Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No 2)
[2018] FCCA 1935
•20 July 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v NSW MOTEL MANAGEMENT SERVICES PTY LTD & ORS (No.2) | [2018] FCCA 1935 |
| Catchwords: INDUSTRIAL LAW – Applicant claims underpayments under and breach of Hospitality Industry (General) Award 2001 – whether employees covered by modern award – classification of employees under modern award – whether other alleged contraventions of modern award or Fair Work Act 2009 (Cth) made out – whether adverse action against employee/s because of workplace right – accessorial liability of second and third respondents. |
| Legislation: Fair Work Act 2009 (Cth), ss.43, 44, 45, 46, 47, 48, 90, 62, 45, 535, 340, 341, 342, 360, 361, 500, 535, 550, 557, 682, 793 Fair Work Amendment (Protecting Vulnerable Workers) Act2017 |
| Cases cited: Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2017] FCCA 416 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No.2) [2017] FCCA 2759 |
Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | NSW MOTEL MANAGEMENT SERVICES PTY LTD |
| Second Respondent: | MICHAEL PARKES |
| Third Respondent: | ROWENA SIOCO PARKES |
| File Number: | MLG 661 of 2016 |
| Judgment of: | Judge O'Sullivan |
| Hearing dates: | 2 and 3 August 2017, 19, 20, 21 February 2018 and |
| Date of Last Submission: | 17 May 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 20 July 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Avallone |
| Solicitor for the Applicant: | Fair Work Ombudsman |
| Counsel for the Respondents on 2 & 3 August 2017 | Mr Albert |
| Solicitor for the Respondents on 2 & 3 August 2017 | Stonier & Associates |
| Counsel for the First Respondent on 19, 20 & 21 February 2018 | Mr Albert |
| Solicitor for the First Respondent: on 19, 20 & 21 February 2018 | Stonier & Associates |
| Counsel for the Second and Third Respondents on 19, 20 & 21 February 2018 | Ms Kapitaniak |
| Solicitor for the Second and Third Respondents on 19, 20 & 21 February 2018 | Stonier & Associates |
| Counsel for the Respondents on 17 May 2018 | Mr Albert |
| Solicitor for the Respondents on 17 May 2018 | Stonier & Associates |
ORDERS
The parties are directed to confer and, if possible, bring in a minute of proposed orders to be made to give effect to these reasons for decision on or before 4pm on 3 August 2018.
In the event of any dispute as to the form of any order to give effect to these reasons for decision:
(a)the applicant file and serve a draft minute of orders accompanied by an outline of submissions (limited to 5 pages) addressing any disputed question in that respect by 10 August 2018; and
(b)the respondents file and serve a draft minute of any alternative orders accompanied by an outline of submissions (limited to 5 pages) addressing any disputed question in that respect by 17 August 2018.
Any question with respect to paragraph 2 shall be resolved on the papers unless in written submissions filed in accordance with the allocated timetable either party seeks an oral hearing in which case the matter be listed on 24 August 2018 to make orders to give effect to these reasons for decision.
Subject to the above orders the remainder of the proceedings be adjourned to a date to be fixed to program the further conduct of the proceedings in relation to the penalty if any that should be imposed on the respondents for the breaches of the FW Act referred to in the accompanying reasons for decision and the Amended SOAF filed 2 March 2018.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT Melbourne |
MLG 661 of 2016
| Fair Work Ombudsman |
Applicant
And
| Nsw MOTEL Management Services Pty Ltd |
First Respondent
| Michael Parkes |
Second Respondent
| ROWENA SIOCO PARKES |
Third Respondent
Table of Contents
Background
Issues to be determined
Evidence of witnesses
The applicant’s witnesses
Observations on the applicant’s witnesses
The respondents’ witnesses
Consideration of the issues
Additional duties performed by each of Ms Virata and Ms Monleon
Whether the employment of Ms Virata and Ms Monleon was covered by the Modern Award and what was their proper classification
Hours worked
Whether entitled to overtime
Overnight stay allowance
Whether Ms Monleon was eligible to receive penalty rates
Whether any additional hours were unreasonable
Whether there was a failure to comply with rostering obligations
Whether there were record keeping contraventions
Adverse action
Evidence on adverse action
Accessorial liability of the second and third respondents
Approach to accessorial liability
Conclusion
Annexure A... ………………………………………………………………….85
Annexure B. ………………………………………………………………….108
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT Melbourne |
MLG 661 of 2016
| Fair Work Ombudsman |
Applicant
And
| Nsw MOTEL Management Services Pty Ltd |
First Respondent
| Michael Parkes |
Second Respondent
| ROWENA SIOCO PARKES |
Third Respondent
REASONS FOR JUDGMENT
On 31 March 2016 the Fair Work Ombudsman (“the applicant”) commenced proceedings in this Court against NSW Motel Management Services Pty Ltd (“the first respondent”), Michael Parkes (“the second respondent”) and Rowena Siocco Parkes (“the third respondent”) (“the respondents”).
The applicant alleged that the respondents contravened, or were involved in contraventions by the first respondent of various provisions of the Fair Work Act 2009 (Cth) (“the FW Act”), the Fair Work Regulations2009 (Cth) and the Hospitality Industry (General) Award 2010 (“the Modern Award”) arising from the employment of four Philippine nationals between 2013 and 2014 in three motels operated by the first respondent.
Background
The first respondent operates three motels trading as Comfort Inn Country Plaza Halls Gap (“Halls Gap”), Quality Inn Country Plaza Queanbeyan (“Queanbeyan”); and Comfort Inn Country Plaza Taree (“Taree”) (collectively the “Business”).
The second and third respondents are a married couple and the directors and shareholders of the first respondent. The third respondent is a dual Philippines national and the secretary of the first respondent.
The former employees of the first respondent whose employment and correct entitlements is the subject of these proceedings, are Ms Rhea Monleon, Ms Maricar Virata, Mr Michael Tan; and Mr Rolando Gagate (“the Employees”).
The Employees were in Australia on Temporary Business Entry (Class UC) subclass 457 visas sponsored by the first respondent. The Employees were classified as follows; Ms Virata a primary visa holder, Mr Gagate a secondary visa holder, Ms Monleon a primary visa holder and Mr Tan a secondary visa holder.
Each of the Employees were employed by the first respondent on a full time basis for the following periods, and at the following locations:
Ms Rhea Monleon worked at:
a)Taree from:
i)5 November 2012 to 24 February 2013
b)Halls Gap from:
i)25 February 2013 to 16 June 2013; and
ii)15 September 2014 to 18 January 2015
c)Queanbeyan from:
i)17 June 2013 to 14 September 2014
Ms Maricar Virata worked at:
a)Halls Gap from:
i)9 February 2013 to 3 July 2014
Mr Michael Tan worked at:
a)Taree from:
i)24 November 2012 to 24 February 2013
b)Queanbeyan from:
i)17 June 2013 to 14 September 2014
c)Halls Gap from:
i)15 September 2014 to 11 January 2015
Mr Rolando Gagate worked at:
a)Halls Gap from:
i)9 February 2013 to 3 July 2014
Following the initiation of the proceedings, the filing of a defence and a number of directions hearings,[1] the parties entered into a Statement of Agreed Facts on 22 December 2016 (“SOAF”). By its defence filed 14 June 2016 and the S.O.A.F, the first respondent had admitted a number of the alleged contraventions, including underpayments of two of the Employees concerned (i.e. Mr Tan & Mr Gagate).
