Fair Work Ombudsman v New Image Photographics Pty Ltd (ACN 010 823 042)
[2013] FMCA 227
•2 April 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v NEW IMAGE PHOTOGRAPHICS PTY LTD (ACN 010 823 042) & ANOR | [2013] FMCA 227 |
| INDUSTRIAL LAW – Failure to pay basic wage and casual loadings – one casual employee at call centre – issue as to identity of employer – issue as to hours worked – significant underpayment of casual loading – failure to keep records – claim not as to records not made out. |
| Australian Pay and Classification Scale derived from the Photographic Award NAPSA Fair Work Act 2009, ss.535, 545, 547, 728(2)(c) Fair Work Regulations2009 Fair Work (Transitional Provisions and Consequential Amendments) Act2009 Notional Agreement Preserving the Photographic Employees’ Award State – 2003 (Qld) Workplace Relations Act1996, ss.185(2), 719(6), 722 Workplace Relations Regulations2006 |
| Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 Fair Work Ombudsman v Quincolli Pty Ltd [2011] FMCA 139 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | NEW IMAGE PHOTOGRAPHICS PTY LTD (ACN 010 823 042) |
| Second Respondent: | BRYAN CHARLES BEDDINGTON |
| File Number: | BRG 166 of 2012 |
| Judgment of: | Jarrett FM |
| Hearing dates: | 26 & 27 March 2013 |
| Date of Last Submission: | 28 March 2013 |
| Delivered at: | Brisbane |
| Delivered on: | 2 April 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Pratt |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Counsel for the Respondents: | Mr Copely |
| Solicitors for the Respondents: | Milner Lawyers |
ORDERS
THE COURT DECLARES THAT
The First Respondent has contravened the following:
a)During the period 3 April 2006 to 30 June 2009:
i) section 185(2) of the Workplace Relations Act1996 (Cth); and
ii) regulations 19.4(1), 19.8(1) and 19.9(1) of the Workplace Relations Regulations 2006.
b)During the period 8 October 2008 to 1 July 2009, section 182(1) of the Workplace Relations Act 1996 (Cth).
c)During the period 1 July 2009 to September 2009, item 5 of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
The Second Respondent was involved in the First Respondent’s contraventions as set out in paragraph 1 hereof.
THE COURT ORDERS THAT:
Pursuant to s.719(6) of the Workplace Relations Act and s.545 of the Fair Work Act, the First Respondent pay the outstanding underpayments totalling $19,009.68 (casual loading) and $304.82 (basic rate) to the estate of Mrs Gail Keen.
Pursuant to s.722 of the Workplace Relations Act 1996 and s.547 of the Fair Work Act2009 interest be paid by the First Respondent to the estate of Mrs Keen on the amounts set out in order 3 hereof at the rate and for the period prescribed by those Acts and the regulations made thereunder.
The sums payable by the First Respondent pursuant to orders 3 and 4 hereof be paid within twenty-eight (28) days of the date of this order.
This matter be adjourned for written submissions on the pecuniary penalty (if any) to be imposed upon the first respondent and the second respondent by reason of the declarations made herein, with each party to file and serve such submissions no later than twenty-eight (28) days after the dispatch by chambers of Reasons for Judgment in this application.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 166 of 2012
| FAIR WORK OMBUDSMAN |
Applicant
And
| NEW IMAGE PHOTOGRAPHICS PTY LTD (ACN 010 823 042) |
First Respondent
| BRYAN CHARLES BEDDINGTON |
Second Respondent
REASONS FOR JUDGMENT
(As corrected)
This application raises three critical issues for determination.
The first, a mixed issue of fact and law, is whether the first respondent was the employer of Ms Gail Keen, now deceased. The second, a question of fact, is whether Ms Keen worked the hours alleged by the applicant in these proceedings. The third relates to the records kept, or more to the point, not kept, by the first respondent if it is found to have been Ms Keen’s employer. There are some subsidiary issues that arise depending upon the answers to the three main issues just identified.
The applicant contends that if the Court finds that the first respondent was Ms Keen’s employer, it did not pay Ms Keen what she was entitled to be paid – either in terms of her basic rate of pay or a casual loading to which she was entitled according to the relevant industrial arrangements that governed her employment. Those failures, it is said, are breaches of the Fair Work Act2009, for which the first respondent is liable to pay a penalty.
The applicant also contends that the second respondent was knowingly concerned in the first respondent’s breaches of the Fair Work Act and is also liable to a penalty.
The first respondent denies that it was Ms Keen’s employer. It alleges that she was employed by another company, New Image Beauty Salons Pty Ltd. Further, even if the first respondent is found to have been Ms Keen’s employer, the first respondent says that she has been paid all that she was owed and more.
Uncontentious Matters
Certain matters are not in dispute having regard to the allegations of fact made by the applicant in his statement of claim, the affidavits filed by the first and second respondents (neither have filed a defence despite an order for them to do so) and the written submissions relied upon by each of the parties.
The facts, about which there seems to be no issue, are:
a)For the purposes of this application, the relevant employment period for Ms Keen was 3 April, 2006 to 2 September, 2009;
b)Over the course of the relevant employment period Ms Keen’s terms and conditions of employment were set by:
(i)from 3 April, 2006 to 1 July, 2009:
1. the Workplace Relations Act1996 (Cth);
2. the Workplace Relations Regulations2006 (Cth);
3. a Notional Agreement Preserving the Photographic Employees’ Award State – 2003 (Qld); and
4. the Australian Pay and Classification Scale derived from the Photographic Award NAPSA;
(ii)from 1 July, 2009 to 2 September, 2009:
1. the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth);
2. the Fair Work Act2009 (Cth);
3. the Fair Work Regulations2009 (Cth); and
4. the Transitional APCS derived from the Photographic Award NAPSA.
c)Ms Keen was employed as a casual employee by the first respondent for the period 3 April, 2006 to 30 June, 2006;
d)Ms Keen was a casual employee for the entirety of the relevant employment period and therefore entitled to casual loading for the hours worked;
e)Ms Keen was not paid the appropriate casual loading for any of the hours worked by her during the relevant employment period;
f)Initially, when she commenced employment with “New Image”, Ms Keen was employed by the first respondent. The first respondent contends that her employment was “transferred” to New Image Beauty Salons Pty Ltd from 1 July, 2006;
g)Ms Keen had a key to the relevant business premises and was usually the first person to arrive at work. She would unlock the door and turn off the security alarms;
h)The first respondent (or the entity that was Ms Keen’s employer) paid its telemarketing staff according to the number of hours they worked. When they commenced work, they logged on to the business’ computer system. The log-on time was recorded. When they completed their work, or went on breaks, they logged-off the computer system. The “logged-on” hours were, subject to the evidence of Ms Piazza set out below, prima facie the hours for which an employee was entitled to be paid.
i)Ms Keen contracted a terminal illness and passed away in March, 2010.
