Fair Work Ombudsman v Deja Vu Elite Security Pty Ltd
[2018] FCCA 1402
•31 May 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v DEJA VU ELITE SECURITY PTY LTD & ANOR | [2020] FCCA 1402 |
| Catchwords: INDUSTRIAL LAW – Alleged contraventions of Fair Work Act 2009 and Fair Work Regulations 2009 – some contraventions admitted – some alleged contraventions disputed – hearing on liability in respect of disputed contraventions – contraventions found proven. |
| Legislation: Corporations Act 2001 Evidence Act 1995, s.140 Fair Work Act 2009, ss.12, 14(1)(a), 45, 535, 536(2), 539, 545(1), 550, 551, 687, 701, 712(3), 712(4), 793 Judiciary Act 1903, ss.55ZG(2), 55ZG(3) Fair Work Regulations 2009, regs.3.31, 3.32, 3.33, 3.34, 3.44, 4.01A General Retail Industry Award 2010, cls.12.2, 13.2, 17, 18.2, 20.2(b)(ii), 29.4(a), 29.4(b), 29.4(c), 29.4(d), B.1.1 |
| Cases cited: Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; (2012) 286 ALR 501; (2012) 86 ALJR 522; (2012) 88 ACSR 246; [2012] HCA 17 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First respondent: | DEJA VU ELITE SECURITY PTY LTD (ACN 131 423 651) |
| Second respondent: | SAID HADDAD |
| File number: | MLG 179 of 2017 |
| Judgment of: | Judge Riley |
| Hearing date: | 22 February 2018 |
| Date of last submission: | 23 March 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 31 May 2018 |
REPRESENTATION
| Counsel for the applicant: | Cathy Dowsett |
| Solicitors for the applicant: | Fair Work Ombudsman |
| Counsel for the respondents: | John Ribbands |
| Solicitors for the respondents: | P. W. Sotir & Co |
THE COURT DECLARES THAT, having regard to the admissions made by the respondents in the statement of agreed facts filed in this proceeding:
The first respondent contravened:
(a)s.45 of the Fair Work Act 2009 (“the Act”), by contravening:
(i)clause 17;
(ii) clause 18.2;
(iii) clause 13.2;
(iv) clause 29.4(a);
(v) clause 29.4(b);
(vi) clause 29.4(c);
(vii) clause 29.4(d);
(viii) clause 20.2(b)(ii); and
(ix) clause 12.2;
of the General Retail Industry Award 2010 (“the Award”); and
(b)s.536(2) of the Act, by giving pay slips to Grant Ferguson, Jessica Clark-Wingrave, Narelle Richards and Angelica Benitez (“the employees”) that did not accurately state the periods to which the pay slips related.
The second respondent was involved in each of the contraventions committed by the first respondent identified in declaration 1.
THE COURT DECLARES THAT:
The first respondent contravened:
(a)reg.3.44(1) of the Fair Work Regulations 2009 (“the Regulations”), by failing to ensure that records required to be kept in relation to the employees were not false or misleading;
(b)reg.3.44(4) of the Regulations, by altering records relating to the employees, other than as permitted by the Act or the Regulations;
(c)reg.3.44(6) of the Regulations, by making use of records by producing them to the applicant, knowing that those records were false or misleading; and
(d)s.712(3) of the Act, by failing to comply with a notice to produce.
The second respondent was involved in each of the contraventions committed by the first respondent identified in declaration 3.
THE COURT ORDERS THAT:
The costs of and associated with the liability hearing be reserved.
The parties have liberty to apply.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 179 of 2017
| FAIR WORK OMBUDSMAN |
Applicant
And
| DEJA VU ELITE SECURITY PTY LTD (ACN 131 423 651) |
First respondent
And
| SAID HADDAD |
Second respondent
REASONS FOR JUDGMENT
Introduction
This is a proceeding to determine whether the respondents are liable for certain alleged contraventions of the Fair Work Act 2009 (“the Act”). In addition, the court is asked to make declarations in relation to certain contraventions that the respondents admitted.
The applicant is the Fair Work Ombudsman. The first respondent is the operator of an IGA supermarket in Fairfield, Victoria (“the business”). The second respondent is the director, secretary and majority shareholder of the first respondent and the store manager of the business.
The applicant filed a statement of agreed facts dated 17 November 2017. In the statement of agreed facts, the respondents admitted numerous contraventions relating to the underpayment of employees, the failure to agree on a regular pattern of work and the provision to employees of payslips that did not accurately state the periods to which they related. The allegations that remained in dispute are that the respondents contravened:
a)reg.3.44(1) of the Fair Work Regulations 2009 (“the Regulations”) by failing to ensure that records required to be made and kept are not false or misleading to the employer’s knowledge;
b)reg.3.44(4) of the Regulations or, in the alternative, reg.3.44(5) of the Regulations, by altering, or failing to ensure that another person did not alter, records required to be made and kept except as permitted by the Act and the Regulations;
c)reg.3.44(6) of the Regulations by making use of a record knowing it to be false and misleading; and
d)s.712(3) of the Act by failing to comply with a notice to produce.
Statement of agreed facts
The statement of agreed facts was filed on 24 November 2017. Paragraphs 5 to 81 below are taken almost verbatim from the statement of agreed facts, although the paragraph numbers have been altered.
a. total underpayments
The contraventions resulted in underpayments totalling $3,907.65 to Angelica Benitez, Jessica Clark-Wingrave, Grant Ferguson and Narelle Richards (collectively “the employees”).
b. admitted contraventions
On the basis of the following facts, the first respondent admitted contravening the following civil remedy provisions:
a)s.45 of the Act:
i)by contravening cl.17 of the General Retail Industry Award 2010 (“the Award”), by failing to pay the minimum base rate of pay to Ms Benitez and Ms Richards;
ii)by contravening cl.18.2 of the Award, by failing to pay the minimum junior base rate of pay to Ms Clark-Wingrave;
iii)by contravening cl.13.2 of the Award by failing to pay the casual loading to Ms Clark-Wingrave and Ms Richards;
iv)by contravening cl.29.4(a) of the Award by failing to pay the evening loading to Mr Ferguson and Ms Benitez;
v)by contravening cl.29.4(b) of the Award by failing to pay the Saturday penalty to Ms Benitez and Ms Clark-Wingrave;
vi)by contravening cl.29.4(c) of the Award by failing to pay the Sunday penalty to Ms Benitez, Ms Clark-Wingrave and Ms Richards;
vii)by contravening cl.29.4(d) of the Award by failing to pay the public holiday penalty to Ms Benitez, Ms Clark-Wingrave and Ms Richards;
viii)by contravening cl.20.2(b)(ii) of the Award by failing to pay the uniform allowance to Mr Ferguson, Ms Benitez, Ms Clark-Wingrave and Ms Richards; and
ix)by contravening cl.12.2 of the Award by failing to agree in writing on a regular pattern of work with Mr Ferguson and Ms Benitez specifying the matters required to be specified by cl.12.2 of the Award; and
b)s.536(2) of the Act, by giving pay slips to the employees that did not accurately state the periods to which the pay slips related.