[1] see Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2017] FCCA 416 for detail
However the respondents otherwise maintained the defence in relation to the remainder of the alleged contraventions. Those issues (which will be identified with particularity later in these reasons) included, inter alia, the award coverage of two of the Employees (Ms Monleon & Ms Virata), the alleged underpayment of those two employees, and alleged unlawful adverse action by the first respondent against two of the Employees. Additionally, the second and third respondents denied that they were “involved” in alleged (and also some admitted) contraventions within the meaning of s.550 of the FW Act.
There had been directions made for the trial to proceed in two stages, with the factual and legal matters still in dispute and any findings of contravention as a result of this to occur first. It was agreed that the issue of any necessary declarations and penalties in respect of those contraventions, either admitted or found proved would be addressed at the second stage.
Pursuant to orders made 10 March 2017, the proceedings were listed for trial beginning 2 August 2017. Mr Avallone of Counsel appeared on behalf of the applicant and Mr Albert of Counsel appeared on behalf of all three respondents. Over the course of 2 and 3 August 2017, the applicant led evidence from its witnesses[2], all of whom were all cross examined. Also, and by agreement of the parties, the respondents’ interposed a number of their witnesses some of whom gave evidence via video link and were cross examined.[3] In doing so, Counsel for the respondents’ made plain his clients’ had yet to open their case.
[2] Lara Hurrell, Ms Maricar Virata, Mr Rolando Gagate, Ms Rhea Monleon & Mr Michael Tan.
[3] Ms Claudia Provenzano, Ms Agnes Monro, Mr Jim Stampton, Mr Christopher Smith & Ms Kelly Lee.
At the close of the applicant’s evidence Counsel for the respondents indicated he wanted to make a further application. As this was without notice to the applicant and the Court, not contemplated in any of the existing orders and directions (which had seen the respondents file detailed affidavit material) and the nature of the proposed application appeared to raise issues on which the applicant needed to get instructions, the trial was adjourned part heard.
On 23 August 2017, an application in a case was subsequently filed on behalf of the second and third respondents and it was listed to 1 November 2017. At that hearing on 1 November 2017, Mr Albert of Counsel appeared on behalf of the respondents’ with Mr O’Grady QC and Mr Avallone of Counsel appearing on behalf of the applicant.
For the reasons set out in Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No.2) [2017] FCCA 2759 on 14 November 2017 the application in a case was dismissed and the trial was listed to resume on 19 February 2018.
When the trial resumed on 19 February 2018, Mr Avallone of Counsel appeared on behalf of the applicant and Mr Albert of Counsel then announced an appearance on behalf of the first respondent only. Ms Kapitaniak of Counsel appeared on behalf of the second and third respondents. Counsel and their instructing solicitors assured the Court they didn’t believe these changes and their arrangements for receiving instructions posed any difficulties and wasn’t opposed by the applicant.
Prior to the resumption of the trial, the parties had agreed on a timetable to deal with the issue of whether the applicant should have its costs for the second and third respondent’s application in a case. On 21 February 2018 and for the reasons set out in Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2018] FCCA 508 the Court dismissed that application for costs.
Over the course of 19 & 20 February 2018, the first respondent opened its case and led evidence from the remaining witnesses, all of whom were cross examined.[4] On 20 February 2018, and after Counsel for the second and third respondents confirmed no evidence would be called from the third respondent, the second respondent gave evidence and was cross examined.
[4] Mr Anthony Trimble, Mr Darren Ryan & Ms Melinda Ryan.
During the course of that cross examination, Counsel for the second and third respondents having objected to a particular line of cross examination sought a certificate for the second respondent pursuant to s.128 of the Evidence Act 1995 (Cth). The evidence for which Counsel sought a certificate was all questions asked in cross examination in relation to the duties of the Employees during the period of their employment, and negotiations (all communications) of duties, in relation to the commencement of the employment. Counsel for the applicant accepted that in all the circumstances the Court could be satisfied there were reasonable grounds for the objection made and after the terms were explained to him and the certificate was issued the cross examination of the second respondent continued to its conclusion the following day.
At the conclusion of the evidence on 21 February 2018, the parties agreed on a timetable for the filing of written submissions in light of the evidence and the matter was adjourned to 17 May 2018 to hear any final submissions from the parties. An amended SOAF was also filed on 2 March 2018 which is Annexure A to these reasons. This was necessary as between August 2017 and the resumption of the trial in February 2018 the first respondent made two further admissions in relation to contraventions concerning Ms Virata.
Finally after the parties had filed submissions in accordance with the abovementioned timetable, on 17 May 2018 there was a further opportunity for the issues canvassed therein to be ventilated before the Court reserved its decision.
At this point it is timely to note that in the amended SOAF, certain admissions were made by the first respondent and the legal and factual matters still in dispute, to which the Court will turn presently, were identified. It was agreed by virtue of the above matters, that each of the second and third respondents were responsible for the:
a)overall direction, management and supervision of the Business in relation to industrial instruments and arrangements, setting and adjusting pay rates, and determining wages and conditions of employment;
b)payment of wages to each of the Employees on behalf of the first respondent;
c)financial management of the Business; and
d)engagement of the Employees in the Business.
It was also agreed that the second respondent at Halls Gap and the third respondent at Taree and Queanbeyan respectively were responsible for:
a)setting rates of pay;
b)facilitating the payment of wages to the Employees; and
c)entering data into the payroll system of the first respondent.
Furthermore, it was agreed that each of the second and third respondents was:
a)a person who authorised decisions regarding the first respondent’s operations including the employment of the Employees and employee entitlements;
b)aware of the nature of the work and duties performed by each of the Employees; and
c)a person to whom each of the Employees reported during their respective periods of employment with the first respondent.
Finally, the parties also agreed, that at all relevant times and the conduct of each of the second and third respondents was within the scope of his/her actual or apparent authority.
It was agreed by reason of s.793(2) of the FW Act, the second and third respondents were deemed a person whose state of mind was the state of mind of the first respondent for conduct engaged in, within the scope of each of their actual or apparent authority.
Against that background, it is timely to turn to the issues to be determined, as they were identified in the amended SOAF. In doing so it is important to note Annexure B to these reasons identifies, by reference to the allegations made in the statement of claim, the position of the parties in relation to liability on those remaining issues.
Issues to be determined
In the amended SOAF, it was agreed the questions that needed to be determined (the remaining issues in dispute) at the first stage were:
a)what additional duties were performed by each of Ms Virata and Ms Monleon;
b)whether the employment of each of Ms Virata and Ms Monleon was covered by the Modern Award and what was their proper classification;
c)whether Ms Virata and Ms Monleon were entitled to overtime under the Modern Award;
d)whether Ms Virata and Ms Monleon were eligible for the overnight stay allowance under the Modern Award;
e)whether Ms Monleon was eligible to receive penalty rates under the Modern Award;
f)whether any additional hours that were worked by each of the Employees, were unreasonable;
g)whether there was a failure to comply with rostering obligations under the Modern Award;
h)whether there were any record keeping contraventions;
i)whether there was adverse action taken by any of the respondents against Ms Monleon and/or Mr Tan; and
j)whether either of the second and third respondents were accessorily liable for contraventions of the first respondent.
