Island Resort Pty Ltd (the First Respondent) which owned and operated the motel known as Ballina Island Motor Inn. It is not in dispute that Mr Laurie was responsible for the day-to-day management of the motel, including its employees.
An investigation transpired which is the subject of these proceedings concerning two issues. Firstly, the non-compliance of the Respondents to a Notice to Produce issued by the Fair Work Ombudsman under s.712 of the Act, and secondly, about a failure by the Respondents to provide pay slips to Ms Eddy in a six week period between 22 June 2009 and
6 August 2009.
Agreed Relevant Facts
In the terms of the factual matrix the agreed relevant facts are as follows:
a)The Fair Work Ombudsman is properly appointed under the Act and capable to apply for relief that it seeks.
b)Ms Eddy was an employee of the First Respondent.
c)The First Respondent owned a motel known as Ballina Island Motor Inn.
d)Ms Eddy worked at the motel from 11 November 2007 until approximately 14 August 2009.
e)She made a complaint to the Fair Work Ombudsman about her employment.
f)Inspector Rhodes who is an inspector within the meaning of the Act attended Ballina Island Motor Inn on 26 August 2009 and served Mr Laurie with a Notice to Produce.
Notice to Produce
The Notice to Produce dated 26 August 2009 required documents pursuant to s.712 of the Fair Work Act (first affidavit of Rhodes – Annexure ‘JR2’) and required documents to be produced to the Coffs Harbour Office of Fair Work Australia by 5pm on 11 September 2009.
There is no dispute between the parties as the First and Second Respondents received the Notice. There is also no dispute that the First and Second Respondents did not comply with the Notice and therefore did not provide any documents in compliance with the Notice by
11 September 2009. It is also not disputed as to the validity of the Notice. Consequently the Fair Work Ombudsman claims that the contravention is made out on the basis that the Notice was issued, there was a failure to produce documents by 11 September 2009 and the dispute between the parties relates to matters that transpired after
11 September 2009.
On 16 September 2009, five days after the Respondents were required to comply with the Notice, Mr Rhodes phoned Mr Laurie to enquire as to where the documents were and why the Notice had not been complied with Mr Laurie alleges that a conversation transpired which results in a dispute as to whether there was some agreement between the parties about there being an extension of time in which to comply with the Notice. The argument being advanced by the Applicant is that even if there was an agreement, there was still a contravention of the Act by the failure to deliver the documents by 11 September 2009.
The second dispute between the parties is that the Respondents contend they did send to the Fair Work Ombudsman, at some time in September (it is agreed that it was after 11 September) documents in response to the Notice. This is disputed between the parties. On 7 October 2009 Inspector Rhodes issued another letter to the Respondents seeking the documents that were required (first affidavit of Rhodes – Annexure ‘JR5’). It is the Applicant’s contention that the documents were not received by Fair Work Ombudsman and that the Respondents failed to comply with the Notice.
There was no further response by the Respondents to this letter as it is the Respondent’s contention that they did not receive the letter. Therefore it still remains a primary contention of the Fair Work Ombudsman that despite the disagreement between the parties concerning what transpired after 11 September 2009, there was nevertheless the contravention of s.712(3) of the Act. The relevance of what transpired thereafter, in the submissions of the Fair Work Ombudsman goes to prove non compliance with the Act but also goes further in the terms of description of the conduct of the Respondents in failing to comply with the Notice at all. The contention of the Fair Work Ombudsman that it was not until
27 January 2010, after an application in these proceedings had been filed and served on the Respondents and after there had been a conversation between the Fair Work Ombudsman’s solicitors and Mr Laurie, that the documents were sent.
Defence of reasonable excuse
Mr Radburn appearing for the Respondent contends that pursuant to s.712(4) that non-compliance with a Notice is permitted if the person has a reasonable excuse. This is discussed in detail in the following paragraphs.
Failure to provide payslips
The second issue in these proceedings relates to a breach of s.536 of the Fair Work Act – employer’s obligation in relation to payslips.
The section states:
An employer must give a payslip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
The submission advanced on behalf of the Fair Work Ombudsman is that such a breach in the failure to provide an employee with a payslip, seriously undermines the employee’s right to know and understand the basis upon which they are paid. Such information is often solely within the knowledge of the employers in terms of how entitlements are computed, and without such transparency, employers cannot be held to account for their responsibilities. The Fair Work Ombudsman contends that there are provisions under the Act and not only are the provisions for prescription of what is to be contained in the payslip but secondly that it is a civil remedy provision if there is a failure to comply with it.
The evidence of Ms Eddy is that she did not receive these payslips and that no copies of the actual payslips were retained by the Respondents and could not be provided to the Fair Work Ombudsman. Ms Raper contends that an inference should be drawn that the payslips were not generated for Ms Eddy in the relevant period.
Evidence
Ms Raper appearing for the Applicants tendered and read the following affidavits:
a)
Exhibit A1 – first affidavit of Jason James Rhodes sworn
17 May 2010;
b)
Exhibit A2 – second affidavit of Jason James Rhodes sworn
16 June 2010;
c)
Exhibit A3 – Affidavit of Kerrie Elizabeth Eddy sworn
12 May 2010;
d)Exhibit A4 – first affidavit of Deborah Rebecca Janice Dinnen sworn 12 May 2010;
e)Exhibit A5 – second affidavit of Deborah Rebecca Janice Dinnen sworn 15 June 2010;
f)
Exhibit A6 – affidavit of Lucy Elizabeth Madden sworn
15 June 2010; and
g)Exhibit A7 – copy of documents provided to the Fair Work Ombudsman by the Respondents.
The following material was tendered by Mr Radburn on behalf of the Respondents:
a)
Exhibit R1 – Affidavit of Matthew Robert Laurie sworn
8 June 2010.
Applicant’s submissions
Ms Raper submits that Part 5 – 2 – Office of the Fair Work Ombudsman of the Fair Work Act 2009 proscribes the extent of the compliance powers of Fair Work inspectors to ensure adherence with the Act and/or Fair Work Instruments. In order for inspectors to determine whether the Act or a Fair Work instrument is being complied with, s.712(1) of the Act provides inspectors with the power to require persons to produce relevant records or documents. The exercise and enforcement of this power is essential to the efficiency of the compliance provisions. On 14 August 2009, the Fair Work Ombudsman received a complaint from Ms Kerrie Eddy in relation to her employment with Ballina Island Resort Pty Ltd which was owned and operated by a motel known as Ballina Island Motor Inn and
Mr Laurie was responsible for the day-to-day management of the motel, including its employees. Ms Eddy’s complaint was allocated to a Fair Work Inspector, Jason Rhodes for investigation.
Section 712 breach
On 26 August 2009 the Inspector attended the Ballina Island Motor Inn and served a Notice upon Ballina Island Resort Pty Ltd pursuant to s.712(1) of the Act. That Notice required the Respondents to produce records relating to Ballina Island Resort Pty Ltd’s employees by
11 September 2009. Accordingly, the Respondents were given 16 days to comply with the Notice which exceeds the minimum 14 days’ Notice stipulated under s.712(2)(c) of the Act. The Notice clearly stated:
Failure to comply with this Notice, without reasonable excuse, is a contravention of sub.s712(3) of the Act and my attract a maximum penalty of $33,000 in respect of a body corporate or $6,600 in respect to an individual.
It is undisputed that Mr Laurie, as a director of the company, accepted service both on his behalf and on behalf of the company. The Notice required him to produce documents by 11 September 2009 however he failed to do that. Ms Raper contends that on that basis alone, not taking into account anything that transpired subsequent to that, it is the submission of the Fair Work Ombudsman that the breach is made out.
Ms Raper acknowledges that there is a dispute between the parties as to whether Mr Rhodes gave the Respondent’s more time to comply with the Notice (Exhibit A1 – first affidavit of Rhodes at [8]; Exhibit R1 – affidavit of Laurie at [32]). Ms Raper submits that it is the Fair Work Ombudsman’s position that no reasonable excuse has been offered for the non-compliance in the period between 26 August 2009 and
11 September 2009.
Ms Raper referred to Mr Laurie’s affidavit evidence where he suggests that the reason for his failure to comply with the Notice was because Ms Eddy had left her employment, placing a resources strain on the organisation. Ms Raper draws to the Court’s attention that on the cross-examination of Mr Laurie he insisted that Ms Eddy did not leave until 14 September 2009 which is in the period subsequent to the expiry of the requirement of the Notice. It is argued that even if an employee had left Ballina Island Resort Pty Ltd, it can be seen from what transpired in this matter in terms of documents that were produced in 2009 and Mr Laurie’s evidence that his capacity to comply with the Notice in the short period of time, there was no material change in the business constraints that existed other than with respect to the company and his pressures.
Ms Raper referred to the defence of reasonable excuse that was being advanced on behalf of the Second Respondent. In respect to the provision under s.712(4) provides a defence to a contravention of s.712(3) if the person served with a Notice to Produce had a reasonable excuse not to comply. Unlike other statutory defences of this kind, “reasonable excuse” is not defined in the Act. The predecessor provisions of s.712(4) in the former Workplace Relations Act 1996 (Cth) does not contain such a defence (s.169(2)(c) and 169(4) of the now repealed Workplace Relations Act 1996 (Cth)). The explanatory memorandum for the Fair Work Bill 2008 does not provide any guidance as to the insertion of and meaning to be proscribed to the phrase “reasonable excuse” (Explanatory memorandum [2654] – [2658]).
Ms Raper submits that the meaning given to “reasonable excuse” should be gleamed positively from the statute. Whilst the term “reasonable excuse” has been used in many statutes and is the subject of reported decisions, those decisions provide guidance as to what “reasonable excuse” means in this context. As what constitutes as “reasonable excuse” depends not only on the circumstances of the individual case, but also on the purpose of the provision to which the defence of “reasonable excuse” is an exception: Taikato v R (1996) 186 CLR 454 per Brennan CJ, Toohey, McHugh and Gummow JJ at 464. This was in a criminal context but it does address what constitutes a reasonable excuse. It concerns a dangerous weapon and whether there was a reasonable excuse for its existence in those circumstances.
A reasonable excuse is no more or less than an excuse that would be accepted by a reasonable person bearing in mind the intention of the legislative provision. Ms Raper acknowledges that in order for this Court to come to some view about what constitutes reasonable excuse, the Court is unfettered as there is nothing in the Act that says how it is defined unlike the Family Law Act which sets out in quite a lot of detail where non-compliance with certain family law orders, what could constitute a reasonable excuse. Nevertheless, the Court’s discretion is fettered by the provisions of the Fair Work Act and the objects of the Act per se. An essential object of the Act is to ensure that employees receive their minimum entitlements under the Act. In order for that to be ensured, Parliament has created a specific compliance body whose functions are to both promote, monitor and investigate potential breaches of the Act. Therefore, it is necessary to consider in that context the very purpose of these provisions and decisions of an offense under these provisions.
Ms Raper contends that in terms of the Court being informed by other authorities is the contention of the Fair Work Ombudsman, that obviously, other authorities won’t be of assistance given that there is a necessity for this Court to consider it in the context of this particular statute and what is required of it in that context. However, Ms Raper did make reference to a couple of decisions that have looked at non-compliance with Notice to Produce documents which may be of limited assistance. If the Respondent is arguing that a reasonable excuse arises from general business constraints during its operation, that would render the whole provision nugatory, in effect to comply with Notice. While it is acknowledged that it is going to be in some way burdensome to require a company to produce documents as it is going to take time, it may have to be performed outside ordinary business hours of the work of the person who performs that work in order to comply.
