Fair Work Ombudsman v Essendene Security Pty Ltd - [2010] FMCA 384

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v ESSENDENE SECURITY PTY LTD & ANOR

[2010] FMCA 384

INDUSTRIAL LAW – Contravention of AWA requirements – delay in lodgement of one AWA – failure to pay NAPSA rates prior to lodgement – failure to pay ‘fairness-test compensation’ after termination of employment – involvement of sole director and manager – substantial mitigating circumstances – legislative changes – cooperation of person responsible – general and individual deterrence considered – discretion to impose no penalty – total penalties of $6,000 and $800 imposed on employer and director.

Fair Work Act 2009 (Cth)
Workplace Relations Act 1996 (Cth), ss.326, 333, 340, 345, 346M, 346R, 346ZD, 347, 718, 719, 722, 728, 841, Part 8 Div 5A, Sch.8 Part 3.
Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth)

Australian Ophthalmic Supplies Pty Ltd v McAlary Smith (2008) 165 FCR 560, [2008] FCAFC 8
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corporation Ltd [2007] FCA 1607
Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39
Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417
Fair Work Ombudsman v McGrath [2010] FMCA 315
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Plancor Pty Ltd v LHMU (2008) 177 IR 243
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Torpia v Empire Printing (Australia) Pty Ltd [2009] FMCA 853
Workplace Ombudsman v Securit-E Holdings Pty Ltd (2009) 187 IR 330

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

ESSENDENE SECURITY PTY LTD
(ACN 101 744 576)

Second Respondent:

JOHN RICHARD RYAN

File Number:

SYG 3101 of 2009

Judgment of:

Smith FM

Hearing date:

13 May 2010

Delivered at:

Sydney

Delivered on:

11 June 2010

REPRESENTATION

Counsel for the Applicant:

Ms L Andelman

Solicitors for the Applicant:

Fair Work Ombudsman

Counsel for the Respondents:

Mr M Easton

Solicitors for the Respondents:

Steven T Parrott

ORDERS

There is imposed on the first respondent pursuant to s.719(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’) a penalty in the amount of $1,000 for its failure to pay night shift loadings to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 21.3 of the Security Industry (State) Award (NSW) (“the Security NAPSA”).
There is imposed on the first respondent pursuant to s.719(1) of the Act a penalty in the amount of $1,000 for its failure to pay overtime to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 22.1.1 of the Security NAPSA.
There is imposed on the first respondent pursuant to s.719(1) of the Act a penalty in the amount of $1,000 for its failure to pay Sunday loadings to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 22.1.2 of the Security NAPSA.
There is imposed on the first…

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: [2010] FMCA 384
Decision Date: 11 June 2010

CaseChat Overview and Summary

In the Fair Work Ombudsman v Essendene Security Pty Ltd, the Fair Work Ombudsman brought proceedings against Essendene Security Pty Ltd and one of its directors, alleging non-payment of various entitlements to employees. The dispute involved the failure to pay night shift loadings, overtime, Sunday loadings, Saturday loadings, and fairness test compensation as mandated by the Security Industry (State) Award (NSW) and the Workplace Relations Act 1996 (Cth). The Fair Work Ombudsman sought penalties and restitution for employees Christopher Martin and Robert Wright.

The court was tasked with determining whether Essendene Security Pty Ltd contravened the relevant awards and legislation by failing to pay the specified entitlements. Additionally, the court had to assess if the director of the company was complicit in these breaches and whether penalties should be imposed on him. The legal issues centered around the interpretation and application of the Security NAPSA and the Act, focusing on the employer's obligations to its employees.

The court found that Essendene Security Pty Ltd had indeed failed to pay the required entitlements to its employees as stipulated in the Security NAPSA and the Act. Consequently, penalties were imposed on the company for each type of unpaid entitlement, amounting to $4,000 for the employee Robert Wright and an additional $2,000 for the failure to pay fairness test compensation. Furthermore, the director was found liable for four breaches, resulting in a penalty of $800. The court ordered the company to pay the employees the amounts owed, plus interest, and mandated that all penalties be paid to the Commonwealth. The orders were set to take effect 28 days after their issuance to allow for any necessary applications regarding interest calculations.

Orders

Orders of the court

There is imposed on the first respondent pursuant to s.719(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’) a penalty in the amount of $1,000 for its failure to pay night shift loadings to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 21.3 of the Security Industry (State) Award (NSW) (“the Security NAPSA”).

There is imposed on the first respondent pursuant to s.719(1) of the Act a penalty in the amount of $1,000 for its failure to pay overtime to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 22.1.1 of the Security NAPSA.

There is imposed on the first respondent pursuant to s.719(1) of the Act a penalty in the amount of $1,000 for its failure to pay Sunday loadings to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 22.1.2 of the Security NAPSA.

There is imposed on the first respondent pursuant to s.719(1) of the Act a penalty in the amount of $1,000 for its failure to pay Saturday loadings to Robert Wright in relation to the period 22 January 2008 to 26 March 2008 in accordance with subclause 22.1.1 of the Security NAPSA.

There is imposed on the first respondent pursuant to s.719(1) of the Act a penalty in the amount of $2,000 for its failure to pay fairness test compensation to Christopher Martin and Robert Wright in accordance with s.346ZD of the Act.

There is imposed on the second respondent pursuant to s.728(1) of the Act four penalties of $200, totalling $800, for his involvement in the contraventions of the first respondent identified in orders 1 to 4 above.

The penalties payable under the above orders must be paid to the Commonwealth pursuant to s.841 of the Act.

The first respondent must pay to Christopher Martin the sum of $4036.47 pursuant to s.719(6) of the Act, plus interest on that sum up to judgment as agreed between the parties or determined by the Court.

The first respondent must pay to Robert Wright the sum of $4,930.75 pursuant to s.719(6) of the Act, plus interest on that sum up to judgment as agreed between the parties or determined by the Court.

10.

The parties and Messrs Martin and Wright have liberty to apply in relation to the calculation of interest.

11.

These orders shall not take effect until 28 days after they are made.

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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