Fair Work Ombudsman v Bedington

Case [2012] FMCA 1133


FEDERAL MAGISTRATES COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v BEDINGTON [2012] FMCA 1133
INDUSTRIAL LAW – ‘Sham’ contract of employment – agreed statement of facts – admission of breach – considerations regarding penalty – agreed penalty not appropriate – penalty fixed.
Corporations Act 2001
Fair Work Act 2009 (Cth), ss.14(a), 44, 45, 87(2), 90(2), 357(1), 539(2), 545(1), 546(1), 547(2), 550, 550(2), 557, 712
Hair and Beauty Industry Award 2010, cl.33.3
A & L Silvestry Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466
Australian  Ophthalmic  Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Carr v CEPU [2007] FMCA 1526
CPSU v Telstra Corporation Limited (2001) 108 IR 228
Darlaston v Risetop Construction Pty Ltd and Ors [2011] FMCA 220
Fair Work Ombudsman v Centennial Financial Services Pty Ltd [2011] FMCA 459
Fair Work Ombudsman v Land Choice Pty Ltd [2009] FMCA 1255
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Limited [2007] FMCA 7
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383
Plancor Pty Ltd v LHMU (2008) 171 FCR 357
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Applicant: FAIR WORK OMBUDSMAN
Respondent: BRYAN CHARLES BEDINGTON
File Number: BRG 360 of 2012
Judgment of: Jarrett FM
Hearing date: 8 October 2012
Date of Last Submission: 27 November 2012
Delivered at: Brisbane
Delivered on: 29 November 2012

REPRESENTATION

Solicitor for the Applicant: Ms Olsen
Solicitors for the Applicant: Fair Work Ombudsman
Solicitor for the Respondent: Ms Milner
Solicitors for the Respondent: Milner Lawyers

ORDERS

THE COURT DECLARES THAT:

  1. New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act2009 by misrepresenting to Daniel Elder that the contract of employment under which he was employed was a contract for services under which he was to perform work as an independent contractor;

  2. New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Muhammad Mehdi that the contract of employment under which he was employed was a contract for services under which he was to perform work as an independent contractor;

  3. New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Kayne Turner that the contract of employment under which he was employed was a contract for services under which he was to perform work as an independent contractor;

  4. New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Jessica Bradley that the contract of employment under which she was employed was a contract for services under which she was to perform work as an independent contractor;

  5. New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Natalie Towns that the contract of employment under which she was employed was a contract for services under which she was to perform work as an independent contractor;

  6. New Image Beauty…

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Details
AGLC
FAIR WORK OMBUDSMAN v BEDINGTON [2012] FMCA 1133
Case
[2012] FMCA 1133
Decision Date

CaseChat Overview and Summary

In the case of Fair Work Ombudsman v Bedington, the Fair Work Ombudsman brought an action against the respondent, Bedington, alleging that New Image Beauty Salons Pty Ltd, of which Bedington was the director, contravened multiple provisions of the Fair Work Act 2009. The primary contention was that New Image Beauty Salons Pty Ltd had engaged in misleading conduct by representing to several employees that they were independent contractors rather than employees, thus avoiding the obligation to provide employee entitlements. Furthermore, the Fair Work Ombudsman argued that the company failed to pay accrued annual leave and leave loading to certain employees as required by the Act and relevant awards.

The court was tasked with determining whether New Image Beauty Salons Pty Ltd had indeed contravened the specified sections of the Fair Work Act 2009, and if so, whether Bedington, as the director, was involved in these contraventions. The key legal issues revolved around the interpretation of the relevant statutory provisions, the nature of the employment relationships, and the applicability of penalties under the Fair Work Act 2009.

