Fair Work Ombudsman v Centennial Financial Services Pty Ltd - [2011] FMCA 459

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v CENTENNIAL FINANCIAL SERVICES PTY LTD & ORS

[2011] FMCA 459

INDUSTRIAL LAW – Sham contracting – failure to pay wages and accrued annual leave entitlements – accessorial liability – consideration of matters relevant to penalty.

Workplace Relations Act 1996, ss.182, 232, 235, 719, 722, 841, 900, 901, 902, 904

Fair Work Ombudsman v Centennial Financial Services Pty Ltd (2010) 245 FLR 242
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383
Construction, Forestry, Mining & Energy Union v Williams (2009) 262 ALR 417
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
A&L Silvestri Pty Limited v Construction, Forestry, Mining & Energy Union [2008] FCA 466
Trade Practices Commission v CSR Ltd (1991) ATPR 41-076
Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462
CPSU, Community & Public Sector Union v Telstra Corporation Ltd (2001) 108 IR 228

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

CENTENNIAL FINANCIAL SERVICES PTY LTD (ACN 112 859 248)

Second Respondent:

ROLF MERTES

Third Respondent:

CHRISTOPHER CHORAZY

File Number:

SYG 3337 of 2008

Judgment of:

Cameron FM

Hearing date:

14 April 2011

Date of Last Submission:

14 April 2011

Delivered at:

Sydney

Delivered on:

21 June 2011

REPRESENTATION

Counsel for the Applicant:

Mr I. Ahmed

Solicitors for the Applicant:

Norton Rose Australia

Solicitors for the Second Respondent:

Collins Legal

The Third Respondent did not appear

ORDERS

The second respondent pay a penalty of $4,400 for contravening s.182 of the Workplace Relations Act 1996 in relation to the non-payment of wages to certain employees of the first respondent, namely Andrew Young, Mirantha Perera, Adje da Silveira, David Peisley, Reagan Murphy, Richard Nguyen and Taranath Shetty.
The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to Andrew Young.
The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to Adje da Silveira.
The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to David Peisley.
The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to Dennis McFarlane.
The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to Andrew Young.
The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to Adje da Silveira.
The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to David Peisley.
The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to Dennis McFarlane.
The third respondent pay a penalty of $250 for contravening s.182 of the Workplace Relations Act 1996 in relation to the non-payment of wages to certain employees of the first respondent for…

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: [2011] FMCA 459
Decision Date: 21 June 2011

CaseChat Overview and Summary

The Fair Work Ombudsman took action against Centennial Financial Services Pty Ltd, with penalties sought against the second and third respondents for various breaches of the Workplace Relations Act 1996. The contraventions involved non-payment of wages and accrued annual leave entitlements to several employees, including Andrew Young, Mirantha Perera, Adje da Silveira, David Peisley, Reagan Murphy, Richard Nguyen, Taranath Shetty, Dennis McFarlane, Helen Kioukas, and Trish Taylor. The primary legal issues the court had to address were whether the second and third respondents contravened specific sections of the Act by failing to pay wages, accrued annual leave, and training time payments to the listed employees.

The court examined the evidence and found that the respondents did indeed contravene the Act by failing to pay wages, accrued annual leave, and training time payments to the employees in question. The penalties imposed were based on the specific sections of the Act breached and the number of affected employees. The court concluded that the second respondent was liable for higher penalties due to the greater number of contraventions and the severity of the breaches, whereas the third respondent faced penalties for fewer contraventions. The court's reasoning was grounded in the statutory provisions and the particular circumstances of each case, ensuring that the penalties reflected the seriousness and impact of the breaches.

The court ordered the second respondent to pay penalties for non-payment of wages and accrued annual leave to multiple employees, totaling $4,400, $1,100 for each contravention of sections 182 and 901, and $1,100 for each contravention of section 902. The third respondent was ordered to pay lower penalties for similar contraventions, totalling $250 for each contravention of sections 182, 901, and 902. Additionally, the penalties were to be distributed among the affected employees. The court mandated that the payments be made by bank cheques drawn in favor of the respective employees. The parties were granted liberty to apply for further orders if necessary.

