Fair Work Ombudsman v Devine Marine Group Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365

Citation: Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Parties: FAIR WORK OMBUDSMAN v DEVINE MARINE GROUP PTY LTD, BRETT BARRY DEVINE and ARTHUR BOUCAUT-JONES
File number: SAD 209 of 2013
Judge: WHITE J
Date of judgment: 12 December 2014
Catchwords:

INDUSTRIAL LAW – contravention of modern award – participants in a claimed unpaid training program were in reality employees to whom the Fair Work Act 2009 (Cth) and Manufacturing and Associated Industries and Occupations Award 2010 (“the Award”) applied – whether employer contravened terms of the Award – whether employees were casuals within the definition in the Award – degree of knowledge required to establish individuals’ accessorial liability under s 550

INDUSTRIAL LAW – failure to comply with Notice to Produce Records or Documents issued by Fair Work Inspector under s 712 of the Fair Work Act 2009 (Cth) – Notice assumed status of workers as “employees” – Notice unduly wide and uncertain – reasonable excuse for failure to comply

Legislation: Evidence Act 1995 (Cth) s 140
Fair Work Act 2009 (Cth) ss 12, 13, 14, 15, 45, 539, 550, 701, 706, 712, 713
Cases cited: Australian Mutual Provident Society v Allan (1978) 52 ALJR 407
Australian Securities and Investments Commission v Albarran [2008] FCA 147; (2008) 169 FCR 448
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Unionv John Holland Pty Ltd [2009] FCA 274; (2008) 180 IR 350
Bank of the Valletta PLC v National Crime Authority [1999] FCA 791; (1999) 164 ALR 45
Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
Fair Work Ombudsman v Al Hilfi [2012] FCA 1166
Giorgianni v The Queen (1985) 156 CLR 473
Hamzy v Tricon International Restaurants [2001] FCA 1589; [2001] 115 FCR 78
Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21
Laing v Carroll [2005] FCAFC 202; (2005) 146 FCR 511
Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; (1999) 94 IR 218
Loves Bus and Taxi Service v Zucchiatti [2006] WAIRC 5758; (2006) 157 IR 348
Poletti v Ecob (No 2) (1989) 31 IR 321
Potter v Fair Work Ombudsman [2014] FCA 187
Qantas Airways Ltd v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 280 ALR 503
Rafferty v Madgwicks [2012] FCAFC 37; (2012) 287 ALR 437
Reed v Blue Line Cruises Ltd (1996) 73 IR 420
Riley McKay Pty Ltd v Bannerman (1977) 31 FLR 129
Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236
Smith v Hughes (1871) LR 6 QB 597
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Taikato v The Queen (1986) 186 CLR 454
Taylor v Johnson (1983) 151…
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Details
Case
[2014] FCA 1365
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) commenced proceedings against Devine Marine Group Pty Ltd (DMG) alleging contravention of the Fair Work Act 2009 (Cth) and the Manufacturing and Associated Industries and Occupations Award 2010. The dispute involved whether participants in an unpaid training program were in reality employees to whom the Act and the Award applied. Additionally, the FWO alleged that DMG failed to comply with a Notice to Produce Records or Documents issued under s 712 of the Fair Work Act 2009 (Cth). The Court had to determine whether DMG contravened the terms of the Award, whether the employees were casuals within the definition in the Award, and the degree of knowledge required to establish individuals’ accessorial liability under s 550. Furthermore, the Court needed to assess whether there was a reasonable excuse for DMG’s failure to comply with the Notice to Produce Records or Documents.

The Court examined the relationship between DMG and the participants, concluding that the men were employees rather than trainees. The Court found that Captain Devine's description of the men as "invited guests" or "trainees" was not determinative of their actual relationship. The evidence showed that the men were engaged in work activities and were paid a cash living allowance, indicating an employment relationship. The Court also considered the notice issued by the FWO, determining that it was unduly wide and uncertain, thus providing a reasonable excuse for DMG's failure to comply. The Court concluded that DMG contravened the minimum hourly rate and weekend penalty rate provisions of the Award and that Captain Devine was involved as an accessory in those contraventions.

In light of the findings, the Court dismissed the FWO's application for accessorial liability of Captain Boucaut-Jones but declared that DMG contravened specific sections of the Award and that Captain Devine was an accessory to those contraventions. The Court ordered appropriate minutes to be brought in to reflect these conclusions and orders. The matter will proceed to determine the imposition of a penalty.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Captain Boucaut-Jones gave evidence in his own defence and did not lead evidence from any other witnesses. He has previously worked as a teacher. He was able to adapt to the Court process much better than Capt Devine but, nevertheless, his evidence was marked by a degree of bombast, bluster and evasiveness. As will become apparent, I do not accept all of his evidence.Background In this section of the reasons, I make findings as to the background circumstances giving rise to the issues for the Court’s determination. In many respects, these findings concern matters which are uncontentious but, in some instances, involve findings of disputed matters. For many years, the business of DMG involved the provision of general marine services as well as marine repair and salvage services. It was established by Capt Devine and was based in Rozelle, Sydney. DMG operated in South Australia from premises at Dock 1, Ocean Steamers Road, Port Adelaide. Much of the evidence in this case concerned its work in the cutting up for scrap of an 80 m fishing vessel described as a “Japanese Longliner” or as the “D3” and the repair of a vessel, the Bradley, at Port Adelaide. The Bradley is a large seagoing barge (83 m in length, 33 m wide and 5 m high) used in salvage and dredging operations. It is equipped with a crane and numerous buoyancy tanks. Captain Devine has been a salvage master for about 40 years. This means that he has a certification issued by the Australian Maritime Authority and that he is qualified to engage in the removal and retrieval of wrecks. He has had a diverse employment history in maritime industries. For many years, Capt Devine has had an association with Fiji and has come to know many people there. From time to time he has carried out salvage operations in and around Fiji.Mr James Mr James is Fijian. He has had a variety of maritime jobs and has worked on large fishing boats as a bosun. A friend, Mamatuki Viliame, told him that he had been to Australia doing salvage work for Capt Devine who had provided his airfares, arranged his visa, provided him with food and paid him a cash living allowance. Mr James was interested in doing the same as there was little work available to him in Fiji. Shortly afterwards, Mr Viliame told him that Capt Devine wished to see his papers. He then emailed copies of his passport, seaman’s book and trade certificates to Capt Devine. Shortly afterwards he received a telephone call from Ms Vulatolu. She arranged to meet him at the Australian Embassy in Suva on 11 January 2011. At the Embassy, Ms Vulatolu assisted Mr James to complete a visa application, giving him the form of application for a Business (Short Stay) visa which permits a stay in Australia of up to three months. Question 17 on the application form required applicants to “describe your intended principal business activity in Australia”. At the direction of Ms Vulatolu, Mr James wrote:Learn about and prepare vessels that are being delivered to Fiji so that I can work on them in Fiji.He gave Capt Devine’s name and address as his contact person. Mr James also provided Ms Vulatolu with copies of references and certificates of service from three previous employers.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

