Fair Work Ombudsman v Jewel Bay 2015 Pty Ltd
[2019] FCCA 3561
•22 November 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v JEWEL BAY 2015 PTY LTD & ANOR | [2019] FCCA 3561 |
| Catchwords: INDUSTRIAL LAW – Fair Work Ombudsman – contravention of the Fair Work Act 2009 (Cth) – adverse action against a pregnant female employee – pecuniary penalties ordered. |
| Legislation: Crimes Act 1914 (Cth), s.16 |
| Cases cited: Australian Building and Construction Commissioner v J Hutchinson Pty Ltd T/A Hutchinson Builders [2019] FCA 667 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | JEWEL BAY 2015 PTY LTD (ACN 600 227 174) |
| Second Respondent: | ABDEL WAHID TAJEDDINE |
| File Number: | PEG 530 of 2018 |
| Judgment of: | Judge Humphreys |
| Hearing date: | 21 November 2019 |
| Date of Last Submission: | 21 November 2019 |
| Delivered at: | Perth |
| Delivered on: | 22 November 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Healy |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Counsel for the Respondents: | Ms Cosentino |
| Solicitors for the Respondents: | Minter Ellison |
ORDERS
A declaration that Jewel Bay contravened s.351 of the Fair WorkAct 2009 (Cth) by taking adverse action against Ms T because of her pregnancy (Admitted Contravention).
A declaration that Mr Tajeddine was involved in the Admitted Contravention, within the meaning of s.550 of the Fair WorkAct 2009 (Cth).
An order pursuant to s.545(2)(b) of the Fair WorkAct 2009 (Cth), that Jewel Bay and Mr Tajeddine, jointly and severally, pay to Ms T the amount of $7,000 by way of compensation for economic and non-economic loss suffered by her as a result of the Admitted Contravention within 28 days of the Court's orders. An order pursuant to s.559 of the Fair WorkAct 2009 (Cth) that, in the event Jewel Bay is unable to locate Ms T, it is to pay the compensation referred to in paragraph 23 above to the Commonwealth within 42 days of the Court's orders.
An order pursuant to s.546(1) of the Fair WorkAct 2009 (Cth) that, Jewel Bay pay a penalty in respect of the Admitted Contravention fixed in the amount of $31,500.00.
An order pursuant to s.546(1) of the Fair WorkAct 2009 (Cth) that, Mr Tajeddine pay a penalty in respect of his involvement, within the meaning of s.550 of the Fair WorkAct 2009 (Cth), in the Admitted Contravention fixed in the amount of $6,300.00.
Orders pursuant to s.546(3)(a) of the Fair WorkAct 2009 (Cth) that, all penalties imposed on the Respondents be paid to the Commonwealth within 28 days of the Court's orders.
An order pursuant to s.545(1) of the Fair WorkAct 2009 (Cth) that, within two months of the date of this order Jewel Bay engage, at its own expense, a person or organisation with professional qualifications in workplace relations to provide training to the directors of, and supervisory and management personnel engaged by, Jewel Bay that covers the obligations on employers under the National Employment Standards and Part 3-1 (General Protections) of the Fair WorkAct 2009 (Cth).
An order that, within 28 days of completing the training in paragraph 28 above, Jewel Bay provide to the Fair Work Ombudsman in writing:
(a)The date on which the training was completed;
(b)The name of the person or organisation that conducted the training; and
(c)The details of the method of delivery of the training and the content of the training.
An order that the Fair Work Ombudsman have liberty to apply on seven days' notice in the event that any of the preceding orders are not complied with.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 530 of 2018
| FAIR WORK OMBUDSMAN |
Applicant
And
| JEWEL BAY 2015 PTY LTD (ACN 600 227 174) |
First Respondent
| ABDEL WAHID TAJEDDINE |
Second Respondent
REASONS FOR EX TEMPORE JUDGMENT
(Revised from Transcript)
Introduction
The First Respondent (“Jewel Bay”) operates Coco’s Restaurant in South Perth. The Second Respondent, Abdul Wahid Tajeddine (“Mr Tajeddine”), is a Director and General Manager of the first respondent. Mr Tajeddine is involved in the day-to-day operations of the restaurant. Jewel Bay and Mr Tajeddine have, by a statement of agreed facts, admitted to taking adverse action against a casual female employee, Ms T, employed at Coco’s Restaurant, in the form of cancelling or reducing her rostered hours, after she disclosed she was pregnant.