Orders

Orders of the court

The second respondent pay a penalty of $4,400 for contravening s.182 of the Workplace Relations Act 1996 in relation to the non-payment of wages to certain employees of the first respondent, namely Andrew Young, Mirantha Perera, Adje da Silveira, David Peisley, Reagan Murphy, Richard Nguyen and Taranath Shetty.

The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to Andrew Young.

The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to Adje da Silveira.

The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to David Peisley.

The second respondent pay a penalty of $1,100 for contravening s.901 of the Workplace Relations Act 1996 in relation to Dennis McFarlane.

The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to Andrew Young.

The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to Adje da Silveira.

The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to David Peisley.

The second respondent pay a penalty of $1,100 for contravening s.902 of the Workplace Relations Act 1996 in relation to Dennis McFarlane.

10.

The third respondent pay a penalty of $250 for contravening s.182 of the Workplace Relations Act 1996 in relation to the non-payment of wages to certain employees of the first respondent for time spent in training, namely Andrew Young, David Peisley, Helen Kioukas, Trish Taylor and Dennis McFarlane.

11.

The third respondent pay a penalty of $1,000 for contravening s.182 of the Workplace Relations Act 1996 in relation to the non-payment of wages to certain employees of the first respondent namely Andrew Young, Mirantha Perera, Adje da Silveira, David Peisley, Reagan Murphy, Richard Nguyen and Taranath Shetty.

12.

The third respondent pay a penalty of $500 for contravening s.235 of the Workplace Relations Act 1996 in relation to the non-payment of accrued annual leave entitlements to certain employees of the first respondent, namely Andrew Young, Mirantha Perera, Adje da Silveira, David Peisley, Reagan Murphy, Richard Nguyen, Taranath Shetty and Dennis McFarlane.

13.

The third respondent pay a penalty of $250 for contravening s.901 of the Workplace Relations Act 1996 in relation to Andrew Young.

14.

The third respondent pay a penalty of $250 for contravening s.901 of the Workplace Relations Act 1996 in relation to Adje da Silveira.

15.

The third respondent pay a penalty of $250 for contravening s.901 of the Workplace Relations Act 1996 in relation to David Peisley.

16.

The third respondent pay a penalty of $250 for contravening s.901 of the Workplace Relations Act 1996 in relation to Dennis McFarlane.

17.

The third respondent pay a penalty of $250 for contravening s.902 of the Workplace Relations Act 1996 in relation to Andrew Young.

18.

The third respondent pay a penalty of $250 for contravening s.902 of the Workplace Relations Act 1996 in relation to Adje da Silveira.

19.

The third respondent pay a penalty of $250 for contravening s.902 of the Workplace Relations Act 1996 in relation to David Peisley.

20.

The third respondent pay a penalty of $250 for contravening s.902 of the Workplace Relations Act 1996 in relation to Dennis McFarlane.

21.

The second respondent pay the penalties ordered in orders 1 to 9 by paying

(a) $290.40 to Andrew Young.

(b) $3,219.48 to Mirantha Perera.

(d) $1,980.00 to David Peisley.

(e) $1,503.48 to Reagan Murphy.

(f) $3,219.48 to Richard Nguyen.

(g) $1,012.44 to Taranath Shetty.

(h) $117.48 to Helen Kioukas.

(i) $117.48 to Trish Taylor.

22.

The third respondent pay the penalties ordered in orders 10 to 20 by paying

(a) $82.50 to Andrew Young.

(b) $914.62 to Mirantha Perera.

(d) $562.50 to David Peisley.

(e) $427.12 to Reagan Murphy.

(f) $914.62 to Richard Nguyen.

(g) $287.63 to Taranath Shetty.

(h) $33.38 to Helen Kioukas.

(i) $33.38 to Trish Taylor.

23.

The second and third respondents pay the amounts listed in orders 21 and 22 by providing to the applicant bank cheques drawn in the relevant amounts in favour of the respective individuals.

24.

The parties have liberty to apply.

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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