The second respondent admitted that pursuant to s.550 of the Act he was involved in each of the contraventions committed by the first respondent as set out above.
c. the parties
The applicant is and was at all relevant times:
a)a statutory appointee of the Commonwealth appointed by the Governor General by written instrument pursuant to s.687 of the Act;
b)a Fair Work Inspector pursuant to s.701 of the Act; and
c)a person with standing to bring these proceedings pursuant to s.539(2) of the Act and reg.4.01A of the Regulations.
The first respondent is and was at all relevant times:
a)a corporation incorporated under the Corporations Act 2001, having been incorporated on 3 June 2008;
b)capable of being sued in its corporate name;
c)a constitutional corporation within the meaning of s.12 of the Act;
d)a national system employer within the meaning of s.14(1)(a) of the Act; and
e)the operator of an IGA supermarket selling foodstuffs and other groceries located at premises in 140 Station Street, Fairfield, in the state of Victoria.
At all relevant times, the business used:
a)a weekly roster to plan the days and hours upon which its employees were required to work; and
b)a time recorder clock, or a clock card system, to record the hours worked by its employees.
The second respondent is and was at all relevant times:
a)a natural person capable of being sued;
b)also known by the name ‘Sam Haddad’;
c)a director of the first respondent;
d)the secretary of the first respondent;
e)the majority shareholder of the first respondent; and
f)a store manager of the business.
d. section 793 of the Act
For the purposes of s.793(1) of the Act, the second respondent’s conduct referred to in the statement of agreed facts was, at all relevant times, conduct within the scope of his actual or apparent authority as an officer of the first respondent.
For the purposes of s.793(2) of the Act, the second respondent’s state of mind was the state of mind of the first respondent.
e. the employees
From 14 September 2015 to 15 November 2015 (“the assessment period”), the first respondent employed the employees.
During the assessment period:
a)Mr Ferguson:
i)was employed as a part-time employee;
ii)was employed by the first respondent as a grocery assistant;
iii)performed duties including packing grocery stock, handling produce and perishable goods, and customer service; and
iv)fell within the classification of ‘Retail Employee Level 1’ as defined in cl.B.1.1 of the Award;
b)Ms Richards:
i)was employed as a casual employee;
ii)was employed by the first respondent as a cashier;
iii)performed duties including scanning customer items at the cash register, weighing fruit and vegetables, and general customer service; and
iv)fell within the classification of ‘Retail Employee Level 1’ as defined in cl.B.1.1 of the Award;
c)Ms Benitez:
i)was employed as a part-time employee;
ii)was employed by the first respondent as a deli assistant;
iii)performed duties including serving deli customers within the store; and
iv)fell within the classification of ‘Retail Employee Level 1’ as defined in cl.B.1.1 of the Award; and
d)Ms Clark-Wingrave:
i)was employed as a casual employee;
ii)was employed by the first respondent as a cashier;
iii)performed duties including serving customers, filling the drinks fridge, and wiping the windows on the drinks fridge; and
iv)fell within the classification of ‘Retail Employee Level 1’ as defined in cl.B.1.1 of the Award.
During the assessment period:
a)Ms Benitez, Mr Ferguson and Ms Richards (“the adult employees”) were each aged over 21 years; and
b)Ms Clark-Wingrave:
i)was 19 years old from 14 September 2015 to 8 November 2015; and
ii)from 9 November 2015 was 20 years old and had been employed by the first respondent for more than six months.
f. pay rates
During the assessment period, each of the employees was paid the following hourly rates of pay for all hours worked:
a)Mr Ferguson: $20;
b)Ms Richards: $17;
c)Ms Benitez: $18; and
d)Ms Clark-Wingrave: $17
(collectively, “the actual hourly rates”).
The actual hourly rates are shown in pay slips issued to the employees during the assessment period (“the employee pay slips”). The employee pay slips retained by the employees are annexed to the statement of agreed facts at Annexure A.
g. legislation and applicable instruments
At all relevant times, the first respondent was required to comply with the Act and the Regulations in respect of the employment of the employees.
At all relevant times, the Award covered and applied to the first respondent in respect of the employment of the employees.
The first respondent was required to comply with the Award in respect of the employees.
h. failure to pay minimum adult rates
Pursuant to cl.17 of the Award, during the assessment period, the first respondent was required to pay each of the adult employees $18.99 per hour for all ordinary hours of work (“the minimum adult wages”).
During the assessment period, Ms Benitez and Ms Richards worked the number of ordinary hours and were entitled to be paid the amounts set out below in respect of the minimum adult wages:
Employee
Ordinary hours worked
Entitlement
Ms Benitez
218.75
$4,154.10
Ms Richards
101
$1,917.99
By reason of the agreed facts in paragraphs 15(b) and 15(c), 17, 22 and 23, the actual hourly rates paid to Ms Benitez and Ms Richards were insufficient to meet their entitlement to the minimum adult wages. Ms Benitez was paid $3,937.50 for the 218.75 hours worked at the actual hourly rate, and Ms Richards was paid $1,717 for the 101 hours worked at the actual hourly rates.
By reason of the agreed facts referred to in paragraph 24, the first respondent contravened s.45 of the Act by contravening cl.17 of the Award.
By reason of the contraventions referred to in paragraph 25, the first respondent underpaid the following amounts in respect of the minimum adult wages:
a)Ms Benitez $216.60; and
b)Ms Richards $200.99.
failure to pay minimum junior rates
Pursuant to cl.18.2 of the Award, the first respondent was required to pay Ms Clark-Wingrave the following hourly rates for all ordinary hours of work:
a)from 14 September 2015 to 8 November 2015: $15.19 per hour
b)from 9 November 2015: $18.99 per hour
(“the minimum junior wages”)
In the week ending 15 November 2015, Ms Clark-Wingrave:
a)worked eight ordinary hours;
b)was entitled to be paid a total of $151.92 in respect of the minimum junior wages; and
c)was paid a total of $136 by the first respondent.
By reason of the agreed facts in paragraphs 27 and 28, the first respondent contravened s.45 of the Act by contravening cl.18.2 of the Award.
By reason of the contraventions at paragraph 29, the first respondent underpaid Ms Clark-Wingrave $15.92 in respect of the minimum junior wages.
j. failure to pay casual loading
During the assessment period, pursuant to cl.13.2 of the Award the second respondent was required to pay Ms Richards and Ms Clark-Wingrave, in addition to the minimum hourly wages stated at paragraphs 22 and 27, the following casual loading for all hours worked, except for ordinary hours worked on a Sunday:
a)Ms Richards: $4.75 per hour; and
b)Ms Clark-Wingrave:
i)from 14 September 2015 to 8 November 2015 (inclusive): $3.80 per hour;
ii)from 9 November 2015: $4.75 per hour
(collectively, “the casual loading”).
