Fair Work Ombudsman v Neave
[2011] FMCA 373
•23 May 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v NEAVE | [2011] FMCA 373 |
| INDUSTRIAL LAW – FAIR WORK – Imposition of penalties for a breach of the NSW Transport Industry Award – failure to provide rostered days off. |
| Fair Work Act 2009 (Cth), ss.546, 550, 557 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) Workplace Relations Act 1996 (Cth), ss.4, 6, 719, 728, 841 |
| Applicant: | FAIR WORK OMBUDSMAN |
| Respondent: | COLIN ALEXANDER NEAVE |
| File Number: | SYG 2759 of 2010 |
| Judgment of: | Driver FM |
| Hearing date: | 23 May 2011 |
| Delivered at: | Sydney |
| Delivered on: | 23 May 2011 |
REPRESENTATION
| Solicitors for the Applicant: | Ms J Dennis Fair Work Ombudsman |
| Solicitors for the Respondent: | Mr C McArdle McArdle Legal |
ORDERS
The Court declares that the respondent, by reason of the operation of s.728 of the Workplace Relations Act 1996 (Cth) and s.550 of the Fair Work Act 2009 (Cth), was involved in the contraventions of subclause 16.3 of the notional agreement preserving the Transport Industry (State) Award.
The respondent pay a penalty of $5,000 for his involvement in the employer’s contravention of subclause 16.3 of the notional agreement preserving the Transport Industry (State) Award in failing to provide rostered days off.
The penalty be paid within 28 days.
The penalty is paid to the Commonwealth of Australia pursuant to s.841 of the Workplace Relations Act 1996 (Cth) and subsection 546(3) of the Fair Work Act 2009 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2759 of 2010
| FAIR WORK OMBUDSMAN |
Applicant
And
| COLIN ALEXANDER NEAVE |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
I have before me an application under the Fair Work Act 2009 (Cth) (“the Fair Work Act”) filed on 21 December 2010 seeking a declaration and the imposition of a penalty against the respondent, Colin Neave. The application is supported by a statement of claim filed on 21 December 2010. A response to the application was filed on 8 February 2011 and points of defence were filed on the same day. The parties have agreed on a statement of agreed facts which was filed on 8 March 2011. That is the substance of the evidence before me.
The agreed facts are:
Background
The Applicant has standing and authority to bring these proceedings.
From 28 February 1995 to 18 June 2010, Corporate Consulting (Australia) Pty Ltd (Employer) was:
(a)a company incorporated under the provisions of the Corporations Act 2001 (Cth);
(b) able to be sued in and by its corporate name;
(c)a constitutional corporation within the meaning of section 4 of the Workplace Relations Act…;
From on or about 6 March 2000 to 18 June 2010, Corporate Consulting (Australia) Pty Ltd was:
(a)an employer within the meaning of section 6 of the [Workplace Relations] Act;
(b)operating a local and long distance trucking services business involved in transporting general freight between various depots in New South Wales; and
(c)an Employer that employed a number of persons as long distance drivers.
On and from 27 March 2006 until 30 June 2009, the Employer was bound by:
(a)the [Workplace Relations] Act;
(b)the Transport Industry (State) Award which was preserved as a notional agreement preserving a state award (Transport NAPSA) under part 3 of schedule 8 of the [Workplace Relations] Act; and
(c)the Australian Fair Pay and Conditions Standard, including a preserved Australian Pay and Classification Scale derived from the Transport Industry (State) Award (Transport APCS).
On and from 1 July 2009, the Employer was bound by:
(a)the [Workplace Relations] Act as continued by Part 3 of Schedule 9 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act);
(b)the Transport NAPSA as continued as an award-based transitional instrument by Part 2 of Schedule 3 of the Transitional Act; and
(c)the Transport APCS as continued as a transitional Australian Pay and Classification Scale by Part 3 of Schedule 9 of the Transitional Act.
The Respondent was at all material times the sole Director and Company Secretary of the Employer and was the person with day-to-day control of the Employer.
Relevant provisions of the Transport NAPSA
The Transport NAPSA during the relevant period 27 March 2006 to 30 June 2009 and as continued as an award based transitional instrument during the relevant period 1 July 2009 to 21 October 2009, provided that:
(a)employees shall accrue paid rostered days off at the rate of 24 minutes for every day of 8 hours or more worked (subclause 16.1);
(b)employees shall be paid an amount for rostered days off equivalent to the weekly rate of their relevant Transport NAPSA classification, divided by 5, plus 30 percent (RDO payment) (subclause 16.2);
(c)“long distance work” is defined as driving work on return trips that are always in excess of 500 road kilometres (subclause 13.1);
(d)employees performing “long distance work” shall be paid an RDO payment in addition to any payments of the kilometre rate earned (subclause 16.2);
(e)employees may be given and take their rostered days off in accordance with a roster providing for 19 days, each of eight hours, over a four week period with employees taking a rostered day off in accordance with the roster (subclause 3.4.1); and
(f)rostered days off may be given and taken in accordance with the method set out in the preceding paragraph (subclause 16.3).