This is in contravention of s.351 of the Fair Work Act 2009 (Cth) (“the Act”). Mr Tajeddine has admitted he was involved in Jewel Bay’s contraventions within the meaning of s.546 of the Act. The parties have agreed to a series of declarations and orders pursuant to draft orders filed with the Court. These orders include that, pursuant to s.545(2)(b) of the Act, Jewel Bay pay an amount of $7000.00 to Ms T, as compensation for economic and non-economic loss as a result of the contraventions.
Further, pursuant to s.545(1) of the Act, it was agreed that, within two months of the date of any orders made by the Court, Jewel Bay is to undertake training of its Directors, on the obligations under the National Employment Standards at Part 3-1 (General Protections) of the Act. I note that the course has already been undertaken.
The Fair Work Ombudsman also seeks, pursuant to s.546(1) of the Act, that Jewel Bay and Mr Tajeddine pay a pecuniary penalty in respect of their contraventions.
The question for the Court is to determine the amount of any pecuniary penalty that Jewel Bay and Mr Tajeddine should pay.
Court’s Powers and Approach to Penalty
I am satisfied that the Court has the power to make the declarations sought pursuant to s.16 of the Federal Circuit Court of Australia Act 1999 (Cth), an order for compensation and loss under s 545(2)(b) of the Act and an order that Jewel Bay and Mr Tajeddine pay pecuniary penalties for contraventions, pursuant to s.546(1) of the Act.
I am satisfied that any pecuniary penalties should be paid to the Commonwealth, pursuant to s.546(3)(a) of the Act.
Statement of Agreed Facts
The statements of agreed facts may be summarised as follows:
·That the First Respondent operates Coco’s Restaurant at 85 South Perth Esplanade, South Perth;
·That the Second Respondent was, at all times, a Director and shareholder of Jewel Bay and a person responsible for the management and operations of Coco’s Restaurant;
·During the period from 24 February 2016 to 24 September 2017, Ms T was employed as a casual waitress by Jewel Bay at Coco’s Restaurant. Ms T’s employment agreement provided that she was employed as a casual waitress. Ms T’s initial rate of pay was $24.70 per hour and hours of work would be rostered by Jewel Bay and may be changed by notification by Jewel Bay with one day’s notice. I note that, although Ms T may be rostered to attend for work, she could be sent home early if there was no work for her to perform;
·On or around 12 April 2017, Ms T verbally informed Mr Tajeddine that she was pregnant. From about July 2017 until the end of the employment period, Ms T was visibly pregnant. In July 2017, prior to a conversation that I will outline below, Mr Tajeddine, after looking at Ms T while she was working on the floor of the restaurant, directed a Mr Audrain, who was the supervisor, to send Ms T home first because “she looks disgusting” in reference to her being pregnant;
·On 22 July 2017, which was after the first conversation, Ms T was rostered to work an evening shift at the restaurant from 6 pm to 10 pm. Prior to Ms T commencing her shift, Mr Audrain had a face-to-face conversation with Mr Tajeddine, in which Mr Tajeddine directed Mr Audrain to cancel Ms T’s evening shift. In directing Mr Audrain to cancel her evening shift, Mr Tajeddine referred directly to Ms T’s pregnancy and the effect of her pregnancy on her appearance and ability to perform her duties.
