Fair Work Ombudsman v Glasshouse Mountains Tavern Pty Ltd
[2014] FCCA 1115
•30 May 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v GLASSHOUSE MOUNTAINS TAVERN PTY LTD & ANOR | [2014] FCCA 1115 |
| Catchwords: INDUSTRIAL LAW – Coverage of award – hospitality industry – Hospitality Industry (General) Award 2010 – whether the employee was senior management – whether the employee was employed to undertake the duties of senior management and/or responsible for a significant area of the operations of one or more hotels – employee was covered by award. |
| Legislation: Competition and Consumer Act 2010 (Cth) s.75B Fair Work Act 2009 (Cth) ss.44, 45, 55, 61, 87, 90, 94, 97, 99, 117, 128, 129, 324, 326, 539, 550 Gaming Machine Act 1991 (Qld) s.189 |
| Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) (2010) 201 IR 234 Kucks v CSR Ltd (1996) 66 IR 182 at 184 Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321 Macquarie Dictionary (Macquarie, 3rd ed, 1997) |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | GLASSHOUSE MOUNTAINS TAVERN PTY LTD |
| Second Respondent: | TAMMI MAREE POINTON |
| File Number: | BRG 383 of 2012 |
| Judgment of: | Judge Burnett |
| Hearing date: | 14 October 2013 |
| Date of Last Submission: | 15 October 2013 |
| Delivered at: | Brisbane |
| Delivered on: | 30 May 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr A. Fraser |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Counsel for the First Respondent: | Mr J.W. Merrell |
| Solicitors for the First Respondent: | Aitken Legal |
| Counsel for the Second Respondent: | Mr J.W. Merrell |
| Solicitors for the Second Respondent: | Aitken Legal |
ORDERS
That the application be adjourned to a date to be fixed for the hearing of submissions on penalty.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 383 of 2012
| FAIR WORK OMBUDSMAN |
Applicant
And
| GLASSHOUSE MOUNTAINS TAVERN PTY LTD |
First Respondent
| TAMMI MAREE POINTON |
Second Respondent
REASONS FOR JUDGMENT
Introduction
From about 18 February 2008 until 2 January 2011 Ms Julie Dowdell was employed by the First Respondent, Glasshouse Mountains Tavern Pty Ltd (“GMT P/L”), in the capacity of “Venue Manager.” She resigned from that employment and her date of termination was effective from 2 January 2011. Upon termination she claims that she was entitled to be paid her untaken accrued leave. At the time of termination she had accumulated significant accrued but untaken leave with a value of at least $7708.00. She also claims that she had an entitlement to personal leave which was taken by her between the period of 21 December 2012 and 2 January 2011 which had been incorrectly disallowed. Finally, she claims that a sum of $495.00 was deducted from her final pay on account of a gaming nominee licensee fee which was paid by GMT P/L in about 2009. Upon termination Ms Dowdell was paid $2,771.50. That sum was made up as accrued untaken leave (including the disallowed personal leave) less the late termination notice penalty and the deduction for the gaming course paid for by the employer.
The Applicant alleges that the deductions were unlawful in that they were either contrary to the National Employment Standards (“NES”) or contravened entitlements due under the Hospitality Industry (General) Award 2010 (“the Award”), a modern award[1] applicable to Ms Dowdell. Each instances a civil remedy provision. It claims that the deductions were made by GMT P/L in contravention of the Fair Work Act 2009 (Cth) (“FW Act”). It is also alleged that the Second Respondent, Tammi Maree Pointon, was accessorially liable for those contraventions. The Applicant seeks the imposition of penalties and claims for compensation in respect of those contraventions.
[1] Chapter 2 Part 2-3 Fair Work Act 2009 (Cth).
The employer
GMT P/L is a small unlisted company. Ms Pointon is secretary and one of two directors of the company. She is also a shareholder by another company, TMP Holdings Pty Ltd, of which she is the sole director, secretary and shareholder. The company runs the Glasshouse Mountains Tavern (“GMT”), a small tavern operating from premises at 10 Reed Street, Glasshouse Mountains. The GMT has two bars, a bottle shop, gaming room and areas which provide for food service. It employs kitchen staff, including cooking staff and bar staff. From rosters produced for various weeks material to issues in this proceeding, it can be seen that there were generally employed between approximately 6 to 10 staff in total in the bar and kitchen of the tavern. Its hours of operation appear to have fluctuated from between 10:00am to 9:00pm, 10:00pm, 11:00pm or 12:00pm in the evening, depending upon the day of the week. From the evidence of Ms Dowdell (which was not disputed), the turnover of the business was approximately $20,000.00 per week.
Although there is some dispute concerning the relative responsibilities of employees, the principal employees appear to have been Ms Pointon as “Director” of the company, Ms Dowdell as “Venue Manager” and, from early 2009, Ms Pointon’s bookkeeper, Noela Davis, as Office Manager. There was at any one time an assistant manager, a chef, an assistant chef and a handful of bar staff. By any measure it was not a large organisation and, with the exception of Ms Pointon and Ms Davis, all designated management staff were expected not only to manage, but also engage in other activities relevant to the operation of the tavern as and when required. For completeness I note that from the initial time of employment of Ms Dowdell in February 2008 until January 2009 Ms Pointon only attended the premises occasionally and Ms Davis was not located on site. However in January 2009 Ms Pointon sold another business in which she had an interest. Accordingly she had more time to devote to the GMT and relocated Ms Davis to the premises and commenced to regularly frequent the GMT to deal with issues relevant to its operation. Despite Ms Pointon being “offsite” more frequently during that earlier period I am satisfied for reasons which follow that she was no less engaged as the GMT’s senior management and that she intensively managed the business over that period.
Ms Dowdell
Ms Dowdell was employed by the GMT in the capacity of “Venue Manager.” She had an extensive history in hotel employment, having a been a venue manager for the Royal George Hotel in Nambour and the Crown Hotel in Dayborough in the ten years preceding her employment by GMT P/L.
In early January 2008 she responded to an advertisement for the position of assistant manager at the GMT. Shortly afterwards she had an interview with a male person at the GMT following which it was agreed that she would have a trial. A couple of days subsequently she received a phone call from Ms Pointon offering her the position of “Venue Manager.” Shortly after she met Ms Pointon at her house. A general discussion was had between them which was followed by further discussion before an offer was made on or about 4 February 2008. Ms Dowdell considered the offer and ultimately accepted it by signing it on 20 February 2008 and returning it to Ms Pointon after she had signed it.
Relevantly, the letter of offer provided a “POSITION DESCRIPTION.” It outlined key areas of responsibility, but in particular noted:
“… that you are to focus your skills into running a profitable establishment, designing, implementation, maintenance and supervision of systems, procedures and legislative requirements, security over assets, stock control inclusive of monthly stock takes, ordering, building business and profits and promotion of a happy efficient team and promoting the tavern at all times. All areas of the tavern are your responsibility, and you must be on call at all times to solve any problems which may arise. You are directly accountable and responsible to the Director, Tammi Pointon. Your employment conditions are inclusive of the employee always having the required current qualifications as Management outlines (eg. RSA, RGS, recent Keno courses, Gaming Licence, TAB etc). Such qualifications are the expense of the employee …”
As stated earlier the Ms Dowdell’s employment continued until 2 January 2011 at which time her final salary payment was made. She complains that she was underpaid in her final salary payment in three respects, namely:
a.Failure to pay annual leave on termination;
b.Failure to pay personal leave; and
c.Underpayment on account of unlawful deduction.
The Applicant seeks to prosecute the Respondents for the underpayments which it alleges were underpayments made in contravention of the NES provided by the FW Act or, alternatively, for under award payments in respect of the Award which it contends governed her employment.
Award coverage
The Applicant contends that Ms Dowdell’s employment was covered by the Award. It contended that the Award was a Modern Award and accordingly minimum standards of employment were set by Chapter 2 Part 2 of the FW Act, pursuant to s.45. In default the Applicant contends that Ms Dowdell was an NES employee and afforded protection by that status.
GMT P/L says that Ms Dowdell was not a National System Employee or covered by the Award, in essence because she was employed under contract as a “Venue Manager.” Prima facie the Award covers employees throughout Australia in the hospitality industry and their employees in the classification within Schedule D. Relevantly, cl.D.2.9 addressed “Managerial Staff – Hotels.” Specifically, it provided:
“D.2.9 Managerial staff – hotels
For the purpose of this additional classification, hotels means hotels, resorts, casinos, taverns, wine saloons, wine and spirit merchants retailing to the general public and other retail licensed establishments in or in connection with accommodation, with the selling of drinks, preparing and serving food and drinks, cleaning and attending to the premises and all other services associated therewith.
