Fair Work Ombudsman v Green Clean (Aust) Pty Ltd

[2022] FedCFamC2G 426

Federal Circuit and Family Court of Australia

(DIVISION 2)

Fair Work Ombudsman v Green Clean (Aust) Pty Ltd [2022] FedCFamC2G 426  

File number(s):	SYG 1100 of 2020
Judgment of:	JUDGE OBRADOVIC
Date of judgment:	3 June 2022
Catchwords:	INDUSTRIAL LAW – Fair Work – contravention of the Fair Work Act 2009 – director’s liability for company breach – accessorial liability of employee – liability established.
Legislation:	Fair Work Act 2009 (Cth) ss.45, 536, 550, 718, 718A Cleaning Services Award 2010 cl.12, 16, 20, 23, 27, 28
Cases cited:	Australian Securities and Investment Commission v AGM Markets Pty Ltd (in liquidation) (No.3) [2020] FCA 208 NMFM Property Pty Ltd v Citibank Ltd (No.10) [2000] FCA 1558 Walplan Pty Ltd v Wallace [1985] FCA 619
Division:	Division 2 General Federal Law
Number of paragraphs:	35
Date of hearing:	4 and 5 April 2022
Place:	Parramatta
Counsel for the Applicant:	Ms Brigden
Solicitor for the Applicant:	Fair Work Ombudsman
Appearing for the First Respondent:	Mr Girowal as director
Appearing for the Third Respondent:	In person

ORDERS

SYG 1100 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

FAIR WORK OMBUDSMAN

Applicant

AND:

AND:

GREEN CLEAN (AUST) PTY. LTD.

First Respondent

KAREENA COLTON

Third Respondent

order made by:	JUDGE OBRADOVIC
DATE OF ORDER:	3 June 2022

THE COURT DECLARES THAT:

1.The First Respondent contravened:

(a)Section 45 of the Fair Work Act 2009 (Cth) (“FW Act”) by failing to pay Mr Shashi Parajuli and Ms Riddhi Sangachhe (“the Employees”) the minimum hourly rate as required by clause 16 of the Cleaning Services Award 2010 (“Cleaning Award”);

(b)Section 45 of the FW Act by failing to pay the Employees casual loading as required by clause 12.5(a) of the Cleaning Award;

(c)Section 45 of the FW Act by failing to pay the Employees shiftwork penalty rates as required by clause 27.1 of the Cleaning Award;

(d)Section 45 of the FW Act by failing to pay the Employees overtime rates as required by clause 28.2 of the Cleaning Award;

(e)Section 45 of the FW Act by failing to pay the Employees broken shift allowances as required by clause 17.1 of the Cleaning Award;

(f)Section 45 of the FW Act by failing to pay the Employees amounts due within seven days of termination as required by clause 20.5 of the Cleaning Award;

(g)Section 45 of the FW Act by failing to make superannuation contributions on behalf of the Employees as required by clause 23.2 of the Cleaning Award;

(h)Section 536 of the FW Act by failing to provide pay slips to the Employees within one working day of paying amounts to them in relation to the performance of work; and

(i)Section 718A of the FW Act by producing documents to a Fair Work Inspector with knowledge or recklessness as to whether the documents were false or misleading.

2.The Third Respondent was involved, within the meaning of section 550 of the FW Act, in the first respondent’s contraventions of sections 45, 536 and 718A of the FW Act as set out in paragraph 1(a) to (f), (h) and (i) above.

THE COURT ORDERS THAT:

1.The matter is listed for directions in respect of penalty at 10:15am on 5 August 2022.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE OBRADOVIC:

1. These are the reasons for judgment in respect of certain alleged contraventions of the Fair Work Act 2009 (“FW Act”).

2. The applicant is the Fair Work Ombudsman. The first respondent, Green Clean (Aust) Pty. Ltd., is the operator of a cleaning business based in Plumpton, New South Wales providing cleaning services to commercial and residential clients. The sole director of the company is Mr Girowal. The third respondent, Ms Colton, performed administrative duties for the business.

