Fair Work Ombudsman v NQ Powertrain
[2023] FedCFamC2G 572
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v NQ Powertrain [2023] FedCFamC2G 572
File number(s): BRG 482 of 2022 Judgment of: JUDGE EGAN Date of judgment: 30 June 2023 Catchwords: INDUSTRIAL LAW – where terms of contravention orders and declarations to be made agreed to by the parties – where the quantum of pecuniary penalties to be imposed was also agreed – orders accordingly. Legislation: Fair Work Act 2009 (Cth) ss, 45, 323, 324, 539, 545, 546 and 687
Federal Circuit and Family Court of Australia Act 2021 (Cth) s. 141.
Cases cited: Fair Work Ombudsman v New Shanghai North T/A New Shanghai Charlestown [2017] FCA 130 Division: Division 2 General Federal Law Number of paragraphs: 16 Date of last submission/s: 9 May 2023 Date of hearing: 29 June 2023 Place: Brisbane Solicitor for the Applicant: Fair Work Ombudsman Solicitor for the Respondent: Gifford Legal ORDERS
BRG 482 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: NQ POWERTRAIN
Respondent
order made by:
JUDGE EGAN
DATE OF ORDER:
30 June 2023
Pursuant to section 141(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and section 545 of the Fair Work Act 2009 (Cth) (FW Act),
IT IS DECLARED THAT:
1.The Respondent contravened section 323(1) of the FW Act by:
(a)making deductions for airport transfers that exceeded their cost to the Respondent and to that extent were not principally for the Employee’s benefit, thereby failing to pay each of the Employees identified in column A of Table 2 of the Annexure to the Statement of Agreed Facts (the Annexure) the amounts payable to them in relation to the performance of their work in full (except as provided by section 324 of the FW Act), during the period set out in Column B, in the total amount of $3,100.88;
(b)making deductions for accommodation that exceeded its cost to NQP and to that extent were not principally for the Employee’s benefit, thereby failing to pay each of the Employees identified in column A of Table 3 of the Annexure the amounts payable to them in relation to the performance of their work in full (except as provided by section 324 of the FW Act), during the period set out in column B, in the total amount of $42,689.76; and
(c)making deductions that exceeded the amount authorised in writing by the Employee, thereby failing to pay the Employees Roger Boe and Joseph Nalau the amounts payable to them in relation to the performance of their work in full (except as provided by section 324 of the FW Act), during the period from 20 May 2019 to 16 December 2019, in the total amount of $300.
2.Contravened section 45 of the FW Act by:
(a)failing to pay each of the Employees identified in column A of Table 4 of the Annexure at the rate of 200% for all hours worked in excess of five hours on a Sunday during harvest period as set out in column B, thereby failing to pay the relevant Employees the total amount of $1,313.63, in contravention of clause 24.2(d) of the Horticulture Award 2010 (Horticulture Award) (before 1 March 2020) and clause 25.2(d) of the Horticulture Award (from 1 March 2020);
(b)failing to pay each of the Employees identified in column A of Table 5 of the Annexure for a minimum of three hours of work on a Sunday, thereby failing to pay the relevant Employees for the number of hours set out in column B and in the total amount of $312.44, in contravention of clause 24.2(e) of the Horticulture Award (before 1 March 2020) and clause 25.2(e) of the Horticulture Award (from 1 March 2020);
(c)failing to pay each of the Employees identified in column A of Table 6 of the Annexure – each with an agreement that met the requirements in clause 24.1 of the Horticulture Award (before 1 March 2020) and clause 25.1 of the Horticulture Award (from 1 March 2020) – at the applicable overtime rate for all overtime hours worked for which they had not taken time off before the termination of their employment as set out in column B, thereby failing to pay the relevant Employees at least the total amount of $428.06, in contravention of clause 24.1(k) of the Horticulture Award (before 1 March 2020) and clause 25.1(k) of the Horticulture Award (from 1 March 2020); and
(d)failing to pay each of the Employees identified in column A of Table 7 of the Annexure at the applicable overtime rate for all overtime hours worked as set out in column B, thereby failing to pay the relevant Employees at least the total amount of $1,788.23, in contravention of clause 24.2 of the Horticulture Award (before 1 March 2020) and clause 25.2 of the Horticulture Award (from 1 March 2020).