During the assessment period, Ms Richards and Ms Clark-Wingrave worked the following number of hours attracting the casual loading and were entitled to be paid the following amounts:
Employee
Hours worked
Casual loading entitlement
Ms Richards
49.00
$232.75
Ms Clark-Wingrave
79.75
$310.65
During the assessment period, the first respondent did not pay any amount in respect of the casual loading to Ms Richards or Ms Clark-Wingrave.
By reason of the agreed facts in paragraphs 17 and 31 to 33, the second respondent contravened s.45 of the Act by contravening cl.13.2 of the Award.
By reason of the contraventions at paragraph 34, the first respondent underpaid the following amounts in respect of the casual loading:
a)Ms Richards: $232.75; and
b)Ms Clark-Wingrave: $310.65.
k. failure to pay evening loading
During the assessment period, pursuant to cl.29.4(a) of the Award, the first respondent was required to pay Mr Ferguson, Ms Benitez and Ms Richards, as adult employees, an evening loading (in addition to the minimum adult wages) of $4.75 per hour for ordinary hours worked after 6pm on Monday to Friday (“the evening loading”).
During the assessment period, Mr Ferguson:
a)worked 22.15 ordinary hours after 6pm on weekdays; and
b)was entitled to be paid $105.21 in respect of the evening loading.
During the assessment period, Ms Benitez:
a)worked 29 ordinary hours after 6pm on weekdays; and
b)was entitled to be paid $137.75 in respect of the evening loading.
During the assessment period, the first respondent did not pay any amount in respect of the evening loading to Mr Ferguson or Ms Benitez.
By reason of the agreed facts in paragraphs 17 and 36 to 39, the first respondent contravened s.45 of the Act by contravening cl.29.4(a) of the Award.
By reason of the agreed facts in paragraph 40, the first respondent underpaid the following amounts in respect of the evening loading:
a)Mr Ferguson: $105.21; and
b)Ms Benitez: $137.75.
l. failure to pay Saturday penalty
During the assessment period, pursuant to cl.29.4(b) of the Award, in addition to the minimum adult wages, the first respondent was required to pay Ms Benitez $4.75 for all ordinary hours worked on a Saturday (“the part time Saturday penalty”).
During the assessment period, pursuant to cl.29.4(b) of the Award, in addition to the minimum junior wages and the casual loading, the first respondent was required to pay Ms Clark-Wingrave the following amounts in respect of hours worked on a Saturday between 7am and 6pm:
a)from 14 September 2015 to 8 November 2015: $1.52 per hour; and
b)from 9 November 2015 to 15 November 2015: $1.90 per hour
(collectively, “the casual Saturday penalty”).
During the assessment period:
a)Ms Benitez:
i)worked 32.5 ordinary hours on a Saturday; and
ii)was entitled to be paid $154.40 in respect of the part time Saturday penalty; and
b)Ms Clark-Wingrave:
i)worked 15 hours on a Saturday between 7am and 6pm; and
ii)was entitled to be paid $22.80 in respect of the casual Saturday penalty.
During the assessment period the first respondent did not pay:
a)any amount to Ms Benitez in respect of the part time Saturday penalty; and
b)any amount to Ms Clark-Wingrave in respect of the casual Saturday penalty.
By reason of the agreed facts in paragraphs 17, 42 to 45, the first respondent contravened s.45 of the Act by contravening cl.29.4(b) of the Award.
By reason of the contraventions at paragraph 46, the first respondent underpaid:
a)Ms Benitez: $154.40 in respect of the part time Saturday penalty; and
b)Ms Clark-Wingrave: $22.80 in respect of the casual Saturday penalty.
m. failure to pay Sunday penalty
During the assessment period, pursuant to cl.29.4(c) of the Award, in addition to the minimum adult wages and the minimum junior wages respectively, the first respondent was required to pay the following rates of pay for hours worked on a Sunday:
a)Ms Richards and Ms Benitez: $18.99; and
b)Ms Clark-Wingrave: $15.19 from 14 September 2015 to 8 November 2015
(collectively, “the Sunday penalty”).
During the assessment period:
a)Ms Richards:
i)worked 52 hours on a Sunday; and
ii)was entitled to be paid $987.48 in respect of the Sunday penalty;
b)Ms Benitez:
i)worked 28.25 hours on a Sunday; and
ii)was entitled to be paid $536.47 in respect of the Sunday penalty;
c)Ms Clark-Wingrave:
i)worked 34.65 hours on a Sunday; and
ii)was entitled to be paid $526.34 in respect of the Sunday penalty.
During the assessment period the first respondent did not pay Ms Richards, Ms Benitez or Ms Clark-Wingrave any amount in respect of the Sunday penalty.
By reason of the agreed facts in paragraphs 17 and 48 to 50, the first respondent contravened s.45 of the Act by contravening cl.29.4(c) of the Award.
By reason of the agreed facts in paragraph 51, the first respondent underpaid the following amounts in respect of the Sunday Penalty:
a)Ms Richards: $987.48;
b)Ms Benitez: $536.47; and
c)Ms Clark-Wingrave: $526.34.
n. failure to pay public holiday penalty rates
During the assessment period, pursuant to cl.29.4(d) of the Award, the first respondent was required to pay the employees the following amounts (in addition to the minimum adult wages, the minimum junior wages and, where applicable, the casual loading) for each hour of work performed on a public holiday:
a)Ms Benitez and Ms Richards: $28.49 per hour;
b)Ms Clark-Wingrave: $22.78 per hour from 14 September 2015 to 8 November 2015
(collectively, “the public holiday penalty rates”).
During the assessment period, Ms Benitez, Ms Richards and Ms Clark-Wingrave each worked four hours on a public holiday and were entitled to be paid as follows:
Employee
Date of public holiday worked
Public holiday penalty entitlement
Ms Benitez
2 October 2015 (Grand Final Eve)
$113.96
Ms Richards
2 October 2015 (Grand Final Eve)
$113.96
Ms Clark-Wingrave
3 November 2015 (Cup Day)
$91.12
During the assessment period, the first respondent did not pay Ms Benitez, Ms Richards and Ms Clark-Wingrave any amount in respect of the public holiday penalty rates.
By reason of the agreed facts in paragraphs 17, 53 to 55, the first respondent contravened s.45 of the Act by contravening cl.29.4(d) of the Award.
By reason of the contraventions in paragraph 56 the first respondent underpaid the following amounts in respect of the public holiday penalty rates:
a)Ms Richards: $113.96;
b)Ms Benitez: $113.96; and
c)Ms Clark-Wingrave: $91.12.
o. uniform allowance
During the assessment period, pursuant to cl.20.2(b)(ii) of the Award, the first respondent was required to pay casual and part-time employees who were required to launder any special uniform, a uniform allowance of $1.25 per shift worked (“the uniform allowance”).