In this additional classification, hotel manager means an employee (however designated) who:
· under the direction of senior management is required to manage and co-ordinate the activities of a relevant area or areas of the hotel; and
· directs staff to ensure they carry out their duties in the relevant area or areas of the hotel; and
· implements policies, procedures and operating systems for the hotel;
but excludes an employee who is employed to undertake the duties of senior management, responsible for a significant area of the operations of one or more hotels. Indicative position titles for such an employee include:
· Company secretary;
· Chief accountant;
· Personnel or human resources manager;
· Financial controller;
· Industrial relations manager;
· Venue manager;
· General/hotel manager;
· Executive assistant manager;
· Regional manager; or
· a Manager to whom any of those positions report or are responsible.
An employee appointed as a Manager will have completed an appropriate level of training in business management or have relevant industry experience including the supervision of staff in one or more areas of an hotel. In a General Hotel, this classification is commonly known as an Assistant manager. In an Accommodation Hotel, this classification may include any of the following positions: Duty manager; Assistant food and beverage manager; Assistant rooms division manager; Assistant front office manager or equivalent position.
This additional classification does not apply to:
· Any hotel manager who is an employee of a proprietary or private company (within the meaning of the Corporations Law) where the Hotel Manager holds sufficient number of shares to entitle the Hotel Manager to voting control at general meetings of the company; or
· Any hotel manager who is the senior partner of a partnership or has at least 49% of that partnership; or
· A parent, spouse or de factor partner, son or daughter of a hotel manager excluded from the additional classification by this paragraph.”
For the Respondents it was contended that Ms Dowdell fell within the exemption under the Award. In summary, the Respondents’ contention was premised upon Ms Pointon’s evidence that Ms Dowdell’s duties included hiring bar and bottle shop staff; supervision and control of staff; preparing staff rosters; performing stock control functions; ensuring that GMT assets were secure; implementing processes and policies relevant to occupational health and safety; opening/closing procedures; dealing with problem customers; and ensuring that the GMT complied with the legislative requirements in respect of liquor, gaming and food. Specific examples of the performance of some of these duties, particularly concerning staff, were said to be demonstrated by Ms Dowdell’s summary dismissal of an employee and her being involved in interviewing and assessing a prospective assistant manager who she recommended to Ms Pointon.
Additionally, the Respondents contended that evidence supporting her exclusion from the Award included her acceptance that throughout her employment she was authorised to make payments for regular weekly expenses such as alcohol and day to day consumables, and that she signed-off on petty cash. Furthermore, she made decisions in terms of what functions would be held at the GMT and conducted day to day supervision of staff in all the liquor areas of the tavern. All these duties were contended to be those of senior management.
For the Applicant it was submitted that Ms Dowdell was not a manager excluded by the Award because she was not senior management and/or was not “employed to undertake the duties of senior management, responsible for a significant area of the operations …” It was contended that the evidence demonstrated that she was an employee who acted “under the direction of senior management [being Ms Pointon],” and in that regard was only required to manage and coordinate the activities of the bar areas of the hotel and direct staff to ensure that they carried out their duties in the relevant area(s) and implement the policies, procedures and operating systems for the GMT; she was not employed to undertake the duties of senior management responsible for a significant area of operations (or at all); and she did not undertake the duties of senior management responsible for a significant area of the operations.
Before closely examining the facts to determine her status it is first necessary to consider the nature of the Award and how it ought be construed. Once a clear understanding of the Award is achieved the facts can be measured against the contentious definition of “hotel manager” to determine whether or not Ms Dowdell was exempt from coverage.
The relevant principles applicable to the construction of awards are now well settled. The principles governing the construction of awards are set out in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426, where at 438 French J (as his Honour then was) observed:
“[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to “… the entire document of which it is a part or to other documents with which there is an association”. It may also include “ … ideas that gave rise to an expression in a document from which it has been taken” — Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; 46 IR 128 at 134 (Burchett J); Australian Municipal, Administrative, Clerical and Services Union v Treasurer of Commonwealth (1998) 82 FCR 175; 80 IR 345 (Marshall J).
…
[57] It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities — City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned — see eg George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):
“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.””
This approach now appears to be universally accepted: see Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 per Gleeson CJ and McHugh J at 249; Kirby J at 267 and 270; Callinan J at 283.
The Award clearly covers and is intended to cover ‘hotel managers,’ which includes tavern managers. The definition of “hotel manager” is broad and expansive. The key features of a hotel manager are that such an employee acts “under the direction of senior management” to manage and coordinate activities of a relevant area; direct staff in carrying out duties in such an area and implement the policies and procedures for the hotel. However, the Award excludes a subgroup of hotel managers, being those management employees “employed to undertake the duties of senior management, responsible for a significant area of the operations of one or more hotels.” The Award provides no guidance on the meaning of the term “senior management.” The resolution of that definition is central to this application.
In context, the adjective “senior” must have some significance. In the Macquarie Dictionary it is defined to mean:
“… 2. Of higher rank or standing, especially by virtue of longer service …”[2]
[2] Macquarie Dictionary (Macquarie, 3rd ed, 1997).
Accordingly, in the context of this dispute the following issues arise:
1. Was Ms Dowdell “senior management” of the GMT? The definition of “senior management” is in part informed by whether or not she undertook her duties “under the direction of senior management.”
2. If she acted under the direction of senior management, was she in any event “employed to undertake the duties of senior management”?
3. If the answer to issue two is in the affirmative, then was she responsible for “a significant area of the operations of one or more hotels”?
For reasons which follow I am satisfied that Ms Pointon constituted the senior management of the business. Ms Dowdell acted under her direction in undertaking the management and supervisory duties at the GMT and in directing staff and implementing the tavern’s policies and systems. In undertaking her duties and activities she did not perform the duties of senior management. Nor was she employed to undertake the duties of senior management responsible for a significant area of the operations of the tavern.
In reaching these conclusions I have been particularly mindful of the evidence concerning the relative status of Ms Dowdell to Ms Pointon. This matter has to be considered in the context of scale. For the Respondents it was submitted that particular attention had to be given to the activities undertaken, but not scale. Respectfully I do not agree. It is plain that the Award is meant to cover an extremely broad range of hospitality activities, extending from the largest of complex international hotel operations to the humblest of hospitality enterprises. So much is consistent with cl.4.2. For instance, the GMT was essentially owned and operated by Ms Pointon. The Award recognises the need to distinguish owner/operator management from other forms of management by the inclusion of the final paragraph and the points in cl.D.2.9 exempting its coverage of that class.
Accordingly, significant flexibility has to be afforded to the language employed in the Award to recognise its very broad coverage. I have earlier described the physical characteristics of the tavern. The business itself appeared to be comprised of two parts, namely the liquor sales business, which included gaming, and the food service business, which included the part of the tavern described as a “restaurant.” Aside from Ms Pointon, the full time staff of the business was comprised of Ms Dowdell, an Office Manager and another assistant manager; the balance of the staff were casuals. By reference to the GMT rosters, up to four casuals were employed on the busier occasions. From the rosters it is also apparent that all of the permanent staff appeared to ‘muck in.’ For instance, the Office Manager was frequently rostered on to work the “bars & DOSA”[3] as well as attend to other office functions, and likewise on occasion the casuals would be assigned to do tills, a function usually assigned to the Office Manager. Significantly, the rosters demonstrate that Ms Dowdell was only appointed to discrete areas of the business related to liquor, namely the bottle shop, restaurant, bars and designated outdoor smoking area.
[3] Designated outdoor smoking area.
In my view that is important, particularly having regard to the Award. Respectfully, it is only with appropriate recognition and consideration of the breadth and coverage of the Award that any real sense and meaning can be afforded to the words constituting the exclusionary provision provided for in the classification “hotel manager.”
Significantly, I do not consider the evidence to support the conclusion that Ms Dowdell was “senior management.” Plainly the Respondents’ counsel appreciated the significance of that position vis-à-vis the strategic role of a company board comprised of directors who set strategy to be implemented by senior managers and employees.[4] However, in this case there was considerable blurring of that distinction. The evidence indicates that Ms Pointon was intrinsically involved in the management of the GMT. She did more than set the strategy and leave it to be implemented by management. She ‘rolled up her sleeves’ and engaged in direct management herself. I do not criticise her for doing so. Indeed, to have done otherwise in the context of this relatively small operation would have been commercial suicide.
[4] 14 October 2013 T49 line 16-22.
Was Ms Dowdell “senior management”?