Evidence of witnesses
The onus of proofin relation to the remaining issues in dispute in these proceedings is on the applicant[5]. The burden of proof is on the balance of probabilities[6]. While the proceedings are civil in character, they are nonetheless penal. Thus, although the applicant must prove the elements of the contraventions on the balance of probabilities, the Court must take into account the nature of the cause of action, the nature of the subject matter of the proceeding and the gravity of the matters alleged[7]. The allegations against the respondents are serious. It follows that any evidence establishing the alleged contraventions by them must be cogent and not be produced by “inexact proofs, indefinite testimony or indirect references”[8].
[5] The applicant accepted the approach to the burden of proof referred to in Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034 at [227] applied. See also generally Transport Workers' Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCCA 4 at [16]. However see these reasons & issue of adverse action regarding s.361 FW Act
[6] Evidence Act 1995 (Cth) (Evidence Act), s.140(1)
[7] Evidence Act, s.140(2)
[8] see LHMU v Arnotts Biscuits Ltd [2010] FCA 770; (2010) 188 FCR 221 at [13] (Logan J)
In closing submissions before the Court Counsel for the respondents submitted that for the applicant to succeed on the agreed issues for determination would require the Court to take leaps from scarce, absent or contrary evidence to finite conclusions that the evidence didn’t support.
The Court’s assessment of the evidence, and that of the witnesses for each of the parties, is also said to be important in determining the remaining issues in dispute. Counsel for the respondents submitted that when the precise allegations made in the statement of claim on those issues were measured against the evidence, the applicant could not succeed. In addition to the matters set out above, if it is accepted that the evidence of the respondents’ witnesses should be preferred over that of the applicant, then the respondents submit that the Court cannot be satisfied to the civil standard that the applicant has made out its case.
The applicant’s submissions filed after the trial on 27 March 2018 noted the evidence given by each of Ms Virata and Ms Monleon and submitted, to the extent it was not challenged in cross examination, that it should be accepted and preferred over contradictory evidence given on behalf of the respondents.[9] The respondents’ closing submissions filed 30 April 2018 took issue with this assertion.[10] The rule in Browne v Dunn (1893) 6 R 67 does not require matters to be put if adequate notice of them has been given in documents filed before the trial.[11] I am satisfied that was the case here.
[9] see para para [12] to [13] of submissions filed 27 March 2018
[10] see para 3 of submissions filed 30 April 2018
[11] see New South Wales Police Force v Winter [2011] NSWCA 330 at [81]
There were numerous facts and matters raised by the parties in these proceedings. The affidavit material is lengthy and covers a significant period of time. I do not intend to recite all of the evidence that was presented at the trial although all of that evidence has been considered and taken into account so far as it is relevant to deciding the issues the parties agreed were before the Court for determination. In order to do justice to the written submissions filed by the parties, and as they helpfully set out the issues and the position of the parties or otherwise where indicated accurately summarised the evidence, it will be necessary to refer to those submissions in detail later in these reasons.
For convenience, and to make these reasons easier to follow, it is timely to express some conclusions about the witnesses at the end of my summary of their evidence. In doing so I reiterate that these conclusions have been reached mindful of the burden of proof, having considered all of the evidence, with the benefit of the transcript of the evidence, in the context of the parties respective submissions and as that evidence compares to evidence given initially by affidavit.
Against that background, and before turning to set out what is a summary of the evidence given by the witnesses in these proceedings, the comments in Ray v Radano[12] by Sheldon J at [480] are apposite:
“No doubt in the house of perjury there are many mansions, but few would be as frequented as the courts in which embittered parties contest claims for past remuneration after severance of employment.”
[12] [1967] AR (NSW) 471
The applicant’s witnesses
Inspector Lara Hurrell
Inspector Lara Lee Hurrell gave evidence and was cross examined. Inspector Hurrell adopted her affidavit filed 3 February 2017 and marked exhibit A10. Inspector Hurrell was able to identify and explain the basis for the calculations that had been done by (and on behalf of) the applicant and what information was obtained during the course of its investigation into the allegations against the respondents.
Inspector Hurrell was confronted in cross examination with documents from the Business (i.e. the log on & log off records from the Choice Advantage system) but made clear that in her opinion those documents, which hadn’t been provided by the respondents previously, were not a good proxy for start and finish times for either Ms Virata or Ms Monleon. Inspector Hurrell’s evidence in cross examination was that on the basis of all the information gathered during the applicant’s investigation into the Business her opinion was that other information was more persuasive.
When asked about the calculations done by the applicant as to the hours worked by the Employees Inspector Hurrell rejected the suggestion put to her in cross examination that it was “glorified guesswork” and reiterated in re-examination the respondents had not provided time and wages records. However Inspector Hurrell during the course of cross examination on 2 August 2017 had agreed her material (and calculations) and her view as to the hours worked had been prepared without there being rosters for some of the sites, records of time taken doing various duties (e.g. housekeeping) and all without any allowance (due to seasonal fluctuations) to the hours that were required by the first respondent.
In closing submissions filed 27 March 2018 the applicant addressed what was said to be Inspector Hurrell’s evidence, acknowledged she had to go through a process of “reconstructing” the hours worked based on available evidence but submitted the Court should accept her evidence of the hours and days worked by Ms Virata and Ms Monleon as accurate.[13]
[13] see paras 4 to 10 of submissions filed 27 March 2018
In written submissions filed 30 April 2018 the respondents roundly criticised the evidence relied on by the applicant from Inspector Hurrell on the grounds it was flawed for being hearsay, inconsistent, uncorroborated, created after the fact and selective.[14]
Mr Peter Smith
[14] see paras 25 to 32 of submissions filed 30 April 2018
The applicant relied on the affidavit of Mr Peter Smith filed 3 February 2017. Mr Smith deposed that he was the Assistant Team Leader of the applicant’s ‘Calculations Team’. Mr Smith was not required for cross examination.
Mr Smith deposed to his involvement in the investigation and the process involved in preparing the calculations the applicant relied on of the hours allegedly worked and entitlements owed to the Employees.
Ms Maricar Virata
Ms Maricar Virata gave evidence and was cross examined. Ms Virata adopted her affidavits filed 3 February 2017 (exhibit A4) and filed 9 May 2017 (exhibit A7). Ms Virata deposed she found it difficult to understand some English vocabulary and (Australian) slang.
In her affidavit (which like all the affidavits upon which the applicant relied had been prepared for the deponent with help by officers of the applicant) Ms Virata acknowledged that in October 2012 she received a letter of offer of employment from the first respondent for the position of “Motel Manager” with an annual remuneration based on a 40 hour week of $55,000 plus superannuation.
Ms Virata acknowledged that along with her partner Mr Gagate, they came to Australia on a visa sponsored by the first respondent, and worked for the Business during the periods and at the locations identified in paragraphs 9 & 11 above. Ms Virata deposed in her affidavit that she had to “operate” the motel at Halls Gap.[15] Whilst Ms Virata referred to rosters, event sheets and accommodation reports in her affidavit[16] she deposed there was “not a record of each of the hours [she claimed she] worked.”