Ms Raper referred to the authorities that whilst a ‘reasonable excuse’ may include physical and practical difficulties in complying with the Notice (Bank of Valletta Plc v National Crime Authority (1999) 164 ALR 45 per Hely J at [42] (principles not overturned on appeal): Bank of Valletta Plc v National Crime Authority (1999) 90 FCR 565; those difficulties could not constitute normal business constraints associated with time pressures and resourcing issues. If this were the case, then the breadth of the defence would prove the time stipulations for compliance with the Notice nugatory. The mere fact that a Notice to Produce would be burdensome could not with respect invalidate the Notice by the suggestion that there was a reasonable excuse for non-compliance: cases concerning s.155 of the Trade Practices Act 1974 (Cth); Pyneboard Pty Ltd v TPC (1982) 57 FLR 368 per Northrop, Deane and Fisher JJ at 377; Reily McKay Pty Ltd v Bannerman (1977) 31 FLR 129.
Ms Raper advances the following material facts relevant to why the defence of ‘reasonable excuse’ should fail:
a)
The breadth of the Notice itself was very limited. The Notice sought employee documents for a month period (10 June –
10 August 2009). An employer was able to easily comply within 14 days.
b)In support of the first proposition, those documents ultimately produced in answer to the Notice were not substantial and were limited to some 80 pages. On a review of those documents, the records fell into four categories:
i)Banking reports (which had already been printed prior to the request);
ii)Employee timesheets;
iii)Bank account “domestic funds transfer reports” (which had been already printed prior to the request);
iv)Employee payslips (which were printed from a computer).
The Respondents have produced no evidence to suggest that the documents were not available to the Respondent at the time required (the evidence reveals that all were available).
c)
As to the circumstances giving rise to ‘reasonable excuse’ the relevant period is between the service of the Notice
(26 August 2009) and when the documents were to be produced by (11 September 2009).
d)To the extent that the Respondents claim that they were unable to comply to the 16 day timetable, they say that this was because of:
i)Being one staff member down, namely because Ms Eddy had left; and
ii)The Second Respondent was working 80 hours per week (Exhibit R1– first affidavit of Laurie at [31]).
These circumstances, both having a casual employee working and having to work 80 hours per week are not such that a failure to comply constitutes a reasonable excuse.
e)
Mr Laurie claims in his evidence, which is disputed, that he spoke to Inspector Rhodes on 16 September 2009 (Exhibit R1 – first affidavit of Laurie at [32]) and then was able to produce the documents, five days later on 21 September 2009 (Exhibit R1 – first affidavit of Laurie at [33]). Mr Laurie provides evidence to suggest his work constraints between the relevant period
(26 August and 11 September 2009) and between 16 September 2009 and 21 September 2009. Accordingly, the inference should be drawn that they could have been done within five days during the relevant period.
f)The evidence has revealed that the Respondents did not answer the Notice until 27 January 2010 (some four and a half months later) (Exhibit A4 – first affidavit of Dinnen). No excuse at all has been provided for the delay, save for the inference that the documents were lost.
g)The evidence has revealed that the Respondents did not answer the further request for documents dated 7 October 2009 (first affidavit of Rhodes – Annexure ‘JR5’). Failure to respond to this correspondence supports the conclusion that the documents were not, in fact, sent on 21 September 2009.
Ms Raper submits that there is a consistent course of conduct of noncompliance, being the failure to comply by 11 September 2009; followed by a failure to comply in response to the verbal request on
16 September 2009; and finally a failure to comply with a written request dated 7 October 2009. In respect to the nature of the documents that were produced, it could not be said that it was burdensome on behalf of the Respondents to comply with the Notice within the 16 day period between 26 August and 11 September 2009. On the evidence presented on behalf of the Respondent, it is alleged that the documents were sent by 21 September 2009, but that is in dispute. Ms Raper contends that an inference should be drawn that the documents were not, in fact, sent to the Fair Work Ombudsman on that date, based on the following:
a)The Respondents did not keep a copy of the documents which they say they produced;
b)
The Respondents did not respond to a letter sent to them by
Mr Rhodes on 7 October 2009. In circumstances where it was received by one of Mr Laurie’s employees.
c)Mr Laurie had not made any attempt to verify whose signature it was on receipt of that letter dated 7 October 2009.
d)It is obvious from Mr Laurie’s own records which he provided to the Fair Work Ombudsman that it was in fact the signature of one of his employees.
To the extent that there is a suggestion that there was some agreement between Mr Rhodes and Mr Laurie about an extension of time in which to respond to the Notice to Produce, it is submitted that Mr Rhodes has provided evidence which should be believed over that of Mr Laurie. On the basis that:
a)Mr Rhodes has a contemporaneous file note of the conversation that occurred on 21 September 2009.
b)The contents of the letter dated 7 October 2009, contains no reference to any agreement with respect to an extension of time. The letter refers back to the Notice of 26 August 2009 and refers to the fact that it has not been complied with.
c)There are no original copies of payslips that were provided to the employees.
d)Despite evidence given in cross-examination about the payslip print out being produced in 2010, this goes against the version of Mr Laurie’s evidence that payslips were generated for Ms Eddy during the period of her employment.
Ms Raper contends that the Court should not be satisfied by the evidence of Mr Laurie as it is either untruthful or, at least, evasive in the way that it describes what transpired in the period after
11 September 2009.
Breach of s.536
Ms Raper submits that Part 3-6, Division 3 of the Fair Work Act 2009 concerns the obligations of national system employers to make and keep employee records in relation to each of their employees (s.535) and to give payslips to each of their employees (s.536). Section 536(1) of the Act requires Ballina Island Resorts Pty Ltd to issue each employee with a payslip within one working day of the payment being made. It is not in dispute that Ballina Island Resort Pty Ltd employed and paid Ms Eddy wages during the period November 2007 to September 2009. However, it is in dispute as to whether Ballina Island Resort Pty Ltd issued any payslips to Ms Eddy for work performed during that period (Exhibit A3 – Affidavit of Ms Eddy paras.[14], [20] and [23]). A failure of Ballina Island Resorts Pty Ltd to issue a payslip to Ms Eddy in accordance with s.536(1) constitutes a breach of s.536(1).
The Fair Work Ombudsman has no record of original copies of payslips being produced. The unchallenged evidence of Ms Eddy (Exhibit A3) as she was not required to give evidence, is that she did not receive her payslips and that she had a conversation with Mr Laurie in which he said:
It’s just a piece of paper, what do you want it for? (Exhibit A3, para.22).
In addition, the copies that were received by the Fair Work Ombudsman on 11 January 2010 are not a true record of what the payslips would have been if they had been generated at the time of the relevant payment in 2009.
Ms Raper contends that what the Respondents were required to do was to provide accurate records of payslips which had been generated during the relevant period. The fact that the Respondents printed out historical records from a computer does obviate them from the responsibility to provide accurate records to the Fair Work Ombudsman in compliance with the Act. Ms Raper contends that the creation of and keeping of accurate payslips is essential both in terms of an employee’s understanding of what is owed to them at the relevant time, also of an employee to be able to, if they can, independently verify that they have been properly paid.
Respondents’ submissions
Breach of s.712
Mr Radburn presented two arguments in support of the claim that Fair Work Inspector accepted the excuse offered by Mr Laurie as a reasonable excuse and extended the time for compliance with the Notice to Produce.
Mr Radburn contends that there is no requirement under s.712 that a reasonable excuse must be provided within the timeframe for compliance and it is in the power of the Fair Work Ombudsman to hear a reasonable excuse and determine whether it is reasonable.
Mr Radburn referred the Court to the letter from the Fair Work Ombudsman dated 7 October 2009 (Exhibit A1- Annexure ‘JR5’, para.4) which supports the argument that the date for compliance had been extended to 14 October 2009 from the original date of
11 September 2009. Paragraph 4 of the Notice to Produce states:
If you do not provide a reasonable excuse for your failure to comply with the Notice by 14 October 2009, the Fair Work Ombudsman may commence legal action against you.
Failure to comply with a Notice to Produce Records or documents is a contravention under subsection 712(3) of the Fair Work Act 2009. A Court may order a maximum penalty of $6,600 for an individual, or $33,000 in respect of a body corporate.
Mr Radburn contends that on 16 September 2009, when Mr Rhodes and Mr Laurie had a conversation, Mr Rhodes has sought an explanation why the Notice had not been complied with. Mr Laurie has given a reason, being that he was busy and under various pressures. Mr Radburn acknowledges that there are different recollections of the conversations, but claims that it is not in dispute that Mr Rhodes provided an extension or amended the timetable to comply until
23 September 2009. It is submitted that by doing that the conduct of the Fair Work Ombudsman, through its Inspector, has accepted the excuse given by Mr Laurie for noncompliance. Further, on that basis, there was no further requirement to comply with that Notice.
Mr Radburn contends that s.712 does not give the Fair Work Ombudsman the power to extend the time in which to comply with the Notice to Produce. The proper course of action would have been to issue a new Notice with a new timetable. It is acknowledged that this has not been done. Mr Radburn advances the argument that there was no need after the 16 September 2009, when that conversation took place, to actually comply with that Notice as a reasonable excuse had been accepted by the Inspector. Mr Radburn maintains that the actions of the Inspector indicate that he gave an extension to 23 September 2009, and the evidence of
Mr Laurie is that he forwarded these documents by that date.Mr Radburn referred the Court to Mr Laurie’s cross-examination where he states that he photocopied all the relevant documents and then put them back into the boxes, in the order in which they had been originally filed. Mr Laurie accepts that he received the Notice and that it was personally served on him by Mr Rhodes. The main issue in dispute is that Mr Laurie says that he did not receive the letter dated
7 October 2010. However, Mr Laurie acknowledges that an employee of Ballina Island Resort Pty Ltd, a Ms Edwina Rummery appears to have signed for the document when it was delivered. However, there is no evidence to say that the document was given to Mr Laurie or that he had any knowledge of that document.
Mr Laurie’s evidence in cross-examination on that issue is:
Ms Raper: It’s the case, isn’t it, that 5 is slip in your affidavit describing the letter as being dated 9 October 2009. That was because you did, in fact, receive it on 9 October 2009, didn’t you?
Mr Laurie: No.
Ms Raper: And the reason why you are being untruthful to the court is because you failed to respond to this letter, didn’t you?
Mr Laurie: No, I didn’t not fail to respond to the letter. I never received the letter.
Ms Raper: And it’s the case, isn’t it, that you didn’t respond to it because you had not, in fact, sent to the Fair Work Ombudsman the documents that were requested of you in September 2009?
Mr Laurie: That would be pretty silly of me, wouldn’t it, if you’ve actually read the letter dated 7 October, because I would be in a lot of trouble if I didn’t abide by that, wouldn’t I?
Ms Raper: That’s right. And it’s the case that you had not, in fact ‑ ‑ ‑?
Mr Laurie: No, that would be ‑ ‑ ‑
Ms Raper:‑ ‑ ‑ sent that letter in September‑ ‑ ‑?