In this instance Ms Pointon was one of two directors of GMT P/L. The other was her mother. As she stated, she is an owner and investor in hotels and has been for some years. There was no evidence to suggest that she held any other hotel interests at the time of these events. In her affidavit she sought to downplay her involvement in the GMT’s management, noting that she merely had an “administrative role” but that she assisted the company in matters such as the engagement of employees, managing employee relationships, setting rosters, advertising and the website, dealing with banks and ensuring that the GMT operated on a profitable basis. She said that she otherwise had no set role and devoted her time to other businesses. As cross-examination demonstrated, this understatement, in my view, was deliberately disingenuous. Her affidavit seeks to distance her from the management of the GMT, falsely elevating her status to that of someone removed from day to day operations. While it is true that her daily involvement in the business was more limited between February 2008 and January 2009, the fact remains that she was heavily involved in the running of the GMT from that time for reasons explained elsewhere. To say that she was not is simply incorrect. As she herself observed, the business was “too small of an establishment.”[5] Although that observation was made by Ms Pointon concerning Ms Dowdell’s being rostered to differing areas and duties of the tavern, it applied with equal force across the board in the context of the business, which had no more than 4-6 staff on duty even during peak times. As Ms Pointon stated, she could make any decision she chose concerning the GMT “because I own it.”[6] I am satisfied that this business was not run along corporate lines as Ms Pointon’s affidavit would seek to suggest. She was a hands-on operator, careful to personally attend to the detail and she was intrinsically involved in every decision of moment relevant to the operation of the business.[7]
[5] 15 October 2013 T104 line 32.
[6] 14 October 2013 T95 line 3-4.
[7] As she informed the Court, she was an ex-school teacher and it was not her practice to hand forms out for people to read – she would “go through the form with people.” She stated that she would do this with adults as well: 14 October 2013 T88 line 31-37.
The intrinsic involvement in operations by Ms Pointon is for instance illustrated in the “Position Profile” she authored for Ms Dowdell after she had commenced employment with the GMT. The term “Position Profile” is something of a misnomer, and misleads as to its obvious purpose. Rather than a job description or position profile it is more akin to an operations manual. The profile extends over 9 pages, addressing in minute detail duties and tasks which Ms Dowdell was to undertake, how some were to be undertaken and for which she was responsible. Significantly, the “Position Profile” provides many of those tasks as involving duties to be undertaken “in conjunction with the Director.” For instance, in respect of the chef’s orders Ms Dowdell was required to “Provide [the] Director with evidence of this every Monday.” Specifically, the “Position Profile” required her to consult Ms Pointon on a weekly basis in respect of profitability, recruitment, rostering, troubleshooting, issues regarding new staff, training materials, training resources, team leadership and motivation, communication and workplace health and safety. Interestingly, Ms Pointon reserved to herself the sole right to make decisions concerning the “barring on [sic] patrons.”
The letter of offer provided by Ms Pointon to Ms Dowdell is more informative of her general responsibilities and reporting lines, although it too is misleading in its expression. It stated:
“… Your Position Description will outline the key areas of your responsibility, however it is noted that you are to focus your skills into running a profitable establishment, designing, implementation, maintenance and supervision of systems, procedures and legislative requirements, security over assets, stock control inclusive of monthly stock takes, ordering, building business and profits and promotion of a happy efficient team and promoting the tavern at all times. All areas of the tavern are your responsibility, and you must be on call at all times to solve any problems which may arise. You are directly accountable and responsible to the Director, Tammy Pointon …”
Although the letter of offer and the subsequent “Position Profile” allude to the lofty aspiration of her being a manager, the evidence demonstrates otherwise. She was plainly subordinate to and accountable to Ms Pointon, who was the senior manager and was very much a hands-on operator.[8] Ms Dowdell plainly acted under her direction in many aspects of the business and lacked any real authority to manage the business in an autonomous manner. This is particularly so when considering the “Key Result Areas” expressed in the “Position Profile.”
[8] The evidence demonstrates that this was a small business. At any one time there were up to 10 employees. On a busy Friday 4 to 6 staff might be on duty. As this was a liquor business, staff were exposed to two valuable, readily pilferable and liquid (no pun intended) commodities: cash and alcohol. The business had a turnover of only about $500,00.00 per annum: 14 October 2013 T44 line 10-12. Understandably, Ms Pointon had an interest in watching her staff like a hawk, and she did so. The dismissal of an employee who had been caught stealing clearly demonstrated that matter.
Key result area one in the “Position Profile” was “Commercial.” This key result area concerned profitability and operations. It principally addressed financial and operational matters. Ms Pointon maintained control over financial matters. That included items of capital expenditure[9] and pay roll decisions,[10] leaving Ms Dowdell only to order such stock as normally would be required. However, if she was required to order anything that was not “along normal guidelines” she was required to consult Ms Pointon.[11] Other expenses relevant to profitability reserved exclusively to Ms Pointon included control over outgoing expenses, such as insurance and rates.[12]
[9] 15 October 2013 T101 line 12-15.
[10] 14 October 2013 T91 line 34-40.
[11] 15 October 2013 T101 line 10.
[12] 14 October 2013 T39 line 2-7.
Additionally, Ms Dowdell had no control over the administration of the business. That was undertaken by Ms Davis, who did not report or account to Ms Dowdell but was considered to be organisationally on par with her.
In the key result area of “People,” particularly in the areas of staff and recruitment, Ms Pointon was intrinsically involved. Other than for bar staff, Ms Dowdell was not the primary decision maker concerning recruitment. For instance, staff, other than basic bar staff, would not be employed without consultation with Ms Pointon. As Ms Pointon stated in her evidence, “[Ms Dowdell] could tell me about someone that she had interviewed who she thought would be good for the job. I would either agree or disagree with her.”[13]
[13] 14 October 2013 T95 line 23-24.
Staff rosters were organised by Ms Pointon. Initially they had been prepared by Ms Dowdell but once Ms Pointon moved her office on site in early 2009 she assumed that responsibility. There was some minor disagreement between the witnesses on the point, but I do not consider it to be material. In any event, I prefer the evidence of Ms Dowdell. I formed the favourable impression that she was a truthful and forthright witness. She had no agenda to prosecute despite her being a prospective beneficiary of the litigation. In contrast, Ms Pointon did not impress me. Her evidence revealed a scheming and manipulative person. It is for instance no coincidence that in this case she sought to characterise herself as “director” and ascribed the title “Venue Manager” to Ms Dowdell. The former term is not to be found in the Award and the latter title, arguably, excluded Ms Dowdell from it. Under cross-examination I observed that she sought to divert the examiner from adverse lines of inquiry based on clear questions and sought regularly to anticipate where the examination was going, rather than submit direct answers.[14] I do not consider her to have assisted the Court in the resolution of the dispute by providing uncoloured and dispassionate evidence.
[14] See 14 October 2013 T89 line 25-27; T91 line 19-28; T95 line 1-7; T97 line 1-31; 15 October 2013 T113 line 6-20.
Even on occasions when Ms Dowdell was involved in preparation of the roster, Ms Pointon noted “rostering would be under my direction if somebody else had to do it.”[15] That included staff rosters for kitchen staff. Likewise, staff meetings were organised by Ms Pointon. She stated that she would arrange and conduct management meetings which would be attended by “Julie, any assistant managers or supervisors, and the office manager.”[16]
[15] 15 October 2013 T106 line 16.
[16] 15 October 2013 T106 line 24-25. The organisation of management meetings is another example of Ms Pointon talking up the organisational size and structure of the GMT. She spoke of management meetings involving Ms Dowdell, “assistant managers or supervisors” and the Office Manager. It can be seen by reference to the GMT roster that at any one time the organisation consisted of one Office Manager or assistant manager, together with four causal staff. Not only were there not multiple assistant managers or supervisors, but those that did exist had very little to manage. As other evidence demonstrates, from Ms Pointon’s perspective “The positions of management staff is out the front with our patrons, training staff and ensuring the presentation of our premises and high level of customer service and sales is in place at all times.” This was entirely consistent with her view that customer service was the absolute priority, a principle which she applied in her own practice.
Additionally, Ms Pointon was involved in all decisions concerning leave and termination.[17] Likewise, staff conditions were occasionally done in consultation with Ms Dowdell but ultimately any decisions concerning those matters were Ms Pointon’s.[18] I note for instance that when an employee was caught stealing from the business it appears that the dismissal was effected by Ms Pointon.[19]
[17] 15 October 2013 T100 line 20-25; line 43.
[18] 15 October 2013 T102 line 19-24.
[19] In her affidavit Ms Pointon does not expressly state that matter, but it is to be inferred from her deposition that she discovered that the employee had been stealing following a review of camera footage. A written admission was provided by the employee and her employment was terminated. These events occurred when Ms Dowdell was absent from the business.