[15] see paragraph 91 Exhibit A4
[16] see Annexure MMV-13 to Exhibit A4
Ms Virata deposed to her “main role” being in reception but also acknowledged working in Darcy’s Bar & Restaurant, the Morningside Café, housekeeping and gardening along with setting up for functions and after-hours guest assistance. In her affidavit filed 9 May 2017 (exhibit A7) Ms Virata admitted she “monitored” and “oversaw” staff and that she also trained staff and called them in as required. Ms Virata also admitted to changing room rates and collecting “timecards” from staff.
Ms Virata confirmed in her evidence before the Court that she had completed paperwork for her visa making clear she was to be employed as a motel manager. When challenged about the veracity of the claims she made regarding hours worked Ms Virata said the documents she had provided to the applicant during its investigation represented a “conservative summary of the days” worked at the Halls Gap motel run by the Business between February 2013 and July 2014.
In answer to questions in cross examination Ms Virata maintained she worked long hours and her answers in relation to questions about the duties she performed and work she carried out demonstrated she believed she deferred to the second respondent and was not a manager.
Despite the basis upon which she was employed, Ms Virata’s evidence in cross examination did not elicit an admission that she regarded herself as a manager (at least all the time). However Ms Virata did admit, inter alia, that she dealt with complaints in the second respondent’s absence.
When confronted with the records from the Choice Advantage system operated by the first respondent Ms Virata did not agree it showed an accurate record of hours worked. Ms Virata’s evidence was it simply showed what time she used the system. When challenged in cross examination about the hours she claimed to have worked Ms Virata rejected the allegation put to her that this was an “exaggeration” and maintained it was a “very conservative” claim and didn’t include hours when she had to get up in the middle of the night.
Mr Rolando Gagate
Mr Gagate adopted his affidavit filed 3 February 2017 (exhibit A8). Mr Gagate deposed that his ability to read English was average and he had difficulty understanding English. This accorded with my assessment of him in the witness box during cross examination.
Mr Gagate deposed in affidavit to his claims regarding his hours of work and the duties performed at Halls Gap. Mr Gagate’s evidence in his affidavit about his hours of work was given at a general level. Bearing in mind he worked at Halls Gap for almost 18 months it is noteworthy Mr Gagate did not depose in detail to his hours of work on a week by week basis.
Mr Gagate denied the allegations put to him in cross examination that the hours he and Ms Virata claimed to have worked were an exaggeration. Mr Gagate, who was also Ms Virata’s partner at the time, did admit that they shared responsibility for night duty.
Mr Michael Tan
Mr Tan gave evidence via video link and adopted his affidavits filed 3 February 2017 (exhibit A11) and 9 May 2017 (exhibit A12). Mr Tan deposed that his ability to read and speak English was average and this accorded with my assessment of him in the witness box.
In relation to his time when working at Taree, Mr Tan’s evidence in his affidavit made clear Ms Monleon “explained” what he had to do. In his affidavit evidence Mr Tan also made clear it was Ms Monleon who “directed” and liaised with the directors of the first respondent.[17]
[17] see Exhibit A11
Mr Tan who was Ms Monleon’s partner at the time gave evidence in cross examination of the hours he observed Ms Monleon work when they were based at, inter-alia, Taree and Queanbeyan. Mr Tan was asked whether he disagreed with Ms Monleon’s evidence regarding her hours of work and said he did.[18] His estimate was greater.
[18] see transcript 3 August 2017 p113 at line 38
In his evidence in cross examination Mr Tan said he had no recollection of threats made to him by the third respondent regarding under recording hours and hadn’t overheard the phone call between Ms Monleon and the third respondent when the other threat was made.
Ms Rhea Monleon
Ms Monleon gave evidence and was cross examined. Ms Monleon adopted her affidavits filed 3 February 2017 (exhibit A9) and 9 May 2017 (exhibit A10). Whilst Ms Monleon deposed she could speak, read and write English well my impression having observed her closely in the witness box was there were limits to this professed ability.
Ms Monleon acknowledged that in January 2012 she received a letter of offer of employment from the first respondent for the position of “Motel Manager” with an annual remuneration, based on a 38 hour week of $55,000 plus superannuation. Ms Monleon acknowledged that along with her partner Mr Tan, they came to Australia on a visa sponsored by the first respondent and worked for the Business during the periods and at the locations identified in paragraphs 8 & 10 above.
Ms Monleon deposed to her duties on reception, whilst waitressing, doing the laundry and housekeeping as well as after-hours guest assistance whilst at Halls Gap. Ms Monleon also deposed to her duties at Taree and Queanbeyan. In her affidavit filed 9 May 2017 (exhibit A10]) Ms Monleon admitted calling in staff and organising staff to do inter alia the housekeeping whilst at Halls Gap. In relation to her time at Queanbeyan Ms Monleon acknowledged she had authority to make purchases and order supplies for the Business as well as set room rates.
Whilst Ms Monleon deposed generally to the variation in the hours she said she worked when at Halls Gap, Taree, Queanbeyan and then again at Halls Gap, it was only in relation to her time at the latter, that she kept a record of “each shift”.
In answer to questions in cross examination Ms Monleon’s evidence was she had worked “really long” hours when based at Taree and Queanbeyan and didn’t work as long when at Halls Gap. Ms Monleon’s evidence in cross examination went to the duties she performed in Taree, Queanbeyan and Halls Gap and when at the latter, she didn’t “tell anyone” where to work.
Ms Monleon agreed she had used the Choice Advantage system but was insistent it only showed hours when at reception and didn’t cover all the duties she carried out. Ms Monleon was asked in cross examination whether she believed she was a manager and was taken to the paperwork associated with her visa application. Ms Monleon’s evidence made clear she agreed that she had said she was a motel manager and that was what was on paper but she believed she took direction from the second and third respondents and didn’t believe she was a manager.
Ms Monleon was asked in cross examination about the allegations of adverse action by the third respondent and it will be necessary to return to her evidence on this in detail later in these reasons. Ms Monleon was told about Mr Tan’s evidence before the Court that he had not said they were threatened by the third respondent and didn’t insist otherwise.
In re-examination Ms Monleon elaborated on the duties she performed, how and why they differed between Queanbeyan, Taree and Halls Gap and made clear she said she always took direction from the second and third respondents.
Observations on the applicant’s witnesses
Whilst each of Ms Virata, Ms Monleon, Mr Gagate and Mr Tan presented as witnesses who were trying to do their best to assist the Court they appeared to have an imperfect grasp of the subtleties of the English language or at least Australian vernacular, limited understanding of the process and at times were prone to a subjective reconstruction of events looked at through the rear view mirror of unsatisfied expectations.
The evidence of Ms Virata, Mr Gagate, Mr Tan and Ms Monleon suffered at times in so far as it was necessary for questions to be repeated many times in order that the question could be understood. This may have been a factor of their non-English speaking backgrounds, their lack of recollection of events many years ago, alternatively, simply a factor of the ordeal of giving evidence or a combination of all of the above. Nonetheless it did leave the impression they weren’t entirely sure of their evidence at times which was unfortunate.
Having seen the applicant’s witnesses I accept the point made in written submissions on behalf of the respondents that the evidence of Ms Virata, Ms Monleon and their former partners (Mr Gagate and Mr Tan) was prone to exaggeration. It will be approached accordingly.