The employees were required to wear a shirt, vest and jumper bearing an ‘IGA’ logo, being the logo of the business, during each shift worked at the business.
The employees were required to launder their own uniforms.
During the assessment period, the employees were entitled to be paid the uniform allowance as follows:
Employee
Number of shifts worked
Entitlement to uniform allowance
Mr Ferguson
15
$18.75
Ms Benitez
47
$58.75
Ms Richards
24
$30.00
Ms Clark-Wingrave
27
$33.75
During the assessment period, the first respondent did not pay the employees any amount in respect of the uniform allowance.
By reason of the agreed facts in paragraphs 58 to 62 above, the first respondent contravened s.45 of the Act by contravening cl.20.2(b)(ii) of the Award.
By reason of the agreed facts in paragraph 63 above, the first respondent underpaid the following amounts in respect of the uniform allowance:
a)Mr Ferguson: $18.75;
b)Ms Benitez: $58.75;
c)Ms Richards: $30; and
d)Ms Clark-Wingrave: $33.75.
p. total underpayment
By reason of the agreed facts paragraphs in 25, 29, 34, 40, 46, 51, 56 and 63 above, the first respondent underpaid:
a)Mr Ferguson: $123.96;
b)Ms Benitez: $1,217.93;
c)Ms Richards: $1,565.18; and
d)Ms Clark-Wingrave: $1,000.58
(collectively, “the total underpayment”).
q. failure to agree on a regular pattern of work
The first respondent was required by cl.12.2 of the Award to agree in writing on a regular pattern of work with each of Mr Ferguson and Ms Benitez at the time each employee was first employed specifying:
a)the hours worked each day;
b)which days of the week the employee will work;
c)the actual starting and finishing times of each day;
d)that any variation will be in writing;
e)that the minimum daily engagement is three hours; and
f)the times of taking and the duration of meal breaks.
The first respondent did not agree in writing to a regular pattern of work specifying the matters set out at paragraph 66 above with either Mr Ferguson or Ms Benitez at the time each employee was first employed.
By reason of the agreed facts in paragraphs 66 to 67 above, the first respondent contravened s.45 of the Act by failing to agree in writing to a regular pattern of work with either Mr Ferguson or Ms Benitez in contravention of cl.12.2 of the Award.
r. failure to comply with pay slip obligations
Pursuant to s.536(2) of the Act and reg.3.46(1) of the Regulations, the first respondent was required to give pay slips to the employees that specified the pay period to which each pay slip related.
During the assessment period, the first respondent issued employee pay slips to the employees as follows:
a)Mr Ferguson, Ms Benitez and Ms Richards were issued employee pay slips for each week during the assessment period; and
b)Ms Clark-Wingrave was issued an employee pay slip for the week ending 15 November 2015 only.
The employee pay slips did not set out the correct pay period to which they related as follows:
a)the employee pay slips show the employees’ pay periods beginning on a Thursday and ending on a Wednesday; and
b)the employees’ pay periods actually began on a Monday and ended on a Sunday.
By reason of the agreed facts in paragraphs 69 to 71 above, the first respondent contravened s.536(2) of the Act.
s. accessorial liability
During the assessment period, the second respondent was a person who:
a)was responsible for ensuring that the first respondent complied with its legal obligations under the Act and the Regulations;
b)was responsible for the operation and financial management of the business;
c)was responsible for the engagement of the employees by the first respondent;
d)authorised decisions regarding the first respondent’s employment practices, including the employment of the employees, the actual pay rates, and the payments made to the employees;
e)was responsible for creating pay slips and making payments to employees; and
f)was responsible for the creation and maintenance of records on behalf of the first respondent.
During the assessment period, the second respondent was the person who, on behalf of the first respondent:
a)provided instructions and directions to Jack Yacoub Pty Ltd trading as Jack Yacoub & Associates in respect of the applicant's investigation into the first respondent’s business; and
b)directed Jack Yacoub & Associates to provide documents to the applicant in response to the notice to produce.
During the assessment period, the second respondent knew that:
a)the Act and the Regulations applied to the first respondent;
b)the Act and the Regulations prescribed minimum terms and conditions of employment such as leave entitlements and record keeping requirements;
c)the Award applied to the first respondent and covered employees of the first respondent engaged at IGA supermarkets;
d)the Award prescribed minimum wages and conditions to the employees covered by the Award, including in relation to minimum hourly rates of pay, casual loadings, and public holiday and weekend penalty rates; and
e)the Award applied to the employment of the employees.
The second respondent was informed about the Act, the Regulations and the Award, which included being informed about:
a)minimum rates of pay;
b)casual loadings;
c)public holiday penalty rates; and
d)weekend penalty rates
under the Award and record-keeping requirements through his previous interactions with the applicant, including but not limited to:
e)responding to six separate complaints;
f)correspondence issued to the second respondent on 5 October 2012, 2 May 2013 and 25 November 2013; and
g)a letter of caution issued to the second respondent on 28 March 2014.
The second respondent received annual wage notices and rates relating to the Award from Master Grocers Australia which specified that the Award applied to the business, the minimum hourly rates of pay for part time and casual employees (including adult and junior rates), casual loadings, weekend and public holiday rates, and evening loading rates.
t. employee duties, rates of pay and hours of work
During the assessment period, the second respondent:
a)was present at the business on a regular basis;
b)calculated and paid wages to the employees;
c)reviewed, amended and approved weekly rosters;
d)collected clock cards used by the employees at the start and end of each shift, which recorded the start and finish times that the employees worked;
e)used the clock cards to prepare the employees’ wages;
f)disposed of the clock cards after the wages had been processed; and
g)prepared pay slips for the employees on the first respondent’s behalf.
By reason of the agreed facts in paragraphs 10, 11, and 73 to 78 above, the second respondent knew:
a)the duties performed by the employees;
b)the days and hours worked by the employees; and
c)the actual hourly rates paid to the employees during the assessment period.
By reason of the agreed facts in paragraphs 73 to 79 above, the second respondent:
a)had actual knowledge of; and
b)was an intentional participant in,
each of the contraventions by the first respondent referred to in paragraphs 25, 29, 34, 40, 46, 51, 56, 63, 68 and 72 above.
By reason of the agreed facts in paragraph 80 above, and pursuant to s.550 of the Act, the second respondent was involved in, and is therefore to be treated as having himself contravened, each of the provisions admitted to having been contravened by the first respondent.
Declarations agreed to by the parties
The parties agreed that the court should make the following declarations:
a)the first respondent contravened:
i)s.45 of the Act, by contravening:
A.clause 17;
B.clause 18.2;
C.clause 13.2;
D.clause 29.4(a);
E.clause 29.4(b);
F.clause 29.4(c);
G.clause 29.4(d);
H.clause 20.2(b)(ii); and
I.clause 12.2;
of the Award; and
ii)s.536(2) of the Act, by giving pay slips to the employees that did not accurately state the periods to which the pay slips related; and
b)the second respondent was involved in each of the contraventions committed by the first respondent identified in paragraph 82(a) above.