The Employer’s business and its Employees
The Employer was incorporated on or about 28 February 1995.
From on or about 6 March 2000 the Employer operated a trucking services business involved in transporting general freight between various depots in New South Wales.
The Employer employed at least 40 persons as long distance truck drivers within the meaning of subclause 13.1 and 13.2 of the Transport NAPSA at various times during the period between 27 March 2006 to 21 October 2009 (Employees).
The Employees’ duties fell within the classification of a Transport Worker Grade 8 pursuant to subclause 1.1.2 of the Transport NAPSA.
Contravening conduct
Breaches of subclause 16.3 of the Transport NAPSA – failure to provide rostered days off
The Employees were full-time employees and engaged to work 38 hours per week plus reasonable additional hours. Overtime was worked if the Employee concerned elected to do so for additional pay and penalty rates.
During the course of the Employees’ employment, no roster was provided for rostered days off for any of the Employees.
During the course of the Employees’ employment, none of the Employees were given, nor did they take, any rostered days off.
During the period 27 March 2006 to 30 June 2009, the Employer contravened subclause 16.3 of the Transport NAPSA by failing to provide rostered days off to eligible Employees in accordance with subclause 3.4.1 of the Transport NAPSA.
During the period 1 July 2009 to 21 October 2009, the Employer contravened subclause 16.3 of the Transport NAPSA as continued as an award based transitional instrument, by failing to provide rostered days off to eligible Employees in accordance with subclause 3.4.1 of the Transport NAPSA.
The Employers contraventions as set out in paragraphs 15 and 16 above are a contravention of the same award term. They are distinguished separately only to reflect the repeal of the Workplace Relations Act 1996 and the commencement of the Fair Work Act 2009 on 1 July 2009. Both paragraphs together constitute the one breach.
The Employer’s breach in respect of each Employee arose out of one factual course of conduct being the Employers failure to include a rostered day off in the roster therefore, by virtue of subsection 719(2) of the Workplace Relations Act 1996 and subsection 557(1) of the Fair Work Act 2009 are taken to constitute a single contravention.
Between 2 March 2007 and 21 October 2009, the Employer’s contravention caused no financial disadvantage to the Employees.
Involvement of the Respondent
During the period 27 March 2006 to 21 October 2009, the Respondent:
(a)was the sole director and secretary of the Employer;
(b)was the person responsible for the day to day management and control of the Employer and the Employees;
(c)was the person responsible for setting and determining the overaward terms and conditions of employment of the Employees;
(d)was the person responsible for determining the times worked by the Employees;
(e)was aware of 2 former employees of the Employer raising issues regarding rostered day off entitlements in February 2009;
(f)commenced making enquiries in February 2009 with his solicitor, the Australian Industry Group and the Transport Workers Union regarding rostered day off entitlements; and
(g)caused the Employer to make specific payments in lieu of rostered days off in October 2009.
On or about 16 October 2009, the Applicant commenced an investigation into a complaint lodged with the Applicant by a former employee of the Employer concerning rostered days off for long distance drivers.
The Employer and the Respondent cooperated with the Applicant’s investigations.
The Respondent was advised by the Applicant on 22 March 2010 that the Employer had contravened clause 16 of the Transport NAPSA.
On 18 June 2010, the Respondent and Mrs Sharon Neave being the members of the Employer Company resolved by ordinary resolution that a liquidator be appointed to the Employer company and by special resolution that the Employer company be wound up.
These proceedings were commenced on 21 December 2010.
Since commencing these proceedings, the Respondent has adopted a co-operative approach with the Applicant to resolving these proceedings.
Admissions
The Respondent admits that, during the period 27 March 2006 to 30 June 2009, he was involved in the contraventions of the Employer specified at paragraph 15 within the meaning of subsection 728(2)(c) of the [Workplace Relations] Act.
The Respondent admits that, during the period 1 July 2009 to 21 October 2009, he was involved in the contraventions of the Employer specified at paragraph 16 within the meaning of subsection 550(2)(c) of the [Fair Work] Act.
The parties filed submissions on penalty, those of the applicant being filed on 9 May 2011 and those of the respondent being filed on 17 May 2011. During the course of the hearing the respondent tendered as an exhibit a letter dated 2 July 2007 from the Transport Workers Union to Mr Neave concerning an inspection of premises.
The matter is a relatively straightforward one. Mr Neave was engaged in the trucking business through a company which is now in liquidation. He has been pursued by the Fair Work Ombudsman on the accepted basis that he was involved in a breach of the transport NAPSA by the company through which the business traded. The agreed statement of facts and the submissions on penalty establish that the issue is one of non-compliance with the award requirement for rostered days off.