·Mr Tajeddine said words to the effect of “she’s holding another human inside of her” and “she can’t move as fast as other staff.” Ms T’s shift was subsequently cancelled prior to her commencing work due to her pregnancy. Three other staff members’ evening shifts were also cancelled for other reasons;
·From on or around 10 July 2017 until the end of Ms T’s employment period on 19 September 2017, when she resigned, her rostered shifts were subsequently cancelled, or hours reduced by the management personnel of the restaurant, including Mr Tajeddine, prior to or during the rostered shift, for reasons that included her pregnancy.
I wish to make it clear, that any pecuniary penalty I impose in relation to Jewel Bay and Mr Tajeddine, is based solely on the contraventions admitted in the statement of agreed facts.
There was one issue of agreed facts that the Court has been required to rule on.
At paragraph 19 of Mr Tajeddine’s affidavit, dated 4 April 2019, he states the following:
I regret making comments about Ms T’s looks and her pregnant appearance. I sincerely wish I had not made those comments. I expressed myself poorly, but I made those comments because I was concerned for her wellbeing…
I reject this explanation. The admitted words of Mr Tajeddine are that, in July 2017, he said Ms T “looks disgusting”. Later in July 2017, Mr Tajeddine admits saying, “she’s holding another human inside of her,” and “she cannot move as fast as other staff.” While the latter two statements may be capable of the explanation offered by Mr Tajeddine, I cannot reconcile the explanation offered with the words “she looks disgusting.” They are plain and simple words and in my view, convey an entirely unacceptable view of pregnant women in modern Australia.
Overall, I find the words said indicate that Mr Tajeddine’s only concern was the effect on his business of employing a clearly pregnant waitress. These words are deeply hurtful and offensive. They are worthy of the strongest possible public denunciation by this Court. The explanation offered by Mr Tajeddine and pressed in the Court yesterday, shows in my view, a lack of contrition and remorse by Mr Tajeddine which continues even till today. However, the Court is not imposing a penalty based on the use of those words. The Court will only impose a penalty based on the prohibited conduct of Jewel Bay and Mr Tajeddine, which relates to the cancelling or reduction of the hours worked by Ms T as a result of her pregnancy.
The Approach to Penalty
The Court has a broad discretion as to penalty. Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 at paragraph [36], summarised how the discretion is to be approached as follows:
1) Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
2) Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct…
3) Consider whether there should be a further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
4) Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
5) Consider the overall penalties arrived at, including by reference to those which may be proposed by the Fair Work Ombudsman and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary.
Consideration
I will consider each of those five steps.
Step 1
Identifying each contravention from July 2017 to September 2017, Ms T was rostered to work 65 shifts. Of those shifts, 10 were worked as rostered, 19 were reduced as to length and 36 were cancelled. The substantial and operative reason for the adverse action against Ms T was her pregnancy, therefore, the contraventions are:
1)Adverse action in contravention of s 351 of the Act, by cancelling Ms T’s rostered shifts because of her pregnancy; and
2)Adverse action in contravention of s 351 of the Act, by reducing Ms T’s rostered shifts that is, reducing the amount of time that she worked and when she did work, due to her pregnancy.
Step 2 and Step 3
These may be dealt with together, which involve grouping the contraventions for common elements. The applicant (“the Fair Work Ombudsman”) submits it is appropriate that Jewel Bay’s multiple contraventions of s.351 of the Act should be grouped into a single course of conduct. I accept that approach as being reasonable in all of the circumstances.
The Court needs to consider the appropriate penalties for each contravention. It is agreed between the parties, taking account of s.4AA of the Crimes Act 1914 (Cth), which makes reference to a penalty unit of $210, that the maximum penalty against Jewel Bay will be $63,000 and $12,600 against Mr Tajeddine.
