Fair Work Ombudsman v Ozkorea Pty Ltd - [2018] FCCA 2350

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v OZKOREA PTY LTD & ORS

[2018] FCCA 2350

Catchwords:
INDUSTRIAL LAW – Contraventions of the Fair Work Act 2009 – Contraventions of the Fair Work Regulations 2009 – failure to pay minimum entitlements under the Cleaning Services Award 2010 – failure to pay minimum wage under Award – failure to keep records – ACCESSORIAL LIABILITY – whether head contractor knowingly concerned with contraventions – knowledge of essential elements of facts going to contravention – knowledge of Award – no knowledge of exact wages paid necessary – actual knowledge imputed – accessorial liability established.

Legislation:

Fair Work Act 2009 (Cth), ss.535(1), 535(2), 536(2), 550, 550(1), 550(2)(c) 793

Fair Work Regulations 2009 (Cth), regs.3.44, 3.44(6)

Federal Circuit Court Rules 2001 (Cth), r.1.05(2)

Federal Court Rules 2011 (Cth), rr.16.02, 16.04

Crimes Act 1900 (NSW) s.188

Cases cited:

ACCC v Giraffe World (No. 2) (1999) 95 FCA 1161
ACCC v IMB Group [2003] FCAFC 17
Banque Commerciale S.A., En Liquidation v. Akhil Holdings Ltd (1990) 169 CLR 279
Cai v Tiy Loy & Co Ltd (No.2) [2015] FCCA 2924
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55
EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134

Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034

Fair Work Ombudsman v No Brace Centre Pty Ltd & Ors [2010] FCCA 738
Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456
R v Raad [1983] 3 NSWLR 344

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

OZKOREA PTY LTD (ACN 603 658 804)

Second Respondent:

SUN GUN HWANG

Third Respondent:

PIONEER FACILITY SERVICES PTY LTD (ACN 163 765 9280)

Fourth Respondent:

PIONEER CONTRACTING SERVICES PTY LTD (ACN 164 009 036)

File Number:

LNG 31 of 2016 and LNG 32 of 2016

Judgment of:

Judge McNab

Hearing date:

4, 5, 6 and 7 December 2017

Date of Last Submission:

7 December 2017

Delivered at:

Melbourne

Delivered on:

24 August 2018

REPRESENTATION

Counsel for the Applicant:

Mr. Healy

Solicitors for the Applicant:

Office of the Fair Work Ombudsman

Counsel for the Respondents:

Mr. Snaden

Solicitors for the Respondents:

Robert James Lawyers

ORDERS

By 4.00pm on 28 August 2018, the Applicant submit a minute of orders giving effect to these reasons.
The parties confer for the purpose of agreeing on orders regarding the filing of any evidence and/or submissions regarding penalty and costs.
The proceeding be fixed for a penalty hearing on 5 October 2018 at 10.00am.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

LNG 31 of 2016 and LNG 32 of 2016

FAIR WORK OMBUDSMAN

Applicant

And

OZKOREA PTY LTD (ACN 603 658 804)

First Respondent

SUN GUN HWANG

Second Respondent

PIONEER FACILITY SERVICES PTY LTD (ACN 163 765 9280)

Third Respondent

PIONEER CONTRACTING SERVICES PTY LTD (ACN 164 009 036)

Fourth Respondent

REASONS FOR JUDGMENT

Introduction

This decision concerns two proceedings: LNG 31/2016 and

LNG 32/2016 which were heard together. Each of the matters concern alleged breaches of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FCCA 2350
Decision Date: 24 August 2018

CaseChat Overview and Summary

The Fair Work Ombudsman brought proceedings against Ozkorea Pty Ltd in the Federal Circuit Court of Australia, alleging contraventions of the *Fair Work Act 2009* (Cth) and the *Fair Work Regulations 2009* (Cth). The dispute concerned Ozkorea's failure to pay minimum entitlements to employees under the Cleaning Services Award 2010, specifically in relation to minimum wages, and its failure to keep proper records.

The central legal issue before Judge McNab was whether Ozkorea, as a head contractor, was knowingly concerned in the contraventions committed by its subcontractor. This required the court to determine the requisite level of knowledge for establishing accessorial liability under the *Fair Work Act*. Specifically, the court had to consider whether Ozkorea needed to have knowledge of the precise wages paid to the employees, or if knowledge of the essential facts giving rise to the contravention was sufficient.

Judge McNab found that Ozkorea was indeed knowingly concerned in the contraventions. The court reasoned that actual knowledge of the essential elements of the facts that constituted the contravention was sufficient to establish accessorial liability. It was not necessary for Ozkorea to have knowledge of the exact wages paid, provided it knew that the employees were not being paid their minimum entitlements under the Award. This knowledge was imputed to Ozkorea, leading to the establishment of accessorial liability.

Orders