It will be immediately apparent from the above uncontentious facts that for the period 3 April, 2006 to 30 June, 2006 the first respondent breached s.185(2) of the Workplace Relations Act 1996 in that it did not pay to Ms Keen a casual loading at least equal to the guaranteed casual loading percentage of the basic periodic rate of pay payable under the APCS for the hours she worked in that period.
It is also apparent from a perusal of schedule 1 to the statement of claim that the failure to pay the appropriate basic rate of pay only, commenced on 8 October, 2008. Before that date, Ms Keen was paid an hourly rate which was more than the prescribed basic rate of pay.
Thus, the issues identified above can only relate to the period from 1 July, 2006 to 2 September, 2009.
Witnesses
The applicant called six witnesses, two Fair Work Inspectors, two lawyers and two witnesses who had once worked in the business known as New Image Photographics.
The respondents called two witnesses – former employees of the first respondent or New Image Beauty Salons Pty Ltd. The second respondent also gave evidence. There was an attempt at the commencement of the trial by the respondents to lead more evidence in the form of a further affidavit sworn by the second respondent on the first day of the trial. For reasons that I gave on the first morning of the trial, I refused leave to the respondents to file any further affidavits of evidence in chief.
Teresa Harris
Teresa Penny Harris, previously known as Teresa Penny Muncey, gave evidence in the proceedings and was called by the applicant. She swore that she was employed on a casual basis at New Image Photographics Pty Ltd between January, 2006 and July, 2008. She was initially employed as a telemarketer however she was soon transferred to new duties which involved contacting shops to enquire as to whether New Image Photographics could place a “New Image Photographics” box on their premises. The placement of the box was a way in which New Image generated “leads” for photographic work. As a telemarketer, she would “cold call” potential customers or “leads” to generate new work.
Ms Harris said that she worked with Gail Keen. Her impression was that Gail Keen was generally at New Image’s premises before all other employees. Ms Keen had the keys to the premises and was responsible for opening up in the morning and disabling the alarm system. On some mornings when Ms Harris arrived at work, she observed Ms Keen standing on a chair turning off the alarms.
The earliest that Ms Harris can recall starting work was at 6:00am. She would have to start early sometimes, especially during periods when daylight saving times were being observed in other states because she could begin contacting people earlier than she usually could due to the time difference. She would not begin cold calling until 8.00am, if she was calling southern states that were using daylight savings time, or 9.00am if she was calling a place that was using Australian Eastern Standard Time. Businesses in both Australia and New Zealand were contacted.
Ms Harris observed Ms Keen performing all sorts of duties during the time she was employed by New Image. Some of those duties she saw Ms Keen perform included bookings for clients to have their photos taken, contacting shops to check whether New Image could place a photo box on their premises and taking phone sales.
According to Ms Harris, Ms Keen also interviewed prospective employees, both telemarketers and photographers, for New Image, such as Ms Harris’ daughter, Jessica Hill. She saw her do this “quite a lot”. To Ms Harris’ observation Ms Keen would conduct the interview and Ms Harris was aware that Ms Keen would take the prospective employee to view a video presentation.
Sometimes when Ms Harris arrived early to work, she observed that Ms Keen was either on the phone or working at papers at her desk. Ms Harris would arrive at work early sometimes and would hear what Ms Keen was saying on the phone when she went to offer her coffee. She never heard Ms Keen making personal or social calls at work. Rather, she was talking to clients that had missed out on a booking and someone had failed to get in contact with that person on the previous day. She did not think that Ms Keen did exactly the same job as Ms Harris because she saw her doing other things, such as those just described as well as attending to bookings.
Ms Harris could not recall if Janette Chambers or Jacquie Given were there early. They were other telemarketers with whom Ms Harris worked and who are witnesses called by the respondents in this case.
Ms Harris gave evidence that Ms Keen had told her that she was instructed by Connie Piazza or Tracey Williamson to do certain things before others had arrived for work. Piazza and Williamson were supervisors who controlled the work done by the telemarketers.
Ms Keen gave evidence that she observed Ms Keen talking to Mr Bedington, the second respondent, on several occasions. Ms Harris formed the impression that Ms Keen and Mr Bedington “got on quite well”.
Concettina Piazza
Concettina Maria Piazza was called by the applicant. She gave evidence that she was “engaged” by New Image Photographics Pty Ltd between 2001 and January, 2010.
By “engaged” she meant that she was employed by Ms Tracey Williamson, or a business operated by her, which had some arrangement for the supply of supervisory services with Mr Bedington or an entity associated with him.
According to Ms Piazza, before 2001, all the staff that later came to be employed by New Image Photographics Pty Ltd were employed by Ms Williamson (or her business). In 2001 New Image Photographics Pty Ltd and Mr Bedington “took over” all of the telemarketing staff (20-40) people from Ms Williamson’s business. According to Ms Piazza New Image Photographics was paying the staff after they moved to Mr Bedington’s control. Ms Williamson maintained a room at New Image’s business premises and Ms Piazza remained employed by Tracey Williamson (or her business) and she and Ms Williamson supervised the telemarketing staff of New Image.
