INDUSTRIAL LAW – accessorial liability – knowingly involved in – Second and Third Respondents not knowingly involved in contraventions of s 45 Fair Work Act 2009 (Cth)
PRACTICE AND PROCEDURE – appeal in the nature of a re-hearing – departure from findings of fact made by primary Judge
[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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AGLC
Fair Work Ombudsman v Hu [2019] FCAFC 133
Case
[2019] FCAFC 133
Decision Date
CaseChat Overview and Summary
In the case of Fair Work Ombudsman v Hu, the dispute involved the interpretation of clause 15 of the Horticultural Award 2010. The Fair Work Ombudsman (FWO) alleged contraventions of the Award by the respondents, which were related to the piecework rates set in their agreements. The primary judge had ruled that while an employer contravenes the Award if they enter into an agreement fixing a piecework rate that does not meet the prescribed minimum, there was no ongoing contravention if an employer failed to enter into such an agreement. However, the primary judge also ruled that employers were required to pay at least the minimum piecework rate that should have been fixed. This decision was challenged on appeal, with the key issue being the proper construction of clause 15 of the Award.
The appeal court found that the primary judge's interpretation that an employer must pay at least the minimum piecework rate was incorrect. The court held that the phrase in clause 15.2, which states that the agreed piecework rate must be paid for all work performed, should be construed to mean that the agreed rate must be at least the minimum level. This interpretation ensures that employers cannot exploit employees by setting inadequate piecework rates, even if those rates were initially adequate at the time of agreement. The court held that where a piecework rate becomes inadequate during the term of an employment agreement, it is a contravention of the Award for an employer to continue paying only the agreed, inadequate rate.
The appeal was ultimately dismissed, affirming the primary judge's decision on the non-ongoing nature of the contravention and rejecting the interpretation that employers must pay at least the minimum piecework rate. The court's reasoning emphasised the protective purpose of the Award's requirements, ensuring that employees are not left vulnerable to exploitation through inadequate piecework rates. The final orders were that the appeal be dismissed, leaving the primary judge's findings on the non-ongoing contravention intact.
Orders
Orders of the court
1. The appeal is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
It is unnecessary to resolve the Amended Notice of Contention.CONCLUSIONS It follows that the appeal should be dismissed. The background facts are sufficiently set out in the reasons of Flick and Reeves JJ to permit me to address, without further introduction, the question of the proper construction of cl 15 of the Horticultural Award 2010 (“Award”). On that question I respectfully differ from the approach taken by Flick and Reeves JJ and the primary Judge.The proper construction of cl 15 The terms of cl 15 of the Award are set out in the joint judgment above at [13]. The primary Judge accepted (at [48]) the appellant’s (“FWO”) construction that an employer contravenes cl 15 by entering into an agreement which fixes a piecework rate that does not enable the average competent employee to earn at least the piecework rate that meets the requirements in cl 15.2 and cl 15.3 of the Award (“the prescribed piecework rate”). His Honour rejected the FWO’s contention that a failure to make an agreement which provided for the prescribed piecework rate constituted an ongoing contravention of cl 15 ([136]-[137]). However, the primary Judge construed cl 15 as not merely prohibiting an employer from entering an agreement with a non-compliant piecework rate, but also as requiring “the employer to pay at least the minimum piecework rate that ought to have been fixed” (at [138]). For that conclusion, his Honour relied on the terms of cl 15.2 that, “The piecework rate agreed is to be paid for all work performed in accordance with the piecework agreement”, in respect of which his Honour said:[138]… The word “agreed” is apparently intended to have the same meaning as “fixed”, but, leaving that aside, the phrase is ambiguous. It could require that the piecework rate that has been agreed, regardless of whether it is inadequate, must be paid for all work performed in accordance with the agreement. Alternatively, it could mean the piecework rate that has been agreed and is at least at the minimum level must be paid for all work performed in accordance with the agreement (emphasis added). [139]In my opinion, the latter construction is to be preferred. The former construction, which could require an employer to pay a piecework rate fixed at a level which does not comply with cl 15, is improbable. Further, that construction would mean that where a piecework rate was initially fixed at an adequate level, but where the piecework rate later becomes inadequate, there is no obligation on the employer to adjust the rate. That would mean, for example, that if the minimum hourly rate prescribed under cl 14.1 of the Award increased during the term of an employment agreement, there would be no corresponding obligation on the employer to increase the piecework rate. Such an outcome cannot have been intended. [140]I recognise the force of the intervener’s submission that this construction produces an inconvenient outcome for employers. The piecework provisions of the Award, seen as a whole, attempt to balance the interests of employers with the risk that employees will be left vulnerable to exploitation. However, the requirements to fix and pay at least minimum piecework rates are protective of employees, and cl 15.2 should be construed in light of that protective purpose. Where the piecework rate was adequate when the agreement was entered, but becomes inadequate during the term of the agreement, it is a contravention of cl 15.2 of the Award for an employer to continue to pay only the agreed, inadequate piecework rate. Contrary to the intervener’s submission, that does not guarantee any employee a minimum wage, but it does guarantee an adequate piecework rate. Such contraventions are capable of fitting the FWO’s description of “ongoing” throughout the period during which the employee is paid an inadequate piecework rate.