One example of this tendency was Mr Gagate’s claim in cross examination that he worked 18 hours a day. The evidence given by the Employees was also on occasions inconsistent with each other. One illustration of this was the disjunct in the evidence given by Ms Monleon and Mr Tan on working hours generally at Queanbeyan. Ms Monleon’s evidence in cross examination was she stayed at reception the whole time whilst when Mr Tan was asked a similar question his evidence was they stayed in the motel most of the time.[19]
[19] see Transcript 3 August 2017, P157, line 38 and P115, line 11 respectively
In relation to the evidence of Inspector Hurrell and Mr Smith, and for reasons to which I will return later in these reasons for decision, they each faced forensic challenges. At this stage it suffices to note that not surprisingly, or in any way being critical of them, the latter’s evidence depended entirely upon the instructions and assumptions of the former. It is also important to note that the respondents’ excoriating criticisms of Inspector Hurrell’s evidence would be easier to digest had her task not been made harder by their failure to keep time and wages records (at least for Mr Gagate & Mr Tan).
Leaving aside the issue of the evidence of the two aforementioned witnesses, in relation to the applicant’s case more generally I am mindful of the frailties of human recollection under the pressures of litigation and the difficulties which affidavits, particularly those exhibiting a formulaic quality can present.[20] I take into account these matters in weighing the evidence on the remaining issues in dispute, mindful that the burden of proof fell to the applicant to make out its case by way of evidence capable of persuading the Court of the facts in issue to the requisite standard.
[20] see Watson v Foxman (2000) 49 NSWLR 315 at [319]
The respondents’ witnesses
Ms Claudia Provenzano
Ms Provenzano was interposed as a witness for the respondents, gave her evidence via video link and adopted her affidavit filed 31 March 2017 (exhibit R1). Ms Provenzano, who worked as a receptionist gave evidence that Ms Virata and Ms Monleon had lived on site at Halls Gap, were present even when they weren’t working (including on their days off), were observed (by her) managing every department (at Halls Gap) and did so even when the second respondent was present.
Ms Provenzano gave evidence in cross examination about her involvement at Halls Gap and admitted she didn’t follow either Ms Virata or Ms Monleon when they were doing housekeeping and they didn’t supervise her. In relation to her time at Halls Gap when Ms Virata or Ms Monleon were there Ms Provenzano’s evidence was that she saw them doing duties in all departments, overseeing staff and that in her opinion they “ran the motel” and were “responsible for the motel generally”.
Ms Provenzano has not been employed by the first respondent for some time and I was given no reason not to accept her evidence.
Ms Agnes Monro
Ms Monro also gave evidence via video link and adopted her affidavit filed 31 March 2017 (exhibit R2). Importantly, Ms Monro who was a housekeeper gave evidence that Ms Monleon was her “manager” when she worked at Queanbeyan.
Ms Monro said in cross examination she worked in housekeeping at Queanbeyan and worked “alongside” Ms Monleon and Mr Tan. Ms Monro also gave evidence about pictures she had of inter alia trips she had taken when they were all at Queanbeyan. In re-examination Ms Monro gave evidence she “lost count” of the number of time she’d seen Ms Monleon leave the Queanbeyan site.
The evidence of Ms Monro in relation to her observations of Ms Monleon and Mr Tan had the ring of veracity to it. As the respondents noted in final submissions Ms Monleon and Mr Tan kept up a lively social life at Queanbeyan yet Ms Monleon told the applicant whilst she was there she had no days off.
Mr Jim Stampton
Mr Stampton gave evidence via video link and adopted his affidavit filed 31 March 2017 (exhibit R3). Mr Stampton, who said he was a marketing consultant, explained he visited the Queanbeyan site monthly and had done so when Ms Monleon and Mr Tan worked there. Mr Stampton deposed he had identified Ms Monleon as the manager at Queanbeyan and had understood she had held the same position previously at Taree.
Mr Stampton’s evidence was that between July 2013 and September 2014 he visited Queanbeyan 8 times but saw Ms Monleon only twice. Mr Stampton’s demeanour left the clear impression, as he’d been told by the second respondent she was managing the property for him, this wasn’t satisfactory.
Mr Stampton admitted in cross examination he didn’t know what Ms Monleon’s duties were but would say she was a manager even if he hadn’t been asked. Mr Stampton was asked in re-examination why that was the case. He made clear in his response that his view was Ms Monleon was “looking after” Queanbeyan for the second respondent.
Given the strident nature of his presentation in the witness box, his self-proclaimed long standing business association with the respondents along with the unprompted evidence he gave in cross examination there is reason to approach his evidence cautiously.
Mr Christopher Smith
Mr Smith, who worked as a driver for Capital Linen and delivered supplies to Queanbeyan whilst Ms Monleon worked there, adopted his affidavit filed 19 April 2017 (exhibit R4). Mr Smith deposed he had been told Ms Monleon was the manager. Mr Smith explained in his evidence before the Court his observations when he attended at Queanbeyan. Mr Smith corroborated the evidence given by Ms Monro (as to Ms Monleon’s role at Queanbeyan). However, Mr Smith made clear he wasn’t in a position to say unequivocally what was going on at Queanbeyan as he didn’t go to reception.
Mr Smith’s evidence was given in a direct and straightforward manner, he had no apparent reason to give anything other than objective evidence and I have no hesitation in accepting his evidence.
Ms Kelly Lee
Ms Lee gave evidence and adopted her affidavit filed 31 March 2017 (exhibit R5). Ms Lee gave evidence of the work she did including working on reception and when required working in the restaurant at Halls Gap. Ms Lee gave evidence that during her time there Ms Virata was “higher management” and that Ms Virata was the manager
However Ms Lee’s evidence in re-examination made plain the second respondent had told her Ms Virata was to be a manager. Ms Lee’s evidence also made clear the second respondent was actively involved when he was at Halls Gap including doing such things as calling staff in to do shifts in the restaurant.
Mr Anthony Trimble
Mr Trimble gave evidence and adopted his affidavit filed 31 March 2017 (exhibit R6). Mr Trimble deposed that he is the chef employed at the Halls Gap motel and gave direct evidence about his role and interaction with other staff members.
Mr Trimble’s evidence in cross examination made clear he ran the restaurant at Halls Gap answering only to the second respondent. Mr Trimble’s evidence reinforced the impression left by all the witnesses that the second respondent was a very ‘hands on’ owner. Mr Trimble’s evidence also made clear he couldn’t vouch for when others were on reception or working in housekeeping as Ms Virata and Ms Monelon had done at various times. He did acknowledge that they had assisted when required in the restaurant as part of the “on site crew”. Mr Trimble presented as a conscientious witness who did not overstate his evidence, was quite firm in the way he recounted matters of which he had a clear recollection and I accept his evidence.
Mr Darren Ryan
Mr Ryan gave evidence and adopted his affidavit filed 31 March 2017 (exhibit R7). In his evidence in cross examination it was made clear that Mr Ryan, who did maintenance and handyman jobs at Halls Gap, observed Ms Virata or Ms Monleon working in all areas and “training” other employees in housekeeping. Moreover Mr Ryan’s evidence was consistent with the evidence given by other witnesses that whoever was part of the “on site crew” was involved right across the site as and when required.
Like his partner, and the next witness to which I will turn Mrs Ryan, he is still employed by the first respondent. Mr Ryan’s presentation in the witness box left the clear impression he had a personal (and adverse) view about the claims made by Ms Virata and Ms Monleon and the applicant generally. Whilst he was not a reticent or unco-operative witness I was left with the impression he was careful to ensure his evidence was consistent with the first respondent’s case.