Mr Laurie: That would be pretty silly of me to not do it, because it clearly states there’s a $33,000 fine down there. So that would ‑ ‑ ‑
Ms Raper: That’s right?
Mr Laurie: Why would I not send this information? What do I have to hide out of not sending this information?
Ms Raper: Well, it’s the case, isn’t it, that the reason why you failed to respond to this letter was because you had not, in fact, sent them in September and you are not being truthful in saying that you did not receive this letter dated 9 October?
Mr Laurie: But I have no reason not to send them in September, when I did send them. That’s my question, why would I not?
Mr Radburn submits that this response is supported when Mr Laurie received the Statement of Claim in December 2009 and he speaks with Ms Dinnen, the Government Solicitor. That conversation is recorded in the second affidavit of Ms Dinnen (Exhibit A5) at paragraph 5.
Mr Laurie then goes on to describe what was sent. Mr Radburn contends that this evidence supports his assertion that:
a)He did send the documents on 21 September 2009, which he states; and
b)He did not receive the reminder Notice dated 7 October 2009.
In paragraph 12 of Ms Dinnen’s affidavit (Exhibit A5) a further conversation between Mr Laurie and Ms Dinnen about the allegation that he has been untruthful and deliberately attempted to frustrate the process. Ms Dinnen states:
On 15 February 2010 at about 3pm I telephoned Mr Laurie.
We had a conversation in words to the effect of:
DD: Mr Laurie, it’s Debroah Dinnen from AGS.
I’ve spoken with my client and they have instructed me that they are still proceeding with the prosecution. However I’m sending you a letter with a proposal to resolve the matter. My client would be willing to resolve the matter on the basis of an Agreed Statement of Facts.
ML: I’m happy to do whatever it takes to sort out these issues. If I’ve done something wrong then I’m happy to fix it.
DD: this matter is listed for first directions in Court on Friday.
ML: Is that in Sydney? I can’t make it to Sydney, I’ve got a business to run here.
DD: I’m looking into whether you can appear by telephone or videolink. What is your fax number so I can send you this letter?
Further, in support of this submission, when Mr Laurie realised that the Fair Work Ombudsman had not received the documents after speaking with Ms Dinnen, he forwarded these documents on to the Australian Government Solicitors immediately. Mr Radburn submits that these actions of Mr Laurie demonstrate that had acted in good faith.
He relied on an extension or an amendment of the timetable to comply with the Notice to Produce granted by Inspector Rhodes and he forwarded the requested documents.
Mr Radburn acknowledges the reminder letter dated 7 October 2009 was delivered to Ballina Island Motor Inn but there is nothing to support the view that it came to Mr Laurie’s attention as there is not evidence from Edwina Rummery that she in fact passed it on. Mr Radburn argues that Mr Laurie’s evidence on this point should be accepted based on his conduct after receiving the Statement of Claim in December 2009.
Mr Radburn submits that this issue does not need to be resolved because inspector Rhodes had accepted Mr Laurie’s excuse.In respect to the timesheet and failure to produce payslips for a six week period, the evidence of Kerrie Eddy has been contradicted by
Mr Laurie (Exhibit R1, paragraphs [20] – [27]).
20. I deny I have failed to provide payslips to employees.
21. When I purchased the business I kept the same procedures in place in respect to payslips that the old proprietors had so as to not cause any confusion.
22. The process was that payslips were collected from the same spot each week, namely in the drawer at the front desk.
This system worked and all employees would collect their payslips from the same spot.
23. No employee ever complained to me that they did not receive their payslip.
24. At no time during her employment did Kerry Eddy ever say to me:
“I have not received a payslip”, or “I cannot find my payslip”.
25. I have read Kerrie Eddy’s affidavit dated 12 May 2010 and I deny paragraphs 20, 21 and 22 of this affidavit.
26. At no time during Kerrie Eddy’s employment did she ever make a complaint or advise me that she had not received her payslip.
27. The accepted procedure was when I processed the pays each week I would print the payslips off, and leave them in a drawer a the front office where the employees would collect them.
Further, Mr Laurie denied he received the reminder letter dated
7 October 2009. The affidavit evidence of Ms Eddy (Exhibit A3, paragraph 23) states:
23. I ceased employment with Ballina Island on or around
6 August 2009. I received payments from Ballina Island into my bank account on 1 September 2009 and 8 September 2009.
A copy of my bank statement is annexed and marked Annexure “KE-2”. I do not know what these payments relate to as I did not receive a payslip for these payments.
Mr Laurie’s sworn testimony under cross-examination was:
Ms Raper: No, okay. Now, I understand from your evidence that Ms Eddy was a casual employee of your until 14 August 2009?
Mr Laurie: No, she was actually employed longer than that.
Ms Raper: Oh, okay. Sorry, my apologies. Perhaps you didn’t understand my question?
Mr Laurie: She was an employee, yes.
Ms Raper: Yes, she was an employee until 14 August 2009; is that right?‑‑‑
Mr Laurie; No, that’s not correct. She was employed longer than that. Your dates are just not quite right. Sean has a copy of a payslip which is her final payslip.
Ms Raper: Oh, okay. Perhaps if I can take you to paragraph 28 of your affidavit, which is on page 3?
Mr Laurie: Yes.
Ms Raper: According to your records, Keri Eddy’s last day of employment was 14 August 2009?
Mr Radburn: September.
Ms Raper: Oh, sorry ‑ ‑ ‑?‑‑‑September is the ninth. September, yes, okay?
Mr Laurie: Yes.
Ms Raper: So she remained in employment until then; is that right?
Mr Laurie: That’s correct, yes.
…
Ms Raper: Yes. And you refer, in paragraph 31, to being one staff member down. And do I understand that that’s as a result of
Ms Eddy leaving your employment?
Mr Laurie: Ms Eddy, yes.
Ms Raper: Yes. And that’s from the - as you’ve told us, on
14 September 2009?
Mr Laurie: Yes, within that week, yes.
…
Ms Raper: And so have you - and so, at that time - so prior to her leaving on 14 September, I understand your evidence to be,
I think, that you had eight casuals including her working for you; is that right?
Mr Laurie: If that’s what it says, yes. Probably was, if it’s in my affidavit, yes.
Ms Raper: And then after she left on 14 September, there were seven remaining; is that right?
Mr Laurie: One less, yes.
…
Ms Raper: Just by way of clarification, you know that it’s
Ms Eddy’s evidence that she finished work with you, I think, on
6 August?
Mr Laurie: Yes. I’ve read that, yes.
Ms Raper: But you say she didn’t actually finish work until
14 September?
Mr Laurie: That’s what her last payslip was, yes.
Ms Raper: And is that because you say that you were still making payments to her up until that point? Is that how you’ve made ‑ ‑ ‑?
Mr Laurie: No, we don’t make back payments or anything.
It’s just – that would have been when she finished, so that would have had to have been the end of her week. So I could have got time – like, more sheets if you want, so that’s fine. I’ve got her last one that she signed, so that would marry up with her final payslip.
Mr Radburn submits that the evidence available indicates that:
a)Ms Eddy finished work with Ballina Island Motor Inn in September 2009;
b)
The wages were paid weekly and it was not the practice to back-pay as deposits were made to her bank account on 1 and
8 September 2009;
c)
Although Ms Eddy claims to have finished her employment on
6 August, she did not finish until September;
d)Ms Eddy’s evidence allows an inference to be drawn that she was unsure of the actual dates;
e)The only evidence in respect to the claim that Ms Eddy didn’t receive payslips for a six-week period comes from Ms Eddy herself;
f)Any adverse inference in respect to the payslips that were produced on 27 January 2010 in respect of the year-to-date figure appearing on those payslips has been explained.
Mr Radburn contends that in respect to the payslips, the issue is simply a failure to provide payslips for a six-week period. The process that was implemented by Mr Laurie was that when he processed written payrolls he printed payslips and placed them in a drawer with the timesheets for collection by each employee. This practice had been followed by the previous owners and he had adopted the practice when he purchased the business. Mr Radburn suggests that if other employees had received their payslips, then Ms Eddy would have also received hers because they were printed out as a batch with each payroll run and placed in a drawer for collection.
Paragraphs 16 – 18 of Ms Eddy’s affidavit (Exhibit A3) states:
16. When the old owners, Pat and Paul ran the business, weekly payslips for all employees of Ballina Island were placed in a drawer in the front desk for collection. This arrangement continued when Mr Laurie took over the business.
17. Payslips were put in the drawer by Mr Laurie for collection by employees. He never handed me a payslip in person. I do not recall Mr Laurie telling me that the payslips were in the drawer but I know that was where they were to be collected for because that was the procedure under the old owners of the business.
18. All employees of Ballina Island had access to the drawer. The payslips were not in envelopes or covered up so the details of the payslips were visible to anyone who looked in the drawer.
Mr Radburn contends that there is no evidence that suggested that any other employee did not receive a payslip during that period and there was nothing put to Mr Laurie in cross-examination that could provide any reason why he would not give all other employees a payslip but excluded Ms Eddy for a six-week period.
In respect of the payslips that were produced and forwarded to
Ms Dinnen, Mr Laurie had an honest belief that those payslips were the correct ones as he had put the payslips requested into the computer which maintains the payroll system and copies of the payslips were printed. Mr Radburn submits that there was no deliberate attempt to mislead anyone or to be untruthful.
Applicant’s submissions in reply
Ms Raper referred to the issue of whether there was an amendment to, or an agreement to extend the time for the Respondents to comply with the Notice to Produce. The contravention is in the period between
26 August when the Notice was issued and 11 September 2009 when the documents were to be lodged. Nothing was produced in time, therefore the breach was made out. To the extent that there is a suggestion that there was some agreement to an extension, this is addressed in the first affidavit of Mr Rhodes (Exhibit A1) at para.9 where he states:9. My intention in having the conversation set out in paragraph 8 was to inform Mr Laurie that the employer was in breach of the Notice to Produce but that production of the documents described in the Notice to Produce was still required, and to warn him that prosecution action could be considered. It was not my intention to convey to Mr Laurie that I had granted an extension of time to comply with the Notice to Produce (emphasis added).
Paragraph 8 makes it clear that there was an expectation that Mr Rhodes received the documents and that the matter may be referred for prosecution.
Mr Raper submits that the letter forwarded by Mr Rhodes dated
7 October 2009 (Exhibit A1, Annexure ‘JR5’) is consistent with the conversation referred to above. There is no reference in the 7 October documents to there being any arrangement to vary or a new Notice being issued. Even if there was some agreement about Mr Laurie providing documents in the future that had nothing to do with the actual contravention that was the failure to provide the documents by 11 September 2009. The other issue is whether there was a reasonable excuse for noncompliance. Ms Raper argues that the Respondents have failed to make out their case.In respect to the receipt of a letter dated 7 October 2009, Ms Raper argues that it was received by an employee of Ballina Island Motor Inn and known to Mr Laurie. It was within the hands of the Respondents to call Edwina Rummery to explain what transpired in the period between her receipt and subsequently. On the basis that she was not called, it is submitted that a Jones v Dunkel inference must be drawn as to why she was not called to give evidence on this issue. The onus is on the Respondents to prove that there was a reasonable explanation and that the onus is not on the Fair Work Ombudsman.