The court cannot make declarations by consent. However, it is open to the court to make declarations on admissions. On the basis of the admissions made in the statement of agreed facts, there will be declarations as sought by the parties.
Proposed orders
In addition to the declarations, the applicants proposed the following orders:
a)pursuant to s.545(1) of the Act, the second respondent be restrained from being in any way directly or indirectly knowingly concerned in conduct in respect of persons employed in the retail industry that contravenes:
i)the Award;
ii)the National Employment Standards contained in Part 2−2 of the Act; or
iii)the record keeping requirements contained in Part 3−6 of the Act and Division 3 of the Regulations; and
b)pursuant to s.545(1) of the Act, the first respondent will, within 30 days of the date of this order, display a notice in premises of any entities owned or operated by the first respondent or the second respondent that are covered by the Award, that can be easily viewed by all employees (“the workplace notice”) on the following terms:
i)the workplace notice must contain:
A.information on the minimum rates of pay, casual loading and penalty rates under the Award; and
B.information on how to contact the Fair Work Ombudsman;
ii)the first respondent provide proof of the display of the workplace notice to the applicant within 14 days of display; and
iii)the workplace notice must be displayed continuously for a period of one year.
The respondents gave provisional agreement to proposed order (b) above, except in relation to the length of time for which the notice would be required to be displayed. The applicant argued that the notice should be displayed for one year. The respondents said in their further amended response filed on 15 November 2017 that the notice should be displayed for a limited period of time but not as proposed by the applicant.
In their closing written submissions filed on 15 March 2018, the respondents argued that the orders sought by the applicant in paragraphs (a) and (b) above should not be dealt with by the court at this the liability stage of the proceedings, but should be dealt with later at the penalty stage of the proceedings. The applicant did not cavil with that submission in her written submissions in reply.
I consider that, strictly speaking, the respondents are correct on this issue, as consequential orders may be part of the penalty to be imposed on the respondents. As a result, I will consider all of the issues relating to penalty and consequential orders together at a separate and later stage.
Agreed facts regarding the disputed, alleged contraventions
The respondents disputed the alleged contraventions listed in paragraph 3 above. Nevertheless, the applicant and the respondents, in the statement of agreed facts, agreed on certain facts related to the disputed, alleged contraventions. The agreed facts in relation to the disputed, alleged contraventions are as set out in paragraphs 89 to 112 below, which are taken almost verbatim from the statement of agreed facts, although the paragraph numbers have been changed.
a. notice to produce records or documents
On 18 December 2015, Patricia Campbell, a Fair Work Inspector, (“FWI Campbell”) served a notice to produce records or documents pursuant to s.712(1) of the Act (“the notice to produce”) on the first respondent.
The notice to produce required the first respondent to produce by 22 January 2016 documents including records and documents showing:
a)the hours worked by the employees including the start and finish times, and the dates worked;
b)the employees’ rates of pay; and
c)the gross amounts and net amounts paid to the employees in cash or otherwise.
On 22 January 2016 and 2 February 2016, the first respondent produced documents in response to the notice to produce including:
a)spreadsheets described as ‘rosters’ setting out the hours worked by the employees during the assessment period (“the employer time records); and
b)pay advices setting out amounts purportedly paid to the employees during the assessment period (“the employer pay records”).
The employer time records and employer pay records were produced to FWI Campbell by Jack Yacoub & Associates. The employer pay records are annexed to the statement of agreed facts at Annexure B.
The second respondent instructed Jack Yacoub & Associates to produce records to the applicant in response to the notice to produce on behalf of the first respondent.
In producing the employer time records and the employer pay records, Jack Yacoub & Associates was acting:
a)on instructions from the second respondent; and
b)within the scope of its actual or apparent authority as an agent of the first respondent.
b. employer pay records
The employer pay records recorded that:
a)Ms Clark-Wingrave was paid an hourly rate of $22.24;
b)Mr Ferguson was paid an hourly rate of $20;
c)Ms Richards was paid an hourly rate of $22.24; and
d)Ms Benitez was paid an hourly rate of $18.99.
The employer pay records recorded that:
a)Ms Clark-Wingrave was paid penalty rates of:
i)$33.36 per hour for work on a Saturday; and
ii)$44.48 per hour for work on a Sunday;
b)Ms Richards was paid a penalty rate of $44.48 per hour for work on a Sunday; and
c)Ms Benitez was paid penalty rates of:
i)$23.74 for work on a Saturday; and
ii)$27.98 for work on a Sunday.
The employer pay records recorded gross and net amounts purportedly paid to the employees on the basis of the rates of pay set out at paragraphs 95 and 96.
The employer pay records were records the first respondent was required to make and keep in accordance with reg.3.33(1)(a), 3.33(1)(b) and 3.33(3) of the Regulations.
c. inaccuracy of employer pay records
The first respondent was required by reg.3.44(1) of the Regulations to ensure that a record it was required to keep under the Act or the Regulations was not false or misleading to its knowledge.
The employer pay records are records of the kind that the first respondent was required to make pursuant to s.535(1) of the Act.
By reason of the actual hourly rates paid to the employees, the employer pay records inaccurately record:
a)the rates of remuneration paid to the employees;
b)the gross and net amounts paid to employees each week; and
c)that penalty rates were paid to Ms Clark-Wingrave, Ms Richards and Ms Benitez for work performed on a Saturday or Sunday.
The second respondent:
a)knew the actual hourly rates paid to the employees;
b)knew that the first respondent did not pay penalty rates to the employees during the assessment period;
c)was responsible for calculating, and arranging payment of, the amounts paid to the employees on a weekly basis;
d)was responsible for preparing and issuing the employee pay slips; and
e)was the source of the information regarding rates of pay set out in the employer pay records and therefore knew the rates of pay which were stated in the employer pay records as set out at paragraphs 95 and 96 above.
By reason of the agreed facts in paragraph 102 above, the second respondent knew that any time and wage record that recorded that the employees were paid:
a)at a rate different to the actual hourly rates; and/or
b)penalty rates for work performed on a Saturday or Sunday,
were not accurate.
When producing the employer time records, Jack Yacoub & Associates:
a)knew that it was providing information regarding the payment of wages, including the rate of pay, gross and net amounts and penalty rates; and
b)was aware of the content of the employer pay records.
At the time that the employer time records were produced to the applicant, the second respondent:
a)knew that the first respondent was providing information regarding the payment of wages, including the rate of pay, gross and net amounts and penalty rates; and
b)was aware of the content of the employer pay records.
Pursuant to s.793 of the Act and by reason of the agreed facts in paragraph 12 above, the knowledge of the second respondent is taken to be knowledge of the first respondent.
Pursuant to s.793 of the Act and by reason of the agreed facts in paragraph 94 above, the knowledge of Jack Yacoub & Associates is taken to be knowledge of the first respondent.
