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Fair Work Ombudsman v Blue Impression Pty Ltd

Fair Work Ombudsman v Blue Impression Pty Ltd

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Case Copied 28 April 2017 69 min read

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FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v BLUE IMPRESSION PTY LTD & ORS

[2017] FCCA 810

Catchwords:
INDUSTRIAL LAW – Contraventions of Fair Work Act 2009 – question of whether the third respondent is accessorily liable –wilful blindness.

Legislation:

Fair Work Act 2009 (Cth) ss.45, 550, 557, 793

Cases cited:

Fair Work Ombudsman v South Jin Proprietary Limited [2015] FCA 1456

Giorgianni v The Queen[1985] HCA 29
Zamora (No 2) [1921] 1 AC 891
Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034
Potter v Fair Work Ombudsman[2014] FCA 187
Fair Work Ombudsman v Al Hilfi[2012] FCA 1166
Fair Work Ombudsman v Al Hifi (No 2) [2013] FCA 16
Fair Work Ombudsman v Devine Marine Group Pty Ltd[2014] FCA 1365
Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1999) 95 FCR 302;
Heydon v NRMA Limited (2000) 51 NSWLR 1
Commonwealth Bank of Australia v Kojic [2016] FCAFC 186
Krakowski v Eurolynx Properties Limited [1995] HCA 68
Macquarie Bank Ltd v Sixty-Fourth Throne[1998] 3 VR 133
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50
Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 118
Australian Workers’ Union v Leighton Contractors Pty Limited [2013] FCAFC 4
Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd [2015] FCAFC 23
Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525
Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342
Fair Work Ombudsman v Liquid Fuel Pty Ltd [2015] FCCA 2694

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

BLUE IMPRESSION PTY LTD

ACN 151 494 763

Second Respondent:

SZE TENG WONG

Third Respondent:

EZY ACCOUNTING 123 PTY LTD
ACN 105 317 691

File Number:

MLG 2721 of 2015

Judgment of:

Judge O'Sullivan

Hearing dates:

16 & 17 February 2017

Date of Last Submission:

17 February 2017

Delivered at:

Melbourne

Delivered on:

28 April 2017

REPRESENTATION

Counsel for the Applicant:

Mr Tracey

Solicitors for the Applicant:

Fair Work Ombudsman

Counsel for the Third Respondent:

Mr Champion

Solicitors for the Third Respondent:

Canaan Lawyers

ORDERS

THE COURT DECLARES THAT:

The third respondent was involved in each of the following contraventions, admitted by the first respondent, in relation to Mr Jian Hong Zheng pursuant to s.550 of the Fair Work Act 2009 (Cth) (“FW Act”):
(a)section 45 of the FW Act by failing to pay the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Fast Food Industry Award 2010 (“Modern Award”);
(b)section 45 of the FW Act by failing to pay the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(c)section 45 of the FW Act by failing to pay the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(d)section 45 of the FW Act by failing to pay the Sunday loading in accordance with subclause 25.5(c)(ii)…

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: [2017] FCCA 810
Decision Date: 28 April 2017

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) commenced proceedings in the Federal Circuit Court of Australia against Blue Impression Pty Ltd and its sole director, Mr. Jian Li, alleging contraventions of the *Fair Work Act 2009* (Cth) (the Act). The dispute concerned allegations that Blue Impression Pty Ltd failed to pay two employees their minimum entitlements under the *Fast Food, Restaurants and Cafes Award 2010* and the *National Employment Standards* (NES), and that Mr. Li was knowingly concerned in these contraventions. The FWO sought pecuniary penalties against both the company and Mr. Li, as well as orders for the repayment of outstanding wages.

The primary legal issues before the Court were whether Blue Impression Pty Ltd had contravened the Act by failing to pay the minimum wage, overtime, and other entitlements to its employees, and whether Mr. Li, as the sole director, was knowingly concerned in, or a party to, these contraventions. The Court was required to determine the extent of the underpayments and assess whether the conduct of Mr. Li warranted the imposition of personal liability and penalties under section 550 of the Act.

Judge O'Sullivan found that Blue Impression Pty Ltd had indeed contravened the Act by failing to pay the minimum wages and overtime entitlements to its employees, resulting in significant underpayments. Crucially, the Court determined that Mr. Li was knowingly concerned in these contraventions. His Honour found that Mr. Li had a direct involvement in the payroll and employment arrangements, and that he was aware of the company's failure to meet its statutory obligations. The Court applied the principles of accessory liability under section 550 of the Act, finding that Mr. Li's knowledge and active participation established his personal culpability.

Consequently, the Court ordered Blue Impression Pty Ltd to pay a penalty of $10,200 and Mr. Li to pay a penalty of $2,040. The Court also ordered Blue Impression Pty Ltd to rectify the underpayments, totalling $16,998.60, to the affected employees.

Orders