In respect to the payslips, Ms Eddy was available for cross-examination and was not required by the Respondents. The payslips that have been produced are not in the original form which provides for the inference to be drawn that they were not generated in proper form in 2009 for
Ms Eddy. The submissions made from the bar table that there is evidence that all other employees received their payslips is not supported by evidence that they did in fact receive their payslips. The only evidence is the bold assertion from Mr Laurie about the practice which he adopted and there is no independent evidence from other employees about this practice or receipt of their individual payslips.In relation to the issue about the documents being lodged in the mail in September 2009, Ms Raper relies on the evidence of Ms Madden (Exhibit A6) and Mr Rhodes (Exhibit A2) as to the attempts by the Fair Work Ombudsman in this year once they were informed that documents had been sent by Mr Laurie in an attempt to try and ascertain whether those documents had been received by Australia Post.
Consideration on liability
These proceedings were commenced by the Fair Work Ombudsman on 16 December 2009 by the filing of an Application and Statement of Claim alleging a failure by Ballina Island Resort Pty Ltd and Matthew Robert Laurie to comply with a Notice to Produce in respect of records and documents issued by the Fair Work Ombudsman on 26 August 2009. The alleged failure is said to be a contravention of s.712(3) of the Fair Work Act. It is alleged that Mr Laurie is a director of Ballina Island Resort Pty Ltd and that he was involved in the company’s contravention. The Fair Work Ombudsman issued the Notice to Produce in order to investigate a complaint from Kerrie Elizabeth Eddy, a former employee of Ballina Island Resort, who alleges that she was not given payslips for a six-week period during July and August 2009.
In the Defence filed on behalf of the Respondents on the 14 May 2010, it is claimed that the Fair Work Inspector, Jason Rhodes, extended the time to produce until 23 September 2009 and that the documents requested were forwarded by Mr Laurie on 21 September 2009 by mail to Post Office Box 2151, Coffs Harbour, New South Wales. The argument being advanced on behalf of the Respondent is they have a defence for the noncompliance under s.712(3) and (4) of the Fair Work Act that:
(3) A person who is served with a Notice to Produce must not fail to comply with the Notice.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(4) Subsection (3) does not apply if the person has a reasonable excuse.
The significant issue is in respect to the interpretation and operation of the term reasonable excuse as:
a)The term is not defined in the Fair Work Act;
b)Although the term reasonable excuse appears in s.819(2) of the Australian Workplace Relations Act 1996 in respect to a factor to respond to a Notice to Produce with the specified period contained in the Notice (s.169(3) and (4)) there is no definition of these terms; and
c)There have been no prior decisions in respect of this term under the operation of the Fair Work Act.
Section 712 does not require in terms of a reasonable excuse to be provided within the prescribed timeframe for compliance in the Notice.
a)The High Court authority advanced to address the interpretation of the term is found in the criminal jurisdiction; and
b)The explanatory memorandum for the Fair Work Bill 2008 does not provide any guidance as to the insertion of and meaning to be proscribed to the phrase ‘reasonable excuse’.
I note the detailed submissions by Ms Raper in respect to the reasonable excuse at [31] – [34] above. Both parties have referred to the decision Taikato v R (1996) 139 ALR 386 where the Appellant, Mrs Taikato was convicted in Liverpool Local Court of an offense under s.545E of the Crimes Act 1990 NSW. The defence of a reasonable excuse was advanced in her defence. Mrs Taikato was carrying a small pressure pack spray can in her handbag when she was stopped in a public place and questioned by police in respect to another matter and one in which she was not in any way involved. The can was enclosed in a leather type case with a cap covering its top. When questioned, Mrs Taikato said that she did not know what was in the can but that she bought it to spray at someone if they ‘attacked her’. She added that she had never used it. When analysed it was found that the spray can contained formaldehyde. Mrs Taikato was therefore charged and convicted with the offense under s.545E of the Act. Mrs Taikato then appealed to the Supreme Court of New South Wales, Criminal Appeals. The Court held that the defence was not established on the proper construction of the section.
Mr Taikato then applied to the High Court for special leave which was granted. Their Honours Brennan CJ, Toohey, McHugh and Gummow JJ at 464 where their Honours state:
The term “reasonable excuse” has been used in many statutes and is the subject of many reported decisions. But decisions on other statutes provide no guidance because what is a reasonable excuse depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of “reasonable excuse” is an exception. One purpose of s 545E is to protect the public from the use of certain dangerous weapons which are analogous to, but not as dangerous as, guns. It strikes at the person who goes into a public place armed with such a weapon. To achieve this purpose it uses language which arguably catches some pharmaceutical and domestic items that are most unlikely to be used to cause harm to members of the public even when they are carried in a public place. Without a defence of reasonable excuse or lawful purpose the reach of the section would be intolerable in a free society. But having regard to the width of the language of s 545E(1) and its evident purpose, determining what constitutes a “reasonable excuse” is not easy.
18 See, for example, Clough v Leahy (1904) 2 CLR 139 (refusal of witness to be sworn without reasonable excuse); R v Lichaa (1980) 3 A Crim R 355 (reasonable excuse for possession of drugs); Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385 ; 57 ALR 751 (reasonable excuse for failure to produce documents); Ganin v NSW Crime Commission (1993) 32 NSWLR 423 (reasonable excuse for refusal to answer question); MacDonald v Australian Securities Commission (1994) 120 ALR 515 (failure without reasonable excuse to comply with Notice to produce issued under the Australian Securities Commission Act 1989 (Cth)); R v Hill (1994) 74 A Crim R 59 (found in a place reasonably suspected of being used for the purpose of prostitution without reasonable excuse); Conners v Craigie (1994) 76 A Crim R 502 (reasonable excuse for offensive language)19 Wong Pooh Yin v Public Prosecutor [1955] AC 93 at 100
Mr Radburn referred the Court to the reasons of Gaudron J where her Honour stated:
A reasonable excuse is no more or less than an excuse which would be accepted by a reasonable person. It is different from a lawful excuse but, as has already been noted, it is difficult to conceive of an unlawful purpose which would constitute a reasonable excuse. Reasonableness provides a test which is well-known in both criminal and civil law and, though it may involve a judgment of degree, has a ready application in widely differing circumstances. The fact that the test of reasonableness frequently involves a question of degree so that minds may differ upon the answer does not relieve a tribunal of the duty to apply the test where that is the test laid down and does not justify confining its scope for the sake of greater precision or certainty. That is particularly so where the test is contained in a provision which is intended to define the circumstances amounting to a defence in a criminal prosecution.
The Court was also referred to s.155 of the Trade Practices Act 1974 which confers extremely wide powers on the Australian Competition and Consumer Commission to investigate possible breaches of the Trade Practices Act by requiring information and documentation to be provided to it. The learned authors of Millers Annotated Trade Practices Act, Australian Competition and Consumer Law, Thompson Reuters, 31 Edition 2010 [1.55.25] considers the issue on the basis of a Burdensome Notice. The mere fact that compliance with s.155 Notice would be burdensome would not invalidate the Notice nor would objective harshness or unreasonableness constitute an independent ground of invalidity.
It is only if harshness, oppressiveness or unreasonableness is such as to warrant the conclusion that the requirement to provide information or documentation could not have been imposed in good faith or could only have been imposed for a collateral purpose or with regard to the burden imposed on the recipient that will resort in invalidity: Pyneboard Pty Ltd v TPC [1983] HCA 9; Riley McKay Pty Ltd v Bannerman (1977) 31 FLR 129. The author notes that the Australian Competition and Consumer Commission should administer the Act in such a way as to not impose on a person or company a burden completely disproportionate to the value of the information sought: Riley MacKay.
A more direct Parliamentary intention is found in the Parliamentary Explanatory Memorandum for the National Consumer Credit Protection Bill 2009 where it makes reference to the term reasonable excuse at cl.877 which states:
Failure of an examinee to comply with a requirement to take an oath or make an affirmation that the statements that the examinees make are true is an offense of strict liability except to the extent that the person has a reasonable excuse [Part 6-6, Division 2, sub-section 290(1) and (4)]. The defendant has the burden of establishing that they had a reasonable excuse for non-compliance as this matter is particularly within the knowledge of the defendant. The penalty is 10 penalty units, or 3 months imprisonment or both [Part 6-6, Division 2, sub-section 290(2)].
There are a further large number of examples where the defence of “reasonable excuse” is addressed in very similar terms.
The learned authors DC Pearce and RS Geddes in the publication Statutory Interpretation in Australia, 6th edition, Lexis Nexus Butterworths set out the key elements in respect to the Court’s obligation in interpreting the language adopted by the legislative draftsman. It is noted in [70] above there is little assistance provided to the Court in respect to the interpretation and operation of the term “reasonable excuse” as contained in s.712(4) of the Fair Work Act.
It does not matter how obscure an Act or other legislative instrument might be, it is the inescapable duty of the Court’s to give it some meaning: Scott v Moses (1957) 75 WN (NSW) 101 at 102; Vanit v R (1997) 190 CLR 378 per Kirby J at 394; Whittaker v Comcare (1998) 86 FCR 532 at 543. I note that this duty cannot be abrogated by agreement between the parties that involves expressly or by implication of some assumption as to the meaning of the legislation, although this has not been the subject of any submission before me.The learned authors provide the following guidance as to the approach in determining the meaning of undefined terms.
a)The Court cannot be bound by the interpretation placed on like words in other legislation by another Court. Since the latter Court was only saying what the words before it meant, this decision cannot be conclusive as the meaning of another similar provision. Other decisions may be of assistance, but they cannot remove from a Court the obligations to seek the meaning of an Act for itself: Ogden Industries Pty Ltd v Lucas [1978] AC 113.
b)Courts have adopted a broad approach that where an Act is curing some “mischief” or is granting a benefit to a person, the Act should be construed generously to ensure that the mischief is remedied or that the person is not denied the promised benefit. What does cause difficulty is where a remedial Act seeks to achieve its end by prescribing certain conduct under threat of a penalty.
c)Words take colour from their surroundings and, accordingly, words of wide significance may well be limited in their context. But at the same time, the Courts, have tended to require such a limitation to be demonstrated. If general words are used, they will be given their plain and ordinary meaning unless the contrary is shown: Cody v JH Nelson Pty Ltd (1947) 74 CLR 629 per Dixon J at 647. While cases indicate that Courts will be slow to cut down the operation of general words, this presumption is of course rebuttable. The context in which the general words are used will usually have a limiting effect. The Court will interpret general words according to their accepted legal meaning.
d)As a general principle the Courts have pointed out that they are not at liberty to consider any word or sentence as superfluous or insignificant. All words must prima facie be given some meaning and effect: Commonwealth v Baume (1905) 2 CLR 405 per Griffith CJ at 414.
e)Provisions that are intended to limit the scope of words that might otherwise have ambulatory effect can be found in legislation.