On 13 May 2010, Fair Work Inspector Keiran Burins interviewed Ms Piazza and on 15 April 2011, Fair Work Inspector Anthony Rains interviewed Ms Piazza by telephone. On both occasions Ms Piazza stated to the inspector that she was employed by New Image Photographics Pty Ltd. Clearly she was not. She was cross-examined by Counsel for the respondents about the contents of her statement (CMP1 to her affidavit in these proceedings) and her assertion that she was employed by New Image Photographics Pty Ltd. She explained that she had said that because she was ultimately paid by Mr Bedington via Ms Williamson. Ms Piazza is not a lawyer and I accept her explanation for the way in which she expressed herself to the Fair Work Inspectors.
During the period relevant to the claim in these proceedings, Ms Piazza, together with Tracey Williamson, was Gail Keen’s direct supervisor.
Ms Piazza says that, initially, Ms Keen was employed as a telesales consultant and then, for approximately the last three years of her employment, she worked in promotions and bookings. Ms Piazza gave evidence that Ms Keen would open up New Image’s business premises as she had the keys to those premises. Consistently with the evidence given by Ms Harris, according to Ms Piazza, Ms Keen would start early so she could call businesses interstate and sometimes in New Zealand. She would also try and contact some people for bookings that could not be contacted the previous day.
Ms Piazza was responsible for allocating work to Ms Keen. She would organise for a list of tasks that required attention from Nicola Bluett (the senior booking clerk) and other telemarketers who had not finished their duties from the day or night before. According to Ms Piazza, this list was written out on a piece of paper and left on Ms Keen’s desk. If she could not ring anybody because it was too early, she would do other work on the computer.
Ms Piazza would also ask Ms Keen to do administration work which required her to prepare the “leads” to be followed up by the telemarketers during the day.
According to Ms Piazza, Ms Keen’s core hours were 9:00am to 5:00pm but she started earlier and would finish around 4:00pm to 4:30pm. There was no roster. Apart from Ms Keen, the other telemarketers generally worked from between 9:00am to 5:00pm because that was normal business hours (with some starting at 8:00am during daylight savings). If Ms Keen wanted to change her hours (for example, for a medical appointment or something like that) she would have to approach Ms Piazza or Tracey Williamson about that.
Some other staff started early or stayed back late, but according to Ms Piazza apart from Mr Bedington, only Ms Keen had keys to the premises.
According to Ms Piazza, Mr Bedington had stopped the telemarketing staff from commencing work before about 8:30am as they had been making personal calls. However Mr Bedington made an exception for Gail Keen. She swears that he told her that no one other than Ms Keen was to start early. Ms Piazza says that she recalls Mr Bedington coming up and speaking to Ms Keen approximately a couple of times per week. Mr Bedington apparently had a marketing room in India and he would use the telemarketers that Ms Piazza supervised to follow up on some of their work. Gail Keen was sometimes used for these jobs.
According to Ms Piazza, Ms Keen had been doing the job for a very long time and was good at it. She did not require close supervision. Ms Piazza generally worked between 9:00am to 5:00pm each day. She was not there at 6:00am. Ms Piazza thought that Ms Keen was very reliable. She was satisfied that Ms Keen completed the work assigned to her to be done in the early morning, because the work was always done. Ms Piazza gave evidence that if she formed the view that Ms Keen was not doing her work, she would not have remained in the job for as long as she did.
Ms Piazza said that as Ms Keen’s supervisor she was satisfied that Ms Keen worked the hours that the computer log-on and log-off records demonstrated she had worked.
It was part of Ms Piazza’s duties to monitor and ensure the accuracy of the computer log-on and log-off records for each of the telemarketers. Ms Piazza says that each week “the accounts area would print out the summary of everyone’s hours” and Ms Piazza would verify them. Sometimes it was necessary to make adjustments to the hours claimed by a telemarketer. Mr Bedington had a rule that there was to be no overtime – i.e., hours worked in excess of 40 per week.
Ms Piazza says that Ms Keen recorded her hours through the computer system; she always kept an accurate account of her hours and had been doing it for years.
Two Fair Work Inspectors also gave evidence for the applicant. I will refer to their evidence where necessary.
Jackie Gavin
Ms Gavin was called to give evidence by the respondents. Until about 6 months ago she worked as a telemarketer at “New Image Photographics”. She says that she had been employed by “New Image Photographics” for the last 12 years, although she says that during that time she has been employed by different companies associated with Mr Bedington.
According to Ms Gavin the telemarketers all worked in the same big open plan room and from desks which were close to each other. So from her desk, she says, she could see what other telemarketers were doing and hear what they were saying.
She swears in her affidavit that as a telemarketer for the New Image business, she did the same job as Gail Keen, although in cross-examination she said that she was not sure what Ms Keen was doing from time to time.
Ms Gavin says that the hours of operation for the call centre during the period including the 2006 – 2009 period were from 9:00am until 5:00pm (or 8:00am until 4:00pm during daylight savings time if the telemarketers so chose). However, she said, people could work hours that suited them within that timeframe, so for example some people started at 9:00am and finished at 1:00pm. There was also some accommodation for a few people who wanted to start a bit earlier, so some might start from 8:30am or so and finish a bit earlier.
According to Ms Gavin, the type of duties Gail Keen did from the start of her employment, and for the majority of the time she worked there, was telemarketing. So she would be cold-calling private homes to try and book photography sessions. Later on (she does not say when), the telemarketers would get competition leads generated from promotional boxes that had been placed in shops and cafes. The marketers would call the unsuccessful entrants to offer photography sessions.
According to Ms Gavin towards the end of Ms Keen’s time at New Image, perhaps the last 6 months or so, Ms Keen was involved in placing the promotional boxes, so that involved ringing businesses to place boxes.
Ms Gavin says that during the last 12 months of her employment, Ms Keen was involved “occasionally” on interviews for new telemarketers, but from her observation, those interviews always occurred during normal business hours of operation, from 9:00am until 10:00am in the morning.
Ms Gavin says that when Ms Keen first started with the business, she would come in at the normal time of 9:00am, but that changed once her son-in-law, who also worked in the business, ceased working there and was no longer available to bring her to work. Ms Gavin says that, although she was not sure when, Ms Keen started coming to work early (around 5:00am/5:30am) as her husband started to drop her into work early in the morning on his way to work.
