Fair Work Ombudsman v Pacific Security Services Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)

Fair Work Ombudsman v Pacific Security Services Pty Ltd [2021] FedCFamC2G 111

File number(s): MLG 3795 of 2020
Judgment of: JUDGE BLAKE
Date of judgment: 6 October 2021
Catchwords:

INDUSTRIAL LAW – Fair Work Act 2009 (Cth) ¬ failure to comply with Compliance Notice issued under section 716 of the Fair Work Act 2009 ¬ Respondent contended that Compliance Notice not validly issued because the inspector could not hold a reasonable belief as to whether the Respondent or another entity engaged the complainant - what factors lead to the formation of a reasonable belief under section 716 of the Fair Work Act 2009.

INDUSTRIAL LAW – Respondents contended Applicant did not have regard to all ascertainable evidence when forming a reasonable belief ¬ Respondents produced evidence to the Court that they had not produced to the Applicant prior to her forming her belief ¬ in the circumstances of this case, no regard should be had to evidence the Respondents did not disclose to the Applicant prior to her forming her belief to issue the compliance notice. Further, whether Inspector’s failure to issue a Notice to Produce to a third party meant she failed to undertake proper inquires leading to a conclusion a that her belief may not have been reasonably held ¬ contention rejected in the circumstances of the case ¬ the failure to issue the Notice to Produce was a significant issue, but does not alter the outcome because documents were obtained from the third party and placed before the Court by another means.

INDUSTRIAL LAW ¬ Court satisfied on the evidence that the Applicant’s belief was reasonable. Notice valid. Further, no reasonable excuse for failing to comply with the Notice to Produce ¬ Court making declaration the Respondent contravened the Act ¬ matter to be set down for penalty hearing.

Legislation:

Fair Work Act 2009 (Cth) ss 545(1), 547(2), 700, 716, 717

Security Services Industry Award 2010 (Cth) cl 10.5, 14.1, 15.1, 22.3

Cases cited:

Fair Work Ombudsman v Joys Child Care Ltd & Anor (No 2) [2020] FCCA 2326

George v Rockett (1990) 170 CLR 104

Hindu Society of Victoria (Australia) Inc v Fair Work Ombudsman [2016] FCCA 221

Potter v Fair Work Ombudsman [2014] FCA 187
Division: Division 2 General Federal Law
Number of paragraphs: 111
Date of last submission/s: 25 June 2021
Date of hearing: 13 & 14 May 2021
Counsel for the Applicant: Ms Campbell
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the Respondent: Mr McKenny
Solicitor for the Respondent: Wisewould Mahony

ORDERS

MLG 3795 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND:
PACIFIC SECURITY SERVICES PTY LTD
Respondent

ORDER MADE BY:

JUDGE BLAKE

DATE OF ORDER:

6 OCTOBER 2021

THE COURT DECLARES THAT:

1.The Respondent contravened section 716(5) of the Fair Work Act 2009 (‘FW Act’) by failing to comply with the Compliance Notice.

THE COURT ORDERS THAT:

2.Pursuant to section…

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Details
Case
[2021] FedCFamC2G 111
Decision Date

CaseChat Overview and Summary

In the matter of Fair Work Ombudsman v Pacific Security Services Pty Ltd, the Fair Work Ombudsman sought to enforce a Compliance Notice issued to Pacific Security Services Pty Ltd, alleging non-compliance with various employment entitlements. The central issue before the Court was whether the Compliance Notice was validly issued, and whether the Respondent had a reasonable excuse for failing to comply with the Notice. The Respondent argued that the Fair Work Inspector did not hold a reasonable belief that the complainant, Kamran Taj, was employed by Pacific Security Services Pty Ltd, and thus the Notice was invalid. The Court considered the factors leading to the formation of a reasonable belief under section 716 of the Fair Work Act 2009 and whether the Inspector had regard to all ascertainable evidence.

The Court held that Inspector Rowe's belief was reasonable based on the evidence available to her at the time of issuing the Compliance Notice. Inspector Rowe had received extensive information from Mr Taj, including email correspondence, text messages, certificates, invoices, bank statements, leave forms, and identification cards, which supported her belief that Mr Taj was employed by Pacific Security Services Pty Ltd and not an independent contractor. The Court found that the Respondent's contention that Inspector Rowe could not have reasonably believed that Mr Taj was an employee of the Respondent was without merit. Furthermore, the Court rejected the argument that Inspector Rowe's failure to issue a Notice to Produce to a third party meant she did not undertake proper inquiries. The Court held that the failure to issue the Notice to Produce did not alter the outcome as documents were obtained from the third party and placed before the Court by another means.

The Court concluded that Inspector Rowe's belief was reasonable and the Compliance Notice was valid. The Court also found that the Respondent had no reasonable excuse for failing to comply with the Compliance Notice. Consequently, the Court made a declaration that the Respondent contravened the Fair Work Act 2009 and set the matter down for a penalty hearing. The Court's decision underscores the importance of Inspectors having reasonable beliefs based on available evidence when issuing Compliance Notices under the Fair Work Act 2009.

