Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamC2G 934
File number(s): SYG 3321 of 2019 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 11 November 2022 Catchwords: INDUSTRIAL LAW – application for remedies in relation to first respondent’s contraventions of award – employer largely admits it failed to make payments as required under relevant award – whether the employer’s managing director was a person involved in the employer’s contraventions of a number of provisions of the award – findings reasonably open to be made which, if made, would support the conclusion that the managing director was involved in a number of contraventions of the award – proceeding to the extent it relates to claims made against managing director set down for directions to give managing director an opportunity to elect to go into evidence. Legislation: Competition and Consumer Act 2010 (Cth)
Fair Work Act 2009 (Cth) ss 44, 45, 90(1), 90(2), 116, 345, 550
Trade Practices Act 1974 (Cth) s 75B
Workplace Relations Act 1996 (Cth) s 728
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 17.05
Federal Circuit Court Rules 2001 (Cth) r 15.29A
Fast Food Industry Award 2010 cls 3.1, 4, 11, 12.1, 12.2, 12.5, 12.7, 13.1, 13.2, 13.4, 16, 17, 18, 25.5(a)(i), 25.5(a)(ii), 25.5(b), 25.5(c), 25.6, 26, 28.3, 30.3
Cases cited: Australian Building and Construction Commissioner v Parker [2017] FCA 564
Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63; 98 ER 969
Director of the Fair Work Building Industry Inspectorate v Bavco Pty Ltd & Ors(No.2) [2014] FCCA 2712
Dowling v Kirk & 16 Ors [2007] FMCA 2106
EZY Accounting 123 Pty Ltd v Fair WorkOmbudsman [2018] FCAFC 134
Fair Work Ombudsman v Al Hilfi [2012] FCA 1166
Fair Work Ombudsman v Chatime Australia Pty Ltd [2021] FCCA 1766
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034
Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833
Giorgianni v R (1985) 156 CLR 473
Hui v Champion [2019] FCA 1111
Johnson v Youden [1950] 1 KB 544
Potter v Fair Work Ombudsman [2014] FCA 187
Richardson and Wrench (Holdings) Pty Ltd v Ligon No 174 Pty Ltd [1994] FCA 1222
Division: Fair Work Number of paragraphs: 113 Date of last submission/s: 23 September 2022 Date of hearing: 20, 21, and 22 July and 20 September 2021 Place: Sydney Counsel for the Applicant: Mr J Darams and Mr M Harker, by video Solicitor for the Applicant: Office of the Fair Work Ombudsman Counsel for the Respondents: Mr D Mahendra, by video Solicitor for the Respondents: Piper Alderman Lawyers ORDERS
SYG 3321 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Keep reading for free
Create a free CaseChat account to read Fair Work Ombudsman v Chatime Australia Pty Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
Details
- Case
- [2022] FedCFamC2G 934
- Decision Date
CaseChat Overview and Summary
In the Fair Work Ombudsman v Chatime Australia Pty Ltd case, the Fair Work Ombudsman (FWO) brought proceedings against Chatime Australia Pty Ltd and its director, Mr Zhao, for alleged contraventions of the Fair Work Act 2009 (FW Act). The FWO claimed that Chatime had failed to pay various loadings and penalty rates to its employees as required by the relevant award, and that Mr Zhao was complicit in these contraventions. The primary legal issue before the court was whether Mr Zhao was implicated in the contraventions of the FW Act by Chatime, and if so, whether he had the requisite knowledge of the facts that constituted the contraventions. The court needed to determine if the material facts pleaded in the statement of claim, if proved, would establish Mr Zhao’s involvement in the contraventions.
The court considered the evidence and admissions provided by both parties. It found that if the allegations in the statement of claim were established or admitted, they could potentially demonstrate Mr Zhao's involvement in the contraventions. The court concluded that it was reasonably open to find that Mr Zhao participated or was implicated in the contraventions based on the available findings and his admissions. The acts constituting Mr Zhao's participation included his acceptance of a recommendation to implement a method that resulted in non-compliance with award provisions, and his failure to take action to rectify the situation. Furthermore, the court determined that Mr Zhao was aware of the award requirements and the method of payment that did not comply with those requirements.
The court held that Mr Zhao was involved in the contraventions of the FW Act by Chatime, and had the requisite knowledge of the facts that constituted the contraventions. Consequently, the court found in favour of the FWO. The final orders of the court are not provided in the text.
The court considered the evidence and admissions provided by both parties. It found that if the allegations in the statement of claim were established or admitted, they could potentially demonstrate Mr Zhao's involvement in the contraventions. The court concluded that it was reasonably open to find that Mr Zhao participated or was implicated in the contraventions based on the available findings and his admissions. The acts constituting Mr Zhao's participation included his acceptance of a recommendation to implement a method that resulted in non-compliance with award provisions, and his failure to take action to rectify the situation. Furthermore, the court determined that Mr Zhao was aware of the award requirements and the method of payment that did not comply with those requirements.
