Fair Work Ombudsman v Lycamobile Pty Ltd - [2018] FCCA 1892

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v LYCAMOBILE PTY LTD

[2018] FCCA 1892

Catchwords:
INDUSTRIAL LAW – Awards – breach of award – underpayment of wages – agreed statement of facts – breaches admitted – same course of conduct – issue of penalty – whether common law grouping principles apply to contraventions –– whether respondent demonstrated contrition and cooperation – whether continuing need for deterrence – penalties imposed – whether declarations and training orders should be made.

Legislation:

Fair Work Act 2009 (Cth) ss. 14, 45, 539, 546, 557, 577

Cases cited:

Fair Work Ombudsman v Lycamobile Pty Ltd [2013] FCCA 2132

Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union

[2018] FCA 934

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017]

FCA 557

Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70
Markarian v R (2005) 228 CLR 357
Mason v Harrington Corporation Pty Ltd t/as Pangea Restaurant & Bar [2007] FMCA 7
Kelly V Fitzpatrick [2007] FCA 1080
Fair Work Ombudsman v Promoting U Pty Ltd & Anor [2012] FMCA 58

Applicant:

FAIR WORK OMBUDSMAN

Respondent:

LYCAMOBILE PTY LTD (ACN 139 717 212)

File Number:

SYG 3069 of 2017

Judgment of:

Judge Emmett

Hearing date:

On the papers

Date of Last Submission:

27 July 2018

Delivered at:

Sydney

Delivered on:

29 August 2018

REPRESENTATION

Solicitors for the Applicant:

Fair Work Ombudsman

Solicitors for the Respondents:

Holding Redlich

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3069 of 2017

FAIR WORK OMBUDSMAN

Applicant

And

LYCAMOBILE PTY LTD (ACN 13 9717 212)

Respondent

REASONS FOR JUDGMENT

Introduction

The Applicant is a person with standing under s.539(2) of the Fair Work Act 2009 (Cth) (“the FW Act”) to apply for orders in respect of contraventions of Civil Remedy Provisions.
The Respondent is a national system employer within the meaning of s.14 of the FW Act. The Respondent engaged in the business of provision of mobile phone services to customers via a mobile virtual network utilising Telstra’s telecommunications infrastructure.
By Statement of Claim filed 4 October 2017, the Applicant sought declarations in respect of the Respondent’s conduct as well as various orders, including the payment of penalties pursuant to s. 546(1) of the FW Act.
By consent, the parties agreed that the only matter for determination was the issue of penalty and that it was appropriate to deal with that issue on the papers. These reasons for judgment have been prepared in accordance with that agreement.
The Applicant relied on the following documents:
a)Statement of Claim filed on 4 October 2018;
b)Affidavit of Ms Jeyavathani Thevakumar affirmed on 21 February 2018;
c)Affidavit of Ms Emme Jane Rodwell affirmed on 28 February 2018;
d)Submissions on penalty filed on 1 March 2018;
e)Submissions by the Applicant in Reply filed 9 April 2018;
f)An Agreed Statement of Facts filed on 29 November 2011.
In response, the Respondent relied on the following documents:
a)Affidavit of Mr Rajanesh Easwarlingam affirmed 19 January 2018;
b)Submissions on penalty filed…

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: [2018] FCCA 1892
Decision Date: 29 August 2018

CaseChat Overview and Summary

This matter concerned a proceeding brought by the Fair Work Ombudsman against Lycamobile Pty Ltd. The dispute centred on alleged contraventions of clause 21.1 of the TS Award, specifically concerning the failure to pay overtime rates to an employee, Ms Thevakumar. This issue had previously been the subject of a decision in 2013, where Lycamobile Pty Ltd was penalised $59,400.00 for contraventions of the General Retail Industry Award 2010 and the TS Award in respect of nine different employees.