3. In accordance with the Statement of Agreed Facts filed 21 April 2021 the first respondent has admitted the following contraventions:

   (a)failed to pay Mr Shashi Parajuli and Ms Riddhi Sangachhe (“the Employees”) the minimum hourly rate as required by clause 16 of the Cleaning Services Award 2010 (“Cleaning Award”), in contravention of s.45 of the FW Act;

   (b)failed to pay the Employees casual loading as required by clause 12.5(a) of the Cleaning Award, in contravention of s.45 of the FW Act;

   (c)failed to pay the Employees shiftwork penalty rates as required by clause 27.1 of the Cleaning Award, in contravention of s. 45 of the FW Act;

   (d)failed to pay the Employees overtime rates as required by clause 28.2 of the Cleaning Award, in contravention of s.45 of the FW Act;

   (e)failed to pay the Employees broken shift allowances as required by clause 17.1 of the Cleaning Award, in contravention of s.45 of the FW Act;

   (f)failed to pay the Employees amounts due within seven days of termination as required by clause 20.5 of the Cleaning Award, in contravention of s.45 of the FW Act;

   (g)failed to make superannuation contributions on behalf of the Employees as required by clause 23.2 of the Cleaning Award, in contravention of s.45 of the FW Act; and

   (h)failed to provide pay slips to the Employees within one working day of paying amounts to them in relation to the performance of work, in contravention of s.536 of the FW Act.

4. Likewise in accordance with the Statement of Agreed Facts, the third respondent has admitted that she was involved, within the meaning of s.550 of the FW Act, in each of the first respondent’s contraventions of ss.45 and 536 of the FW Act as set out above.

5. The applicant further alleges that in contravention of s.718A of the FW Act, the first respondent produced documents to a Fair Work Inspector with knowledge or recklessness as to whether the documents were false or misleading. The applicant says that the third respondent was also involved in the first respondent’s alleged contravention of s.718.

6. Both the first and third respondent deny this allegation, and accordingly these reasons relate to the issue of liability, namely as to whether the first respondent is in contravention of section 718 of the FW Act by producing documents to a Fair Work Inspector with knowledge or recklessness as to whether the documents were false or misleading and whether the third respondent was involved in that contravention.

7. The first respondent relies on its defence filed 31 March 2022. The third respondent has not filed any documents apart from her appearance. As well, neither the first respondent nor the third respondent have filed any liability evidence notwithstanding orders being made for them to do so.

8. The matter was originally scheduled to commence on 1 February 2022, however it was adjourned on the application of the respondents because Ms Colton was involuntary admitted to hospital and could not participate in the hearing.

9. The matter was set down again to commence on 4 April 2022. On that occasion, Mr Girowal appeared as sole director for the first respondent and the third respondent appeared self-represented.

10. Judgment was reserved on 5 April 2022.

    Findings

11. In addition to the matters set out in the Statement of Agreed Facts (which is reproduced at Appendix “A” to these reasons for judgment), the following facts at [12] to [23] below,  are relevant to the issues which the Court must determine.

12. Mr Michael Girowal is the sole director and secretary of the first respondent.

13. On 14 June 2019, the applicant received a request for assistance by the Employees about their employment with the first respondent. In or about July 2019, the applicant commenced an investigation into the allegations made by the Employees, with such investigations concluding in late January 2020.

14. During the investigation, the Fair Work inspectors corresponded with the first respondent about the Employees’ allegations and their employment. The first respondent was issued with a Notice to Produce Records or Documents (“Notice to Produce”) pursuant to s.712(2) of the FW Act on 16 July 2019. A copy of the Notice to Produce was sent to Mr Girowal, via email to [email protected].

15. The Notice to Produce requested the first respondent produce specified records and documents including those relating to the business structure and reporting lines of the first respondent and the employment of Mr Parajuli by 5 August 2019.

16. On 6 August 2019, the first respondent was issued with a Failure to comply with a Notice to Produce Records or Documents in respect of the Notice to Produce issued on 16 July 2019. The first respondent was provided 7 days to provide a reasonable excuse for failing to comply with the notice. A copy of the letter in relation to the first respondent’s failure to comply with the Notice to produce was also sent via email to Mr Girowal at [email protected].