The first respondent was required by reg.3.44(4) of the Regulations not to alter a record that the first respondent was required to keep under the Regulations except in compliance with reg.3.44(2) and reg.3.44(3) of the Regulations or as otherwise permitted by the Act or the Regulations.
The first respondent was required by reg.3.44(5) of the Regulations to ensure that a record it was required to keep under the Act or the Regulations was not altered by another person except as provided in compliance with reg.3.44(2) or reg.3.44(3) of the Regulations or as otherwise authorised by the Act or the Regulations.
The first respondent was required by reg.3.44(6) of the Regulations not to make use of an entry in an employee record made and kept for Subdivision 1 of Division 3 of Part 3-6 of the Regulations, if it does so knowing that the entry is false or misleading.
The employer pay records were records of the kind that the first respondent, as an employer, was required to make and keep.
The first respondent made use of entries in the employer pay records, within the meaning of reg.3.44(6) of the Regulations, by producing them to the applicant in response to the notice to produce.
Disputed facts regarding the disputed, alleged contraventions
The respondents did not agree with the facts alleged in paragraphs 90, 91, 95 to 97, and 102 to 106 of the statement of claim filed on 30 January 2017. Those paragraphs are as follows:
90. By reason of the knowledge of the Second Respondent and the knowledge of Jack Yacoub & Associates, the First Respondent knew that the Employer Pay Records were false and misleading.
91. By reason of the matters alleged in paragraphs 81 to 90 [of the statement of claim], the First Respondent contravened regulation 3.44(1) of the FW Regulations by failing to ensure that:
(a)the records of the rates of remuneration paid to the Employees;
(b)the records of gross and net amounts paid to Employees each week; and
(c)the records of penalty rates purportedly paid to Jessica, Narelle and Angelica for work performed on a Saturday or Sunday,
were not false or misleading to the First Respondent’s knowledge.
…
95.On or prior to 22 January 2016, the records of the Actual Hourly Rate made and kept by the First Respondent were altered to produce the Employer Pay Records as follows:
(a)by changing the hourly rate of pay; and
(b)including penalty rates for work performed on a Saturday and Sunday,
thereby altering the gross and net pays recorded on each of the Employer Pay Records.
PARTICULARS
The Employee Pay Slips show the Actual Hourly Rates of pay, and did not include any reference to penalty rates.
96. The alteration of the records of the Actual Hourly Rates paid to the Employees to create the Employer Pay Records was not in accordance with regulations 3.44(2) or 3.44(3), or as otherwise authorised by the FW Act or the FW Regulations.
PARTICULARS
The Employer Pay Records did not contain a notation indicating that they had been altered to correct an error.
97. By reason of the matters alleged in paragraphs 76 to 77, and 95 and 96 [of the statement of claim], the First Respondent contravened regulation 3.44(4) of the FW Regulations by altering records that the First Respondent was required to keep under the FW Regulations other than as permitted by regulation 3.44(4) of the FW Regulations.
…
102. The First Respondent knew the entries in the Employer Pay Records were false and misleading as to:
(a)the rate of remuneration paid to the Employees;
(b)the gross and net amounts paid to Employees each week;
(c)the penalty rates purportedly paid to Jessica, Narelle and Angelica for work performed on Saturday or Sunday.
PARTICULARS
The Applicant refers to and repeats paragraphs 83 and 90 [of the statement of claim].
103. By reason of the matters alleged in paragraphs 99 to 102 [of the statement of claim] the First Respondent contravened regulation 3.44(6) of the FW Regulations.
Failure to comply with Notice to Produce
104. By reason of the matters pleaded at paragraph 83 [of the statement of claim], the Employer Pay Records were not a record of:
(a)the Employees’ Actual Hourly Rates; or
(b)the actual gross amounts and net amounts paid to the Employees.
105. The First Respondent did not, by 22 January 2016 or at any other time, provide in response to the Notice to Produce:
(a)copies of the Employee Pay Slips;
(b)copies of any emails sent to the Employees during the Assessment Period attaching the Employee Pay Slips; or
(c)any other record of the amounts paid to and/or the hourly rates paid to the Employees.
106.By reason of the matters pleaded at paragraphs 104 and 105 [of the statement of claim], the First Respondent contravened section 712(3) of the FW Act by failing to produce documents as required by the Notice to Produce.
The legislation
Subsection 535(1) of the Act provided that:
(1)An employer must make, and keep for 7 years, employee records of the kind prescribed by the regulations in relation to each of its employees.
Subsections 536(1) and (2) of the Act provided that:
(1)An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
(2) The pay slip must:
(a)if a form is prescribed by the regulations–be in that form; and
(b)include any information prescribed by the regulations.
Section 550 of the Act provided that:
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
Subsection 712(3) of the Act provided that:
A person who is served with a notice to produce must not fail to comply with the notice.
Section 793 of the Act provided that:
Conduct of a body corporate
(1)Any conduct engaged in on behalf of a body corporate:
(a)by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or
(b)by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;
is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.
State of mind of a body corporate
(2)If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:
(a)that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and
(b)that the person had that state of mind.
Meaning of state of mind
(3)The state of mind of a person includes:
(a)the knowledge, intention, opinion, belief or purpose of the person; and
(b)the person’s reasons for the intention, opinion, belief or purpose.
Disapplication of Part 2.5 of the Criminal Code
(4)Part 2.5 of Chapter 2 of the Criminal Code does not apply to an offence against this Act.
(5)In this section, employee has its ordinary meaning.
Subregulation 3.31(1) of the Regulations provided that:
(1)For subsection 535(1) of the Act, an employee record made and kept by an employer for this Subdivision must be of the following kind:
(a)a record in a legible form and in the English language;
(b)a record in a form that is readily accessible to an inspector.
Regulation 3.32 of the Regulations provided that:
For subsection 535(1) of the Act, a kind of employee record that an employer must make and keep is a record that specifies:
(a)the employer’s name; and
(b)the employee’s name; and
(c)whether the employee’s employment is full-time or part-time; and
(d)whether the employee’s employment is permanent, temporary or casual; and
(e)the date on which the employee’s employment began; and
(f)on and after 1 January 2010—the Australian Business Number (if any) of the employer.
Regulation 3.33 of the Regulations provided that:
(1)For subsection 535(1) of the Act, a kind of employee record that an employer must make and keep is a record that specifies:
(a)the rate of remuneration paid to the employee; and
(b)the gross and net amounts paid to the employee; and
(c)any deductions made from the gross amount paid to the employee.
(2)If the employee is a casual or irregular part‑time employee who is guaranteed a rate of pay set by reference to a period of time worked, the record must set out the hours worked by the employee.
(3) If the employee is entitled to be paid:
(a)an incentive–based payment; or
(b)a bonus; or
(c)a loading; or
(d)a penalty rate; or
(e)another monetary allowance or separately identifiable entitlement;
the record must set out details of the payment, bonus, loading, rate, allowance or entitlement.