Step 4
A non-exhaustive list of factors relevant to the imposition of penalty was summarised by Mowbray FM in Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant& Bar [2007] FMCA 7 at paragraphs [26] - [29]. I will go through and deal with each of those factors:
1) The nature and extent of the contravening conduct is submitted by the Fair Work Ombudsman represents a serious breach of Jewel Bay and Mr Tajeddine’s obligations under the Act. The adverse action flowed from explicit and very derogatory comments made by Mr Tajeddine to other employees. Mr Tajeddine has admitted that he directed Mr Audrain to cancel Ms T’s rostered shifts, for the words that I have indicated above. Jewel Bay and Mr Tajeddine have also made admissions to the fact that Ms T’s shifts were cancelled or reduced because of her pregnancy.
2) The nature and extent of any loss or damage as a result of the contraventions. Ms T seeks and Jewel Bay and Mr Tajeddine have consented to an order for $7000 to be paid to Ms T by way of compensation for economic and non-economic loss, suffered by her as a result of the contraventions. Whilst this has been agreed between the parties, had I been asked to, I would have considered making a much higher order for compensation because of the derogatory nature of the comments that were made and their unacceptable place in a modern Australian workplace, however, as it was agreed between the parties, I do not consider it appropriate that I should move from that agreement.
3) Similar previous conduct. As far as the Fair Work Ombudsman is aware, Jewel Bay and Mr Tajeddine have not previously been the subject of any findings of any contravention of Commonwealth workplace laws. Therefore, the Court must deal with Jewel Bay and Mr Tajeddine as first offenders and apply appropriate reductions in penalties that might have otherwise been awarded but for the fact that they were first offenders.
4) The size of the business. Jewel Bay and Mr Tajeddine have provided limited evidence about Jewel Bay’s profitability. No submissions were made as to the incapacity of both Jewel Bay and Mr Tajeddine to pay a pecuniary penalty. Accordingly, I propose to proceed on the basis that each is well able to pay a pecuniary penalty.
5) Deliberateness and involvement of senior management. I am of the view that Jewel Bay and Mr Tajeddine’s conduct can only be seen as deliberate. I find, as stated above, disingenuous and simply not credible that the comments made by Mr Tajeddine were in relation to a concern as to the wellbeing of Ms T. Ms T had provided a medical certificate that stated she was fit for work and her pregnancy was uncomplicated. It was open to Jewel Bay to have placed her in a position, for example, at the front desk, where it would not have required her to move around as much as might have been otherwise.
6) Contrition. As at the date of this decision, no formal apology has been tendered to Ms T. I acknowledge that the corrective action, being a course of instruction in relation to requirements under the Act, has been undertaken and I have been provided with a document that evidences that situation. I note, however, that the compensation which was agreed to be paid as far back as February 2019, has still not been paid. This does not provide evidence of a real sense of contrition and remorse on any part by Jewel Bay and Mr Tajeddine.
7) Corrective action. As previously stated, the course of instruction has been completed.
8) Cooperation. It is conceded by the Fair Work Ombudsman, Jewel Bay and Mr Tajeddine have generally cooperated with the Fair Work Office during the investigation. They initially denied the contraventions without providing any particularisation, however, in February 2019, they made admissions and a statement of agreed facts was signed. The Fair Work Ombudsman submits that a discount of no more than 15 per cent from the maximum penalty is appropriate to acknowledge Jewel Bay and Mr Tajeddine’s admissions, obviating the need for contested liability hearing. I consider, having looked at the evidence that the statement of agreed facts, which involved admissions, was of a utilitarian nature. It was certainly not made at the first available opportunity and followed, as I understand it, a mediation between the parties. In those circumstances, whilst acknowledging a degree of cooperation, I cannot give it the maximum discount I would otherwise, had admissions been made at the first available opportunity.
9) General deterrence. General deterrence is directed at ensuring the penalty would act as a deterrent to others who may be likely to offend. The Fair Work Ombudsman submitted there is a need for penalties to be sufficiently high in this case for the purposes of general deterrence. Indeed, they say that it should be given not merely a “passing reference” in the Court’s assessment of penalty, but the consideration which is “primarily, if not wholly” the purpose of a civil penalty regime found in the Act (see Australian Building and Construction Commissioner v J Hutchinson Pty Ltd T/A Hutchinson Builders [2019] FCA 667 per Logan J at paragraphs [11] - [18]).