Mrs Melinda Ryan
Mrs Ryan gave evidence and adopted her affidavit filed 31 March 2017 (exhibit R8). Mrs Ryan deposed that she had been working at the Halls Gap motel since 2010 and was the conference and events co-ordinator. Mrs Ryan also deposed to what tasks she observed Ms Virata carry out when she was working there.[21]
[21] see para 8 Exhibit R8. This evidence wasn’t denied by Ms Virata. Instead in her affidavit in reply Ms Virata sought to downplay the import and nature of the tasks she carried out (see Exhibit A7)
Mrs Ryan’s evidence in cross examination made plain she had on occasion instructed staff (new hires and casuals) in areas of the operation at Halls Gap. Mrs Ryan’s evidence also reinforced the evidence given by a number of witnesses that those who worked on reception (as Ms Virata and Ms Monleon did) had limited discretion (circumscribed by procedures of the first respondent) and were regarded as part of the “on site crew”.
However in this regard Mrs Ryan’s evidence was noteable as she indicated she had on occasion had to ask either Ms Virata or Ms Monleon to help even on their days off. Mrs Ryan admitted she wasn’t in a position to dispute the claims made by Ms Virata about working on weekends, public holidays or after the restaurant had closed.
Importantly and consistent with the evidence given by Ms Virata and Ms Monleon Mrs Ryan’s evidence made clear the Choice Advantage system was not a “good proxy” for hours of work as her evidence made clear it was possible to be logged in under one name and stay logged in even though different people may have taken over. Indeed Mrs Ryan admitted in her evidence this was “common practice”.
Mrs Ryan who is still employed by the first respondent, and like many of the witnesses it relied on, in her presentation before the Court did little to conceal her distaste for the claims made by the applicant on behalf of the Employees, particularly Ms Virata and Ms Monleon. However, she gave what was in my assessment honest and forthright evidence to the best of her recollection and I have no reason to reject it.
The second respondent
The second respondent was called to give evidence, he adopted his affidavit filed 6 April 2017 (exhibit R9) and was cross examined. The second respondent’s cross examination, as detailed earlier, continued with the protection of a certificate.
The applicant’s closing submissions filed 27 March 2018 addressed the second respondents evidence, noted it demonstrated his “overall level of control and decision making across the three motels” and asserted his evidence did not “disturb” the applicant’s pleaded case.
It is correct that the second respondent’s evidence did reinforce a conclusion available on the evidence about his “overall level of control”. In cross examination the second respondent agreed “the buck” stopped with him and the third respondent, that he took a keen interest in what was going on at each of the motels and that he was not an “absentee landlord”.[22]
[22] see transcript 20 February 2018, p139, line 21-32
Having observed the second respondent give evidence it was clear he was very careful in his answers to questions in cross examination. There were occasions when I was left with the clear impression the second respondent, even with the protection of a certificate, tailored parts of his evidence to suit his case and the case of the first respondent. An illustration of this tendency was his affidavit evidence, which he didn’t resile from before the Court, regarding his understanding of the FW Act which was clearly directed to minimise the case against him under s.550 and (on at least this issue for reasons to which I will return) strained the bounds of credulity.
The second respondent’s affidavit evidence was apparently inconsistent on this issue. On the one hand he deposed he “knew” employees had “rights and entitlements” but he also deposed he did not know “specifics”. He then deposed to being “familiar with…Awards and what is in them.”
In cross examination the second respondent was asked whether the transcript of his interview with the applicant in October 2014 was accurate and he agreed it was.[23] In that interview the second respondent had admitted he:
·understood the first respondent was covered by the Modern Award;
·understood what awards (such as the Modern Award) were and that they provided terms and conditions of employment;
·understood there were different (wage) loadings for different hours of work including on weekends and public holidays;
·hadn’t provided pay slips; and
·entered information into the first respondent’s wage system to generate the wages that were paid to the Employees.[24]
[23] see Transcript 20 February 2018, P136 line 28-29
[24] see CB 452-459, Tab 30 to Exhibit LLH1 to Inspector Hurrelll’s affidavit
Contrary to the impression created by the second respondent’s affidavit that the first respondent had “re-joined” the AHA “as a result of this case”[25] the second respondent also admitted in that interview the first respondent was a member of the AHA, got regular information on the Modern Award and wages through that organisation and the wage software provider used by the first respondent, Wage Easy.
[25] see para 59 affidavit of second respondent filed 6 April 2017, Exhibit R9
The second respondent also gave evidence in cross examination that he was responsible for ensuring other casual staff engaged by the first respondent got what they were entitled to and he was aware of the Modern Award.[26] Finally I make clear the account of events given by the respondents, including the explanations proffered by the second respondent was challenged by the applicant.
The third respondent
[26] See Transcript 20 February 2018, P194 lines 33-34
Despite having filed an affidavit the third respondent was not called to give evidence. Counsel for the second and third respondents on 20 February 2018 advised the Court that as part of their case they would not be leading evidence from the third respondent, but beyond this went no further, and provided no explanation then nor was any provided in subsequent written or oral submissions.
In her closing submissions filed 27 March 2018 at paragraphs [28] to [30] the applicant invited the Court to draw an adverse inference from the absence of evidence from the third respondent.
The rule in Jones v Dunkel is that an unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party’s case (see Jones v Dunkel (1959) 101 CLR 298; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [63] (Heydon, Crennan and Bell JJ).
Whether the rule can or should be applied depends upon the satisfaction of three conditions, namely:
(a)the missing witness would be expected to be called by one party rather than the other;
(b)the witness’s evidence would elucidate a particular matter; and
(c)the witness’s absence is unexplained.[27]
[27] see Coles Supermarkets Australia Pty Ltd v Torney [2009] NSWCA 135 at [61] & BNMB Transport Pty Ltd v Mercedes-Benz Australia Pacific Pty Ltd [2018] FCA 223 at [89].
There had been an affidavit filed by the third respondent and the respondents’ written submissions filed before the trial indicated that evidence from the third respondent would go to, inter alia, the issue of the allegations made by the applicant about adverse action.
Ultimately at trial, and after separate Counsel had been engaged on behalf of the second and third respondents the latter’s absence was unexplained. It was for the respondents (or at least Counsel for the second and third respondents) who might have been expected to call the third respondent or to provide some explanation and there was none.[28] Finally, there is no basis for holding that the nature of the proceedings should be regarded as an explanation for the failure to give evidence.[29]
[28] Coles Supermarkets Australia Pty Ltd v Torney [2009] NSWCA 135 at [62]
[29] Adler v Australian Securities and Investments Commission [2003] NSWCA 131 at [649], [662-664]
It is well established that “when circumstances are proved indicating a conclusion and the only party who can give direct evidence of the matter prefers the well of the court to the witness box a court is entitled to be bold”.[30] The principle in Jones v Dunkel, as explained by Newton and Norris JJ in O'Donnell v Reichard [1975] VR 916 at 929,[31] applies to civil cases as well as criminal cases, “in particular cases where circumstances, capable of being explained or denied by an accused, point towards his guilt”.[32]
[30] Insurance Commissioner v Joyce [1948] HCA 17; (1948) 77 CLR 39 at 49 (Rich J); cited by Winneke P in Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 (Longmuir) at 131.