Ms Gavin says that after Ms Keen had the key to the business premises, she would regularly go into work around 7:00am. Ms Keen would always be at work before her. Ms Gavin claimed that it would “just be me and Gail” for around the first hour after I arrived. Janette Chambers, another telemarketer, would usually get in around 8:00am and the others would drift in after that.”
Ms Gavin says that she did not recall ever seeing Teresa Muncey (now Harris) getting to work early and certainly not in the period from 2006 to 2009.
Ms Gavin says that when Ms Keen and she were in the office together in the early mornings, she never saw Ms Keen do any work. She swears that “When we work we are constantly on the phone or using the computer to check things or keep a record of what we are doing. When I got in at around 7.00am, I did not see Gail working like this.”
She says that Ms Keen would read books, magazines, or would have a chat and make tea or coffee. Ms Gavin also noticed that “most mornings (at least 4 out of 5 mornings)” that we were in early Ms Keen would speak to her daughter in New Zealand on the phone. Ms Gavin claims that she could tell she was doing this either from what Ms Keen said or from overhearing her conversation and when Ms Gavin got off the phone “she would tell me”.
Ms Gavin also observed that by the time she had arrived at work Ms Keen would have turned on everyone’s computers so that they were ready to go when the other telemarketers arrived. Ms Gavin says: “I don’t know why she did this. I am not aware if she logged herself or anyone else on – which you could do if you knew someone’s password.”
Jeanette Chambers
Ms Chambers is currently employed as a customer service officer at “New Image Photographics Pty Ltd”. However, up until about 10 – 12 months ago, she worked mainly as a telemarketer, together with doing some other administrative and customer service duties.
Ms Chambers has been employed with the “New Image Photographics business” for the last 10 years, and she has been a telemarketer all of that time, with the exception of her recent change of position.
Ms Chambers swears that during that time she became aware that “we” were employed at various times by different companies of Mr Bedington’s, New Image Photographics Pty Ltd and New Image Beauty Salons Pty Ltd, but she cannot recall when these changes happened.
According to Ms Chambers, all telemarketers worked in the same room, and could see everyone else in the room.
As a telemarketer for the New Image Photographics business, most of the time she was doing “the same job as Gail Keen”, with the exception of the other administrative and customer service duties that she performed from time to time.
Ms Chambers swears that the hours of operation for the call centre during the period including the 2006 – 2009 period were from 9.00am until 5:00pm, or 8:00am until 4:00pm depending on the areas and the time-zones that were called. However, staff had some flexibility within that timeframe, and could manipulate their start and finish times to suit themselves.
According to Ms Chambers, no-one was to ever start earlier than 8:00am because “you were not allowed to call people before 8.00am” and it was outside “normal business hours”.
Ms Chambers swears that “Connie and Tracey”, (Ms Piazza and Ms Williamson) “who supervised the telemarketers had a set of rules that they required the telemarketers to comply with. These were strict rules about logging on to the computer when starting work, logging off for breaks and not making calls before the stated commencement time”.
According to Ms Chambers, the type of duties undertaken by Ms Keen were telemarketing duties that all involved the use of a telephone, “whether it was for cold-calling private homes, following up competition leads from promotional boxes, or placing promotional boxes with businesses”. She swears that it was “phone-based work” that also involved the use of the computer to record the work that was done while it was done.
Ms Chambers says “When we were off the phone, we did not do other general office duties. Unless we were using the phones, there was really nothing for us to do.”
Ms Chambers saw that Ms Keen may occasionally have been involved with interviews for new telemarketers, but that occurred “always between 10.00am and 2.00pm”.
Ms Chambers was aware that Ms Keen arrived early to work. She says that she also knew that at some point Ms Keen had been given a key to the office.
Ms Chambers says that she would normally go into work between 7:00am and 8:00am. Ms Keen and Ms Gavin would always be at work before her. Ms Chambers does not ever recall seeing Teresa Harris at work before her during the period from 2006-2009. Ms Chambers says that since it was only three people at work early, if Ms Keen had been working it would have been pretty clear to her “since you would be able to hear her making calls with just the three of us in the room”.
Ms Chambers says that when she got to work she never saw Ms Keen do any work. Instead she would see Ms Keen having a chat, or reading a book, or having breakfast. Mr Bedington would often walk through the office in the mornings and “he would see us having a chat together, usually Gail, Jackie and myself”.
Ms Chambers never saw Ms Keen calling her daughter in New Zealand as Ms Gavin claims.
Ms Chambers confirmed in her evidence that the telemarketing room supervisors Ms Piazza and Ms Williamson, impressed upon all staff that they were not supposed to log-on to the computers until they were to start work. According to Ms Chambers the “log-on” on the computer is the source information from which a person’s pay entitlements were calculated.
Ms Chambers observed that Ms Keen would turn on all of the computers. Ms Chambers does not know if Ms Keen logged herself or anyone else on when she turned on the computers.
Bryan Charles Bedington
Mr Bedington swears that New Image Photographics is an Australian-owned and operated business that began in 1974 as a group of travelling portrait photographers performing child and family portraits, specialising in servicing country and remote Australian locations on a mobile basis by visiting regional locations on a rotational basis several times each year. He claims that over the years, New Image Photographics expanded its operation to become a network of permanent and mobile studios throughout all of Australia and which also operated in New Zealand in the 1990s. It also expanded the nature of its business for a while, but ceased providing the expanded services in the 1990s.
New Image Photographics directly markets its photographic services to members of the public, using telemarketers located at the businesses administration office in Woolloongabba.
Mr Bedington swears:
a)Ms Keen was an employee the first respondent prior to 30 June, 2006;
b)From 1 July, 2006 until 4 September, 2009 Ms Keen was an employee of New Image Beauty Salons Pty Ltd.
c)New Image Beauty Salons Pty Ltd was placed into liquidation on 14 September, 2011.
Mr Bedington says that Ms Keen was employed as a Business to Business telemarketer. He says that her hours commenced at 9:00am to 9:30am depending on the areas that she serviced. He asserts that Ms Keen left work each day between 2:30pm and 3:00pm.
Mrs Keens attached PAYG summaries (annexure 1) for the years 01’2006-2007-2008-2009 show that the records of the ATO (Australian Taxation Office) and the Company show that New Image Beauty Salons was her employer.