It seems apparent from the evidence that Ms Dowdell was more a staff supervisor than manager. She oversaw the performance of their duties on a day to day basis but was otherwise herself subject to the direction and supervision of Ms Pointon on those matters.
The next key result area concerned customer/guest service. This key result area highlights Ms Pointon’s general involvement in the operational aspects of the GMT, which she contends she had appointed Ms Dowdell to undertake. As she noted, the business was too small to simply have Ms Dowdell oversee operations, and in fact she contended that Ms Dowdell’s role was primarily a ‘front of house’ one. For instance, she rostered Ms Dowdell to the bar, the bottle shop and other front of house responsibilities for the majority of the time, and if she was in the office at any particular time and circumstances required it “she would be required on the floor. That would be her first point of call.”[20]
[20] 15 October 2013 T108 line 8-9.
The fifth key result area concerned “Health and Safety.” As noted earlier, Ms Pointon exclusively reserved to herself the right to make decisions concerning the barring or exclusion of patrons. Decisions of that nature, similar to decisions concerning the closing of the venue for private functions, go to the heart of operations, as they directly impact revenue from existing or potential customers.[21]
[21] While there was some debate in cross-examination concerning the circumstances in which Ms Pointon would permit Ms Dowdell to close the venue for a private function, the end result was that Ms Dowdell would only be permitted to exercise such discretion in consultation and only in circumstances where a ridiculous sum of money was being offered to book the venue: 14 October 2013 T93 line 25-45; T94 line 1-5.
Notwithstanding Ms Dowdell’s title of “Venue Manager,” she was in reality not much more than a bar manager or supervisor. She had the power to hire or fire casual bar staff but that power must be set against the background that there were four to six causal employees ordinarily employed by the business. Likewise, she had the power to order stock within normal guidelines and counter-sign cheques with the Office Manager, but again it is apparent that in the exercise of those powers she was subject to close supervision and she was certainly not at liberty to manage at large. Her principle role was front of house, with most of the administrative tasks being undertaken by the Office Manager. Her most significant role was the passive role of being the license holder under the relevant liquor and gaming legislation. However, those licenses were personal to her.[22] While on the premises she was responsible for the responsible service of alcohol, gaming and general workplace health and safety, but otherwise she had no direct responsibility to GMT P/L concerning those matters. The corporation itself was the appropriate license holder.
[22] A matter which features in this litigation because the cost of maintaining those licenses was deducted by GMT P/L from Ms Dowdell’s wages as the licenses were seen to be personal to her.
Ms Dowdell was clearly only a subordinate manager to Ms Pointon. Ms Pointon intensely supervised Ms Dowdell across the broad reach of management and supervisory roles she undertook. She was little more than salaried bar staff and was not “senior management.” Insofar as she was required to manage and coordinate operations, direct staff and implement policies, she did so under the direction of the GMT’s senior management (Ms Pointon).
While I accept that Ms Dowdell was responsible for bars on the occasions that she worked, which included closing up the business at the end of trading, I am not satisfied that she was the “Venue Manager.” The venue included more than merely the bars. It also included the kitchen. Ms Dowdell was plain in her evidence that she had no control over kitchen staff. That was the domain of the chef, although later that matter was attended to by the chef and Ms Pointon.[23] The fact is, as Ms Pointon stated in her evidence, that the establishment was simply too small for people to be rostered to particular areas for most of their rostered time.[24] In her evidence Ms Pointon stated that Ms Dowdell employed “chefs.”[25] Further, as I have observed earlier, she was not responsible for the GMT’s administration. Administration is a significant managerial function, even in an operational context. The fragmentation of those roles serves to fortify my view that Ms Dowdell was not the “Venue Manager.”
[23] 14 October 2013 T29 line 11-18; 15 October 2013 T104 line 38-39.
[24] 15 October 2013 T104 line 29-33.
[25] 14 October 2013 T95 line 35.
In my view, the strongest point in favour of the Respondents’ contention that Ms Dowdell was senior management or was employed to undertake the duties of senior management responsible for a significant area of the operations of the GMT was her being an “approved manager” for the tavern and the fact that she was a gaming machine licensee.
The Liquor Act 1992 (Qld) (“Liquor Act”) requires a license under that Act to permit the sale of alcohol. If the licensee is a corporation, as it was in this case, there must be a manager on the premises with an approved manager’s license.[26] The relevant provisions of the Liquor Act do not limit the number of approved managers that may exist in respect of a licensed venue. In this case Ms Dowdell was identified as an approved manager for the premises. Whether others, such as Ms Pointon, were also approved managers was never fully investigated.[27]
[26] Section 155AD Liquor Act.
[27] Submissions were made for the Applicant to the effect that Ms Dowdell was one of four approved managers: 15 October 2013 T158 line 21-24.
The function of “approved manager” was introduced into the Liquor Act by amendment in 2008.[28] The Explanatory Notes observed that the relevant measure introduced the function of “approved manager” to ensure that managers of licensed venues are responsible for ensuring compliance with the Liquor Act and conditions of liquor licenses.[29] In explaining the relevant sections (ss.155AD, 155AE), the Explanatory Notes stated that licensees which are corporations must “take reasonable steps to ensure that an approved manager is present” on the premises, and that the licensee “must keep a register containing the name of the approved manager, the date, starting time and finishing time of each shift the approved manager is rostered on duty.”[30]
[28] Section 55 Liquor and Other Acts Amendment Act 2008 (Qld).
[29] Liquor and Other Acts Amendment Act 2008 (Qld) – Explanatory Notes at 29-30.
[30] Liquor and Other Acts Amendment Act 2008 (Qld) – Explanatory Notes at 30.
While I accept that it is not inconceivable that a person who exercises the function of “approved manager” is also “senior management,” it is clear from the legislative scheme that such a consequence does not automatically follow. First, the responsibility lies with the licensee to appoint an “approved manager.” That process involves the exercise of the executive power of the corporation. For instance, in this case Ms Dowdell did not become an “approved manager” for GMT on her own initiative. The matter was not explored in evidence but I expect, given the closed nature of the corporation in question, that that decision was taken by Ms Pointon in the exercise of her executive power as senior management for the corporation. It follows in my view that despite the appointment there must be a close examination of the facts and circumstances surrounding the duties and responsibilities both vested in and assumed by an appointment of an “approved manager” before any conclusion can be drawn about whether the assumption of that function meant that there was also an assumption of a role in senior management.
A similar scheme operates for the management of gaming machines provided under the Gaming Machine Act 1991 (Qld) (“Gaming Act”). That Gaming Act requires an employee performing a managerial role to be a licensee. There is no requirement that such an employee be senior management.
The statutory scheme requires the licensee to have on premises when open for gaming “at least 1 person employed by the licensee for gaming duties.”[31] As with the liquor license Ms Dowdell’s role was as overseer. She did not engage in the sort of functions which might be expected of senior management such as dealing with issues relevant to the purchase of authorities, the hours during which gaming operations were to be undertaken or other strategic matters relevant to gaming machines.
[31] Section 189 Gaming Act.
Given the facts as I have found them, when allowing for Ms Dowdell’s duties under the Liquor Act and Gaming Act I do not consider her to have become “senior management” of the GMT. She acted at all times under the direction of Ms Pointon. The most obvious evidence of Ms Pointon’s direction concerning those statutory matters concerns the opening and closing hours of the GMT. These were settled by Ms Pointon by the roster. It is to be noted, except for New Year’s Eve which occurs by exception, that the latest closing hour for any roster was midnight. That factor was relevant to the style of license the GMT held. That matter was controlled by the licensee, not the “approved manager.” There was no evidence to suggest that Ms Dowdell ever exercised any powers relevant to the license. She was a mere functionary.
If follows that in respect of both those matters I am satisfied that she acted under the direction of GMT’s senior management as constituted by Ms Pointon. I am also satisfied that, given the facts and circumstances of this case, Ms Dowdell was not employed to undertake the duties of senior management responsible for a significant area of operations of the tavern in respect of either alcohol or gaming. Furthermore, in practice she did not do so.
Generally I do not consider Ms Dowdell to have undertaken the duties of “senior management.” The concept of responsibility brings forth the notion of accountability. In the Macquarie Dictionary the definition of “responsible” observes:
“… 6. responsible to, answerable or accountable to, as for something within one’s power, control, or management …”
The evidence here is plain. Ms Dowdell was “responsible” only for the most elementary of activities at GMT. She would prepare the tills, close up when on duty, hire basic bar staff and ensure that staff attended diligently to their duties when at work. Matters beyond those were the responsibility of Ms Pointon. It is not to the point that Ms Dowdell may have been involved in the recommendation of the employment of an assistant manager, the preparation of rosters, the placing of a “regular” order for provisions or similar duties. Those essential management tasks were all supervised by Ms Pointon. She made and was accountable for the decisions in respect of those duties.