The addition of the adverb is intended to avoid argument that the thing in question may come within the operation of the legislation, if it is used in part for the purpose stated.f)In respect to parliamentary and executive materials, the Courts usually draw a distinction between discovering the purpose of an Act or the mischief with which it was intended to deal, and establish parliamentary intention in relation to a particular provision in order to resolve an ambiguity or doubt as to meaning. The general view was that such material might be referred to for the former but not for the latter purpose: Bitumen and Oil Refineries (Aust) Ltd v Commissioner of Government Transport (1955) 92 CLR 200.
g)The enactment of statutory provisions govern the use of parliamentary and executive materials in the interpretation of legislation the focus has shifted to the operation of those provisions. However the common law principles in dealing with the use of such materials continues to have a role notwithstanding the enactment of those provisions. More recently the High Court affirmed that the common law permits the Court to refer both to reports of law reform bodies and to explanatory memorandums to ascertain the mischief to be remedied by a statute: in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 per Brennan CJ, Dawson, Toohey and Gummow JJ at 408.
h)If a word or phrase is not defined in the definition section or the dictionary of an Act it may be helpful to refer to a dictionary for its popular meaning (or meanings) or, where appropriate, its technical meaning (or meanings). For the latter, specialist dictionaries such as legal dictionaries may be of assistance, R v Peters (1886) 16 QBD 636 per Lord Coleridge at 641.
i)Courts are prepared to look at prior statutory provisions dealing with the same subject matter in order to enable them to interpret a current statute. This is slightly different from looking at statutes “in pari materia” where current statutes in the same terms are looked for interpretation purposes. The intention here is that the Court will have regard to the history of the legislative scheme in order to enable it to work out what the legislation was intended to achieve.
j)Reference may be made to similar statutes within the same jurisdiction in ascertaining the meaning of an Act before the Court. The “in pari materia” principle extends to statutes in different jurisdictions.
k)His Honour Sugerman J cast doubt on the use that could be made of the definition of a word or phrase in a statute in the interpretation of that word or phrase in a similar statute in which it was not defined. He considered that attachment of a meaning to a word in the interpretation clause of a statute very commonly involved some artificial extension or limitation of the natural meaning of the word for the purposes of the statute. Accordingly, statutory definitions depend upon their context and little benefit was to be arrived in the consideration of the meaning of the defined word for the purposes of another statute: M Collins & Sons Pty Ltd v Bankstown Municipal Council (1958) 3 LGRA 216.
l)The Noscitur a sociis rule reflects the philosophy as the general approach of reading the Act as a whole. When writing, a person assumes that a reader will not read the document word by word but will look at the whole of the phrase or section. The Courts have recognised this and when ascertaining the meaning of a word have in many cases paid attention to the context in which the word appears: Avondale Motors (Parts) Pty Ltd v Federal Commissioner of Taxation (1971) 45 ALJR 280 per Gibbs J at 283 where His Honour states:
The meaning of a phrase like that of any other ambiguous expression, depends on the context in which it appear.
In the absence of much of the material identified by the authors Pierce and Geddes indicate that to the interpretation of the term reasonable excuse requires a “noscitur a sociis” approach to be adopted.
There are a number of factors that assist in this interpretation:
a)The intention (or lack of, in this case) expressed in the Parliamentary Memorandum;
b)The compliance period being expressed as not less than 14 days whereas many other compliance provisions are expressed 21 days;
c)The civil penalty quantum is expressed in the same terms as the majority of the penalties for breaches of the Act;
d)The civil penalty provisions applicable to the Fair Work Act are broken into two ‘bands’, those attracting a maximum 30 penalty unit fine and those attracting a maximum penalty of 60 penalty units. Within these ‘bands’, the type of offense is not subject to a gradient in terms of the severity of the breach, but more serious breaches attract the maximum 60 unit penalty.
e)Similar provisions existed in the Workplace Relations Act 1996 (now repealed) in s.169(2) and (4) which placed a similar requirement that documents to be produced in accordance with written Notice served on a person required that person to produce those documents at a specific place within a specific period (not being less than 14 days). Section 819 of the Workplace Relations Act carried a penalty of six months imprisonment for a person guilty of an offense if the person contravenes the requirement made by an inspector under sub-clause 169(2)(b)(iv), 169(2)(c) or 169(4). In s.819(2) states that sub-section (1) does not apply if a person has a reasonable excuse, noting that the defendant bears the evidentiary burden in relation to the matter in sub-section (2) (see sub-section 13.3(3) of the Criminal Code).
Sections 712(3) and 712(4) appear in “Subdivision D – Function and Powers of the Fair Work Inspectors of the Fair Work Act”. Contained within this subdivision are the powers granted to Fair Work Inspectors who exercise compliance with the Act and / or Fair Work Instruments. The Parliament has created a specific compliance body being the Office of the Fair Work Ombudsman and its inspectors whose functions are to investigate potential breaches of the Act.
An essential object of the Act is to ensure that employees receive their minimum entitlements under the Act. When compliance officers are made aware of a potential breach of the Act, Subdivision D provides those officers with powers to enable them to effectively undertake an investigation of that alleged breach. Consequently, the Notice to Produce provides the compliance officers with a mechanism to obtain all relevant documentation to establish whether compliance with the Act has or has not occurred. This section of the Act imposes civil remedy provisions for contravention with a maximum of 60 penalty units.
The list of civil penalties in Chapter 4 – Compliance and Enforcement Part 4 – 1 Civil Remedies, Division 2, Subdivision A, Section 539 provides two maximum penalties set at 60 penalty units and 30 penalty units, respectively. In the case of an individual, the penalty of
60 penalty units results in $6,600.00 penalty and in the case of a body corporate, 300 penalty units resulting in $33,000.00 penalty. In the Act there are a number of obligations imposed on persons that are civil remedy provisions. If a civil penalty provision is contravened, the Fair Work Ombudsman may apply to the Court for an order for a pecuniary penalty and other orders against the alleged wrongdoer. Each section in the Act that is a civil remedy provision is appropriately identified using a legislative note. Contravention of Fair Work Australia orders may also be potentially subject to a criminal penalty under s.675.In the Explanatory Memorandum issued to the House of Representative at the introduction of the Fair Work Bill it states in the outline that the intention was to create a national Workplace Relations System that is fair to working people, flexible for business and promotes productivity and economic growth. The document then recites a long list of anticipated improvements with the introduction of the legislation.
The Explanatory Memorandum indicates that the intention of “Subdivision D” is to identify who has the relevant documents in respect of any particular investigation and that the sections within that part authorised an inspector to require a person to tell them who has the custody of, or access to, a record of document as this information is often a necessary order for inspectors to require the person with custody of, or access to, a record or document to produce the record or document or issue a Notice to Produce to that person. The intention of this is to allow workplace inspections to quickly and accurately identify documents that are relevant to their investigation and therefore facilitate compliance with the Act or a Fair Work Instrument.
Section 709(d) permits an inspector to require a person who has custody of, or access to, a record or document to produce the record or document to the inspector while the inspector is on the premises, or within a specified period. A written Notice to Produce has a specified time for production of documents under this section being a period of not less than 14 days (s.712(2)(c)). It should be noted that where a person is asked to produce documents that are kept electronically, s.25A of the Acts Interpretation Act 1901 provides that the information is to be provided in a form that is capable of being understood by the inspector.
Although the interpretation of statutes can be divided into remedial, penal or fiscal law, the adoption of different handling of these categories has generally been abandoned. The more modern approach being that Courts interpret the Act according to the intention of the Parliament which passed them. However, there is still a distinction between remedial statutes and the ones that contain penal provisions. The Fair Work Act is clearly intended to be a remedial or beneficial statute, but it includes civil and criminal provisions. A remedial or beneficial provision is one that gives some benefit to a person thereby remedies or prevents some injustice. The most commonly cited examples of remedial or beneficial provisions are social welfare, pension legislation, workers compensation, safety legislation and workplace relations. Any legislation that has taken to make a change in existing law or adopt new provisions that are advantageous to an individual or to the public is generally described as remedial or beneficial legislation.
Consequently, the provisions of the Fair Work Act generally would be interpreted in a beneficial manner and therefore interpreted liberally. However, the parts of the Act that are intended to enforce the provisions and provide the individual covered by the Act so as to ensure that they receive the beneficial aspects which is the parliamentary intention, then these parts need to be enforced by interpreting the provisions more strictly. The Court must go further in its enquiries and must ascertain the legislator’s wish and carry out those wishes.
The issue of what constitutes a ‘reasonable excuse’ in other jurisdictions has been considered by the authors of Australian Corporation Law Principles & Practice (2011) LexisNexis online, in respect to the requirements of compliance with ASIC:
If the recipient knows in advance that there will be a reasonable excuse for being unable to comply with the requirement on the day stipulated, that excuse may be given to ASIC and an alternative date set or the reasonable excuse otherwise overcome. Reasonable excuse applies to physical or practical difficulties in production of documents: Australian Securities Commission v Ampolex Ltd (1995) 18 ACSR 735; 14 ACLC 80. Whether legal professional privilege provides a reasonable excuse under the Corporations Act is open to argument: Daniels Corp International Pty Ltd v ACCC (2002) 192 ALR 581; 43 ACSR 189; BC200206568; [2002] HCA 49 .
A reasonable excuse does not invalidate the Notice or requirement. Once the excuse ceases to exist, the obligation of compliance is restored: Leydon v Forrest (1980) 23 SASR 364;
4 ACLR 502; Hopfner v Flavel (1990) 2 ACSR 295 .
It is not a reasonable excuse for a person refusing to answer that the answer might tend to incriminate the person or make the person liable to a penalty: s 68(1). The immunity against use of self-incrimination evidence prevents the information from being admissible in evidence in subsequent proceedings: see [29.215].
Turning to the evidence, the sworn affidavit material of Mr Laurie is that he is the owner-operator of a 40 room motor inn with an affiliation with the Best Western hotel chain and is operated as a small business. He employs a fulltime chef and 7 casual employees. At the time of preparing his affidavit, he states that he is 33 years of age and married with two young children. The motor inn was purchased in November 2007, prior to which he had operated truck stops in various parts of Queensland since the age of 17. In cross-examination, Mr Laurie confirmed that he was also a director of Kambal Proprietary Limited which operates a roadhouse in Warwick – Queensland. That venture employed a manager on a permanent basis and 10 casuals. Mr Laurie indicated that he oversaw the operations of the manager, paid the bills and reviewed the sales statistics.
Mr Laurie’s evidence is that Ms Eddy, who was a casual employee, usually as a receptionist but at times in the bar or the restaurant being rostered to do various shifts. She phoned him at short notice advising that she was not coming to work as it was her intention to attend the races instead. The evidence was uncontested as an affidavit of
Ms Eddy was read but she was not called to give evidence. Ms Eddy did not attend any subsequent rostered shifts from that date and was assumed to have abandoned her further employment.It is not in dispute that the Fair Work Inspector, Jason Rhodes, attended the motel on 26 August 2009, in response to a complaint by Ms Eddy that the Respondents had failed to provide her with payslips during a six-week period prior to her abandoning her employment. There is no dispute that Mr Rhodes personally served Mr Laurie a Notice to Produce and that the Notice clearly identified the documentation required by the Inspector and the consequences should the Notice not be complied with by the specified date on 11 September 2009.
Nor is there any dispute that the Notice to Produce contained the following warning:
Failure to comply with this Notice, without reasonable excuse, is a contravention of sub-section 712(3) of the Act and may attract a maximum penalty of $33,000.00 in respect to the body corporate or $6,600.00 in respect of an individual.
There is no dispute that Mr Laurie failed to respond to the Notice to Produce within the specified time limit.