The court held that Mr Zhao was involved in the contraventions of the FW Act by Chatime, and had the requisite knowledge of the facts that constituted the contraventions. Consequently, the court found in favour of the FWO. The final orders of the court are not provided in the text.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
The determination of the issues arising on the parties’ competing submissions turns on whether:(a)the statement of claim pleads sufficient facts (material facts) which, if proved, would establish that Mr Zhao was implicated in one or more of Chatime’s contraventions of s 45 of the FW Act, that he had the requisite knowledge of the facts that constituted the contraventions; and, (b)given Mr Zhao’s admissions, and the findings I have already made, the material facts have been established. Material facts It would be useful to group the material facts into three classes: those that constitute Chatime’s contraventions in which the FWO alleges Mr Zhao was involved; those that constitute Mr Zhao’s participation or implication in Chatime’s contraventions, and those that allege Mr Zhao’s knowledge of the facts and legal character of Chatime’s contraventions. Relevant contraventions The contraventions of Chatime in which the FWO alleges Mr Zhao was involved[189] are those alleged in paragraphs 34-36 of the statement of claim (failure to pay casual loading in contravention of cl 13.2 of the Award), paragraphs 37-40 of the statement of claim (failure to pay Saturday loading in contravention of cl 25.5(b) of the Award), paragraphs 41-44 of the statement of claim (failure to pay Sunday Loading in contravention of cl 25.5(c) of the Award, paragraphs 45-47 of the statement of claim (failure to pay public holiday penalty rates in contravention of cl 30.3 of the Award), paragraphs 48-50 of the statement of claim (failure to pay 9:00 pm Midnight Loading in contravention of cl 25.5(a)(i) of the Award), paragraphs 51-55 of the statement of claim (failure to pay Post Midnight Loading in contravention of cl 25.5(a)(ii) of the Award), and paragraphs 56-58 of the statement of claim (failure to pay Overtime Rates in contravention of cl 26 of the Award). Each of these contraventions (Relevant Contraventions) is alleged to have consisted in Chatime paying the Employees concerned a flat rate of pay which was less than the rates payable to the Employees for the work they had performed at the times they performed the work.[189] Statement of claim, [90]-[92]Mr Zhao’s participation in the Relevant Contraventions The conduct that is alleged to constitute Mr Zhao’s participation or implication in the Relevant Contraventions are the matters alleged in paragraphs 76-83 and 86 of the statement of claim. In those paragraphs the FWO alleges Mr Chen presented Costing Model A and Costing Model B; Mr Chen made statements to the effect that Costing Model A reflected the amounts Chatime was required to pay under the Award, and Costing Model B reflected payment of only some of the amounts Chatime was required to pay under the Award; Mr Zhao instructed Mr Chen to implement Costing Model B; from 12 September 2013 to around February 2014 Mr Chen took steps to implement Costing Model B; and from around February 2014 to 25 December 2016 Mr Zhao had taken no step to change or remove Chatime’s method for paying its employees that was provided for by Costing Model B.
Evidence
Evidence Before The Court
I am satisfied that, if established or otherwise admitted, the allegations of fact on which the FWO relies in the statement of claim are capable of establishing that Mr Zhao was involved in the Relevant Contraventions.Evidence and admissions The allegations on which the FWO relies includes allegations that rely on the evidence of Mr Chen. I have not accepted Mr Chen’s evidence; but in paragraph 36 of these reasons I have set out findings I have concluded are reasonably open to be made (Available Findings). Mr Zhao’s participation in Relevant Contraventions On the basis of the Available Findings, if made, and the admissions Mr Zhao makes in his defence, it is reasonably open to find that Mr Zhao participated or was implicated in the Relevant Contraventions. The acts that would constitute Mr Zhao’s participation or implication in the Relevant Contraventions would be as follows:(a)Mr Zhao having heard the presentation Mr Chen gave at the meeting of 12 September 2013, and his having seen the PowerPoint presentations, and in particular the “Factsheet: award rate” slide, and Costing Model A and Costing Model B.(b)Mr Zhao, together with Ms Qian, Mr Wang, and Ms Ferrao, accepting Mr Chen’s recommendation that Chatime implement the “Implementation plan”, that is, Costing Model B, and instructing or authorising Mr Chen to implement Costing Model B.(c)Mr Chen having completed the implementation of Costing Model B by February 2014.(d)Mr Zhao taking no action to alter the method for paying Chatime’s employees that was set up on Mr Chen’s implementing Costing Model B for the period that extended at least up to 25 December 2016. Mr Zhao’s participation in the Relevant Contraventions are open to be characterised in two ways. One way is that Mr Zhao was one of a number of persons who induced or authorised Mr Chen to implement a method which, when implemented, resulted in Chatime making payments to its members that did not comply with provisions of the Award. It would be open to characterise this as Mr Zhao counselling or procuring Chatime to implement a method for paying wages that involved Chatime not paying the Award rates to the Employees. A second characterisation is that Mr Zhao, as the managing director of Chatime, was in a position to alter the Costing Model B method for paying wages that had been implemented by February 2014, but he did not do so. On this characterisation, Mr Zhao’s participation would constitute his aiding and abetting the Relevant Contraventions.Mr Zhao’s knowledge Given the Available Findings, and in particular the Available Findings in paragraph 36(d) of these reasons for judgment, it would be reasonably open to find that, at the time Mr Zhao, Ms Qian, Mr Wang, and Ms Ferrao accepted Mr Chen’s recommendation that Chatime authorised or instructed Mr Zhao to implement it, Mr Zhao was aware of the following: (a)the Award applied to Chatime; (b)Chatime employed full time, part-time, and casual employees; (c)the Award required the payment of a minimum rate, and additional rates for casual and other loadings and penalty rates; (d)Costing Model B provided for a method of payment that did not allow for the payment of amounts above the minimum rate provided for by the Award, and in particular amounts for casual loadings, and penalty rates;(e)on Mr Chen’s implementing Costing Model B, Chatime would be paying its employees according to the method provided for by Costing Model B which would involve Chatime not paying to its employee amounts for the casual and other loading rates or penalty rates the Award would require Chatime to pay; and (f)for the period that extended at least up to 25 December 2016 Chatime paid its employees according to the method provided for by Costing Model B.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.