AND IT IS ORDERED THAT:
3.Pursuant to section 546(1) and 546(3)(a) of the FW Act, the Respondent pay a pecuniary penalty in the amount of $106,430.63 to the Commonwealth Consolidated Revenue Fund, such monies to be paid as agreed to between the parties, but no later than on or before 4:00pm on 30 September 2023.
4.The Applicant have liberty to apply on the giving of seven (7) days’ notice in the event that Order 3 of these Orders are not complied with by the Respondent.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE EGAN
Introduction
On 2 November 2022, the applicant filed an Originating Application and a Statement of Claim, by which the following Orders were sought:
58. Pursuant to section 141(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and section 545 of the Fair Work Act 2009 (Cth) (FW Act), declarations that the Respondent, NQ Powertrain Pty Ltd (ACN 143 330 590) (NQP), contravened the following civil remedy provisions in respect of each of its employees identified in column A of Table 1 annexed to this claim (Employees):
(a) section 323(1) of the FW Act, by:
(i)making deductions for airport transfers that exceeded their cost to NQP and to that extent were not principally for the Employee’s benefit, thereby failing to pay each of the Employees identified in column A of Table 2 of the Annexure the amounts payable to them in relation to the performance of their work in full (except as provided by section 324 of the FW Act), during the period set out in column B, in the total amount of $3,100.88;
(ii)making deductions for accommodation that exceeded its cost to NQP and to that extent were not principally for the Employee’s benefit, thereby failing to pay each of the Employees identified in column A of Table 3 of the Annexure the amounts payable to them in relation to the performance of their work in full (except as provided by section 324 of the FW Act), during the period set out in column B, in the total amount of $42,689.76;
(iii)making deductions that exceeded the amount authorised in writing by the Employee, thereby failing to pay the Employees Roger Boe and Joseph Nalau the amounts payable to them in relation to the performance of their work in full (except as provided by section 324 of the FW Act), during the period from 20 May 2019 to 16 December 2019, in the total amount of $300;
(b) section 45 of the FW Act, by:
(i)failing to pay each of the Employees identified in column A of Table 4 of the Annexure at the rate of 200% for all hours worked in excess of five hours on a Sunday during harvest period as set out in column B, thereby failing to pay the relevant Employees the total amount of $1,313.63, in contravention of clause 24.2(d) of the Horticulture Award 2010 (Horticulture Award) (before 1 March 2020) and clause 25.2(d) of the Horticulture Award (from 1 March 2020);
(ii)failing to pay each of the Employees identified in column A of Table 5 of the Annexure for a minimum of three hours of work on a Sunday, thereby failing to pay the relevant Employees for the number of hours set out in column B and in the total amount of $312.44, in contravention of clause 24.2(e) of the Horticulture Award (before 1 March 2020) and clause 25.2(e) of the Horticulture Award (from 1 March 2020);
(iii) failing to pay each of the Employees identified in column A of Table 6 of the Annexure – each with an agreement that met the requirements in clause 24.1 of the Horticulture Award (before 1 March 2020) and clause 25.1 of the Horticulture Award (from 1 March 2020) – at the applicable overtime rate for all overtime hours worked for which they had not taken time off before the termination of their employment as set out in column B, thereby failing to pay the relevant Employees at least the total amount of $428.06, in contravention of clause 24.1(k) of the Horticulture Award (before 1 March 2020) and clause 25.1(k) of the Horticulture Award (from 1 March 2020);
(iv) failing to pay each of the Employees identified in column A of Table 7 of the Annexure at the applicable overtime rate for all overtime hours worked as set out in column B, thereby failing to pay the relevant Employees at least the total amount of $1,788.23, in contravention of clause 24.2 of the Horticulture Award (before 1 March 2020) and clause 25.2 of the Horticulture Award (from 1 March 2020).
59. Pursuant to section 546(1) of the FW Act, an order that NQP pay pecuniary penalties for committing each of the contraventions set out in order 1.
