Fair Work Ombudsman v Hu

Case [2019] FCAFC 133


FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Hu [2019] FCAFC 133

Appeal from: Fair Work Ombudsman v Hu (No 2) [2018] FCA 1034
File number: QUD 530 of 2018
Judges: FLICK, REEVES AND BROMBERG JJ
Date of judgment: 16 August 2019
Catchwords:

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

Legislation:

Fair Work Act2009 (Cth) ss 45 - 49, 134, 138, 550,

Workplace Relations Act 1996 (Cth) ss 45, 576A, Pt 10A

Horticulture Award 2010 cll 10, 14, 15, 16, 22, 23, 24, 28, Schs A, C, D  

Cases cited:

Australian Securities and Investments Commission v Hellicar [2012] HCA 17, (2012) 247 CLR 345

Blatch v Archer (1774) 1 Cowp 63, (1774) 98 ER 969

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833, (2001) 117 FCR 424

Commissioner of Taxation v Amway of Australia Ltd [2004] FCAFC 273, (2004) 141 FCR 40

Cooper Brookes (Wollongong) Pty Ltd v The Commissioner of Taxation (1981) 147 CLR 297

Ezy Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134, (2018) 282 IR 86

Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365

Fair Work Ombudsman v Hu (No 2) [2018] FCA 1034

Jones v Dunkel (1959) 101 CLR 298

Lek v Minister for Immigration, Local Government and Ethnic Affairs (1993) 43 FCR 100

Marku v Minister for Justice [2015] FCA 831, (2015) 237 FCR 580

National Retail Association v Fair Work Commission and Another (2014) 225 FCR 154

Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union (No 2) [2016] FCA 2

The Legal Practitioner v Council of the Law Society of the ACT [2015] ACTCA 20

United Group Resources Pty Ltd v Calabro (No 5) [2011] FCA 1408, (2011) 198 FCR 514

Award Modernisation – Decision [2009] AIRCFB 345

Decision [2009] AIRCFB 966 

Date of hearing: 26 and 27 February 2019
Date of last submissions: 14 March 2019
Registry: Queensland
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 112
Counsel for the Appellant: Mr J Bourke QC with Mr AJ Coulthard
Solicitor for the Appellant: Fair Work Ombudsman
Counsel for the First Respondent: The First Respondent did not appear
Counsel for the Second and Third Respondents: Mr P Tucker with Mr D King
Solicitor for the Second and Third Respondents: Hopgood Ganim Lawyers
Counsel for the Intervener: Mr R Dalton SC with Mr A Denton
Solicitor for the Intervener: Seyfarth Shaw Australia

ORDERS

QUD 530 of 2018
BETWEEN:

FAIR WORK OMBUDSMAN

Appellant

AND:

TAO HU

First Respondent

MARLAND MUSHROOMS QLD PTY LTD

Second Respondent

TROY MARLAND

Third Respondent

NATIONAL FARMERS’ FEDERATION LIMITED

Intervener

JUDGES:

FLICK, REEVES AND BROMBERG JJ

DATE OF ORDER:

Continue reading Fair Work Ombudsman v Hu

Sign in free to access the full text

Details
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.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.