Although there are issues between the parties relating to the financial benefit provided to or detriment suffered by employees over varying periods, the essential issue is the non-provision of rostered days off in accordance with the award. It is accepted that the provision of financial benefits does not excuse the non-provision of rostered days off. There is in this matter a particular concern over the non-provision of rostered days off because of the potential impact on road safety and issues of public policy relating to issues of road safety.
The Fair Work Ombudsman asserts that there is a well-established link between fatigue and poor road safety, particularly in the area of northern New South Wales in which the employer principally operated. There is a significant public interest in enforcing entitlements such as rostered days off within the transport industry. The respondent notes that there are other more direct mechanisms for monitoring road use and road safety which protects that public interest.
I, nevertheless, accept that while rostered days off are common in many industries, in the long haul trucking industry rostered days off support the public interest of safe road use. This further impacts on issues of general and specific deterrence. In my view, the Court should in this matter express its disapproval of the failure to provide rostered days off, however well meaning the employer may have been in seeking to compensate employees particularly over the more recent period dealt with in the agreed statement of facts.
I agree generally with the applicant’s submissions on penalty. In particular I agree that the Court’s approach to determining penalty should be as follows:
a)the first step is to identify each of the separate contraventions involved. Each breach of each separate obligation found in the Workplace Relations Act and Fair Work Act in relation to each employee is a separate contravention;
b)secondly, consider whether the breaches arising in the first step constitute a single course of conduct;
c)thirdly, to the extent that two or more contraventions have common elements, this should be taken into account in considering what is an appropriate penalty in all the circumstances for each contravention. The respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to what the respondents did. This task is distinct from and in addition to the final application of the “totality principle”;
d)fourthly, consider the appropriate penalty for the single breach(es) and, if relevant, each group of contraventions, taking into account all of the relevant circumstances; and
e)finally, having fixed an appropriate penalty for each group of contraventions or course of conduct, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the conduct which led to the breaches. The Court should apply an “instinctive synthesis” in making this assessment. This is what is known as an application of the “totality principle”.
In the present case I accept that the respondent is entitled to the benefit of s.719(2) of the Workplace Relations Act. The respondent’s breach arose out of one factual course of conduct and should be treated as a single contravention of subclause 16.3 of the Transport NAPSA.
The conduct in this case involved the failure by the employer to provide the employees their entitlement to rostered days off under the Transport NAPSA. The breaches took place in circumstances where the employees were regularly required to drive trucks on routes in excess of 500 kilometres. During the course of the employees’ employment, no roster was provided for rostered days off for any of the employees. None of the employees were given, nor did they take, any rostered days off.
The respondent was the sole director and secretary of the employer. He was the person responsible for the day to day management of the employer and was responsible for determining and setting the terms and conditions for the employees. The respondent was aware of two former employees raising issues regarding rostered days off in early 2009 and only caused the employer to commence making specific prepayments in lieu of rostered days off in October 2009. The respondent was advised by the applicant in March 2010 and again in June 2010, that contraventions of the Transport NAPSA had been identified. A short time later, the employer was placed into voluntary liquidation.
Pursuant to subclause 6.1 of the Transport NAPSA, the employees were entitle to accrue and be paid rostered days off. I accept that during the period 27 March 2006 to 1 March 2007, 15 of the 40 employees were entitled to accrue rostered days off and that, during that period, would have accrued an entitlement equivalent to the value of approximately $19,280.52 (gross). The respondent has not admitted that the employees have been underpaid and no rectification payments have been made.
The parties agree that the employer’s contraventions during the period 2 March 2007 to 21 October 2009 caused no financial disadvantage to the employees. This appears to have arisen as a result of the employer paying the employees a higher cents-per-kilometre rate than that provided for by the Transport NAPSA.
The respondent has raised various matters in mitigation. To some extent these are not supported by evidence. The only evidence before me is the agreed statement of facts and exhibit R1. That exhibit establishes that the employer appeared to have an appropriate working relationship with the Transport Workers Union, but little more than that.
I accept that Mr Neave was an apparently competent and well meaning employer who did not intend to cause any harm by failing to provide rostered days off in accordance with the award. Nevertheless, that failure has potential serious consequences and cannot and should not be avoided by the simple expedient of the payment of money to the affected employees. I accept the applicant’s submissions as to the need for general and specific deterrence in this case.
Having considered all of the parties’ submissions and the relevant considerations bearing on penalty I have concluded that I should make the following orders: first, a declaration that the respondent by reason of the operation of s.728 of the Workplace Relations Act and s.550 of the Fair Work Act was involved in the contraventions of subclause 16.3 of the notional agreement preserving the Transport Industry State Award.
Secondly, I will order that the respondent pay a penalty of $5,000 for his involvement in the employer’s contraventions of subclause 16.3 of the notional agreement preserving the Transport Industry State Award in failing to provide rostered days off. That penalty must be paid within 28 days.
I will further order, as sought in the applicant’s statement of claim, that the penalty be paid to the Commonwealth of Australia pursuant to s.841 of the Workplace Relations Act and s.546(3) of the Fair Work Act.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Driver FM
Date: 30 May 2011
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