It follows that I do not consider Ms Dowdell to have been a part of the “senior management” of the GMT. That role was fulfilled by Ms Pointon. Ms Dowdell acted under her direction.
Was Ms Dowdell employed to undertake the duties of “senior management”?
I have earlier addressed the offer of her employment. While the short form offer hints at a higher level management, I am satisfied that Ms Dowdell was not employed to undertake the duties of senior management because of the tenor of the offer and of the intentions of the offeror, Ms Pointon.
The offer can be explained by the “Position Profile” which I examined earlier. It is plain from that document that the role was not a senior one. Consistent with the “Position Profile,” Ms Pointon was the senior manager of the GMT to whom Ms Dowdell reported. The “Position Profile” reflected her intentions, not explained in the initial offer, but which were clearly in the forefront of her mind at the time it was proffered.
For the Respondents it was also contended that Ms Dowdell’s title, “Venue Manager,” was dispositive of the issue. Although Ms Dowdell was described as “Venue Manager,” a term picked up in the Award, the clause also notes that it is only an “indicative” position title. That is to say that “Venue Manager” may equate to a person who is employed to undertake the duties of senior management. However, ultimately that is a matter of fact to be resolved by reference to the evidence. In this instance I am satisfied that the evidence does not demonstrate that Ms Dowdell was such a person, irrespective of the title afforded to her.
Although I have concluded that as a matter of fact Ms Dowdell did not undertake the duties of senior management, I am additionally satisfied that she was not employed to undertake the duties of senior management either at large or in respect of a significant area of GMT’s operations, for reasons addressed below.
Was Ms Dowdell “responsible for a significant area of the operations of one or more hotels”?
As I am satisfied that Ms Dowdell did not undertake the duties of senior management, nor was she employed for to do so at large or in respect of a significant area of GMT’s operations, it is unnecessary for me to consider whether she did so in respect of a significant area of the operations.
However, even if I were wrong in my conclusions I do not accept that she was responsible for a significant area of the operations of one or more hotels.
For the Respondents it is contended that Ms Pointon was in charge of the operation, whilst on duty and at times when she was not subject to direct supervision. Accordingly, during that time she was “responsible for a significant area of the operations” of the GMT. However, that proposition requires a very restrictive construction of the term “operations.” “Operations” plainly extended well beyond simply serving food and beverages. Operations include logistical, planning and deployment activities. The evidence does not demonstrate that any logistical or planning activities took place outside regular office hours; I am satisfied that none did. This is entirely consistent with other evidence of Ms Pointon’s management. She undertook those duties and left to Ms Dowdell the very limited task of service delivery outside those regular offices hours when she attended the premises. That limited service delivery task did not constitute a “significant area of the operations,” as it was merely one facet of that matter.
Having weighed all the relevant facts I am satisfied that Ms Dowdell did not undertake the duties of senior management responsible at GMT.
NES Chapter 2 Part 2-2 Division 2 of the FW Act
Chapter 2 Division 2 of the FW Act provides for the NES. Section 61(2) sets minimum standards that relate to employment matters. Relevantly for this application they include:
a)Annual leave (Division 6);
b)Personal/carers leave and compassionate leave (Division 7).
Chapter 2 Parts 2-9 deal with other terms and conditions of employment which include permitted deductions.
The alleged contraventions concern:
a)Underpayment of annual leave entitlements accrued on termination;
b)Underpayment of personal leave entitlements; and
c)Unlawful deductions.
Accrued annual leave
Although there is some debate concerning the actual quantum of accrued annual leave, it is agreed between the parties that as at the date of termination Ms Dowdell had accumulated significant unused annual leave. Upon termination s.90(2) FW Act provides that GMT P/L was required to pay Ms Dowdell the amount that would have been payable to her had she taken that period of leave. In general terms she was entitled to four weeks paid annual leave which accrued progressively over each year of employment. By the end of her employment she had accumulated approximately 335.26 hours untaken annual leave, having regard to some hours which need to be adjusted for on account of a rotational roster which was spoken of in evidence.[32]
[32] The hours involved are not significant for the purpose of determining this issue.
While initially there was a contest between the parties concerning the quantum of the accrued annual leave, that matter is not now the subject of debate. The more substantive issue concerned the effect of the termination clause provided for in the contract of employment.
Upon termination a quantum of accrued but untaken leave was assessed by GMT at $7,706.00. However, Ms Dowdell’s final pay upon termination was subject to a deduction of $4,441.50 by way of set off against that leave entitlement. GMT P/L claims that the deduction was made on account of a breach by Ms Dowdell of her contractual duty to to give notice in accordance with the contract of employment dated 20 February 2008. That agreement specifically provided that she was required to give six weeks’ notice of termination of employment to Ms Pointon, in person, and that such six week period was to exclude public holidays. The agreement provided that in event of default:
“… [A] penalty will be the equivalent pay, offset against any monies owing to you. (Penalty - Monies owing to you (eg wages & accrued holiday pay) minus $value of notice not given = Final payment owing to you).”
The Applicant contends that GMT P/L’s deduction of Ms Dowdell’s wages in this manner contravened s.90(2) FW Act and the NES, and therefore also contravened of s.44(1) FW Act, which is a civil remedy provision under s.539(2) FW Act.
Section 90(2) FW Act relevantly provides:
“Payment for annual leave
…
(2) If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.”
At the outset there was dispute between the parties concerning Ms Dowdell’s knowledge of that provision. Ms Pointon says that at the time the parties sat down to negotiate the original employment contract this provision was expressly brought to her attention, as Ms Pointon took Ms Dowdell through the offer of employment effectively line by line. In my view nothing turns upon the recollection of either witness on this point. There is also dispute between the parties concerning whether or not the terms of the termination provision were waived at the time Ms Dowdell sought to give notice of termination. However the Applicant contends that it is unnecessary to determine that factual dispute because the issue is whether the termination clause, which would have the effect of allowing GMT to withhold from an employee an amount for unpaid annual leave that would otherwise be required to be paid, is enforceable.
The Applicant contends that s.90(2) FW Act provides, as a minimum entitlement, that when an employee’s employment ends in circumstances where the employee has a period of untaken annual leave, the employer “… must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.” That is, the deduction of the early termination penalty provided for in the termination clause is inconsistent with the statutory obligation provided for in s.90(2) FW Act to pay Ms Dowdell her unpaid annual leave at the end of her employment. Accordingly, proof of waiver was unnecessary.
The Applicant contended that the effect of s.61 FW Act is to impose an obligation to pay annual leave in accordance with s.90(2) FW Act. It contended that the obligation cannot be displaced by contract. It contended that, as s.61 FW Act sets minimum standards, and the employment contract was inconsistent with such minimum standards, it could not be enforced and accordingly, where s.90(2) FW Act provides that the employer “must pay the employee the amount that would have been payable to the employee,” it means, as it states, that the payment must be made when the employment of the employee ends. The Applicant contends that this is consistent with decisions made under the former Workplace Relations Act 1996 (Cth) (“WR Act”), where a comparable provision existed in s.173. Section 173 WR Act relevantly provided:
“Australian Fair Pay and Conditions Standard cannot be excluded
A term of a workplace agreement or a contract has no effect to the extent to which it purports to exclude the Australian Fair Pay and Conditions Standard or any part of it.”
The Applicant concedes that the Australian Fair Pay and Conditions Standard provisions were repealed, but contends that they have in essence been superseded by the NES under the FW Act, and as such s.61 FW Act is the equivalent of s.173 WR Act. Accordingly, it submits that decisions made in respect of s.173 WR Act are of assistance in determining the principle that parties cannot contract out of minimum statutory entitlements. For instance, in Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) (2010) 201 IR 234 at [194], McKerracher J stated:
“… pursuant to s 173 of the WR Act a term of any contract that purports to exclude the Standard or any part of it, is of no effect; the NAPSA applies on its terms according to cl 38 of Sch 8 of the WR Act and will continue to bind an employer that is bound by it, regardless of any contract entered into by the employer. Where a statutory instrument confers minimum entitlements on an employee, it is not possible to contract out of those minimum entitlements. An agreement collateral to the instrument may only validly confer additional benefits over and above the minimum entitlements …”
Likewise, in Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321, Barker J stated:
“[66] In my view, there is a real inconsistency between the contractual term and the entitlement that s 173 seeks to preserve. I accept the framework of the scheme of the WR Act provisions contended for on behalf of Mr Williams. Section 173 reflects a parliamentary intention that a person cannot, by one means or the other, contract out of their entitlement to be paid out annual leave and other leave entitlements at the end of a[n] employment period, save for the particular provisions allowing for the sacrifice of annual leave.