Regulation 3.34 of the Regulations provided that:
For subsection 535(1) of the Act, if a penalty rate or loading (however described) must be paid for overtime hours actually worked by an employee, a kind of employee record that the employer must make and keep is a record that specifies:
(a)the number of overtime hours worked by the employee during each day; or
(b)when the employee started and ceased working overtime hours.
Subregulation 3.44(1) of the Regulations provided that:
An employer must ensure that a record that the employer is required to keep under the Act or these Regulations is not false or misleading to the employer’s knowledge.
Subregulation 3.44(2) of the Regulations provided that:
An employer must correct a record that the employer is required to keep under the Act or these Regulations as soon as the employer becomes aware that it contains an error.
Subregulation 3.44(3) of the Regulations provided that:
An employer must ensure that a record that the employer is required:
(a) to keep under the Act or these Regulations; and
(b) to correct in accordance with subregulation (2);
contains a notation of the nature of the corrected error with the correction.
Subregulation 3.44(4) of the Regulations provided that:
An employer must not alter a record that the employer is required to keep under the Act or these Regulations except:
(a)in compliance with subregulation (2) or (3); or
(b)to any extent otherwise permitted by the Act or these Regulations.
Subregulation 3.44(5) of the Regulations provided that:
An employer must ensure that a record that the employer is required to keep under the Act or these Regulations is not altered by another person except:
(a)in compliance with subregulation (2) or (3); or
(b)to any extent otherwise permitted by the Act or these Regulations.
Subregulation 3.44(6) of the Regulations provided that:
A person must not make use of an entry in an employee record made and kept by an employer for this Subdivision if the person does so knowing that the entry is false or misleading.
Material relied upon
The applicant relied on:
a)the affidavits affirmed by Patricia Louise Campbell on 15 December 2017 and 16 February 2018;
b)the affidavit affirmed by Sally Patti McLeod on 15 December 2017;
c)the affidavit sworn by Narelle Cindy Richards on 15 December 2017;
d)the statement of agreed facts; and
e)exhibit 6, being a USB produced under subpoena to Sky Software Pty Ltd.
The applicant’s witnesses were not required for cross-examination. I accept their unchallenged evidence, except insofar as it was struck out. There was no suggestion that the USB contained inaccurate information. I accept that the information contained in the USB is accurate. The USB contained information about the actual hours worked and amounts paid to the employees, as well as some actual pay slips of the employees.
The respondents relied on the affidavit sworn by the second respondent, Said Haddad, on 6 February 2018. The second respondent was cross-examined.
Overview of the respective cases
The applicant argued that the respondents had knowingly manufactured false pay records in relation to the employees and provided them to the applicant in answer to a notice to produce. More particularly, the false pay records indicated that the employees were paid at the correct award rates when in fact they were paid at less than those rates.
The respondents accepted that they had manufactured false pay records. However, they said that:
a)they did not intend to mislead or deceive;
b)rather, they had lost the original pay records in September 2015 in a computer crash which partially destroyed the first respondent’s computer hard drive;
c)they thought the applicant required them to recreate documents lost in the computer crash;
d)they thought that the purpose of the notice to produce was to acknowledge the employment of their employees and to provide an approximate statement of the amounts paid to the employees;
e)they used work rosters to reconstruct the pay records;
f)the reconstructed records used the award rates of pay, although that is not what the employees were paid;
g)the first respondent had emailed payslips to the employees for the relevant periods;
h)the payslips emailed to the employees stated what they had actually been paid;
i)the respondents believed that the applicant had obtained the correct payslips from the employees concerned;
j)the respondents believed that the applicant would know that the pay records the respondents produced were not entirely accurate; and
k)the respondents created the false pay records in an attempt to assist the applicant and to restore what had been lost in the computer crash.
The respondents provided to the applicant during the course of the investigation a letter dated 18 November 2016 from an external IT consultant (exhibit PLC-24 to the affidavit of Ms Campbell affirmed on 15 December 2017). The letter said that there was a disc crash in September 2015 in the first respondent’s office PC and some, but not all, of the data could be retrieved. The applicant did not interview the IT consultant or require him to attend for cross examination.
The applicant argued that:
a)it was nonsense that the respondents could not produce the pay records because of a computer crash;
b)the respondents in fact used a web based pay system which kept pay records in the cloud; and
c)consequently, the pay records could be accessed from any computer, irrespective of whether a particular computer had a corrupted hard drive and had not been backed up.
Model litigant issues
The applicant invited the court to reject the claim that the first respondent’s relevant records were irretrievably lost as a result of a computer crash. The respondents argued that the applicant had failed in her duty as a model litigant by not alerting them to the fact that she did not accept that there had been a computer crash, or that there were records that were inconsistent with the fact of a computer crash. The respondents argued that, as a result, they had been denied procedural fairness. The respondents relied on Morley v Australian Securities and Investments Commission (2010) 274 ALR 205; (2010) 247 FLR 140; (20120) 81 ACSR 285; [2010] NSWCA 331.
The applicant said that the decision of the New South Wales Court of Appeal in Morley was of no assistance to the respondents because it was overturned on appeal by the High Court in Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; (2012) 286 ALR 501; (2012) 86 ALJR 522; (2012) 88 ACSR 246; [2012] HCA 17.
Moreover, the applicant argued that compliance with a Legal Services Direction, such as the Commonwealth’s model litigant policy, is only enforceable by or on the application of the Attorney-General (s.55ZG(2) of the Judiciary Act 1903) and non-compliance with a Legal Services Direction may not be raised in any proceeding except by or on behalf of the Commonwealth (s.55ZG(3) of the Judiciary Act 1903).
In addition, the applicant argued that it was obvious from the pleadings that she did not accept that a computer crash explained the first respondent’s failure to produce accurate records, and it was incumbent on the respondents to call the external IT consultant if they wanted to press that claim.
I accept the applicant’s submissions on the model litigant issue for the reasons that she gave.
Standard of proof
The respondents accepted that s.551 of the Act required that the court apply the rules of evidence and procedure applicable to civil matters in determining this case. The respondents accepted that that meant that s.140 of the Evidence Act 1995 applies. That section provides that:
(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a)the nature of the cause of action or defence; and
(b)the nature of the subject‑matter of the proceeding; and
(c)the gravity of the matters alleged.
Paragraph 140(2)(c) of the Act is a statutory encapsulation of the well-known principle stated in Briginshaw.[1]
[1] Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] ALR 334; (1938) 12 ALJR 100; [1938] HCA 34
Subregulation 3.44(1) of the Regulations
Subregulation 3.44(1) of the Regulations provided that:
An employer must ensure that a record that the employer is required to keep under the Act or these Regulations is not false or misleading to the employer’s knowledge.