60. Pursuant to section 546(3)(a) of the FW Act, an order that NQP pay any pecuniary penalties to the Commonwealth.
61. An order that the amounts referred to in order 2 be paid within 28 days of the Court’s order.
62. An order that the Applicant has have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
A Statement of Agreed Facts (SOAF) was filed on 9 February 2023. The agreed facts were as follows:
As set out at [60] – [67] inclusive of the SOAF, rectification was made by the respondent in a timely manner, both in respect of amounts owed to 54 identified employees, as well as in respect of 33 employees who were unable to be located. The Court accepts that such rectification evidenced the co-operation by the respondent with the enforcement of provisions of the Act by the applicant.
By order of the Court made on 29 November 2022, a hearing for the imposition of pecuniary penalties was listed for 29 June 2023 in circumstances where orders were agreed to be made by consent, the relevant relief having been set out at [68] – [71] of the SOAF.
Consideration of Written Submissions
In submissions filed on behalf of the respondent on 9 May 2023, the respondent relied upon what was held by Bromwich J in Fair Work Ombudsman v New Shanghai North T/A New Shanghai Charlestown [2017] FCA 1301 at [36] where it was said:
[36]The written submissions in chief for the FWO helpfully outlined the approach that should be taken in determining the appropriate penalty, there being no dissent between the parties at this level of principle. Five steps were described as follows (with some adjustment of expression):
(1)Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
(2)Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
(3)Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
(4)Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
(5)Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate[2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick[2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith[2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102].
It was submitted on behalf of the applicant, and acknowledged as being correct by the respondent, that the multiple contraventions evidenced in the schedules to the SOAF were committed by the same entity, and arose out of the same course of conduct. That being so, the respondent conceded that there were 7 relevant contraventions for which the respondent was liable for the imposition of a penalty.
It was acknowledged by the respondent that the contraventions related to vulnerable and low paid workers, but the Court accepts that the particular facts of this matter ought to be taken into account when assessing pecuniary penalties at the lower end of the scale.
An affidavit affirmed by one Peta Kasey Rudd was filed on behalf of the respondent on 2 March 2023. In such affidavit, Ms Rudd deposed that she was at all relevant times a director and secretary of the respondent. Ms Rudd had grown up in Papua New Guinea and Fiji, and around 2008, she commenced working toward the setting up of a business which would involve the recruitment of Pacific Island workers for the performance by them of work in Australia. Ms Rudd deposed that in 2018, the respondent became the first approved employer in Australia under the Pacific Australian Labour Mobility Scheme, which allowed for the employment in Australia of Pacific Islanders. Ms Rudd deposed that in the time between the commencement of such scheme in 2018 and April 2022, the respondent had employed more than 3000 different workers and had paid wages of approximately $9,238,954.00 exclusive of superannuation.
The Court accepts the evidence of Ms Rudd that the contraventions arose by reason of a lack of proper administrative/clerical oversight, and not by reason of any intentional design. Ms Rudd has expressed contrition on the part of the respondent in circumstances where adverse press coverage of the respondent’s contraventions resulted in much embarrassment and a deterioration of her health. Her contrition was evident at [76] – [79], [83] – [88] and at [91] – [98] which relevantly were as follows:
76.As stated above, on 9 April 2022, I decided that NQP would cease operating as a labour hire business and would no longer be a participant in the PLS.
77.On closing the business, I felt an obligation to ensure that the workers were transferred to reputable approved employers and that all employees final pays (including entitlements) were correct. Annexure “PKR-4” (page 30) is a true copy of an example letter sent to host firm about sourcing transfers and redeployment of workers upon the cessation of NQP’s operations.
78.In anticipation of the business closing and the employment of all on-hire employees ceasing, from 6 June 2022, my team and I worked seven days a week for three weeks to ensure the payments were accurate and workers understood their final pays. Information packs were prepared and sent to every employee with detailed reports of their entitlements, and enquiry lines were kept open, usually until late in the eventing, until the enquiries from workers ceased. Mass meetings with the workforce and meetings with representatives from The Australian Workers’ Union were also convened in this period.