17. At 10:10am on 6 August 2019, Fair Work Inspector (“FWI”) Dodd received an email from the email address [email protected] which stated the following:

    I sent all documents you requested yesterday. I will resend shortly but in the meantime check your junk folder in case it landed there.

    Please let me know if you don’t receive the documents by this afternoon.

    Also happy to send via registered list if that makes it easier.

    Kind regards,

    Michael

18. At 9:34pm on 6 August 2019, FWI Dodd received an email from the email address [email protected] which attached a number of documents in answer to the Notice to Produce and forwarded an email purportedly sent from the email address [email protected] to Ms Sangacche on 17 March 2019. The email had the subject line “Independent Contractor Agreement & key log” and attached documents titled “Independent Contractor Agreement” and “Subcontract Details and Key Log”.

19. That same day, at 9.41pm, FWI Dodd received an email from the email address [email protected] which forwarded an email purportedly sent by Ms Colton, from the email address [email protected] to Ms Sangachhe and copied to Mr Parajuli on 23 April 2019, which had the subject line “Independent Contractor Agreement and key log- please complete and return immediately.”

20. The first and third respondents admit that:

    (a)The third respondent produced the 17 March 2019 and 23 April 2019 emails;

    (b)Neither the 17 March 2019 email nor the 23 April 2019 email were sent to the employees’ emails on the dates they were purportedly sent or at all during March or April 2019; and

    (c)The third respondent knew, or was reckless whether, the 17 March 2019 email and the 23 April 2019 email were each false or misleading in material particulars, namely the dates upon which they were purportedly sent to the Employees and the terms and conditions upon which the first respondent attempted to engage the Employees.

21. On 14 December 2021, the applicant served a Notice to Admit on the first respondent by express post and also by email to Mr Girowal at [email protected]. The Notice to Admit included a request to admit the following facts are true:

    2. The Third Respondent was an employee of the First Respondent as at August 2019.

    3. As at August 2019, Mr Michael Girowal authorised the Third Respondent to respond to emails sent from personnel from the Fair Work Ombudsman to the email account [email protected] from that email account.

    4. As at August 2019, Mr Girowal had authorised the Third Respondent to send emails from the email account [email protected].

22. On 14 December 2021, Mr Girowal sent an email to the applicant in answer to a Notice to Admit dated 14 December 2021. That email read:

    … Kareena was not an employee. With her disability she can’t hold a job so I offered her work as we are old friends. So I can’t admit to that.

    Kareena did have access to my email and was allowed to reply in this instance so for the purposes of the case so I can admit this.

23. On 16 December 2021, the applicant responded, and confirmed its understanding (in reference to Mr Girowal’s email of 14 December 2021) that the first respondent admits that as at August 2019, Mr Girowal authorised the third respondent to respond to emails sent from personnel from the Fair Work Ombudsman to the email account [email protected] from that email account and that the first respondent admits that as at August 2019, Mr Girowal had authorised the third respondent to send emails from the email account [email protected]. No further response was received from Mr Girowal.

    Issues for Determination and Determination

24. The first issue for determination is whether there is sufficient basis for a declaration as to the first respondent’s contravention of s.718 of the FW Act. The applicant relied upon s.793 of the FW Act in support of the submission that when the third respondent did the matters referred to in [20] above, that she did so on behalf of the first respondent such that the first respondent contravened s.718.

25. Therefore, it is necessary to determine firstly whether the conduct which was engaged in by the third respondent had been engaged “in or on behalf of” the first respondent “by an…employee or agent of the body within the scope of his or her actual or apparent authority”.

26. While Mr Girowal denied in his email of 14 December 2021, that the third respondent had been an employee of the first respondent at the relevant time, he did refer to offering her “work”. In his submissions Mr Girowal said to the Court:

    … At no point did I make any admissions to having directed Ms Colton falsify documents or send fake emails on behalf of me. That admission simply related to the fact that while Kareena was working there, she had access to my emails and she could send and receive my emails… this was done without my knowledge and I’ve already admitted to that. I’ve taken responsibility…

    … Ms Colton has been a friend of mine for a long, long time, perhaps approaching over 15 years. And in her battles with depression and bipolar disorder, I as a friend gave her an opportunity to work here and there in my business,  just to keep her sort of, you know, mentally occupied and to give her something to work towards…

27. The phrase “on behalf of” in s.793 of the FW Act is not defined. It is not a phrase with a strict legal meaning and is used in a wide range of relationships[1]. In the context of similarly worded provisions[2], it has been held that “an act is done “on behalf of” a corporation… if either one of two conditions is satisfied: that the [person]… engaged in the conduct intending to do so “as representative of” or “for” the corporation, or that the [person]… engaged in the conduct in the course of the corporation’s business, affairs or activities”[3].