The reason advanced for this failure is contained in Mr Laurie’s affidavit, (Exhibit R1) at para.31 which states:
As a result of being one staff member down, namely Kerrie Eddy, I was required to work additional shifts. I was doing her shift which meant I was on duty approximately 80 hours per week, and as a result, was unable to collate and send documents requested under the Notice to Produce before the deadline of the
11th of September 2009.Under cross-examination Mr Laurie indicated that Ms Eddy had not been replaced as he could not find anybody suitable to fill the role.
The next discussion between Inspector Rhodes and Mr Laurie is recorded in their respective affidavits in substantially the same terms and there is no dispute between them that the Notice to Produce had not been complied with. Mr Rhodes’ affidavit at para.8 records the conversation in the following terms:
On 16 September 2009 at approximately 1:49pm I rang the landline telephone number for the Employer to speak to
Mr Laurie about the Notice to Produce. After speaking briefly to a female who identified herself to me as ‘Edwina’, I asked to speak to Mr Laurie. Mr Laurie answered the phone and I recognised his voice from when I had personally served him with JR-2. I had a conversation with Mr Laurie.Me: “Matt, I am ringing about the records that were due on 11th of this month”
Matt: “Oh yeah, I’ve been busy and just had a staff member leave. Been working flat out”.
Me: “The requirements to produce the records are very clear, they were due on the 11th. When can you forward these records?”
Matt: “I’ll get on to it”.
Me: “I will expect the records by next Wednesday. The matter may be referred for prosecution”.
Matt: “Oh gee”.
Me: “Matt, we take the non-production of records pretty seriously”.
Matt: “I’ll get started tonight”
I hung up the phone at 1:51pm and at 1:54pm typed up a file note of the above conversation. Annexed and marked JR-4 is a copy of a file note.
Both Inspector Rhodes and Mr Laurie attest to the conversation indicating that the records should be delivered by Wednesday 23 September 2009. Inspector Rhodes states:
I’ll expect the records by next Wednesday. The matter may be referred for prosecution.
And then Mr Laurie stated that Mr Rhodes said:
I’ll give you until next Wednesday to provide the records.
Mr Rhodes, in para.9 of his affidavit (Exhibit A1) explains the purpose of the phone call as being:
9. My intention in having the conversation set out in para.8 [reproduced at 96 above] was to inform Mr Laurie that the employer was in breach of the Notice to Produce but that production of the documents described in the Notice to Produce were still required, and to warn him that the prosecution action could be considered. It was not my intention to convey to
Mr Laurie that I had granted an extension of time to comply with the Notice to Produce.From this point there is a divergence in respect to the evidence of what occurred. Mr Laurie states at para.33 - 34 of his affidavit (Exhibit R1)
33. On or about 21 September 2009 I forwarded the documents requested in the Notice to Produce to PO Box 2151, Coffs Harbour NSW as requested on the Notice to Produce.
34. I did not hear anything further or receive another phone call from Jason Rhodes and accordingly I assumed they had received the documents and everything was fine.
Mr Rhodes’ affidavit evidence at para.10 states:
I did not receive any documents or records from the Employer on or before 23 September 2009 (being the Wednesday following my conversation with Mr Laurie on 16 September 2009).
The affidavit evidence of Mr Rhodes is that he then formally sought from Mr Laurie, a reasonable excuse for not complying with the Notice.
This is clearly set out in his affidavit in paras.11-15 where he states:11. On 7 October 2009 I drafted a letter to Mr Laurie on behalf of the Employer (“the Letter”). Annexed and marked “JR-5” is a copy of the Letter. The Letter requested that the Employer advise if it had a reasonable excuse for not complying with the Notice to Produce.
12. I placed the Letter into a registered post envelope and arranged for my colleague Ben Jenks, administration assistant, to send the Letter by registered post. Annexed and marked “JR-6” is a copy of a “Registered Post and Optional Services” lodgement form completed for the Letter. I recognise the handwriting and signature on the form as that of Mr Jenks.
13. A few days later, I received a registered post Delivery Confirmation for the Letter from Mr Jenks as he was distributing the mail. Annexed and marked “JR-7” is a copy of the ‘Delivery Confirmation – Advice Receipt’.
14. When I received the Delivery Confirmation I identified that the Registered Post No. on JR-7 matched the Registered Post No. on the sticker I had stuck to a copy of JR-5. As soon as I received JR-7 I wrote the words “NTP Letter” on it to distinguish it from Delivery Confirmations I had received from other matters.
15. I have not received any reply to that Letter.
Mr Laurie, in his affidavit (Exhibit R1) at para.36 denies receiving the letter dated 7 October 2009 and at para.37 denies that his signature appears on the Postal Confirmation docket.
36. As to paragraphs 11, 12, 13 and 14 of the affidavit of Jason Rhodes, I deny I received any letter dated 9 October 2009 asking why, in accordance with annexure 5.
37. I further refer to annexure “JR7” and deny that is my signature on the delivery confirmation on the advice receipt.
I note on annexure 7 that registered post articles sent person to person must be signed by the addressee only and I did not sign that document nor did I receive it.During cross-examination of Mr Laurie (transcript p.26-28) the signature on the Postal Delivery Confirmation – Advice Receipt docket is identified as Ms Edwina Rummery, another casual employee of the Ballina Island Motel. An affidavit sworn by Ms Rummery was filed in these proceedings but was not read. Consequently, there is no explanation before the court as to the actions that Ms Rummery took on receipt of the letter to bring it to Mr Laurie’s attention.
In cross-examination on this issue, Mr Laurie gave the following evidence:
Ms Raper: And then you’ll see at JR7, is the delivery confirmation which was received from Australia Post by the Fair Work Ombudsman, saying that this letter had been received at your premises. Do you see that?
Mr Laurie: JR7?
Ms Raper: Yes?
Mr Laurie: The delivery confirmation receipt, yes.
Ms Raper: And you recognise there, in terms of the signature of the addressee or agent, to be the signature of Ms Edwina Rummery; don’t you?
Mr Laurie: Well, it appears that way, yes.
Ms Raper: And so you accept, therefore, that an employee of yours received that letter, namely 7 October letter? Yes. And so you accept, don’t you, that you, in fact, did receive a copy of this letter, dated 7 October?
Mr Laurie: No, that is not – I didn’t receive that letter. I never received that letter. As soon as - the next correspondence that I had was on the 23rd, when I realised something was wrong.
Ms Raper: But you accept, now, that it was received by - at your premises by one of your employees?
Mr Laurie: It looks to be, yes.
Ms Raper: And is there a reason why you omitted to make reference to that in your affidavit?
Mr Laurie: Why I omitted to what, sorry?
Ms Raper: Make reference to the fact that an employee of yours had received that document in your affidavit?
Mr Laurie: I think you’ll find that the first time when I’m looking at that signature is when you pointed it out this morning.
Ms Raper: And it’s the case, though, isn’t it, that you say in your affidavit that that signature is not yours?
Mr Laurie: No, that’s correct.
Ms Raper: And you say that at page 37 of your affidavit. Sorry, paragraph 37 of your affidavit, so this is R1, your Honour. Page 5, paragraph 37. You refer specifically to that annexure, don’t you?
Mr Laurie: I further refer to annexure JR7 and deny that that was my signature on the delivery confirmation, yes.
Ms Raper: But you knew, didn’t you, when you swore this affidavit, that it was the signature of one of your employees, didn’t you?
Mr Laurie: No, I think we just covered that. You pointed that out on the pay sheets about 10 minutes ago, so ‑ ‑ ‑
Ms Raper: And so you took no steps when you were swearing this affidavit to find out whose that signature was?
Mr Laurie: I had a copy of Ms Edwina Rummery’s signature in my filing cabinet when she’s witnessed signatures, and it’s her full name, it’s not a squiggle.
Ms Raper: But you accept, don’t you, that for the purpose of this - preparation of this affidavit, you took no steps to try and identify whose signature that was?
Mr Laurie: Yes, I have everybody’s - I’ve seen people - the only people I associate with is Edwina. So - and the only other person it could’ve been was Kerrie Eddy.
Ms Raper: And you accept, though, don’t you, that from the documents that you provided to the Fair Work Ombudsman, that it’s clear that this signature is the signature of Ms Rummery, don’t you?
Mr Laurie: As far as I was concerned, when I wrote my affidavit, it could well have been an Australia Post employee.
The material that is before the Court establishes that the Notice to Produce dated 26 August 2009 clearly stated that compliance was required by the specified date unless a reasonable excuse was provided. It is not in dispute that the Notice was not complied with by the specified date. The significant confusion in respect of Mr Laurie appears to have occurred during the telephone discussion with Mr Rhodes on
16 September 2009, when he explained the delay was due to his work load as a result of being one casual staff member down. Mr Laurie appears to have formed the view that the verbal explanation for the delay was accepted by Mr Rhodes as the reasonable excuse. He seems to have believed the further oral request to provide the required document by the next Wednesday being 23 September 2009, as confirmation that his explanation for the delay was accepted by Mr Rhodes.Mr Laurie claims that he forwarded the required documents by ordinary postal service to the Coffs Harbour office of Fair Work Australia on 21 September 2009. This claim cannot be supported by any evidence provided by Mr Laurie such as a Registered Post Delivery Confirmation – Advice Receipt or a copy of the accompanying letter. The explanation given by Mr Laurie is that he selected the relevant documents from his files, photocopied them and then returned the originals to the files. I note that this approach is inconsistent with the approach adopted in January 2010 when the payslips were produced by a special computer run.
As at 16 December 2009 when these proceedings were commenced
Mr Laurie had not provided the Fair Work Inspector Mr Rhodes with any form of written explanation that contained a reasonable excuse for not complying with the Notice to Produce and consequently s.712 was breached. Similarly, the documents requested had not been provided despite the claim that they had been forwarded on 21 September 2009. The enquiries carried out by Lucy Elizabeth Madden (Exhibit A6, paras.3-12) confirm this.Mr Laurie appears to be a victim of his own lack of knowledge and understanding of his obligations and duties under the Fair Work Act. Although the relevant sections of the Fair Work Act became effective on 26 May 2009 the obligation which Mr Laurie has breached are not substantially different to those that operated under the previous Workplace Relations Act 1996. The evidence is that Mr Laurie had been involved in small business as an operator of various truck stops in Queensland for approximately sixteen years commencing his career at the age of seventeen. His working experience in the motel industry is more limited having purchased the Ballina Island Motor Inn in November 2007. At Ballina Island Motor Inn there was a permanent cook, a casual breakfast cook, a casual dishwasher, two casual receptionists/waitresses and four casual housekeepers (Exhibit A7).
Mr Laurie also oversees a truck stop in Warwick, Queensland, with one permanent staff and nine casuals (Transcript p.10). Both of these business pursuits involved the employment of staff, the bulk of which were casuals, with some permanents. However, there is no evidence provided as to the extent of this experience and when Mr Laurie became responsible for the employment and supervision of staff.Mr Laurie’s evidence is that he commenced his career at the age of seventeen but there is nothing before the Court as to his educational history. It is not known whether Mr Laurie successfully completed his secondary schooling and no evidence was lead about any further post secondary school educational programmes undertaken. In the absence of this material it must be assumed that Mr Laurie has acquired his knowledge of business practice as what is normally described as “on the job” training and business experience. This is supported by his own comments about the operation of the software package called Payroll Premier which he used for payroll management.