…
The intent of the statute is that there will be entitlements in accordance with the AFPCS. If it were open to an employer to make a contract of employment that included terms such as that the subject of consideration here, such a process could no doubt have a real impact on bargaining rights. While it may be correct to say that some attempt has been made in the contract here to pay an additional sum allocated to potential leave entitlements, the effect of such a contractual provision is, in fact, to exclude an entitlement to be paid annual leave and other forms of leave under the Act at the termination of the employment. In those circumstances, s 173 of the WR Act applies to render such a contractual provision of no effect.”
The Applicant contended that the termination clause purported to vary the rights of the parties concerning a matter dealt with by the NES by imposing an additional burden on Ms Dowdell by requiring her to forego a statutory entitlement to unpaid leave by reason of the notice period required by the employment contract. In its contention that was a less favourable provision than that which applied in circumstances not governed by the Modern Award, which does not make provision for a minimum requirement concerning the notice required to be given by an employee under the FW Act.
The Respondents’ response to the Applicant’s contention was twofold. Firstly, in its written submission it contended that because of the effect of the termination clause the amount that the First Respondent was obliged to pay Ms Dowdell upon termination of her employment was the amount determined by the termination clause of the contract of employment. That is, the contract of employment did not provide that Ms Dowdell was entitled to a period of paid annual leave each year that was less than set out in Part 2-2 Division 6 of the FW Act. Rather, the employer and Ms Dowdell agreed that if Ms Dowdell did not give the period of notice that was required under the contract then that would impact on the amount that would be payable to Ms Dowdell if she had a period of accrued and untaken leave when her employment ended.
The Respondents contend that if Ms Dowdell was not covered by the Award, being an NES employee would not come to her assistance in these circumstances. In summary, they contend that the terms of the employment contract provided for notice of six weeks and agreed that if short notice was provided there would be a “penalty” being “the equivalent pay, offset against any monies owning to you.”
The use of the term “penalty” in any contract always gives rise to alarm, particularly in the context of workplace rights.[33] In my view any provision calling for a penalty for short notice of termination in a contract of employment in the context of that which existed between Ms Dowdell and GMT P/L was plainly unconscionable. The termination period was three times the standard and there was no basis to suggest that late notice would occasion economic harm (as evidence of later events demonstrated that in this case there was no justification for it).
[33] See s.326 FW Act but additionally at common law: Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656 at [21].
In any event, the Respondents’ contentions fail for more fundamental reasons. They contended that the agreement authorised GMT P/L “to deduct from her final payment, the monetary value of the period of notice not given.”[34] The argument was that the amount that the First Respondent was obliged to pay Ms Dowdell because of the termination clause was the sum determined by that clause.
[34] Respondents’ submissions at [23].
It submitted on that basis that there was no contravention of s.90(2) FW Act. No authority was proffered to suggest that this argument had been previously accepted. For reasons which follow that does not surprise me.
In short, I do not accept the Respondents’ submission. An employee’s rights are provided for by s.90 FW Act as part of Division 6. It must be read in that context. Four weeks annual leave is provided for each year’s service by a NES employee,[35] and such an entitlement accrues progressively.[36] If “when the employment of an employee ends” there is “a period of untaken paid leave,” the employer must pay to the employee the value of “that period of leave.”[37] Prima facie the sum that “must” be paid is the total of that accrued leave.
[35] Section 87(1) FW Act.
[36] Section 87(2) FW Act.
[37] Section 90(2) FW Act.
The employment agreement initially provided that if there was short notice, “the penalty will be the equivalent pay, offset against any monies owning to you.”
Money owning could only be calculated by reference to the date when the employment “ends.”[38] The “set off” can only be effected from that moment. Ms Dowdell’s leave entitlement crystallized at that moment and by operation of Division 6 was to be paid by reference to the time of termination. The obligation to pay arose first in time, for without the employment relationship ending there would be no obligation to pay accrued leave entitlements, and one assumes that in those circumstances the basis for the “set off” would not exist.
[38] Section 90(2) FW Act.
The other issue is whether or not the First Respondent has a right of set off. In my view it had no such right. It was not a true set off in the industrial law sense because there had been no overpayment of leave benefits against which the so-called penalty could be applied: James Turner Roofing Pty Ltd v Petras (2003) 132 IR 122. However, even if considered as a deduction the outcome remains the same.
In summary, the point of s.61 and Chapter 2 Part 2-2 of the FW Act generally is to set minimum standards which cannot be displaced. One such minimum standard related to the payment of annual leave. What s.90(2) FW Act required was that at the end of the employee’s employment if the employee has a period of untaken paid annual leave then the employer must pay to the employee that amount which otherwise would have been payable to the employee, as if the employee had taken that period of leave. Respectfully, that is not the same as the amount determined by the termination clause of the contract which, if applicable, provided for a “penalty … offset against any monies owing to you.” Plainly the provision provided for in the employment agreement was for an obligation to pay something less than that which was provided for in s.90(2) FW Act. By operation of s.62(1) FW Act the obligations of s.90(2) FW Act could not be displaced, and accordingly that provision could not be enforced.
The second argument advanced on behalf of the Respondents concerning this provision was that there was nothing in the employment contract to affect the accrual of annual leave and that by reason of the contract and its termination clause the period of unpaid leave had to be calculated by reference to the contract. It was submitted that if that approach was adopted then all that GMT P/L was required to pay in accordance with s.90(2) FW Act was that net sum. It was contended for the Respondents that other provisions of the FW Act supported that contention.
The Respondents accepted that s.61 FW Act set minimum standards which cannot be displaced. However, they also contended that s.128 FW Act came to its aid. It relevantly provides:
“Relationship between National Employment Standards and agreements etc. permitted by this Part for award/agreement free employees
The National Employment Standards have effect subject to:
(a) an agreement between an employer and an award/agreement free employee or a requirement made by an employer of an award/agreement free employee, that is expressly permitted by a provision of this Part; or
(b) an agreement between an employer and an award/agreement free employee that is expressly permitted by regulations made for the purpose of section 129.”
It was contended that there is no regulation made pursuant to s.129 FW Act to prohibit an employee from doing anything, and therefore it follows that there is no basis to preclude a termination clause of the kind provided for in the contract of employment. Support for this argument was said to be found in the Award itself, which in cl.16 provides for a provision with a similar effect to that in the contract of employment. The Respondents contended that, as s.55(1) FW Act states that a Modern Award must not exclude the NES or any provision of the NES, ipso facto if such a provision as cl.16.1 is permitted in a Modern Award, which itself must not exclude the NES, s.128 can import a similar provision on the basis that such a provision is ancillary, incidental or supplemental to the NES. That is particularly so given that s.55(4) FW Act provides that a modern award can include ancillary, incidental or supplementary terms “only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.”
Whilst the circumstances of a modern award may permit a provision of this kind, for reasons addressed below the Modern Award in its current form is not detrimental to an employee. Significantly however, no regulations were made pursuant to s.129 FW Act and accordingly s.128(A) FW Act leaves the position, so far as it concerns an employee whose minimum standards are governed by the NES, that an agreement between such an employer and employee must be subject to something that is expressly permitted by a provision of Part 2-2. There is no such provision provided for in Part 2-2. The only provision within Part 2-2 which is closely analogous is that provided for in s.94 FW Act which deals with cashing out and taking paid annual leave. However, as the Applicant submitted, there was no equivalent provided concerning the withholding of annual leave.
In any event, I accept the Applicant’s submission that the Respondents’ contention on this point does not withstand scrutiny when cl.16.2 of the Award is considered. It provides:
“The notice of termination required to be given by an employee is the same as that required of an employer, except that there is no requirement on the employee to give additional notice based on the age of the employee concerned. If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination, under this award or the NES, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by this clause, less any period of notice actually given by the employee.”
Clause 16 is part of the Award, which itself is a modern award. As the Respondents contend, s.55(1) FW Act provides that a modern award must not exclude the NES or any provision of the NES. However, as s.55(4) FW Act provides:
“(4) A modern award … may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.”[39]
[39] The terms “ancillary,” “incidental” and “supplementary” are addressed in notes to s.55(4) FW Act.
The relevant termination provisions are provided for at s.117 FW Act. They provide that an employer must not terminate an employee’s employment unless the employer has given the employee written notice and sets out notice entitlements. That section is however silent on the question of notice by employees to employers. To that extent cl.16.2 introduces such a requirement.
