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Fair Work Ombudsman v Grouped Property Services Pty Ltd

Fair Work Ombudsman v Grouped Property Services Pty Ltd

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Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034
KATZMANN J
summary
In accordance with the practice of the Federal Court in some cases of public interest, the following Summary has been prepared to accompany the reasons for judgment delivered today. The Summary is intended to assist understanding of the decision of the Court. It is not a complete statement of the conclusions reached by the Court or the reasons for those conclusions. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment. The published reasons for judgment and this Summary will be available on the Internet at align="center">Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034
KATZMANN J
SUMMARY
This is a case about the calculated exploitation of a vulnerable workforce.
The Fair Work Ombudsman sued a contract cleaning business known as Grouped Property Services Pty Ltd (GPS) for multiple breaches of the Fair Work Act 2009 (Cth). She also sued two people who were involved in the management of GPS: Enrico Pucci and Enrico’s brother, Rosario (also known as “Ross”). Enrico was the sole director of GPS. Rosario was its Chief Operating Officer and, from mid-April 2012 to at least December 2015, an undischarged bankrupt.
Sone 36 contraventions of the Act were pleaded. Yet many of the contraventions involved more than one employee. Consequently, the substance of the Ombudsman’s case was that GPS (or alternatively National Contractors) breached the Fair Work Act more than 580 times. The breaches were said to have taken place over a period between 2011 and 2013 and to have affected a total of 51 employees.
Some of the breaches related to a failure to pay basic employee entitlements, including penalty rates, annual and personal leave, payment in lieu of notice on termination, superannuation, minimum wages and, in some cases, any wages at all. Others related to a failure to keep proper records and provide pay slips. One involved an employee, Moona Hasan, who was fired merely because she made repeated inquiries about why she had not been paid and when she would be paid. Another concerned representations made to a number of individuals that they were contractors rather than employees.
The Ombudsman said that Enrico was involved in the unlawful dismissal of Ms Hasan, and that Rosario was involved in each of the other breaches.
In its defence, GPS and Enrico claimed that GPS had not employed any of the 51 individuals. Rather, they said that it hired their labour from National Contractors and certain other companies. National Contractors admitted that some of the 51 were employees, but said that others were independent contractors. Rosario did not file a defence at all.
The evidence supported most, but not all, of the Ombudsman’s allegations. The evidence also disclosed that, more often than not, when employees asked why they had not been paid, their inquiries were repeatedly ignored and/or rebuffed. Sometimes the employees were abused — merely for pursuing…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] FCA 1034
Decision Date: 26 August 2016

CaseChat Overview and Summary

In the Fair Work Ombudsman v Grouped Property Services Pty Ltd case, the Fair Work Ombudsman (the applicant) brought proceedings against Grouped Property Services Pty Ltd (GPS), Enrico Pucci, and Rosario Pucci (the respondents) for alleged contraventions of the Fair Work Act 2009 (Cth). The primary issue was whether certain individuals were classified as employees or subcontractors and if GPS was the true employer of these individuals. Additionally, the case addressed allegations of underpayment of statutory and award entitlements, adverse action, false representations, failure to keep proper records, and failure to provide pay slips. GPS was also alleged to be accessorially liable for the actions of National Contractors Pty Ltd. The case was heard in the Federal Circuit Court of Australia.

The court had to determine the legal classification of the workers in question and whether GPS was indeed their employer. It also needed to examine if there were breaches of the Fair Work Act and associated awards. Furthermore, the court had to consider if the individuals in question were engaged in conduct that contravened the Cleaning Services Award, the Clerks Modern Award, National Employment Standards, national minimum wage orders, or other industrial instruments. The court also had to assess the implications of accessorial liability under the Fair Work Act.

