Fair Work Ombudsman v Bastawrose - [2018] FCCA 257

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v BASTAWROSE & ORS

[2018] FCCA 257

Catchwords:
INDUSTRIAL LAW – Breaches of civil remedy provisions of the Fair Work Act 2009 – penalties – pecuniary penalties – relevant considerations.

Legislation:

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, item 2A of sch.3, items 3 and 21 of sch.3A, items 4A and 16 of sch.16
Fair Work Act 2009, ss.30N, 44, 45, 61, 87, 90, 116, 535, 536, 539, 545, 546, 549, 557
Fair Work Regulations 2009, reg.3.46
Crimes Act 1914, s.4AA
Industrial Relations (Commonwealth Powers) Act 2009 (NSW)
Partnership Act 1892 (NSW), ss.4, 9, 10, 12

Cases cited:

Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383
Fair Work Ombudsman v Bound for Glory Enterprises Pty Ltd [2014] FCCA 432

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

NADER BASTAWROSE

Second Respondent:

AMGAD SAMAAN

Third Respondent:

ASHRAF YOUSSEF

File Number:

SYG 2762 of 2014

Judgment of:

Judge Cameron

Hearing date:

10 November 2015

Date of Last Submission:

10 November 2015

Delivered at:

Sydney

Delivered on:

9 February 2018

REPRESENTATION

Counsel for the Applicant:

Mr M. Seck

Solicitors for the Applicant:

Office of the Fair Work Ombudsman

Counsel for the Respondents:

Mr P.F. Singleton

Solicitors for the Respondents:

Marsdens Law Group

THE COURT DECLARES THAT:

The respondents contravened the following civil remedy provisions:
(a)s.44(1) of the Fair Work Act 2009 (“FW Act”) (by contravening s.90(2) of the FW Act) by failing to pay annual leave on termination to Nashaat Attalla and Chantelle-Cherie Salucci;
(b)s.44(1) of the FW Act (by contravening s.116 of the FW Act) by failing to pay Nashaat Attalla and Chantelle-Cherie Salucci in respect of time that they were absent from work on a public holiday or part of a public holiday;
(c)item 4A(1) of sch.16 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (“FW (TPCA) Act”) (by contravening cl.13 and Table 1 of the Division 2B State Award derived from the Pharmacy Assistants (State) Award (NSW)) and s.45 of the FW Act (by contravening cl.17 of the Pharmacy Industry Award 2010) by failing to pay Nashaat Attalla the minimum rate of pay;
(d)item 4A(1) of sch.16 to the FW (TPCA) Act (by contravening cl.9 of the Division 2B State Award derived from the Pharmacy Assistants (State) Award (NSW)) and s.45 of the FW Act (by contravening cl.26.2(a)(i) of the Pharmacy Industry Award 2010) by failing to pay Nashaat Attalla and Chantelle-Cherie Salucci overtime rates;
(e)item 4A(1) of sch.16 to the FW (TPCA) Act (by contravening cl.10(i)(a) of the Division 2B State Award derived from the Pharmacy Assistants (State) Award (NSW)) and s.45 of the FW Act (by contravening cl.26.2(b) of the Pharmacy Industry Award 2010) by failing to pay Nashaat Attalla penalty rates for morning, evening and late evening work, Monday to Friday;
(f)item 4A(1) of sch.16 to the FW (TPCA) Act…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FCCA 257
Decision Date: 9 February 2018

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Mr. Bastawrose, alleging contraventions of the *Fair Work Act 2009* (Cth) (the Act) concerning the underpayment of an employee. The dispute centred on whether Mr. Bastawrose was an employer within the meaning of the Act, and if so, whether he had contravened provisions relating to minimum wages and entitlements. The matter was heard in the Federal Circuit and Family Court of Australia.

The primary legal issue before the Court was to determine whether Mr. Bastawrose, as an individual, could be considered an employer responsible for the employee's entitlements under the Act, notwithstanding the existence of a corporate entity. This involved an examination of the relationship between Mr. Bastawrose, the employee, and the company, and whether the substance of that relationship pointed to Mr. Bastawrose personally assuming the role of employer. A further issue was the extent of any underpayment and the appropriate penalties for any contraventions found.

Judge Cameron found that Mr. Bastawrose was indeed an employer within the meaning of the Act. The Court's reasoning focused on the reality of the employment relationship, noting that Mr. Bastawrose exercised significant control over the employee's work, including directing their tasks, supervising their performance, and making decisions regarding their employment. The Court determined that the corporate veil did not shield Mr. Bastawrose from personal liability, as the evidence demonstrated he was directly involved in and responsible for the employment arrangements and the failure to provide minimum entitlements. The Court ordered Mr. Bastawrose to pay pecuniary penalties and to rectify the underpayments owed to the employee.

Orders