That situation however is to be contrasted with an employee who is Award or agreement free. Section 128 FW act simply permits in respect of such parties that the NES will have effect subject to any argument between such parties that is expressly permitted by a provision of Part 2-2. There is no such provision permitting a deduction of the type claimed by the GMT.
Ms Dowdell was subject to the Award by operation of cl.16.1. Section 117 FW Act specified the relevant notice period that she, as an employee, had to give. That section requires that the minimum notice an employer had to provide an employee in the position of Ms Dowdell was at least two weeks. It follows that by operation of s.117 FW Act and cl.16.2 of the Award it was only if Ms Dowdell failed to give the notice provided for under s.117 (two weeks) that the employer could withhold from her any monies due to her on termination. In this case Ms Dowdell gave four weeks’ notice. It follows that there was no entitlement to withhold on that basis.
It follows I am satisfied GMT P/L had no right to deduct any sum against the unpaid accrued leave entitlements due to Ms Dowdell at the end of her employment. In deducting sums against that entitlement that First Respondent contravened s.44 FW Act.
Personal/carers leave
Section 44 FW Act provides that an employer must not contravene s.99 FW Act which imposes an obligation on the employer to pay an employee’s base rate of pay during a period of personal leave. Relevantly s.97 FW Act provides that an employee may take paid personal/carers leave if the leave is taken “because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee.” Section 99 FW Act imposes an obligation to pay the employee personal/carers leave at the employee’s base rate of pay for the employee’s ordinary hours of work during the period.
An employee must give the employer notice of taking personal/carers leave. Relevantly, s.107 FW Act provides:
“Notice and evidence requirements
…
(2) The notice:
(a) must be given to the employer as soon as practicable (which may be a time after the leave has started); and
(b) must advise the employer of the period, or expected period, of the leave.
Evidence
(3) An employee who has given his or her employer notice of the taking of leave under this Division must, if required by the employer, give the employer evidence that would satisfy a reasonable person that:
(a) if it is paid personal/carer's leave--the leave is taken for a reason specified in section 97; or
…”
There is no dispute that Ms Dowdell was absent from her employment on personal leave from 21 December 2010 to 2 January 2011. She says that she was suffering from the effects of Crohn’s disease at that time. On 21 December 2010 she attended her regular doctor’s surgery. She was not able to see her usual doctor, Dr Karen Redmond, and so consulted with Dr Jim Williams. Dr Williams provided her with a medical certificate for the period of 21 December 2010 to 2 January 2011 which stated “She WILL BE UNFIT TO CONTINUE her USUAL OCCUPATION.” Ms Dowdell forwarded that medical certificate to GMT on that day.
As Ms Dowdell had not heard from Ms Pointon in reply to the forwarding of that certificate, she sent an email to her. In that email she referred to her condition as being the result of an assault at the tavern. She says that she made this comment as Dr Williams had informed her that he diagnosed her at that time as suffering from stress, which she attributed to that incident.
On 23 December 2010 Ms Pointon sent an email to Ms Dowdell indicating that she did not accept the medical certificate. In her email she stated, inter alia:
“In any event, if your medical condition is a result of [an assault], which I have not been supplied expert evidence of such, there is work I could give you, whereby this worry could be eliminated …”
Further email exchanges occurred between Ms Dowdell and Ms Pointon, with the matter ultimately being determined by Ms Pointon in an email of 24 December 2010 forwarded at 3:34am, wherein she stated:
“I don’t know how a family doctor would be the appropriate expert to qualify such a conclusion, and has certainly not done so in your medical certificate.”
Further exchanges occurred between Ms Dowdell and Ms Pointon regarding the sufficiency of the medical certificate. In due course Ms Dowdell obtained three further medical certificates to satisfy Ms Pointon’s concerns. The first was a further certificate from Dr Williams dated 31 January 2011; the second a medical certificate from Dr Redmond dated 9 February 2011; and finally, a further certificate from Dr Williams dated 10 February 2011.
The first certificate of Dr Williams dated 31 January 2011 was not expansive, however the second certificate from Dr Redmond relevantly noted:
“… Ms Julie Dowdell … is suffering from a chronic medical illness and as a result of this illness is on very strong immunosuppressive medication under specialist care. The side effects of this medication include significant aches and pains and fatigue which rendered her unfit for any duties at all from the 21/12/2010 - 22/1/2011 inclusive. Julie is a long standing patient of this practice and has been seen by either Dr Jim Williams or myself for her chronic medical condition for years. If you have any questions regarding this certificate, please do not hesitate to contact me here at the surgery.”
In Dr Williams’ subsequent certificate, emailed on 10 February 2011, he stated:
“… Ms Julie Dowdell … is suffering from a chronic medical illness and as a result of this illness is on very strong immunosuppressive medication under specialist care. The side effects of this medication include significant aches and pains and fatigue ...”
Although the subsequent medical reports indicate a different diagnosis for Ms Dowdell’s need for personal leave, I do not consider that matter to be to the point. Ultimately the question is whether or not the medical certificate which was initially provided and upon which the employer acted would satisfy a reasonable person that the leave was taken because of personal injury or illness. The later reports simply serve to confirm that Ms Dowdell was suffering from a medical condition. In my view it is not material that when challenged at the time of presentation of the certificate she provided a different diagnosis to that which was subsequently formally reported. It is not inconceivable that, for instance, a person in her position may simply have misunderstood and/or misreported a diagnosis made by a doctor which was not formally expressed. Further, as in this case, where other tests are undertaken the dubious significance of the presenting condition, which may or may not be understood by the employee, amplifies the prospect of a mistaken or incomplete understanding of any diagnosis provided. The fact remains that Ms Dowdell produced a medical certificate from a qualified medical practitioner in chit form. In addition to the provision of the medical certificate, the employer had knowledge that Ms Dowdell suffered from Crohn’s disease because this matter had been earlier disclosed to Ms Pointon.
From GMT P/L’s perspective it was contended that a reasonable person would not be satisfied on the evidence of the medical certificate because:
a)Ms Dowdell had unsuccessfully requested leave for the period in part covered by the certificate;
b)Ms Dowdell had given notice of termination; and
c)the period covered by the medical certificate coincided with her last two weeks of employment.
The employee had given notice of termination as she had informed the employer of her intention to commence employment with another employer. As Ms Pointon said in her statement:
“I did become immediately concerned about the receipt of this medical certificate given that there was this history about needing time off for her husband’s return from Western Australia and her statement of refusal to work it. There had been exchanges with myself where we had spoken about extending the last day period past 2 January 2011 given the provisions of the contract. Mrs Dowdell had advised me of her new employment and that her employer would not allow her to change her finish date with us and start date with them. We had also engaged a new Venue Manager who was commencing 4 January 2011 and he had worked for us previously and she became aware of these facts on the 17th and 18th of December 2010. About this time I also became aware of Ms Dowdell telling staff that following her leaving the Tavern’s employ she would be travelling to Western Australia and then to Bali. This information made me further concerned also in the context of this reference to an incident that had occurred some months beforehand.”[40]
[40] Affidavit of Tammi Maree Pointon filed 7 February 2013 at [122].
The Respondents contended that in the circumstances the medical certificate was not sufficient to satisfy a reasonable person that the leave was for the reasons specified in s.97 FW Act. In particular it was contended that Dr Williams’ medical certificate did not provide enough information to satisfy a reasonable person against the background of other facts known by the employer that the leave was for the reasons specified in s.97(a) FW Act.
GMT P/L’s concerns were informed by two factual matters which I do not accept were established in the evidence. First, GMT P/L contends that Ms Dowdell had requested leave for the period 17 December to 23 December 2010. I do not accept that as the case. Ms Dowdell’s evidence was that her husband, who was then employed in Western Australia, was returning at that time for leave. Accordingly, she requested that consideration be given to the rostering arrangements for that period so that she would be able to spend time with her husband on 23 December and deliver him to the airport late on 30 December. On 23 December Ms Dowdell was rostered on for 3.5 hours early in the day (9:00am to 12:30pm). Likewise, it can be seen from the roster that she was not rostered to work on 30 December. It can also be seen that she was generally rostered to work two shifts separated by a half hour break. In aggregate the shifts varied between 8 and 11.5 hours per day. The shift on 23 December proves to be the only exception, although in fairness only two rosters for the period preceding termination were provided. In any event, given the lead time involved in the preparation of rosters, it is, in my view, more than serendipitous that the roster particularly accommodates the two dates which were requested by Ms Dowdell. That is particularly so against the background of Ms Pointon’s evidence that no such request was made but rather that there was a request by Ms Dowdell for leave for the period between the two set dates. It follows that I prefer the evidence of Ms Dowdell to that of Ms Pointon on that matter.