The court found that New Image Beauty Salons Pty Ltd had misrepresented the employment status of the individuals in question, thereby contravening s.357 of the Act. Additionally, the company was held to have failed to pay accrued annual leave and leave loading to the employees as required by s.44 and s.45 of the Act. The court further concluded that Bedington was involved in these contraventions as per s.550 of the Act. Consequently, the court ordered Bedington to pay penalties for the contraventions and directed the distribution of the penalties to the affected employees or, if they could not be located, to the Commonwealth Consolidated Revenue Fund. Each party was ordered to bear their own costs.

Orders

Orders of the court

THE COURT DECLARES THAT:

1.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Daniel Elder that the contract of employment under which he was employed was a contract for services under which he was to perform work as an independent contractor;

2.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Muhammad Mehdi that the contract of employment under which he was employed was a contract for services under which he was to perform work as an independent contractor;

3.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Kayne Turner that the contract of employment under which he was employed was a contract for services under which he was to perform work as an independent contractor;

4.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Jessica Bradley that the contract of employment under which she was employed was a contract for services under which she was to perform work as an independent contractor;

5.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Natalie Towns that the contract of employment under which she was employed was a contract for services under which she was to perform work as an independent contractor;

6.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Samantha Dodd that the contract of employment under which she was employed was a contract for services under which she was to perform work as an independent contractor;

7.

New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work Act 2009 by misrepresenting to Esther Marshall that the contract of employment under which she was employed was a contract for services under which she was to perform work as an independent contractor;

8.

New Image Beauty Salons Pty Ltd contravened s.44 of the Fair Work Act 2009 by failing to pay to the persons named in declarations 1 – 7 hereof their accrued annual leave at termination pursuant to s.90 of the Fair Work Act 2009 ;

9.

New Image Beauty Salons Pty Ltd contravened s.45 of the Fair Work Act 2009 by failing to pay to Samantha Dodd, Esther Marshall and Kayne Turner their accrued annual leave loading at termination pursuant to clause 33.3 of the Hair and Beauty Industry Award 2010;

10.

The respondent was involved, within the meaning of s.550 of the Fair Work Act 2009, in New Image Beauty Salons Pty Ltd’s contraventions set out in declarations 1 – 9 hereof.

THE COURT ORDERS THAT:

11.

The Respondent pay a penalty under s.546(1) and 550 of the Fair Work Act 2009 for New Image Beauty Salons Pty Ltd’s contravention of s.44 of the Fair Work Act 2009 in the amount of $1,980.

12.

The Respondent pay a penalty under s.546(1) and 550 of the Fair Work Act 2009 for New Image Beauty Salons Pty Ltd’s contravention of s.45 of the Fair Work Act 2009 in the amount of $1,980.

13.

The Respondent pay a penalty under s.546(1) and 550 of the Fair Work Act 2009 for New Image Beauty Salons Pty Ltd’s contravention of s.357 of the Fair Work Act 2009 in respect of:

(a) Daniel Elder in the amount of $1,980;

(b) Muhammad Mehdi in the amount of $1,980;

(c) Kayne Turner in the amount of $1,980;

(d) Samantha Dodd in the amount of $1,980;

(e) Esther Marshall in the amount of $1,980;

(f) Natalie Town in the amount of $1,980; and

(g) Jessica Bradley in the amount of $1,980.

14.

That the Respondent pay the penalties imposed under orders 11 to 13 to the Applicant within 28 days of the date of this order.

15.

That the Applicant apply the monies received by it under order 14 as follows:

(a) distributing the following amounts to the following persons:

(i) Daniel Elder $1,178.76

(ii) Jessica Bradley $997.41

(iii) Natalie Towns $149.08

(iv) Muhammad Mehdi $680.05

(v) Samantha Dodd $1,512.74

(vi) Kayne Turner $2,164.38

(vii) Esther Marshall $1,605.84

(b) if the Applicant is unable to locate any of the person set out in order 15(a) hereof the Applicant shall remit any monies held on account of those persons to the Commonwealth Consolidated Revenue Fund; and

(c) in respect of any remainder, remitting to the Commonwealth Consolidated Revenue Fund.

16.

Each party bear their own costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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