The court ruled in favour of the applicant, finding that GPS was the true employer of the individuals in question and that there were significant breaches of the Fair Work Act and associated awards. The court held that GPS was accessorially liable for the actions of National Contractors Pty Ltd. Consequently, the court ordered an audit of GPS’s compliance with the Fair Work Act and relevant awards, mandated training for GPS, and imposed restraints on GPS and the Puccis from engaging in conduct that contravenes the Fair Work Act and associated awards. The court also ordered that judgment be entered in favour of National Contractors Pty Ltd.

The final orders included an audit of GPS’s compliance with the Fair Work Act and relevant awards, mandatory training for GPS, restraints on GPS and the Puccis from engaging in conduct that contravenes the Fair Work Act and associated awards, judgment in favour of National Contractors Pty Ltd, and the forwarding of a copy of the reasons to relevant authorities. The matter was stood over for the hearing of the application for compensation and penalties, and the question of costs was reserved.

Orders

Orders of the court

1. Pursuant to subs 545(1) of the Fair Work Act, GPS undertake, or at its expense engage a third party with qualifications in accounting or workplace relations to undertake, an audit of GPS’s compliance with the Fair Work Act and the Cleaning Services Award and Clerks Modern Award on the following terms:

(a) the audit period will be the period commencing on 15 September 2013 and ending six months after the date of this order;

(b) the audit is to be completed within 30 days of the end of the audit period;

(c) the audit will apply to all employees and persons otherwise engaged to perform work for GPS (including persons purportedly employed or engaged by National Contractors Pty Ltd) at any time during the audit period;

(d) according to each employee’s classification of work, category of employment, and hours worked during the audit period, the audit will assess GPS’s compliance with the following obligations:

(i) wages and work related entitlements under the Cleaning Services Award, the Clerks Modern Award, other industrial instruments or national minimum wage orders;

(ii) accrual and payment of entitlements under the National Employment Standards in Part 2–2 of the Fair Work Act;

(iii) method and frequency of payment in accordance with s 323 of Fair Work Act;

(iv) permitted deductions in accordance with s 325 of the Fair Work Act;

(v) contracting arrangements in accordance with s 357 of the Fair Work Act; and

(vi) record keeping and pay slip obligations in Division 3 of Part 3-6 of the Fair Work Act.

2. Within 30 days of the audit in order 1 above being completed, GPS provide the applicant with:

(a) a copy of the audit report which will include a statement of the methodology used in the audit; and

(b) written details of any contraventions identified in the audit, the steps GPS will take to rectify any identified contravention(s) and by when the rectification will occur.

3. Within six months of the date of this order, GPS engage, at its own expense, a person or organisation with professional qualifications in workplace relations to provide training to GPS that covers the following:

(a) obligations on employers under the Cleaning Services Award, Clerks Modern Award and the National Employment Standards in the Fair Work Act; and

(b) payment of wages in accordance with Division 2 of Part 2-9 of the Fair Work Act.

4. Within 30 days of completing the training in order 3 above, GPS notify the applicant, in writing of:

(a) the date on which the training was completed;

(b) the name of the person or organisation that conducted the training; and

5. Pursuant to subs 545(1) and/or subs 545(2)(a) of the Fair Work Act, GPS be restrained, whether by its officers, agents or otherwise, from engaging in conduct that contravenes the Cleaning Services Award, the Clerks Modern Award, National Employment Standards, national minimum wage order or other industrial instrument.

6. Pursuant to subs 545(1) and/or subs 545(2)(a) of the Fair Work Act, Enrico Pucci and Rosario (also known as Ross) Pucci be restrained from:

(a) aiding, abetting, counselling, procuring; or

(b) being in any way knowingly concerned, whether directly or indirectly, in conduct that contravenes the Cleaning Services Award, the Clerks Modern Award, National Employment Standards, national minimum wage orders or other industrial instruments.

7. Judgment be entered in favour of National Contractors Pty Ltd.

8. The District Registrar forward a copy of these reasons to the Australian Securities and Investments Commission and the Australian Taxation Office.

9. The matter be stood over to a date to be fixed for the hearing of the application for compensation and penalties.

10. The question of costs be reserved.

The Sunday Telegraph

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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