Mr Bedington swears that employment records for Ms Keen prior to 30 June, 2006 were kept by an in-house wage system written by “the company”. From 1 July, 2006 until Ms Keen left the wages records were maintained using a software package called “Quickbooks Professional”. Mr Bedington says that at all times both of the software packages recorded:
a)The name of the employer;
b)The type of employment;
c)The date the employment commenced.
Mr Bedington swears that upon advice from “our accountant”, a number of associated companies were used to undertake the business activities of New Image Photographics including:
a)New Image Beauty Salons Pty Ltd (ACN 063 863 570) – engaged the make-up beauty artists and photographers and, from 1 July 2006, also employed the telemarketers; and
b)the First Respondent in these proceedings, New Image Photographics Pty Ltd (ACN 010 823 042) – until 30 June 2006, employed the telemarketers and at all times employed all administration staff; and
c)Earlpark Pty Ltd (ACN 010 389 689) engaged those workers who were involved in printing and framing.
Mr Bedington says that from 1 July, 2006 there was a change in the operation of the business, as advised by the business’ accountants, so that the marketing of the photography services and the employment of the telemarketers was transferred from New Image Photographics Pty Ltd to New Image Beauty Salons Pty Ltd.
Mr Bedington swears that the system of business was:
a)New Image Beauty Salons Pty Ltd engaged telemarketers (from 1 July, 2006), make-up artists, and photographers whose role was to create and generate photographic leads for New Image Photographics Pty Ltd;
b)New Image Beauty Salons Pty Ltd then attempted to convert those leads into sales of photographs on behalf of and in the name of New Image Photographics Pty Ltd and dealt with the sales until the delivery of the finished product to customers;
c)Once the lead was converted to a sale, the contractual arrangement was between the customer and New Image Photographics Pty Ltd (which had to fulfil the order);
d)The photographers and makeup beauty artists who may receive a deposit from the customer took their commission out of the deposit paid by the customer and then they the balance of the deposit was paid to New Image Photographics Pty Ltd .
Mr Bedington says that “because the telemarketers were at the start of the process, versus the end product which was the sale, we transferred them to the cost centre at the start of the process, i.e. New Image Beauty Salons Pty Ltd and it was mainly a decision to ensure that these services were provided by one entity and the customer service provided by New Image Photographics Pty Ltd”.
Mr Bedington swears that Ms Keen was employed at all times as a telemarketer. She commenced employment with New Image Photographics Pty Ltd on or about 18 July, 2002. He asserts that Ms Keen’s employment was from 1 July, 2006, transferred from New Image Photographics Pty Ltd to New Image Beauty Salons Pty Ltd.
Mr Bedington asserts that New Image Beauty Salons Pty Ltd from 1 July, 2006:
a)paid Ms Keen’s wages;
b)paid Ms Keen superannuation; and
c)provided her with Group Certificates and Payment Summaries.
Mr Bedington says that the sole job of the telemarketers was to sell or market by phone the photography services to generate photographic leads/sessions for the photographers and make-up beauty artists. They did not do clerical work or other types of general administrative work, no general typing, no filing, no cleaning, no other duties other than phone-based work. He claims that the telemarketers did not usually book the photography sessions, as there were booking clerks who contacted the customer (once they had agreed to a photographic session) and arranged the details of the photographic sessions.
Inconsistently with that assertion, Mr Bedington gives evidence that there were four types of calls that a telemarketer would make, namely:
a. Promotional calls - which are calls direct to businesses to place promotional boxes in their business. This involves calling the businesses in an area we are servicing and asking them to put promotional boxes on their counters. The promotional boxes invited members of the public to enter a competition to win a photographic session. We would then following (sic) them up the business during and after the promotional period to facilitate the promotional activity. Leads would be obtained from the information filled in by members of the public who entered the competition by filling in a form and putting it in the promotional box (i.e. contact details of potential customers) We gave the businesses who agreed to place promotional boxes a small inducement to do so. We would ring businesses we had dealt with before and also new businesses (cold calls) to try and organise placement of a promotional box. These types of calls were the major focus of our telemarketing activities.
b. Telesales calls - are calls to customers to attempt to convert the leads from the promotional boxes. So, when the boxes come in, they contain slips of paper which have the details for people who have entered the competition. When we got the box back, we would ring the customers directly and, if they didn’t win the prize for a free session, then we would offer them a discount photographic session.
c. Follow-up booking calls – If we could not convert the lead at the time, we would also ring them at a later date - days when we were going to be back in their town. We would try to make an appointment at a later time when we were going to be in their town.
d. Administrative calls - cancellations or other administrative issues - this type of call would usually be fairly infrequent.
Mr Bedington gave evidence that the business’ call centre hours of operation were 9:00am until 5:00pm (or an hour earlier during daylight savings time). He says that was the responsibility of the administration team to ensure that our business complied with any government requirements such as the code for telemarketing. The administration team consisted of Mr Bedington, the financial controller, the accountant and some administrative personnel. Tracey Williamson and Concettina (“Connie”) Piazza were the supervisors in the telemarketing room.
Within the business hours of operation Mr Bedington says that the telemarketers could work flexible hours. Despite the evidence of Ms Gavin and Ms Chambers, Mr Bedington says that there was no standard starting time for every telemarketer. However, he swears that none of the telemarketers were required to work before the commencement of business hours, i.e., before 9:00am (or 8:00am in daylight savings time).
Mr Bedington says that he became aware that soon after she started, Ms Keen’s husband was dropping her outside the business’ premises early in the morning as he was going to work and she would sit outside waiting for someone to open up. Mr Bedington says that as a result he organised for Ms Keen to be given a key to the premises and the security codes so that she could let herself in.
Mr Bedington says in his affidavit filed on 25 October, 2012 that:
36. At no time did I direct, require, or authorise Gail to perform any work prior to her normal starting time. The reason I gave her the key and allowed her to enter the premises early was so that she was not sitting outside in the doorway in the cold, and so that she could wait inside in the warm, have a cup of tea, and so on. At no time did I agree to change Gail’s working hours so that she worked outside our core business working hours.