[31] Longmuir at 131 (Winneke P) and 138 (Tadgell JA).
[32] Longmuir at 132 (Winneke P).
As Mason CJ, Deane and Dawson JJ said in Weissensteiner v R. (1993) 178 CLR. 217 at 227:
“… it has never really been doubted that when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence.”
In Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd[2011] FCAFC 53 (13 April 2011) a Full Court of the Federal Court addressed the rule. At paragraph [79], the Full Court (Besanko, Perram and Katzmann JJ) held:
“It is accepted that where a party fails, without explanation, to call a witness who that party might have been expected to call and whose evidence might have elucidated the matter in dispute, then the inference may be drawn that the evidence of the absent witness would not have assisted the party that failed to call that witness: Jones v Dunkelat 308, 312 and 320-321. By itself that inference is frequently somewhat barren, for knowing that the evidence of a witness would not have assisted tells one nothing about what the witness’s evidence affirmatively would have been. Often more directly useful is the allied principle that in such a case the trier of fact may more confidently draw any inference unfavourable to the party that failed to call that witness if that witness appears to be in a position to cast light on whether the inference should be drawn: Jones v Dunkel at 308 per Kitto J, 312 per Menzies J, and 320-321 per Windeyer J. Neither inference is mandatory and, generally speaking, these inferences only become material where the balance of the evidentiary record is equivocal.”
A Jones v Dunkel inference allows for the more ready acceptance of evidence which might have been contradicted but which was not. What a Jones v Dunkel inference does not permit is a choice between two guesses or conjectures, nor does it supply missing gaps in evidence.
Finally I note in this context the decision in Director of Fair Work Building Inspectorate v McCullough [2016] FCA 1291 at [154] & [183] and I shall return to this issue later in these reasons where it is necessary to do so.
Consideration of the issues
Additional duties performed by each of Ms Virata and Ms Monleon
Before turning to the first issue in dispute (as identified in the Amended SOAF), being what additional duties were performed by Ms Virata and Ms Monleon (if any) during their employment with the first respondent it is important to note the following uncontroversial matters.
Ms Monleon was employed by the first respondent from November 2012 to January 2015 whilst Ms Virata was employed from February 2013 to July 2014. They each received a letter of offer for the position of “Motel Manager” with the first respondent and were paid an annual wage plus superannuation and lived on site.
Also there was no dispute that Ms Virata and Ms Monleon performed the following duties during their employment – reception, housekeeping, laundry, waiting tables, after-hours guest services including late check in and minor maintenance.
Beyond this, in submissions filed 5 July 2017, the applicant’s position on this issue was summarised at paragraphs [24] to [48]. The respondents’ position on this issue was set out at in paragraphs [8] to [18] of the submissions filed 14 July 2017. Whilst the applicant reiterated its position at paragraphs [9] to [10] in submissions in reply filed 21 July 2017.
Annexure B to the applicant’s submissions filed 5 July 2017 had set out (by reference to the affidavit material relied on) what was claimed to be the jobs, tasks or duties carried out by Ms Virata and Ms Monleon.
Essentially, the position of the applicant in those submissions was that the additional duties performed by Ms Virata and Ms Monleon were under instruction from the second and third respondent, did not require the exercise of discretion and had only limited authority.
Conversely, in the respondents’ submissions filed 14 July 2017 at paragraph [8] to [16] their position on this issue was to the effect that the additional duties performed by both Ms Virata and Ms Monleon were consistent with that of a manager, responsible for a significant area of operations of the Business and was indicative that they were both employed above the highest classification in the Modern Award.
The applicant’s closing submissions in reply also noted the evidence of the second and third respondents’ knowledge of the facts constituting the contraventions alleged and maintained the Court should be satisfied to the requisite standard they were “involved” in the contraventions.
In oral submissions Counsel for the applicant emphasised this was not a situation where the second and third respondents were “absentee landlords”. It was submitted given the evidence showed each of the second and third respondents kept “a hand on the tiller” the Court should be satisfied they were involved in the contraventions as alleged.
In oral submissions Counsel for the respondents submitted the applicant really “eschew” the requirement to make out on the evidence the actual knowledge of second and third respondents that was required to establish their involvement in the alleged contraventions.
Whilst Counsel for the respondents did not resile from the position that the second and third respondents ought to have known about the admitted contraventions by the first respondent, at one point it appeared that a submission was made that what the evidence demonstrated was a breach by negligence. However, Counsel subsequently sought to withdraw that submission[80] before subsequently “conditionally” conceding[81] that if the Court found there had been adverse action as alleged the third respondent should be held to have been involved.[82]
[80] see Transcript 17 May 2018, P66, Line 24-43
[81] see Transcript 17 May 2018, P68, line 38
[82] see Transcript 17 May 2018, P69, line 3
Approach to accessorial liability
Section 550(1) of the FW Act provides that a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
Section 550(2) of the FW Act defines when a person is involved in a contravention, relevantly:
“(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.”
Also relevant for the purposes of these reasons is s.793 of the FW Act which relevantly provides that any conduct engaged in or on behalf of a body corporate by an officer, employee or agent of the body within the scope of his or her actual or apparent authority is taken, for the purposes of the FW Act, to have been engaged in also by the body.
For the purposes of s.550 of the FW Act a person will be regarded as sufficiently involved in a contravention to invoke this provision if the person intentionally participated in the contravention. Intentional participation requires actual, rather than constructive, knowledge of the essential matters that make up the contravention, and a level of involvement: cf Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 670 (Mason ACJ, Wilson, Deane and Dawson JJ), 676 (Brennan J); Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 (“Giorgianni”) at 481-482 (Gibbs CJ), 494 (Mason J), 500 (Wilson, Deane and Dawson JJ); Gore v Australian Securities and Investments Commission [2017] FCAFC 13; (2017) 341 ALR 189 (“Gore”) at [6]-[16]. However, where there is a combination of suspicious circumstances and a failure to inquire, that may lead to an inference that the relevant person had actual knowledge of the essential matters that make up the contravention, which would be sufficient to attract liability: cf. Giorgianni at 504-505 (Wilson, Deane and Dawson JJ), cited in Gore at [169].
In Australian Building and Construction Commissioner v Parker [2017] FCA 564 Flick J at paragraphs [121] to [128] considered what “involvement in contravention” meant for the purposes of s.550 of the FW Act. In the course of that decision Flick J referred to the decisions in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365, Potter v Fair Work Ombudsman [2014] FCA 187, Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 and Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034.
In Australian Building and Construction Commissioner v Construction Forestry Mining and Energy Union [2018] FCA 42 the Federal Court considered the interaction between ss.550 & 793 of the FW Act. At paragraphs [46] to [58] the Federal Court, in light of the authorities, considered the liability of an individual as an accessory to a contravention by a body corporate whose liability arises by reason of the conduct of that individual being deemed to be the conduct of the body corporate.
Contrary to the submissions made on behalf of the respondents (before trial) [83] neither the decision in Giorgianni nor Yorke v Lucas required that it be proven that the alleged accessory (the second and third respondents) knew of the relevant legal provisions (which the respondents’ submissions referred to as “the contents of the [FW] Act”) which rendered the principal contravener’s conduct (the first respondent) unlawful.[84]
[83] see paragraphs [33] to [36] of submissions filed 14 July 2017
[84] see Gore v ASIC [2017] FCAFC 13 at [38]
What those decisions require is that the alleged accessory (the second and third respondents) knew the relevant factual matters leading to illegality. In this case the position of the applicant was that in relation to the second respondent, as the hands and the brains of the first respondent, it would be passing strange that he should not be answerable for the contraventions which he himself has perpetrated.