    [1] Walplan Pty Ltd v Wallace [1985] FCA 619 at [37]; (1985) 8 FCR 27

    [2] s.84(2) of the Trade Practices Act 1974 (Cth) (repealed); s.84(2) of the Competition and Consumer Act 2010 (Cth)

    [3] NMFM Property Pty Ltd v Citibank Ltd (No.10) [2000] FCA 1558 at [1244] referring to Lisciandro v Official Trustee in Bankruptcy (1995) ATPR 41-436 at 40,903-40,904

28. The third respondent sent emails from Mr Girowal’s email address (which she was “allowed” to do) in response to correspondence from the applicant, referring to the Notice to Produce and advising that the first respondent had not been complied with. The emails from the third respondent were sent in purported compliance with the Notice to Produce issued to the first respondent, in respect of documents concerning the first respondent and from an email address belonging to the first respondent. The third respondent “worked” for the first respondent. The emails were sent during the course of the work that she did for the first respondent. As such, the third respondent, engaged in the admitted conduct in the course of the first respondent’s business, affairs or activities and she did so either as an employee or an agent of the first respondent.

29. It is not necessary for the purposes of these proceedings to determine whether the third respondent was an employee or an agent. She certainly “worked” for the first respondent. She is referred to in the “business structure” as “Admin/Sub-contractor Manager”. She had been employed by the first respondent as at August 2016. She had access to Mr Girowal’s emails and furthermore she had actual[4] authority to reply to applicant’s emails from Mr Girowal’s email address. If she was not an employee she certainly was an agent, with the requisite authority.

    [4] And not just apparent authority

30. The fact that neither the first respondent nor Mr Girowal directed the third respondent to falsify documents or send fake emails on behalf of the first respondent, does not change anything; it is not necessary to show that the third respondent was authorised to send false documents. It is sufficient that the third respondent’s authority extended to producing documents on behalf of the first respondent. A principal is answerable for the wrong of the agent, provided that act was done, not from any caprice of the agent, but in the course of the agency.[5] Whether an agent is determined to be acting within her apparent authority is to be determined from the perspective of the third party who engages with that agent[6].

    [5] Australian Securities and Investment Commission v AGM Markets Pty Ltd (in liquidation) (No.3) [2020] FCA 208 at [467]

    [6] Ibid at [470]

31. In this instance, the third respondent’s conduct in sending emails to the applicant was engaged in on behalf of the first respondent and was conduct that was engaged in on behalf of the first respondent within the meaning of s.793(1)(a) of the FW Act, and is thus conduct which is taken to have been engaged in by the first respondent.

32. In the circumstances of the admissions made, noted at [20] above, namely that the third respondent knew or was reckless as to whether the documents were false or misleading, the Court is satisfied that the first respondent contravened s.718A FW Act[7].

    [7] In particular s.718A(1) of the FW Act

33. Lastly, in respect of accessorial liability of the third respondent, that is whether the third respondent was directly or indirectly, knowingly concerned in or party to the first respondent’s contravention of s.718A(1) of the FW Act, the Court is satisfied having regard to the admissions made, noted at [20] above, that the third respondent knew that she on behalf of the first respondent, produced documents in response to the Notice to Produce and that she knew that she knew or that she was reckless, in whether the documents were false or misleading at the time she produced them.

34. As such, the third respondent was involved, within the meaning of s.550 of the FW Act in the first respondent’s contravention of s.718A.

35. For these reasons, orders as set out at the forefront of these Reasons for Judgment are made.

I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic.

Associate: L. Hassan

Dated: 3 June 2022

Appendix “A”