It was common ground that:
a)the first respondent was required under the Act or Regulations to keep pay slips that were not false or misleading to the first respondent’s knowledge;
b)the first respondent provided payslips to the employees for the period 14 September 2015 to 15 November 2015 (“the actual payslips”) which accurately showed the employees were paid under award wages;
c)on 22 January 2016 and 2 February 2016, the first respondent produced to the applicant false payslips for the employees for the period 14 September 2015 to 15 November 2015 (“the false payslips”) which contained numerous inaccuracies;
d)some of the inaccuracies indicated that an employee had been paid award wages when he or she had not, and other inaccuracies indicated that an employee had worked more or fewer hours that he or she actually had; and
e)if the second respondent knew that the false payslips were false or misleading, his knowledge would be imputed to the first respondent.
To state the obvious, the false pay slips that the first respondent produced to the applicant were records that the first respondent kept. The area of dispute in the present case was whether the second respondent knew that the false pay slips were false or misleading.
The respondents argued that, for a contravention of reg.3.44(1) of the Regulations to be made out, the applicant had to prove that the second respondent intended to wilfully mislead or deceive. That is not correct. All that was required was that the first respondent kept records that the second respondent knew were inaccurate. His intention and motivation were irrelevant. That accords with the plain words of the regulation.
The second respondent admitted in cross-examination that he did know that the false records were false and misleading. The second respondent explained that an administrative person prepared the false payslips using information he gave her about the hours worked and she inserted the award rates. He said that he knew that she put in the award rates and he knew that the first respondent did not pay award rates.[2] He agreed that he knew that the payslips the administrative person produced were incorrect.[3] He claimed that he did not tell the applicant that the records were 100 per cent. However, that is irrelevant.
[2] Tr. p.84 l.1-4.
[3] Tr. p.84 l.6.
The second respondent also conceded in cross-examination that, at the time that the false pay slips were created in January 2016 showing that the first respondent had paid the employees award wages, he knew that the first respondent had to pay the employees award wages and he knew that the first respondent had not.[4]
[4] Tr. p.85 l.29-30.
The second respondent also conceded in cross-examination that, when the first respondent produced the false records, the second respondent knew that the first respondent had not paid weekend penalty rates, contrary to the statements made in the false records.[5]
[5] Tr. p.85 l.41-2.
In my view, this evidence establishes, on the Briginshaw standard, that the second respondent knew that the false payslips were false and misleading. The second respondent’s knowledge is imputed to the first respondent. The first respondent kept records that it knew to be false and misleading.
Subregulation 3.44(4) of the Regulations
Subregulation 3.44(4) of the Regulations provided that:
An employer must not alter a record that the employer is required to keep under the Act or these Regulations except:
(a)in compliance with subregulation (2) or (3); or
(b)to any extent otherwise permitted by the Act or these Regulations.
Subregulation 3.44(2) of the Regulations provided that:
An employer must correct a record that the employer is required to keep under the Act or these Regulations as soon as the employer becomes aware that it contains an error.
Subregulation 3.44(3) of the Regulations provided that:
An employer must ensure that a record that the employer is required:
(a) to keep under the Act or these Regulations; and
(b) to correct in accordance with subregulation (2);
contains a notation of the nature of the corrected error with the correction.
The respondents submitted that the first respondent did not alter a record because the relevant records had ceased to exist as a result of a computer crash in September 2015. The respondents submitted that it was not possible to alter something that did not exist.
The respondents gave no real answer to the applicant’s claim that all relevant information was kept in the cloud, and therefore a computer crash could not have destroyed the relevant records. The second respondent only said, in effect, that he was not very good with computers.
However, the second respondent did not dispute that, at all relevant times, the first respondent had a contract with a software company that retained in the cloud all of the information contained in the actual pay slips that the first respondent gave to the employees. The software company produced that information to the court in answer to a subpoena. Obviously, the first respondent could have obtained the same information from the software company. The records existed. It is simply not the case that they had ceased to exist.
By creating the false records, the respondents altered records that the first respondent was required to keep, otherwise than in compliance with reg.3.44(2) or (3) of the Regulations.
Regulation 3.44(4) of the Regulations does not impose a requirement that the records be altered to the employer’s knowledge. As such, the contravention of reg.3.44(4) of the Regulations appears to be an offence of strict liability.
However, in the event that I am wrong about that, I consider that it is clear that the second respondent knew that the records were altered, and his knowledge is imputed to the first respondent. The second respondent knew that the records were altered because, on his own evidence as discussed above, he instructed an administrative person to create records knowing them to be false.
The second respondent’s claims of being naïve and computer-illiterate beggar belief. He successfully ran at least two companies. Moreover, the alleged computer crash occurred in September 2015. It does not explain why the first respondent’s records for October, November and December 2015 were altered.
As I have found a breach of reg.3.44(4) of the Regulations, it is unnecessary to consider the alternative of reg.3.44(5) of the Regulations.
Subregulation 3.44(6) of the Regulations
Subregulation 3.44(6) of the Regulations provided that:
A person must not make use of an entry in an employee record made and kept by an employer for this Subdivision if the person does so knowing that the entry is false or misleading.
In the present case, the first respondent made and kept the false records for the purposes of Subdivision 1 of Division 3 of Part 3-6 of the Regulations. This is the same subdivision that contains 3.44(6) of the Regulations. The first respondent made use of them by providing them to the applicant. For the reasons discussed above, the first respondent knew that the false records were false or misleading.
Subsection 712(3) of the Act
Subsection 712(3) of the Act provided that:
A person who is served with a notice to produce must not fail to comply with the notice.
Subsection 712(4) of the Act provided that:
Subsection (3) does not apply if the person has a reasonable excuse.
The applicant sent to the first respondent a notice to produce which required the production of certain records. The first respondent did not comply with that notice. Instead, the first respondent produced to the applicant some other records which were false and misleading.
The respondents submitted that they had a reasonable excuse for not producing the documents, being the excuse that it was impossible to produce the documents because they had been destroyed. However, for the reasons discussed above, I do not accept that the documents had been destroyed.
The respondents also submitted that, logically, reg.3.44(6) of the Regulations and s.712(3) of the Act could not both be breached. The respondents submitted that those two contraventions could only be alternatives.
The respondents’ point seemed to be that, if the respondents used the records by producing them, they could not simultaneously have failed to produce them.
However, the respondents made and kept the false records in breach of reg.3.44(6) of the Regulations. They failed to produce the actual records in breach of s.712(3) of the Act. Consequently, it was possible for the respondents to breach both provisions.
Subsection 712(3) of the Act does not specify that the failure to comply must be done with knowledge. Consequently, it appears to be an offence of strict liability. However, if I am wrong about that, I consider, on the Briginshaw standard, that the second respondent knew that the first respondent failed to comply with the notice to produce for the reasons discussed above. The second respondent’s knowledge is imputed to the first respondent.
Conclusion
Each of the matters alleged has been established on the Briginshaw standard. There will be declarations accordingly.
I certify that the preceding one hundred and seventy two (172) paragraphs are a true copy of the reasons for judgment of Judge Riley.
Date: 31 May 2018
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