79.Around this period, NQP also had to complete the rectification payments. I have outlined above the efforts taken by me to attempt to contact the former employees the subject of the FWO investigation.
…
83.As a result of the contraventions and the reporting of the contraventions, my reputation has been irreparably damaged, and I do not feel confident that I will ever be able to work in a management or leadership position again.
84.The publication of The Courier Mail article caused great embarrassment to me personally.
85.My personal standing in the community and in the industry has been damaged, and no doubt the contraventions have harmed the way in which I am perceived by people I have worked with for many years in a professional capacity.
86.I have always been and remain a passionate advocate of the Pacific labour mobility schemes. In particular, I am incredibly proud of the opportunities I provided women – helping them to take control of their financial security and their children's education. This goal has always been one of my principal drivers for operating NQP.
87.Over the years, I have provided support for women who have suffered extreme domestic violence, given personal loans to pay school fees, held hands during court sessions and dedicated hours to counselling on subjects from extramarital affairs to the death of a child. I was “mum” to many of them, and my job was to protect them while they were in Australia and ensure they were paid correctly and provided with safe, clean and comfortable accommodation. I am incredibly remorseful, and disappointed in myself, that some workers were not paid correctly by NQP.
88.Seeing my name and face in The Courier Mail reported as someone who has “stolen” money off these workers was devastating to me. I had personal relationships with most of the employees who were the subject of the FWO investigation as they were some of my team members who had returned more than once to work for NQP across the years – most had been to my house and knew my husband and children.
…
91.In the last two weeks, I have become involved as a volunteer with an organisation called Australian Business Volunteers (“ABV”) and have been selected to facilitate a “YES” program in Lihir Island in Papua New Guinea in late May/early June 2023.
92.The purpose of the program is to deliver training and mentoring activities to Lihir Island businesses so that they become viable to the extent they can partner with Newcrest Mining or conduct business opportunities beyond mining, for the benefit of the local community. Business and prospective business owners learn business and management skills through the program.
93.My motivations for becoming a volunteer of this program are from my core values of wanting to help people and valuing the effect of lifelong learning during capacity building for communities.
94. I am particularly passionate about the education of children, specifically female children and helping people to afford education which is somewhat viewed as a luxury the South Pacific
95.The position is a volunteer position without any salary or any other remuneration.
96.Annexure “PKR-7” (page 41) is a true copy of correspondence from Newcrest Mining Limited in support of me obtaining a Business Short Single Entry Visa to participate in the ABV program. My remorse for shortcomings of NQP
97.This situation has weighed heavily on me. I believe that NQP has made a great contribution to the lives of many workers from the South Pacific, and it saddens me that this contribution has been diminished by NQP’s failure to ensure these workers received the full amounts they should have. Having lived in a number of South Pacific communities, I am well aware of the hardships many of our workers and their families may experience back at home, and whilst the amounts of the underpayments were not immaterial for NQP, I understand they were amounts that would have been of real significance for the employees affected.
98. I hope I have managed to explain how these errors came about, and I hope that both the Court and, perhaps more importantly, the workers affected, can accept that these shortcomings were never intentional, nor did they result in a windfall for NQP in circumstances where our model was to simply pass the labour costs on to the host firm. Nevertheless, I accept this is of no comfort to the workers affected and understand that NQP needs to take responsibility for this.
The respondent is no longer trading and has allowed its licence to operate as a labour hire provider to lapse. There is therefore no reasonable likelihood that the respondent will reoffend in the future, a matter which goes to the deterrent aspect of the imposition of a pecuniary penalty. Further, the Court has had regard to the fact that the respondent has co-operated with the applicant throughout, and that Ms Rudd was appropriately remorseful.
Both parties have submitted that penalties ought to be imposed in accordance with the proposed penalties as set out in Annexure A to the submissions filed on behalf of the applicant on 26 April 2023 which Annexure was relevantly as follows:
The Court is satisfied that the agreed pecuniary penalties appropriately reflect the nature, extent and seriousness of the identified contraventions.
Declarations and orders are made as per the SOAF.
Pecuniary penalties are imposed in accordance with the agreed schedule.
And it is so ordered.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan. Associate:
Dated: 30 June 2023
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