The court was required to determine whether Lycamobile Pty Ltd had contravened clause 21.1 of the TS Award in respect of Ms Thevakumar during 32 separate paid periods. These were divided into 7 pre-penalty contraventions (occurring before the 2013 decision) and 25 post-penalty contraventions (occurring after the 2013 decision). The central legal question was how these contraventions should be treated for the purposes of penalty, particularly in light of the previous penalty imposed and the provisions of the Fair Work Act 2009 (Cth) concerning re-offending.

The court considered submissions regarding the grouping of contraventions. The applicant conceded that the 25 post-penalty contraventions could be treated as a single contravention, as they stemmed from the same course of conduct. However, the applicant argued that the pre-penalty contraventions and post-penalty contraventions constituted two distinct groups, each requiring a penalty. The respondent contended that the conduct penalised in the 2013 decision encompassed the pre-penalty contraventions in the current proceeding. The court rejected the respondent's contention, finding that a bare assertion of factual similarity between the pre-penalty contraventions and those in the 2013 decision was insufficient to establish a course of conduct for the purposes of section 557(1) of the FW Act. The court relied on principles from Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557, which emphasised the need to identify the "same criminality" rather than mere similarity of subject matter when grouping contraventions.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In Fair Work Ombudsman v Lycamobile Pty Ltd [2013] FCCA 2132 (“the 2013 Decision”), the Court ordered the Respondent to pay a total penalty of $59,400.00 for contraventions of the General Retail Industry Award 2010 and the TS Award. The penalty was for contravening cl. 21.1 of the TS Award and that was the same provision that is the subject of the proceeding before this Court. The 2013 Decision was in respect of 9 different employees. The Respondent was penalised $6,600.00 in respect of each employee. The Applicant submits that the Respondent contravened cl. 21.1 of the TS Award in respect of Ms Thevakumar during 32 separate paid periods as follows:(a) 7 were before the 2013 Decision (Pre-Penalty Contraventions); and (b) 25 were after the 2013 Decision (Post-Penalty Contraventions). The Respondent submitted that the Court should exercise its discretion to treat the Post-Penalty Contraventions as one and as the only contravention; or, alternatively, that the Pre-Penalty Contraventions and the Post-Penalty Contraventions should be treated as one contravention pursuant to the common law grouping principles, given they arise from the same conduct. The Applicant submitted that ss.557(1) and (3) of the FW Act operate to impose a greater penalty upon a Respondent who has re-offended after having already been penalised by a court for the same contravention. The Applicant conceded that it is appropriate to group the 25 Post-Penalty Contraventions as a single contravention because each contravention stems from the same course of conduct, being the decision not to pay Ms Thevakumar overtime rates for work in excess of 38 hours a week, despite the requirements of cl. 21.1 of the TS Award (see Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCA 934 Jagot J at [14]). The Applicant submitted that the Pre-Penalty Contraventions and the Post-Penalty Contraventions are two groups of contraventions, each of which requires the imposition of a penalty. The Respondent submitted that the conduct the subject of the 2013 Decision was a course of conduct that covered the Pre-Penalty Contraventions in the case before this Court. For the reasons below, I do not accept that contention. I accept the Applicant’s submission that the Respondent’s bare assertion that the facts relating to the Pre-Penalty Contraventions are the same as those in the 2013 Decision (albeit in relation to a different employee) is insufficient to establish a course of conduct for the purposes of s. 557(1) of the FW Act. In support the Applicant referred to Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 where Katzmann J said as follows at [437]: “Sadly, in the present case little or no attempt was made to identify “the same criminality” involved in the various contraventions. Similarity of subject matter, which appears to be the basis of the Ombudsman’s suggested groupings and the approach taken in some of the judgments to which I have referred, is not or at least not necessarily synonymous with similarity of “criminality”. In my respectful opinion, the Full Court in FWBII v CFMEU correctly recognised (at [46]) that what was said in Cahill “may have been erroneously interpreted by some as justifying single global penalties where there is a course of conduct”.”

Ratio Decidendi

Legal Principle Established

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