FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v MCGRATH & ANOR | [2010] FMCA 315 |
| INDUSTRIAL LAW – Civil penalty proceedings – employer failing to lodge AWAs within 14 days – whether AWAs were not ‘actually received’ by post by contractor of Workplace Authority – liability of directors as persons involved – failure to establish knowledge and intentional participation in essential ingredients of contravention – consequential liability for employer’s contraventions of applicable provisions of NAPSA not established – application dismissed. |
| Workplace Relations Act 1966 (Cth), ss.182, 195, 326, 333, 340, 342, 344, 345, 347, 407, 719, 727, 728, Sch.8 Part 3 Evidence Act 1995 (Cth), s.140 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | MATTHEW MCGRATH |
| Second Respondent: | GARY CARPENTER |
| File Number: | SYG 1554 of 2009 |
| Judgment of: | Smith FM |
| Hearing dates: | 2 & 3 March 2010 |
| Date of Last Submission: | 26 March 2010 |
| Delivered at: | Sydney |
| Delivered on: | 21 May 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr L Innes |
| Solicitors for the Applicant: | Sparke Helmore |
| Counsel for the Respondents: | Ms A Perigo |
| Solicitors for the Respondents: | Beverley Foster & Associates |
ORDERS
The application is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1554 of 2009
| FAIR WORK OMBUDSMAN |
Applicant
And
| MATTHEW MCGRATH |
First Respondent
| GARY CARPENTER |
Second Respondent
REASONS FOR JUDGMENT
The Fair Work Ombudsman seeks orders imposing pecuniary penalties on Mr McGrath and Mr Carpenter, as persons involved in contraventions of the Workplace Relations Act 1996 (Cth) by their company, McCarvis Pty Ltd (‘McCarvis’). The Fair Work Ombudsman’s standing to seek these orders, and the continuing relevance of the Workplace Relations Act after the commencement of the Fair Work Act 2009 (Cth) are not challenged, and it is unnecessary for me to trace the laws which have this effect.
McCarvis employed about 52 casual employees at different times between 2005 and 2008, in a business trading as Southbound Protective Services. It provided security services in the Southern Highlands and Illawarra regions of NSW, mainly to clients of the Chubb Security network. Following the loss of that source of work, a creditors’ voluntary liquidator was appointed on 19 January 2009 (see exhibit DP35). At all relevant times, Mr McGrath and Mr Carpenter were the company’s directors who conducted its day to day management from offices in Moss Vale and Wollongong. They were both involved to some degree in personnel matters, including the determination of general conditions and remuneration of employees, and the engagement and supervision of particular employees.
When the WorkChoices legislation introduced provision for individual Australian Workplace Agreements in 2006, the directors…
Keep reading for free
Create a free CaseChat account to read Fair Work Ombudsman v McGrath & Anor and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2010] FMCA 315
- Decision Date
CaseChat Overview and Summary
The legal issues addressed by the court included whether section 347 of the legislation meant that an AWA became legally operative on the date it was lodged, even if formalities were not complied with, and whether such an agreement could operate despite not being lodged. Additionally, the court considered whether the introduction of a fairness test could retrospectively invalidate an already operative AWA. The court examined the text of section 347, particularly subsections (1), (2), and (2A), and interpreted their implications regarding the operation of AWAs under various circumstances.
In delivering the judgment, the court concluded that an AWA became legally operative on the date it was lodged, irrespective of any non-compliance with formalities or the outcome of the fairness test. The court found that section 347(1) established the date of lodgement as the operative date of the AWA, while section 347(2) confirmed that the agreement would still operate even if not lodged within the 14-day period. The court also noted that an AWA would not operate if it was never lodged at all. The decision emphasized that while the introduction of the fairness test could subsequently invalidate an AWA, this did not affect the initial operation of the agreement upon lodgement.
The court's findings meant that the AWAs executed by McCarvis Pty Ltd and its employees were valid from the date of their lodgement, regardless of any delays or non-compliance with procedural requirements. The application by the Fair Work Ombudsman was dismissed, as the court found no basis to invalidate the AWAs based on the arguments presented.
Orders
Orders of the court
1.
The application is dismissed.
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
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Under both versions of the legislation, an AWA came into operation as the legal source of the employee’s entitlements upon the date of its lodgement, and took effect at that date even if the formalities in relation to its making had not been complied with, and even if no decision had been made that it passed the fairness test. In this respect s.347 provided at the relevant times:347 When a workplace agreement is in operation(1)A workplace agreement comes into operation on the day the agreement is lodged.(2)A workplace agreement comes into operation even if the requirements in Divisions 3 and 4 and section 342 have not been met in relation to the agreement.(2A)If:(a)an employer and an employee or employees of the employer, or an organisation of employees, make a workplace agreement (within the meaning of section 333); and(b)the employer does not lodge that workplace agreement (the unlodged agreement), but subsequently lodges a declaration under subsection 344(2); and(c)the declaration purports to identify as parties to a workplace agreement:(i) the employer who lodged the declaration; and(ii) at least one employee, class of employees or organisation; and(d)the employer and the other parties identified in the declaration are parties to the unlodged agreement; and(e)a document that is different from the unlodged agreement is attached to the declaration;then:(f)the unlodged agreement comes into operation as a workplace agreement at the time the declaration is lodged; and(g)the document that is attached to the declaration does not come into operation as a workplace agreement. The effect of the reference to the “requirements” of s.342 in s.347(2) is not entirely clear, and was not the subject of any submissions to me. However, in my opinion, when read in the light of subsections (1) and (2A), it has the effect that an AWA became legally operative even if it was lodged, in the sense of ‘actually received’, after the 14 day period specified in s.342, and notwithstanding that the delay exposed the employer to prosecution for contravention of s.342. However, a properly executed AWA would not take any legal operation, including to exclude the operation of a NAPSA, if it was never lodged with the relevant authority, whether before or after the 14 day deadline. This seems to be the consequence of s.347(1), in relation to which s.347(2) appears to provide only an embellishment. After the introduction of the fairness test, a duly lodged AWA could cease to operate as a result of a determination of the Workplace Authority, but it is unnecessary for me to examine the provisions which had this effect. No submissions were made to me whether the standard form of AWA executed by employees of McCarvis Pty Ltd was ever determined not to pass the fairness test, nor whether it would have passed the test if a determination were made. There is no evidence whether Mr McGrath or Mr Carpenter were aware of the introduction of the fairness test, nor whether they expected their AWA to be favourably assessed under that test. It was not put to them in cross-examination that they might have been motivated to withhold lodgement of their AWAs during 2007, due to a concern about the introduction of the fairness test. I therefore would not find that any such motivation existed.