37. I was never aware that Gail Keen claimed to be working during this period before her normal starting time. At this time my general routine was get to work around 6-6.30am and, although I work on a different floor of the building, I would usually do a walk around to different parts of the building at least a few times a week. When I did that I would notice that Gail Keen would be there before me. On those occasions I never saw Gail performing any work. In fact, when I saw her she would be reading a book, drinking tea or reading something else. I certainly never saw her telephoning anyone. If I had seen her working during this time I would have asked her what she was going and stopped her doing it.
Mr Bedington specifically refutes Ms Piazza’s evidence that she had a discussion with Mr Bedington about Ms Keen’s start times. Mr Bedington denies that Ms Keen ever approached him and asked if she could start at 6:30am. He says that he did not have any such discussion with her.
Mr Bedington says that he set the telemarketer’s rate of pay on what he understood to be the hourly rate of pay under the applicable award. He does not identify the “applicable award”. He swears that there was also a commission structure in place which was based upon performance.
As to the way in which the computer generated work times were recorded, Mr Bedington swears in his affidavit filed on 25 October, 2012:
42. The log-in and log-out times were intended to generate a record of a telemarketer’s hours at work. The computer time was usually a reliable indicator of work because the telemarketers could not do their job without logging onto the computer, because their leads information are all stored in the computer. Telemarketers were told that their pay was calculated by reference to their logged hours. However, telemarketers were not meant to be logged on the computer when not working nor were they permitted to log someone else on when that person was not present.
43. Each week, our accountant in our administration office would print out that record of the telemarketer’s hours of work based on the log-in/log-out times. That print-out also shows log-in, morning tea, lunch, afternoon tea, and log-out at the end of the day. Telemarketers were required to log-off each time they went for a break.
44. That print-out with the computer log on and log off information (for the telemarketing employees) was sent to Concettina (“Connie”) Piazza for checking and authorisation to pay. Connie authorised the payment for those hours of work by signing or authorising that computer print-out. That signature or authorisation from Connie was the accountant’s authorisation to pay the employees for those hours of work. Payment of wages would occur mostly without any reference to me.
Mr Bedington swears that he relied upon Connie Piazza to audit and authorise the hours of work being claimed by the telemarketers. He also swears that at no stage during Ms Keen’s employment did Connie Piazza come to him highlighting any concerns over Gail Keen’s hours of work. Nor did she ever come to me to seek authorisation to pay Gail for more than 40 hours. There is no evidence that Ms Keen was ever paid for working more than 40 hours per week.
Mr Bedington annexes to his affidavit filed on 25 October, 2012 print outs from the business computer system. As best as I can tell, those records demonstrate the log-in/log-out hours of Gail Keen and the amounts of time she worked for the period 28 June, 2007 to 18 June, 2009 (annexure BCB-8). The documents show that Ms Keen was not paid for more than 40 hours per week of work, consistent with Mr Bedington’s policy of “no overtime”.
Consideration and Findings
Ms Keen’s work hours
I am satisfied that Ms Keen worked the hours that the applicant claims that she worked over the relevant employment period. I reach that conclusion because:
a)The hours worked by Ms Keen were recorded according to the system established by the business (irrespective of the entity that carried on that business). Her hours were recorded in the computer log-in and log-off times. Her hours were checked by her immediate supervisor, Ms Piazza.
b)I found Ms Piazza an impressive and reliable witness. She was the only witness who, in my view, truly knew what it was that Ms Keen was asked to do in the course of her employment from time to time. Mr Bedington’s evidence was that Ms Piazza had authority to organise and supervise the work of the telemarketers.
c)I accept Ms Piazza’s evidence that Ms Keen would be left lists of work to do when she came in early in the morning. It was not necessarily telephone work and included the preparation of “leads” from the competition boxes used by the business to generate leads. It was work that had to be done and I accept Ms Piazza’s evidence that she would task Ms Keen to do that work in the mornings before cold calling could begin.
d)I reject the evidence of Ms Gavin and Ms Chambers that Ms Keen did not work when she came into the office early and they were there. Both ladies gave evidence of the type of work telemarketers did. Neither seemed to know that Ms Piazza would ask Ms Keen to do other work apart from telephone work. Neither did Mr Bedington. I reject their evidence that Ms Keen was not performing any work duties before at least 8:00am because she was reading books, magazines, eating breakfast, making tea/coffee, talking with other employees, or speaking with her daughters by phone during the time before she commenced work.
e)Whilst the hours of operation for the call centre during the relevant employment period were generally from 9:00am until 5:00pm, or 8:00am until 4:00pm depending on the areas and the time-zones, Ms Keen was required by her supervisor Ms Piazza to perform other duties upon her arrival at work in the morning.
f)Whilst Ms Keen might initially have been permitted by Mr Bedington to access the business premises before 8:00am or 9:00am because her husband dropped her off early on his way to work, I am satisfied that Ms Piazza took advantage of Ms Keen’s presence to have work performed by her.
g)Whilst Ms Keen was not directed, or otherwise required or authorised, by Mr Bedington to perform work before the normal hours of operation of the call centre, she was required to, and authorised to perform work by Ms Piazza, her immediate superior.
h)I accept Ms Harris’ evidence that she would see Ms Keen either on the telephone or working at papers at her desk when she would come in early.
I reject the oblique suggestion by Mr Bedington in cross-examination that Ms Keen was committing a fraud on the company by logging in early on her computer. If she was committing a fraud, it was easily detected because the log-on times were not just available to Ms Keen – they were also available to Ms Piazza, whose job it was to monitor them. They were also available to the business’ accountant who generated payments according to the log-in and log-off times. The accountant was part of the business’ administration team.
Further, I reject the proposition put by Mr Bedington that Ms Keen is only entitled to be paid for hours worked by her from the authorised start time of 9:00am (or 8:00am in daylight savings time). Her work hours were authorised by Ms Piazza, a person who had authority to organise and supervise Ms Keen’s work. Her hours were authorised and supervised by Ms Piazza, and she was paid for those hours by the employer’s accountant.
I am satisfied that the calculations set out in Schedules 1 and 2 to the statement of claim filed on 20 February, 2012 are correct. They are based upon the hours worked by Ms Keen and paid by the employer.