I am satisfied that in this case, there is a need for a substantial penalty to serve as a marker for others who might engage in such conduct and that there will be significant financial penalties, which will generally outweigh any financial benefit that might be derived from engaging in prohibited conduct.
10) Specific deterrence. There is still a need, in my view, for the penalty to reflect specific deterrence, given the serious nature of Jewel Bay and Mr Tajeddine’s conduct, as previously mentioned, including, the lack of contrition and the continued operation of Jewel Bay and Mr Tajeddine’s business and the need to ensure this conduct does not occur again.
Step 5
The last step is to consider the overall penalties and the totality principle. It has been submitted to the Court to bear in mind the $63,000.00 is the maximum penalty for Jewel Bay but a discount of 15 per cent, which has been urged by the Fair Work Ombudsman, would mean a maximum penalty after discount of $53,550. It is proposed by Jewel Bay that the minimum penalty should be set at 60 per cent and the maximum penalty at 70 per cent. This would give a minimum penalty of $32,130 and a maximum of $37,485.
In relation to Mr Tajeddine, the Fair Work Ombudsman notes that the maximum penalty is $12,600. A discount is proposed of 15 per cent, which would give the maximum penalty after discount of $10,710.00. It is proposed that, again, the same range of penalty is appropriate, somewhere between 60 and 70 per cent, which would give a minimum penalty of $6426.00 and a maximum penalty of $7497.00.
Consideration
Jewel Bay and Mr Tajeddine have asked the Court to note the agreement to pay Ms T $7000.00 by way of compensation for loss of income and non-economic loss by way of hurt and compensation. Jewel Bay and Mr Tajeddine have asked this to be taken into account when fixing any penalty. It was submitted to the Court that the range of penalties suggested by the Fair Work Commission is harsh and excessive. Jewel Bay and Mr Tajeddine submitted that a penalty of between 5 and 20 per cent of the maximum, was appropriate in all the circumstances.
The Court was referred to a recent matter of Leutton v Sheralee Hotel Pty Ltd t/as Imperial Tavern [2019] FCCA 2471, per Judge Egan. This matter involved a wrongful termination of employment of a pregnant woman, however, in that case, the Court ordered the pecuniary penalty of $10,000. But of significance, to my mind, the Court also ordered compensation in the amount of $28,978.18, including an amount of $15,000.00 for hurt and humiliation. In that matter, the pecuniary penalty was also payable to the applicant. I take into account in this matter that the pecuniary penalty will not be paid to the Fair Work Ombudsman but, in fact, will be paid to the Fair Work Commission.
In considering the overall penalty, the Court places great weight on the vulnerability of Ms T, who was employed on a casual basis in an industry, where hours of work are variable. Ms T could be rostered to work, her work could be cancelled on one day’s notice and she could be sent home early. The impact of any loss of any anticipated remuneration for Ms T was significant, bearing in mind that she has no access, as a casual employee, to either sick leave or employer paid maternity leave.
I am of the view that the Court needs to send a clear message of general deterrence that employers who use casual employees in the manner that Ms T was used, particularly in the hospitality industry, cannot discriminate against women based on pregnancy and the cost of doing so, will well outweigh any perceived financial benefit from doing so.
I have placed weight on the admissions that were made and the fact that corrective action has been carried out by way of instruction to employees and directors of their obligations under the relevant legislation.
I also give adverse weight to the lack of a direct apology to Ms T and, in my view, the lack of any real remorse or contrition by Jewel Bay and Mr Tajeddine I have given weight to the fact that Jewel Bay and Mr Tajeddine had no previous history of contraventions.
Conclusion
Taking all matters into account, I order the following pecuniary penalties:
1) Jewel Bay to pay a penalty of $31,500
2) Mr Tajeddine to pay an amount of $6300.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Humphreys
Deputy Associate:
Date: 24 December 2019
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