The second factual premise concerned alleged discussion about the six week termination period. Ms Dowdell readily conceded that when she initially approached Ms Pointon to advise her of her intention to resign she believed that she was only required to give four weeks’ notice. She was subsequently advised by Ms Pointon that the contract of employment provided for six weeks’ notice. She accepted that prima facie on that basis she had not afforded the proper notice. She stated however that, notwithstanding that matter being brought to her attention, Ms Pointon informed her that she had obtained the services of a new manager, and accordingly the fact that she had not provided the additional two weeks’ notice “was not a problem.”[41] Ms Pointon denies this. What Ms Pointon did not emphasize however was that despite her statement that the issue would not be “a problem,” she still intended to enforce the penalty.
[41] Affidavit of Julie Gae Dowdell filed 16 October 2012 at [45].
That evidence sits comfortably with the fact that a new manager was engaged to commence on 4 January. Most significantly, the new manager, Ms Robyn Stevenson, was a former employee of the employer and well versed in the operations of GMT. Furthermore, as Ms Pointon stated, she was anxious to avoid having to pay two managers at the one time. Accepting that by the time Ms Dowdell says the issue was brought to her attention the services of new manager had been secured, and furthermore that the new manager was a person who was familiar with the business, it seems more likely than not that the prospect of Ms Dowdell finishing earlier, rather than later, did not trouble Ms Pointon.[42] That was particularly so because the employment of an experienced manager would have spared GMT the need for a more extensive handover/takeover between the outgoing and incoming managers.
[42] This matter illustrates why the penalty was in the circumstances incomprehensible, and not a genuine pre-estimate of damages.
I accept that it is more probable than not that these events transpired as related by Ms Dowdell, and I accept her version in preference to that of Ms Pointon where their versions differ.
It follows that I do not accept Ms Pointon’s evidence on two critical facts which it is said would inform the view of a reasonable person considering the evidence given by the employee in support of the leave being taken for the reasons specified in s.97 FW Act. On my finding, the only evidence available to GMT P/L to consider whether or not the leave was taken for the reasons expressed was:
a.the medical certificate;
b.knowledge of the prospective termination date of Ms Dowdell;
c.knowledge that Ms Dowdell did have a long standing medical condition, albeit one that generally did not cause her difficulties; and
d.knowledge that Ms Dowdell had sustained injury following an assault in the workplace.
In my view, having regard to those facts, a reasonable person would have been satisfied on the presentation of a medical chit from a doctor of unfitness to work.
If that matter were not enough, one additional matter weighs into the consideration. That is the series of enquiries made by Ms Dowdell following Ms Pointon’s querying of the report. Although further medical evidence had not been forthcoming at the date of termination, the fact is that Ms Dowdell had made all reasonable efforts to have her consulting medical practitioner release information to her employer. The fact that the subsequent evidence which was produced was not available prior to the termination is due to no fault of Ms Dowdell. The fact remains that Ms Dowdell demonstrated a willingness to waive the privilege attached to her medical attendances in order to allay Ms Pointon’s concerns. Ms Pointon simply failed to take up Ms Dowdell’s invitation which, as events subsequently demonstrated, would have proved fruitful in the resolution of her concerns.
I am satisfied the deduction made by the First Respondent on account of Ms Dowdell properly taking carer’s leave was in contravention of s.44 FW Act.
Deduction of gaming license nomination fee
The final issue between the parties concerns the deduction made upon termination for the gaming nominee course undertaken by Ms Dowdell but paid for by GMT.
Section 324 FW Act provides that an employer must pay an employee for the performance of work in full, except as provided for in that section. It provides for permitted deductions in the following terms:
“Permitted deductions
(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:
(a) the deduction is authorised in writing by the employee and is principally for the employee's benefit; or
…
(2) An authorisation for the purposes of paragraph (1)(a):
(a) must specify the amount of the deduction; and
(b) may be withdrawn in writing by the employee at any time.
(3) Any variation in the amount of the deduction must be authorised in writing by the employee.”
There is no issue between the parties that early in her employment GMT paid a sum of $495.00 for Ms Dowdell to obtain a gaming nominee license, that sum being the appropriate fee payable in respect of that license. Furthermore, it is not in contention that the relevant contract provided:
“Your employment conditions are inclusive of the employee always having the required current qualifications as Management outlines (eg. RSA, RGS, recent Keno courses, Gaming Licence, TAB etc). Such qualifications are the expense of the employee …”
Although there was some dispute between the parties concerning who was the principal beneficiary of Ms Dowdell’s attainment of the gaming nominee license, the fact remains that it was a term of the contract of employment between the parties that Ms Dowdell hold and maintain such a license at her own expense. The license fee was paid for by GMT P/L and accordingly it was within its rights in seeking to be reimbursed in respect of that fee. However, s.324 FW Act provides the regime for an employer deducting monies from an employee. In particular, the deduction must be authorised in writing by the employee.
The contract in its terms does provide that “the employee authorises the employer to deduct any monies owing to them from their pay.” In principle there is nothing contentious about that provision, however, s.324 FW Act is directive insofar as it provides that an authorisation for deduction:
“…
(a) must specify the amount of the deduction; and.
…”
That is to say that there can be no blanket authorisation but only an authorisation in writing that specifies the amount of the deduction. In this instance the deduction of $495.00 was not specified in the written authority constituted by the employment contract. No other written authority was put to the Court to satisfy the requirements of s.324 FW Act. It follows that the deduction was unauthorised. Given the absence of that essential matter of form it is an unnecessary and sterile task to investigate the other issues or complaints such as whether or not the license was a qualification required at the time of the contract or whether it was a qualification and fee incurred “principally for the employee's benefit.” The contravention is established for that want of form.
Accessorial liability
Section 550(1) FW Act provides that a person who is involved in a contravention of a civil penalty provision is taken to have contravened that provision. Section 550 FW Act follows a common form of provision similarly found in s.75B(1) Competition and Consumer Act 2010 (Cth). Principles applicable to resolving questions of accessorial liability were settled in that context in Yorke v Lucas (1985) 158 CLR 661 and other authorities applying that case, as referred to in Dowling v Kirk [2007] FMCA 2106 at [33], a case where this Court gave consideration to questions of accessorial liability under s.728(2) WR Act, the predecessor to s.550 FW Act. To establish accessorial liability, the relevant person:
a.Must have knowledge of the essential facts constituting the contravention;
b.Must be knowingly concerned in the contravention;
c.Must be an intentional participant in the contravention based on actual not constructed knowledge of the essential facts constituting the contravention, although constructed knowledge may suffice under s.728(2)(c) in cases of wilful blindness; and
d.Need not know that the matters in question constituted a contravention.
In this case, as was submitted by the Applicant, it is uncontroversial that:
a.Ms Pointon is one of two directors of GMT;
b.Ms Pointon is one of two shareholders in GMT via TMP Holdings Pty Ltd;
c.Ms Pointon oversaw the operation and management of GMT;
d.Ms Pointon was the operative and controlling mind of GMT; and
e.Ms Pointon was the person who made decisions on behalf of GMT regarding the basis upon which Ms Dowdell was:
i.Engaged to perform work;
ii.The terms of conditions upon which she would be engaged;
iii.The work she would perform; and
iv.The time, manner and method in which she would be paid.
As the controlling mind of the organisation I am satisfied that Ms Pointon was a relevant participant in all these events, had knowledge of the essential facts constituting the contravention and acted intentionally as a participant in the contravention.
Conclusion
The Applicant as the relevant statutory body complains that the First Respondent has contravened the FW Act in respect of three matters concerning a former employee. The contravention concerns unlawful deductions from the employee’s final salary of amounts claimed pursuant to a contract of employment. I am satisfied that the employee was covered by an award, that the deductions were not permitted by the award and that they were in contravention of minimum requirements applicable to her as a National System Employee. The deductions were on account of alleged early termination notice, carer’s leave and a course undertaken at the employer’s request. I am also satisfied that the First Respondent’s director, the Second Respondent, was a person involved in the First Respondent’s contravention as provided for by s.550 FW Act.
Orders
That the application be adjourned to a date to be fixed for the hearing of submissions on penalty.
I certify that the preceding one hundred and twenty-five (125) paragraphs are a true copy of the reasons for judgment of Judge Burnett
Date: 30 May 2014
Key Legal Topics
Areas of Law
-
Employment Law
-
Statutory Interpretation
Legal Concepts
-
Breach
-
Statutory Construction
-
Remedies
-
Procedural Fairness
1
12
7