Schedule 1 demonstrates that until 8 October, 2008 Ms Keen was paid above the basic periodic rate of pay to which she was entitled. Given Mr Bedington’s evidence that he set the telemarketer’s rate of pay on what he understood to be the hourly rate of pay under the applicable award, the fact that Ms Keen received a rate above the basic award rate must mean that she was knowingly paid that greater rate. There is, then, no “overpayment” as such.
From 8 October, 2008 to 2 September, 2009 Ms Keen was not paid the basic periodic rate of pay to which she was entitled. The underpayment amounts to $304.82. To the extent that the respondents submit that the overpayment of ordinary pay can be set-off against any alleged underpayment of ordinary pay, I reject that proposition, because, in my view, the employer must be taken to have always intended that Ms Keen be paid what she was. There was no mistake of fact or law proved in the evidence that would entitle the respondents to now say that she was not entitled to what it was that she received.
Schedules 1 and 2 reveal that Ms Keen was never paid any casual loading to which she was entitled. The underpayment in that regard is $19,009.68.
When Mr Bedington became aware that Ms Keen had a terminal illness he says that he instructed the business’ accountant to “gift” her some money. Three payments were made totalling $3,000 to Ms Keen. In the claims between the parties leading up to these proceedings, the $3,000 has been set off or credited to the respondents. In my view that is inappropriate given that the amount paid was a gift.
The total amount that Ms Keen has been underpaid is $19,314.50.
The identity of the employer
The respondents’ Counsel helpfully referred me to the decision of Collier J in Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 at [75] where her Honour said:
In circumstances where there are multiple possible employers of a person, the traditional approach of the courts is to endeavour to determine which Is the actual employer, by applying principles developed for determining whether there is an employment relationship: Pitcher v Langford (1991) 23 NSWLR 142; Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) FCA 1613 at [60]-[61]. More specifically in In the matter of C& T Grinter Transport Services Pty Ltd (in liq) [2004] FCA 1148 Finn J explained relevant principles as follows:
The principles to be applied in the identification of the employer of an employee where there are two or more possible employers, are reasonably well settled. For present purposes I would note the following:
(1) A contract of service cannot be transferred by one employer’ to another or novated as between them without the employee’s consent: Nokes v Doncaster Amalgamated Collieries Ltd (1940) AC 1014; Re Coogi Nominees Pty ltd (Administrators appointed);; McCluskey v Karagiosis [2002] FCA 1137 ; (2002) 120 IR 147. Questions of estoppel apart: Smith v Blandford Gee Cementation Co Ltd [1970] 3 All ER 154; the employee’s consent must be a real one whether express or implied and is “not to be raised by operation of law”: Denham v Midland Employers Mutual Assurance Ltd [1955]2 QB 437 at 443.
(2) The totality of the circumstances surrounding the relationships of the various parties including conduct subsequent to the creation of an alleged employment relationship is relevant to the assessment to be made: Romero v Auty (2001) 19 AGLC 206 at [10] and [42)-[44].
(3) Documentation created by one or more of the parties describing or evidencing an apparent employment relationship will be relevant to, but not necessarily determinative of, the true character of that relationship: Pitcher v Langford (1991) 23 NSWLR 142; Marrs Fabrics Pty Ltd & Nathan Wholesale Fabrics Pty Ltd v Whipps (1991) 33 AILR 167. In determining the identity of a disputed employer, the Court is entitled to consider lithe reality of purported contractual arrangements”: Dalgety Farmers Ltd t/a Grazcos v Bruce, NSWCA, 3 August 1995. The documentation may have been brought into existence for other purposes, for example, tax minimisation or the reduction of insurance premiums, without reflecting the reality of the parties relationship: ibid; Pitcher v Langford, at 149; Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 454.(4)
(4) Conversations and conduct at the time of the alleged engagement of the employee is of considerable significance: Romero, at [9]. The beliefs of the employees as to the identity of their employer is admissible and is entitled to weight: Pitcher v Langford.
(5) In cases of the engagement of new employees to work in a business in which a number of separate corporate entities participate otherwise than as partners:
... it was open to those controlling the business to select which company should be the employer provided that the selection was consistent with the financial and administrative organisation of the business and was not otherwise a sham.
As the respondents’ Counsel helpfully summarised, the evidence in support of the allegation that the first respondent was the employer at the relevant time is:
a)Mr Bedington’s acknowledgement that originally all employees were employed by New Image Photographics Pty Ltd;
b)The claim form lodged by Ms Keen with the applicant;
c)Letters from a superannuation fund saying that the first respondent was making the contributions;
d)The wages actually paid to Ms Keen were paid from the bank account held by the first respondent;
e)Payslips from 2007 to 2009 that contain the ACN of the first respondent;
f)A letter from Tracey Williamson – (the marketing manager) saying Ms Keen was employed by the first respondent, and
g)An allegation from Ms Piazza.
The evidence suggesting New Image Beauty Salons Pty Ltd was the employer is:
a)An undated letter signed by Mr Bedington saying New Image Beauty was the employer;
b)In 2006 Ms Gavin was provided with a memo saying that her employment was to be transferred from Photographics to Beauty;
c)Mr Bedington’s stating from 1 July 2006, all telemarketers were employed by Beauty;
d)That whilst the actual money to pay the wages of the telemarketing staff came from a bank account in the name Photographics (hence the reference on the payslips), the accounts kept show that the wages paid to Ms Keen were journalled back to Beauty.
e)The PAYG summaries for Ms Keen referred Beauty.
Other evidence is:
a)A letter from Mr Bedington (undated) saying Beauty was the employer since July 2002, which the respondents submit is likely to be written around the time Ms Keen ceased working, and
b)Ms Gavin and Ms Chambers say that they were employed by both Beauty and Photographic but cannot recall at which time the transfer took place.
Here there is no dispute that before 1 July, 2006, the first respondent was Ms Keen’s employer. As I have set out above, as a matter of principle, a contract of service cannot be transferred by one employer to another or novated as between them without the employee’s consent. The employee’s consent must be a real one whether express or implied and is “not to be raised by operation of law” (see the authorities set out above).