For these reasons, I consider that the FWO does not establish the claimed accessorial liability of Capt Boucaut-Jones. Conclusion In summary, I consider that, for the purpose only of establishing the accessory liability of Capt Devine, the FWO has established that DMG contravened s 45 of the FW Act by failing to pay the minimum hourly rate required by cl 24.1(a) of the Manufacturing and Associated Industries and Occupations Award 2010 and by failing to pay the weekend penalty rates required by cll 40.7 and 40.8 of the Award. I consider that the FWO has established that Capt Devine was involved as an accessory in those contraventions. There will be declarations accordingly. In accordance with the arrangements made at the commencement of the hearing, I will hear from the parties further on the question of imposition of a penalty. In all other respects, the application of the FWO is dismissed. The FWO is to bring in appropriate minutes to give effect to these conclusions and orders.

Ratio Decidendi

Legal Principle Established

The more recent cases recognise that the relationship of employer and employee is not capable of precise definition and that regard must be had to the combined effect of a variety of indicia of which the element of control is important but not decisive. Because of the variety of circumstances in which employment relationships exist, different features may be influential in a given case. For this reason, it is necessary to have regard to the totality of the relationship: Hollis v Vabu at [24]. The characterisation which the parties themselves, or one of them, gave to the relationship at the time may be a relevant consideration, but is not decisive: Australian Mutual Provident Society v Allan (1978) 52 ALJR 407 at 409. Accordingly, Capt Devine’s description of the Fijian men as his “invited guests” or as “trainees” is not conclusive of the proper characterisation of their relationship.Consideration of the relationship Considered objectively, the conclusion that Mr James and Mr Kouka had entered into a contractual relationship with DMG, which is properly characterised as that of employee-employer, is the only proper conclusion on the evidence. First, Captain Devine himself used the word “work” to describe the men’s activities. When he spoke to Mr James on Ms Vulatolu’s mobile phone in Suva, he told him that he could come and “work” for him on the same conditions as Mr Viliame. Captain Devine did not use the word “training”. I accept Mr James’ evidence about that. Mr James gave this evidence in his affidavit and said much the same in his cross-examination by Capt Boucat‑Jones:CAPT BOUCAUT-JONES: … Did Captain Devine ask you to come to Australia to be his employee? A:That’s correct.HIS HONOUR: Well, did he use the word “employee”?A:He used the word – if you [are] interested in working with me, you can work under the same condition[s] as [Mr Viliame].CAPT BOUCAUT-JONES: What were the conditions that you were told about working with Captain Devine by [Mr Viliame]? A:They will be doing welding, cutting, getting $100 a day.Q:Did he say anything about being trained?A: No. Captain Boucaut-Jones cross-examined Mr James about his understanding of the word “work” with a view, apparently, to establishing that Mr James had understood Capt Devine’s use of it in a distinctive sense. However, Mr James said:In my first language, work is to do something to get something out of it … I think it’s common sense. Everybody knows you work to get money. Nobody works to get something else. … Money is … the main thing. In my view, that accords with the ordinary understanding of the word “work” and both Capt Devine and Mr James understood the word in that sense. Mr Kouka said that Capt Devine told him that he could come to Australia to “work” for him and that he would be “working” on tugboats in Sydney. Mr James did say that Capt Devine had spoken of plans to establish a company in Fiji. It is possible that, in that context, Capt Devine mentioned the prospect of the men obtaining work with him in Fiji. Mr James gave the following evidence:HIS HONOUR: When you did come to talk to Capt Devine was there any discussion about the work or working in Fiji later on or anything of that kind?A:No. He used to – he said – like, after, after all this he’s going to make a company in Fiji, but no guarantee that …HIS HONOUR: What did he say on that topic?A:He used to tell us that all the projects here will be finished and he’s going to open a company in Fiji.HIS HONOUR: And was there anything said about you working for that company when it was established?A:No idea, but we don’t know if we’re going to work in Fiji. So we tried to prove ourselves here so we had the chance to work in Fiji.I accept that evidence. It indicates that Mr James had the hope of obtaining work with Capt Devine’s company in the event that he established operations in Fiji, but it is well short of indicating that Mr James was informed that he was undergoing training in Australia for contemplated employment in Fiji.