The applicant’s submissions filed 5 July 2017 summarised the matters the second and third respondents agreed with, agreed they ought to have known, had actual knowledge of or were wilfully blind to and/or were involved in.[85]
[85] see para [249] to [265] of submissions filed 5 July 2017
In the applicant’s closing submissions filed 27 March 2018 the second respondent’s evidence before the Court was chronicled at paragraphs [139] to [140].
Given the Amended SOAF, to paraphrase the approach taken in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 the essential facts amounting the first respondent’s contraventions of which the second respondent had to have actual knowledge were, given the findings already made in these reasons, that:
(a)Mr Gagate and Mr Tan were entitled to annual leave, minimum hourly rates, penalty rates and other loadings under the Modern Award along with the provision of rosters and records under same or the FW Regulations; and
(b)each of the Employees should have received a Fair Work Information Statement.
For the reasons set out above I am satisfied the second respondent knew the first respondent was covered by the FW Act, FW Regulations and the Modern Award. The second respondent knew the first respondent employed each of Mr Gagate and Mr Tan and the duties performed by each of them for the first respondent. The second respondent knew the Modern Award stipulated the minimum obligations mentioned in the preceding paragraph. The second respondent knew having processed the pays (to the extent that Mr Gagate and Mr Tan were paid) and implemented the processes by which the first respondent organised the work done by each of them of the hours and days on which work was performed. The second respondent given his role in organising the pay for the first respondent, knew the rates of pay paid (or not) to Mr Gagate and Mr Tan by the first respondent, that the Fair Work Information Statement was not provided to the Employees, that the records and rosters kept by the first respondent did not contain the requisite information and that pay slips were not provided.
Like the decision in Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034 the evidence was the second respondent operated and was aware of the (pay and working) system that produced the resulting contraventions by the first respondent. I accept the submissions of the applicant, so far as they are relevant, as to the evidence establishing the second respondent’s involvement at paragraphs [249] to [259] of the submission filed 5 July 2017.
On that basis, and subject to the findings made earlier in these reasons, I accept the applicant’s submission that a finding can be made the second respondent was involved in (i.e. had knowledge of, and was directly or indirectly knowingly concerned in) the first respondent’s admitted contraventions set out in Annexure B to these reasons for decision. Specifically those at items (b), (c), (e), (f), (g), (h), (i),(j),(k),(l),(m),(o),(p),(s), (t), (u), (v), (w) thereof (see paras 32 to 177 SoC).
Such a conclusion, given the second respondent’s involvement in the Business, is similar to the result arrived at in Fair Work Ombudsman v Ramsay Food Processing Pty Ltd [2011] FCA 1176 at [205] and Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833 at [124].
Next, given the third respondent was not called to give evidence the applicant’s closing submissions filed 27 March 2018 asked the Court to draw an adverse inference that her evidence would not have assisted the respondents because of that unexplained absence.[86]
[86] see para [28] to [30]
The applicant’s closing submissions also pointed to those matters that were agreed, agreed the third respondent was aware of or ought to have known, had actual knowledge of or at least was wilfully blind to.[87]
[87] see para [142] to [143]
In closing submissions filed 30 April 2018, and in oral submissions on 17 May 2018, Counsel for the respondents relied on the decision in Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99 (“Port Kembla”) at [460] per Rangiah J. As I understood the submission made it was to the effect that the decision of the Federal Court in that case stands for the principle that “in order for allegations of this kind to be proved, intentional or wilful blindness, a suspicion …even a deep suspicion is not enough.” [88]
[88] see Transcript 17 May 2018, P71, Lines 26-30
It is correct to say that s. 361(1) of the FW Act does not apply to an allegation of contravention of s.340 through the operation of s.550. However unlike the decision in Port Kembla in this case there was no evidence given by the third respondent denying that the reasons for the adverse action was for or included the prohibited reasons.
The applicant was required to prove that the third respondent was involved in the first respondent’s contraventions (as admitted and outlined in Annexure B or as otherwise determined in these reasons). There is also the operation of and interaction between ss.550 & 793 of the FW Act to consider in this context. As set out in Australian Building and Construction Commissioner v Construction Forestry Mining and Energy Union [2018] FCA 42 at paragraph [53] to [56], s.793 operates to deem the conduct of the third respondent to be that of the first respondent and there is no barrier to the third respondent also being held to be have been involved as an accessory to that same conduct.
There is no evidence of or reason why the third respondent did not give evidence. The third respondent could have given direct evidence of when and in what circumstances she spoke to Ms Monleon in relation to the first instance of adverse action and to Mr Tan in relation to the second instance of adverse action. The third respondent could have given evidence of her own subjective intention in that regard. The third respondent could have given evidence about what went on in both conversations. Further the third respondent could have given evidence which sought to explain the body of evidence relied on by the applicant from Ms Monleon and Mr Tan as to her involvement in both instances. She did not.
In Prentice v Cummins (No.5) [2002] FCA 1503 having considered relevant authority it was said at [114]:
“As a matter of principle, it is difficult to understand why, in such a case, once the respondents have made the election not to call evidence, the material to be taken into account should not include any inferences that may be available on the principle of Jones v Dunkel [1959] HCA 8: (1959) 101 CLR 298 by reason of their failure to call evidence. The respondents, by their election, have chosen to adduce no evidence to support their case.”
This statement was referred to in Fair Work Ombudsman v Offshore Marine Services Pty Ltd(No.2) [2013] FCA 943 at [128] and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25 at [165] to [166].
Taking into account the admissions made in these proceedings (in the Amended SOAF) and s.140 of the Evidence Act, I consider the evidence before the Court (including the inferences open to be drawn from that evidence) establishes that the third respondent had knowledge of, and was directly or indirectly knowingly concerned in, the essential elements of each of the two separate instances of adverse action by the first respondent referred to earlier in these reasons.
This case is different to Port Kembla. Given the unexplained absence of the third respondent, who (as a party witness) did not give evidence to contradict the evidence relied on by the applicant as to her involvement in the instances of adverse action, I am satisfied given the Amended SOAF, and subject to the findings made earlier in these reasons, she was involved in the first respondent’s contraventions at items (q) & (r) set out in Annexure B to these reasons. Beyond this, given on the evidence of the role of the second respondent as the “guiding mind” of the first respondent I am not satisfied as to her involvement in the other contraventions admitted by (or otherwise established in these reasons against) the first respondent.
Conclusion
The parties are directed to confer and, if possible, bring in a minute of proposed orders to be made to give effect to these reasons for decision within 14 days. If the parties do not agree on the orders which should be made in accordance with these reasons for decision, then the matter will be listed 21 days thereafter to make orders to give effect to these reasons for decision.
The remainder of the proceedings will be adjourned to a date to be fixed to program the further conduct of the proceedings in relation to the penalty if any that should be imposed on the respondents for the breaches of the FW Act referred to in these reasons for decision and the Amended SOAF filed 2 March 2018.
I certify that the preceding three hundred and sixty eight (368) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Associate:
Date: 20 July 2018
ANNEXURE A
ANNEXURE B
6
33
6