Mr Bedington gave evidence that Ms Keen’s employment was transferred to New Image Beauty Salons Pty Ltd. There are no documents to suggest that a transfer took place. There is no evidence that Ms Keen was told of the transfer. There is evidence from Ms Gavin that she received a “memo” saying that her employment was to be transferred from the first respondent to New Image Beauty Salons Pty Ltd, but she did not produce the memo as part of her evidence. As I understand the submissions made to me when Counsel for the respondents sought leave to file and rely upon a further affidavit from Mr Bedington at the commencement of the trial, part of the purpose of that was to put the memo into evidence. I refused that in the circumstances I described when I dealt with that application. But that was not the only way it could have been put into evidence. It might have been put in cross-examination to the applicant’s witnesses who had worked at the business. It was not.
In any event, there is no evidence that it was given to Ms Keen. There is no evidence that she consented to the transfer or the novation.
The documentary evidence is equivocal. For example, Ms Keen’s pay slips from 2007 to 2009 contain the ACN of the first respondent and its name, not that of New Image Beauty Salons Pty Ltd. The payslips also demonstrate that the first respondent was withholding income tax for Ms Keen. Moreover, the identification of the first respondent on the pay slips negatives and inference that might otherwise arise that Ms Keen in some way impliedly consented to a transfer of her employment from the first respondent to New Image Beauty Salons Pty Ltd
Yet the relevant PAYG payment summaries were issued in various names, and in particular:
a)New Image Beauty Salons Pty Ltd (2007 PAYG summary);
b)New Image Beauty Saloons (2008 PAYG summary);
c)New Image Beauty Saloons (2009 PAYG summary).
Each PAYG summary bore the Australian Business Number of New Image Beauty Salons Pty Ltd.
Ms Keen’s wages and superannuation were paid either by or from a bank account controlled by the first respondent. Mr Bedington said that there would then be accounting entries which regularised the situation and which recorded the payments against the accounts of New Image Beauty Salons Pty Ltd. However, no evidence to support those assertions was led from the companies’ accountants, nor were they called to explain the reason for those otherwise curious practices.
I accept the applicant’s submission that Mr Bedington’s attempt at explaining away the significance of the payslips was disingenuous. In cross-examination Mr Bedington suggested that the full registered name and ABN being on the payslips issued to Ms Keen on a weekly basis were no more than a clerical mistake brought about by a system said by Mr Bedington to have been recommended by his accountants and which was designed for the purposes of avoiding potential error. However, it seems that the very system Mr Bedington claimed to be implemented for the purpose of avoiding error perpetuated what he says is a most fundamental error – the identity of the employer.
Mr Bedington has, on differing occasions represented different things about the identity of Ms Keen’s employer. For example by an undated letter (annexure KTB-4 to Mr Burns affidavit) Mr Bedington represents that Ms Keen was employed by New Image Beauty Salons Pty Ltd and had been so employed since July, 2002. That is entirely inconsistent with the case which is advanced now.
Having regard to the unequivocal acknowledgement that the first respondent was Ms Keen’s employer until at least 1 July, 2006, and that there is no evidence that Ms Keen was informed of a transfer of her employment, nor that she consented to that transfer, I find on the balance of probabilities that the first respondent was Ms Keen’s employer over the relevant employment period from 1 July, 2006 to 2 September, 2009.
The Time and Wages Records
There is no dispute that the first respondent was obliged to keep time and wages records in respect of Ms Keen’s employment which illustrated her name, the employer’s name, her starting date and the nature of her employment status.
I accept the respondents’ submission, however, that the applicant has not proved that the first respondent has not kept the relevant records as required by the Fair Work Act. The evidence reveals that two notices to produce were generated by the applicant’s inspectors. The first, dated 7 December, 2009, was directed to the first respondent. It sought certain specific document relating to Ms Keen, but not all of the records now said to have not been kept by the first respondent. The second notice, dated 19 May, 2011, was sent to New Image Beauty Salons Pty Ltd, which is not a respondent to these proceedings.
The applicants claim that the first respondent has breached the Fair Work Act by not complying with s.535 of the Act must be dismissed.
Second Respondent’s involvement in the Contraventions
In Fair Work Ombudsman v Quincolli Pty Ltd [2011] FMCA 139 at [68] and [69], the Court said that a person who is to be fixed with accessorial liability:
a)must have knowledge of the essential facts constituting the contravention;
b)must be knowingly concerned in the contravention;
c)must be an intentional participant in the contravention based on actual or constructive knowledge of the essential facts constituting the contravention – although constructive knowledge may be sufficient under s.728(2)(c) in cases of wilful blindness; and
d)need not know that the matters in question constituted a contravention.
Mr Bedington argues that he was not a knowing participant in the contraventions of the Act that I have found above were committed by the first respondent. He argues that there is no evidence or no sufficient evidence to show that he was knowingly involved in any breach of the Workplace Relations Act or the Fair Work Act.
However, the evidence demonstrates that Mr Bedington accepted that he was ultimately responsible for setting the wages paid to Ms Keen. He swore in his affidavit filed on 25 October 2012 that he set the telemarketer’s rate of pay on what he understood to be the hourly rate of pay under the applicable award. That evidence demonstrates in my view, a knowing involvement in the first respondent’s failure to pay the correct basic rate of pay under the award and the failure to pay the casual loading.
Conclusion
For the reasons given above, I am satisfied that the first respondent was Ms Keen’s employer for the period from 3 April, 2006 to 2 September, 2009. I am satisfied that she was underpaid her ordinary rate of pay from 8 October, 2008 to 2 September, 2009, a total of $304.82. She was entitled to casual loading for the entire period and it was not paid to her. She was entitled to $19,009.68 for that loading. Her estate is entitled to recover those sums, with interest.
I will make directions for the filing of submissions on penalty. Otherwise the orders I make are set out at the commencement of these reasons.
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Jarrett FM delivered on 2 April 2013.
Date: 2 April 2013
CORRECTIONS:
On page 1 of the coversheet and orders delete “[2010]” and insert “[2011].”
In paragraph 100 of the reasons for judgment delete “[2010]” and insert “[2011].”
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