Mr Laurie was dealing with Mr Rhodes who was a sophisticated bureaucrat who possessed a detailed working knowledge of the provisions of the Fair Work Act and fully understood the detailed steps to be pursued to ensure that the provisions of the Fair Work Act were being strictly complied with. This is clearly demonstrated by
Mr Rhodes on his receipt of the complaint by Ms Eddy when he visited the Ballina Island Motor Inn with a prepared Notice to Produce for personal service. That Notice complied strictly with the provisions of the Fair Work Act. Similarly, each subsequent step taken by
Mr Rhodes also complied with the provisions addressing the circumstances where there was a failure to respond to the Notice within the specified time limits.The material before the Court indicated that Mr Laurie did not appear to appreciate the significance or the seriousness of the contents of the Notice. Although Mr Laurie initially acknowledged the personal service of the Notice he appears to have adopted the attitude that it was something that had to be responded to. However, he did not appear to give the Notice any priority over the normal daily operation of the motel in which he was suffering difficulties because of short staffing. The uncontested testimony is that Mr Laurie had no previous dealings with the Ombudsman or Inspectors involving the operation of the motel or his truck stop operations. The visit by Mr Rhodes appears to be the first encounter with anybody involved with the compliance provisions of the Fair Work Act. Mr Laurie does not seem to have appreciated the significance of the visit, personal service and the contents of the Notice to Produce.
The Notice to Produce required the delivery of approximately eighty documents all of which are business records that should be returned and be in the possession of Mr Laurie. A review of the document finally forwarded to Ms Dinnen (Exhibit A7) reveals that the Notice was satisfied by the supply of the following documents:
a)Weekly Banking Reports for Employee Payments (9);
b)Employee Time Sheets (36);
c)NAB National Online, Domestic Funds Transfer Report (9); and
d)Employee Timesheets (3 per page) (25).
In order to comply with the Notice to Produce it would be required that the documents produced be in hard copy form, to be extracted and photocopied. Alternatively, if documents are normally retained in soft copy form in a computer system then a special run would be required to produce the relevant documents. This is permitted under the provisions of s.25A of the Acts Interpretation Act 1901 provided the software has this capacity. Mr Laurie’s evidence is not clear on this point as the copies of the payslips ultimately sent to Ms Dinnen did not accurately reflect the situation for the relevant period. This may be due to Mr Laurie’s lack of understanding in operating the system or it may reflect that the system does not have that capability. If this is the situation then hard copies should have been retained. Then, in order to comply, it would involve the extraction and photocopying of the relevant payslips.
Mr Laurie’s failure to satisfy the Notice to Produce and in the absence of a formal reasonable excuse he has breached s.712 of the Fair Work Act. I accept the submission made by Ms Raper at [36] – [38] above in support of this view.
Failure to provide payslips
This claim is advanced on the basis that Ms Eddy made a complaint to the Fair Work Ombudsman that she did not receive a payslip for a period of six weeks. It is not in dispute that the established practice was that payslips for all employees were placed in a drawer in the front office of the motel and that each individual collected their own payslips at their own convenience. This practice was used by the previous owners, identified as Pat and Paul (Exhibit A3, para.2), and adopted by Mr Laurie when he purchased the motel in November 2007. There was no evidence advanced to suggest that this method of distribution of payslips had been the source of any complaint or dispute in the past by any employee. It is noted that Ms Eddy had worked for the previous owners and continued when Mr Laurie took control of the operation. Nor is there any evidence that Ms Eddy had any previous complaint about the receipt of payslips during the term of her employment.
Ms Raper in her submission invites the Court to draw the inference that the payslips were not generated for Ms Eddy during the relevant period of six weeks. However, the material before me does not support this proposition. Mr Laurie, during his cross-examination indicated that he used a software payroll package called Payroll Premier (transcript p.23-24). The tone of his evidence would suggest that it caused him some difficulty that he did not have a complete mastery of the product. Although no specific evidence was given on this point it is appropriate to assume that Mr Laurie, or one of his staff through some data entry procedure, manually loaded details from the individual timesheets prior to the weekly payroll run. The payroll run produced various reports, some of which appear in Exhibit A7. One of these standard reports are individual employee payslips. When Mr Laurie attempted to reproduce payslips in answer to the Notice to Produce it was obvious that he experienced difficulty in preparing the document with the correct year-to-date amounts. He was emphatic that individual payslips could not be amended or adjusted (transcript p.23-24).
In the circumstances and in the absence of any evidence or submissions to the contrary, I believe it is appropriate to accept that when a payroll run is executed using the Payroll Premier package, that payslips would be produced for all employees. The reports appearing at Exhibit A7 indicate that Ms Eddy was in receipt of her salary which was deposited into her bank account electronically. There has been no suggestion that Ms Eddy did not receive her wage entitlements during this period. Consequently, I am satisfied that payslips for Ms Eddy were produced automatically by the Payroll Premier package and that the inference that they were not generated cannot be sustained.
Similarly, there is no submission supported by relevant authorities that indicate that payslips must be given to an employee in any particular way. Section 536 of the Fair Work Act states that “an employer must give” the relevant payslips to employees, but the method is not defined. Common experiences demonstrate that there may be different methods of distribution adopted by different work environments. In some cases this may involve a department supervisor handing the payslips to each individual employee while others may involve payslips being left in pigeon holes through to postal delivery, particularly when the employee seldom visits the employer’s place of business. The distribution of payslips has changed significantly with the introduction of electronic transfer of wages and salary.
The problem for Mr Laurie is the informality of the method of distribution of the payslips. The procedure of placing the payslips in the drawer in the front office for collection by the individual employees at their own convenience deprives Mr Laurie of any supervision or control as to who actually collects the document. This criticism must be tempered by the fact that Mr Laurie is running a small business with minimum work force. The majority of employees are casuals, working various shifts and with varying work patterns. A number of the employees may not necessarily visit the motel within the 24 hour period of the nominated pay day. For a substantial period of Ms Eddy’s employment she has made no complaint that the method for distribution of payslips has resulted in her not receiving her personal payslip on time.
Unfortunately, the comment allegedly made by Mr Laurie to Mr Eddy where it is claimed he stated:
It’s just a piece of paper, what do you want it for?
This appears in the affidavit of Ms Eddy (Exhibit A3, para.22) but she was not called to be cross-examined on this issue. Also in light of the evidence given by Mr Laurie who was subjected to cross-examination, although not on this point, he states that Ms Eddy notified him at a very late stage that she did not intend to attend her shift because she was going to the races and abandoned her employment at this point. Consequently, I gave Ms Eddy’s evidence little weight.
There is not other claim about the content or form of the payslip such as those encountered by his Honour Federal Magistrate Burnett in Fair Work Ombudsman v Aussie Little Auction Houses Pty Ltd [2010] FMCA 806 indicates the requirements stipulated under the former regulations in relation to payslips:
[74] When one looks to the contents of pay slips as required by reg 19.21, there are three matters which are critical, among others, for a pay slip to satisfy the definition. First, the pay slip must specify the date on which the payment, to which the payslip relates, was made. Second, it must specify the period to which the payslip relates and if the employee is paid at an hourly rate, the ordinary hourly rate.
[75] By reference to the pay slips (and it does not particularly matter which one is looked to, but for the purposes of this exercise I have looked at the payslip for the week ending 25 June 2008) it can be seen that there is an omission in respect of those three items in the wage record. It follows that even though the employee may have signed something, at least as a receipt of pay, the wage record itself is deficient in that it does not identify the date to which the payment of the payslip relates. Nor does it specifically identify the period to which the payslip relates or the hourly rate.
[76] While particulars of those matters might be distilled from an examination of the wage record, that distillation does not, in my view, satisfy the requirements of reg 19.21. Which requires it to be formally expressed in a document, in a manner comprehensible by the employee. It follows that there was a failure to provide the employee with a payslip and accordingly there has been a contravention of that provision.
The other argument advanced against Mr Laurie is that he did not retain copies of the payslips but Mr Laurie had elected to retain this material electronically which he is entitled to do under the provision of s.25A of the Acts Interpretation Act 1901. Mr Laurie did fail to reproduce copies of the relevant payslips when he eventually responded to the Notice to Produce however this may have been due to his lack of experience with the Payroll Premier package.
On the material before the Court I am not satisfied that a claim that s.563 of the Fair Work Act has been breached and this element of the proceeding should be dismissed.
Penalty
The written submission of Ms Raper contend that there are three main purposes for the imposition of a penalty, being;
a)Punishment, which must be proportionate in the circumstances of each contravention, is important;
b)Deterrence, both personal and general. In respect to personal deterrence, an assessment must be made of the risk of reoffending, taking in the following factors:
i)Ballina Island Resort is still a registered corporation operating its business and employing other employees.
ii)Mr Laurie is currently a director and secretary of two companies; and
iii)Mr Laurie failed to cooperate fully with the Fair Work Ombudsman in its investigation and its attempts to ensure compliance with workplace laws.
In respect to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend. The penalty therefore should be of a kind that would, by like minded persons or organisations: Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93] – [94]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 per Graham J at [54].
c)Rehabilitation.
Ms Raper referred the Court to the role of general deterrence in determining the appropriate penalty and the comments of his Honour Lander J in Ponzio v B & P Caelli Constructions Pty Ltd at [93]:
There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general.
In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979)
22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.
In CPSU v Telstra Corporation Ltd (2001) 108 IR 228 per Finkelstein J at [231] where his Honour states:
…even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law's disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct.
The contravention of s.712(3) concerns the power of the Fair Work Inspectors and their ability to ensure effective compliance with minimum entitlements. Ms Raper submits that a penalty should be imposed on a meaningful level so as to deter other employers from committing similar contraventions and to emphasise the importance of assisting and cooperating with the Fair Work Inspectors in their investigations.
Ms Raper referred the Court to various authorities that have considered factors that may be relevant to the assessment of penalty. In Kelly v Fitzpatrick (2007) 166 IR 14 per Tracey J at [14], his Honour adopted from the judgment of his Honour Mobray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [26] – [29]. This latter decision concerned the operation of the Pangaea Bar and Restaurant at Manuka in the Australian Capital Territory, contains a convenient checklist which does not proscribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion: Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 at [11]; Australasian Ophthalmic Supplies Pty Ltd v McAlary-Smith (supra) at [91]. In A & L Silvestri Pty Ltd v CFMEU [2008] FCA 466 per Gyles J at [6], his Honour observed the discretion in fixing a penalty is at large and there is no mandatory statutory criteria.
Ms Raper submits that there has been a single contravention of s.712(3) in that one decision was made by Mr Laurie not to respond to the Notice to Produce which required documents to be delivered up by the date stated on the Notice. The failure of Mr Laurie to produce the documents or records requested in the Notice was a wilful (or at least negligent) breach. Such a breach is very serious as it stifles the capacity of the Fair Work Ombudsman to conduct its legitimate investigation of a complaint made by a member of the public. One of the principle objects of the Fair Work Act, s.3(b), is to ensure a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions for all employees. In order to enforce these minimums, Fair Work Inspectors must be able to exercise their compliance powers effectively. The failure of Mr Laurie to comply with the Notice prejudiced Mr Rhodes’ investigation of Ms Eddy’s claim.
Ms Raper submits that the substantial penalty set by the legislation in relation to the contraventions of provisions such as 712(3) reinforce the importance placed with compliance with minimum standards.
Mr Laurie was personally served with the Notice and, as Director of Ballina Island Resort Pty Ltd had access to the documents and records requested by the Fair Work Ombudsman. Further, as owner and manager of Ballina Island Resort Pty Ltd, Mr Laurie was responsible for complying with this Notice. Employees should not be left with the impression that they may breach their obligations under the Fair Work Act or other industrial instruments: Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at [27] – [29]. Ms Raper informed the Court that the Fair Work Ombudsman does not propose a figure for the penalty to be imposed for the contravention but submits that the penalty should be in the low to mid range.
As a guide in determining penalty, I refer to the Pangaea summary that appears in his Honour Tracey J’s decision in Kelly v Fitzpatrick (supra) at [14] where it states:
[14] In Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Mowbray FM identified “a non-exhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of the penalty”. Those considerations were derived from a number of decisions of this Court. I gratefully adopt, as potentially relevant and applicable, the various considerations identified by him. They were:
• The nature and extent of the conduct which led to the breaches.
• The circumstances in which that conduct took place.
• The nature and extent of any loss or damage sustained as a result of the breaches.
• Whether there had been similar previous conduct by the Respondent.
• Whether the breaches were properly distinct or arose out of the one course of conduct.
• The size of the business enterprise involved.
• Whether or not the breaches were deliberate.
• Whether senior management was involved in the breaches.
• Whether the party committing the breach had exhibited contrition.
• Whether the party committing the breach had taken corrective action.
• Whether the party committing the breach had cooperated with the enforcement authorities.
• The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
• The need for specific and general deterrence.
The parties accepted that these considerations should guide the exercise of my discretion in the present proceeding.
The nature and extent of the conduct
In this matter there is a single breach of s.712(3) being the failure of Mr Laurie and his corporate structure Ballina Island Resort Pty Ltd to comply with the Notice to Produce and not being able to provide a reasonable excuse for the delay as provided in s.712(4). It is the nature and the form of this expression reasonable excuse that is central to this breach. The lack of sophistication and understanding of the term reasonable excuse by Mr Laurie resulted in him forming the view that is informal explanation given to Mr Rhodes during the telephone discussion on the 16 September 2009 satisfied the requirements of the Fair Work Act and the conditions of the Notice.
The formal statutory defence of reasonable excuse was first raised in the Defence filed on 14 May 2010, at a time when Mr Laurie was legally represented. Prior to this time and especially at the time of the telephone discussion between Mr Rhodes and Mr Laurie on
16 September 2009, I do not believe that Mr Laurie had any comprehension of a statutory defence but rather had the understanding that a reasonable excuse was being used in the common English usage absent of any significant legal meaning.
Circumstances in which the conduct took place
Mr Laurie operated the 40 room motel as the owner operator in what is described as a small business and employs a small casual staff.
Mr Laurie commenced his work life at the age of 17 when he operated truck stops in various parts of Queensland. He purchased the motor inn in November 2007. When he prepared his affidavit for these proceedings in June 2010 he was 33 years of age, married with two young children. There is no evidence as to what academic levels he achieved and no evidence of post secondary school educational programs. Although Mr Laurie used computer software in the administration of the motel operations, his evidence demonstrates a considerable lack of sophistication in understanding of its use. He has no previous criminal antecedence or previous dealings with the Fair Work Ombudsman or their predecessors. At the time he was served with the Notice to Produce he did not retain any legal services or obtain advice. At the time of personal service of the Notice to Produce the evidence before the Court strongly suggests that Mr Laurie did not grasp the significance of the request or his strict legal obligations.
Mr Laurie in his affidavit evidence clearly states that it was not until
22 December 2009 when he received a Statement of Claim filed in this Court that he realised that there was a problem. He made contact with a senior lawyer at the Australia Government Solicitor allocated to these proceedings. After various correspondence and discussions between Mr Laurie and the solicitor, Deborah Dinnen, that it was suggested that he should seek legal advice. It was not until April 2010 that he sought and obtained legal representation at which stage this matter had already been subject to two direction hearings.
The nature of the Statutory Offense contained in s.712(4) of the Fair Work Act was clearly not understood by Mr Laurie which is abundantly apparent from the evidence that has been given in respect of the telephone discussion on 16 September 2009 (Exhibit R1, para.32).
Nature and extent of loss or damage
The Fair Work Ombudsman was in receipt of a claim that the provisions of the Fair Work Act have been breached and the Fair Work Inspector was allocated to investigate. The Fair Work Act prescribes the extent of compliance powers of the Fair Work Inspectors to ensure adherence to the Act and/or Fair Work Instruments. The highest need for this assistance would be the area of small business, especially during the introductory phase of the new legislation. In circumstances where the inspector meets resistance or lack of cooperation. In order for inspectors to determine whether the Acts or instruments are being complied with, s.712(1) provides inspectors with the power to require persons to produce relevant records or documents. The initial function of the Ombudsman is to provide information and advice on the Commonwealth workplace laws to employees and employers. Significantly, there is no element of this claim that Ms Eddy had been underpaid or had yet received payment for any period of work that she had performed.
Similar previous conduct
There is no evidence of any previous breach of any award or Act.
Whether the breaches were properly distinct or arose out of one course of conduct
The breach is attributable to the failure of Mr Laurie to comply with the Notice to Produce by the specified date. This course of action appears to be attributable to Mr Laurie’s lack of understanding initially of the strict requirement to comply with the Notice and secondly, with the mistaken belief that he had satisfied the statutory defence of reasonable excuse. I am satisfied this is due to his lack of understanding of these concepts and issues together with the failure to seek legal advice. This observation must be seriously tempered by
Mr Laurie’s complete ignorance of the seriousness of the circumstances which he faced.
Size of Respondent’s business
As discussed above, Mr Laurie is an under resourced businessman. There is no evidence of any external assistance such as accounting or financial services. The affidavit and oral evidence of Mr Laurie clearly demonstrates that he has a very demanding personal commitment to maintain the operation.
Whether the breaches were deliberate
I am satisfied that the failure to comply with the Notice to Produce was not deliberate but rather a failure to understand the significance of the request and the mistaken belief that his oral response to the Inspector was a satisfactory explanation making the defence and that an extension was granted.
Involvement of senior management
Mr Laurie is solely responsible for all aspects in the day-to-day administration of the business. Unfortunately, Mr Laurie when he finally grasped the significance of these proceedings on the receipt of the Statement of Claim commenced a cooperative dialogue with the Australian Government Solicitors to comply with the requests made by the Inspector.
Corrective action
When Mr Laurie finally comprehended the significance of the proceedings he demonstrated a willingness to assist in the resolution of the issues. I note the function of the Fair Work Ombudsman as defined in the Act is stipulated in s.682:
682. Functions of the Fair Work Ombudsman
(1) The Fair Work Ombudsman has the following functions:
(a) to promote:
(i) harmonious, productive and cooperative workplace relations; and
(ii) compliance with this Act and fair work instruments;
including by providing education, assistance and advice to employees, employers, outworkers, outworker entities and organisations and producing best practice guides to workplace relations or workplace practices;
(b) to monitor compliance with this Act and fair work instruments;
(c) to inquire into, and investigate, any act or practice that may be contrary to this Act, a fair work instrument or a safety net contractual entitlement;
(d) to commence proceedings in a court, or to make applications to FWA, to enforce this Act, fair work instruments and safety net contractual entitlements;
(e) to refer matters to relevant authorities;
(f) to represent employees or outworkers who are, or may become, a party to proceedings in a court, or a party to a matter before FWA, under this Act or a fair work instrument, if the Fair Work Ombudsman considers that representing the employees or outworkers will promote compliance with this Act or the fair work instrument;
(g) any other functions conferred on the Fair Work Ombudsman by any Act. (Emphasis added)
In a number of Australian Government Publications this aspect of the Act emphasised above appears prominently in those documents.
For example:
The Fair Work Ombudsman commenced operation on 1 July 2009.
What is the role of the Fair Work Ombudsman?
The role of the Fair Work Ombudsman is to promote harmonious, productive and cooperative workplaces and where necessary, compliance with workplace relations laws. The Fair Work Ombudsman will also provide information and advice on Commonwealth workplace laws to employees, employers, outworkers, outworker entities and organisations. (emphasis added)
At this relatively early stage of the introduction of this legislation (approximately two months) and in light of the clearly stated objections (set out above) it would seem that the more appropriate approach by the Inspector would be to enquire as to the practice of payslip distribution adopted by Mr Laurie and provide some suggestion on how the system could be improved to meet with the requirements of the Fair Work Act. Especially in circumstances where there was no denial of any employee wages or superannuation entitlements, award conditions or any other employment arrangements that this new Act was being so widely promoted to cure.
However, there is no evidence, submissions or even a suggestion that this avenue has been pursued by the Fair Work Inspector. This small business owner, and many like him, do not appear to have received any assistance in establishing any form of compliance program to satisfy the Act. The approach taken by the Inspector was to immediately commence a paper trail with an intention to proceed to a strict compliance approach and prosecution. This appears to be contrary to the stated intention to provide information and advice on Commonwealth workplace laws to … employers. It would appear that the motivation of the Fair Work Ombudsman and his Inspectors were focused on some other objectives other than those expressed in the Fair Work Act and the material published at the time of introduction of the Act claiming to revolutionise the industrial law regime in this country. Mr Laurie’s uncontested evidence is that he had not previously breached any Award or Industrial Act in his sixteen year business career. The first time that any form of government official involved with industrial legislation visits his premises is to personally serve a statutory demand that carries very significant penalties for non compliance.
Cooperation with enforcement authorities
Initially it appears that Mr Laurie did not appreciate his obligations to comply with the Notice to Produce. On the receipt of the Statement of Claim it appears that Mr Laurie, at that stage, realised the significance of his breach and took a number of steps in attempt to rectify his position. Unfortunately, he did not have the benefit of legal advice until the proceedings were advanced to a stage where directions for a final hearing were being made.
Deterrence
As this breach occurred as a result of ignorance of the operative provision of recently introduced legislation and in the absence of assistance to small business operators to ensure that operators comply, the concept of deterrence should be minimal
Additional considerations
Taking into account the issues of punishment, deterrence and rehabilitation I have formed the view that this breach was not the result of any deliberate, wilful or premeditated action by Mr Laurie but rather a result of a small businessman struggling with the management and administration of his business venture combined with a limited educational background and the apparent ignorance of the provisions of the Fair Work Act and has not offered any information or advice on how he could comply.
Within the last five years there had been very significant changes in the philosophy and direction of Industrial Law. This breach took place within 1 month of the introduction of the Fair Work Act. Many large well resourced organisations have breached provisions of the Act since its introduction so it is not surprising that a small, under resourced owner-operator business is not fully conversant with the provisions of the Fair Work Act.
Quantum of Penalty
Having regard to the forgoing principles, I consider that the appropriate penalty for the breach of s.712 by Ballina Island Resort Pty Ltd be $500.00 with the penalty payable to the Commonwealth. Although
Mr Laurie has also breached s.712 I am satisfied that the penalty imposed on the corporation and the expense involved in defending these proceedings is an adequate penalty.
I certify that the preceding one hundred and fifty-three (153) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Date: 1 July 2011
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