Orders

Orders of the court

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Background

Background to the litigation

For the reasons that follow, I have decided the Respondent has failed to comply with the Compliance Notice.FACTUAL BACKGROUND Ms Samantha Rowe (“Inspector Rowe”) is a Fair Work Inspector appointed under section 700 of the Act. On 6 May 2019, the Applicant received a request for assistance from Kamran Taj. Mr Taj complained about his employment by an organisation known as Knight Watch Security Services Pty Ltd trading as Bluestar Security Services (Bluestar). The Applicant commenced an investigation in relation to the complaint received from Mr Taj. Ultimately, Inspector Rowe formed the belief that the Respondent was the employer of Mr Taj, and further that Mr Taj was not an independent contractor. Whether that belief was reasonably held by Inspector Rowe is a matter of dispute. For present purposes, it is sufficient to record that Inspector Rowe formed the belief that Mr Taj’s employment was covered by the Security Services Industry Award 2010 (‘Award’) and that Mr Taj had been underpaid the following entitlements pursuant to the Award: minimum wages (clause 14.1 of the Award); casual loading (clause 10.5 of the Award); weekend penalty rates (clause 22.3 of the Award); night shift penalty rates (clause 22.3 of the Award); public holiday penalty rates (clause 22.3 of the Award) and vehicle allowances (clause 15.1 of the Award). On 24 February 2020, Inspector Rowe gave the Compliance Notice to the Respondent. The Respondent admits it received the Compliance Notice. The Compliance Notice, among other things, required the Respondent to calculate and rectify the effects of the contraventions of the Award identified by Inspector Rowe. The Respondent did not comply with the Compliance Notice. Nor did it make any payment to Mr Taj as requested. The Respondent did not seek to review the Compliance Notice under the procedure set out in section 717 of the Act. Subsequent to the events above, and in the course of preparing for these proceedings, the Respondent produced a document entitled ‘Agency Agreement between Pacific Security Services Pty Ltd and Subcontractor’ (‘Agency Agreement’). The Agency Agreement is purportedly an agreement between the Respondent and Mr Taj under which, inter alia, Mr Taj agreed to provide services to the Respondent as an ‘independent contractor’. ISSUES IN DISPUTE There is not any dispute that Inspector Rowe had standing to issue the Compliance Notice, that the Compliance Notice was issued in its correct form, or that the Compliance Notice required the Respondent to undertake certain tasks. It is not in dispute that the Compliance Notice was not complied with by the Respondent. The Respondent accepted that if its submissions outlined below were not accepted by the Court, the outcome is that the Respondent has failed to comply with the Compliance Notice as contemplated by section 716(5) of the Act. The Respondent contends that while Inspector Rowe may have had a belief that Mr Taj was employed by the Respondent and was owed various employment entitlements, that belief was not one that was ‘reasonable’ in the circumstances. The Respondent submits that section 716(1) of the Act has therefore not been satisfied and the Compliance Notice has not been validly issued. Further, the Respondent contends that it had a ‘reasonable excuse’ for not complying with the Compliance Notice as contemplated by section 716(6) of the Act. The factual basis underpinning the Respondent’s submissions is as follows. It contends that Mr Taj is properly to be regarded as an independent contractor either of the Respondent or of Bluestar. At the very least, it is contended by the Respondent that Inspector Rowe could not have reasonably believed that Mr Taj was an employee of the Respondent in the circumstances of the matter and further, that the surrounding circumstances mean the Respondent had a ‘reasonable excuse’ for not complying with the Compliance Notice.

Evidence

Evidence Before The Court

In order to resolve these matters, it is now necessary to turn to the evidence in the case and in particular the evidence of Inspector Rowe.THE WITNESS EVIDENCEThe evidence before Inspector Rowe at the time she issued the Compliance Notice Upon receiving the complaint from Mr Taj, officers engaged by the Applicant commenced a range of inquiries. These are summarised below. Mr Taj provided a range of information to the offices of the Applicant at the time, or shortly after, making his complaint. That information included email correspondence, text messages, certificates, invoices, bank statements, leave forms, and identification cards. The information provided is described in greater detail below. Annexed to Inspector Rowe’s affidavit was a range of material that Mr Taj provided for the purpose of the investigation. That material discloses, among other things, the following:(a)Mr Taj communicated with Esther Palmer from ‘Pacific Security Services rostering team’ in connection with his work locations, roster, and induction;(b)The involvement of Bluestar in the arrangements with Mr Taj, for example, an email from ‘Bluestar Security’ to ‘Esther’ dated 9 April 2018 requesting information to enter Mr Taj’s details into the Smartek Epworth Compliance System; an email between Karen Xuereb at Bluestar Security and Esther dated 9 April 2018 passing on information regarding guarding arrangements being handled by Brad Clarke, an Administration Manager, at Bluestar Security; an email from Ms Palmer dated 29 May 2018 passing on information from ‘Kumar and Bluestar head office’ concerning arrangements for the Eid and Ramadan festivals; a form dated 10 January 2019 entitled ‘Bluestar Counselling and Discipline Form’ that records a final warning given to Mr Taj for using a mobile device on shift; and leave record or application forms for Mr Taj that carry the logo of ‘Bluestar Security’;(c)an email from Ms Palmer to all guards asking that they keep their phones switched on 24 hours dated 2 May 2018, (d)an email dated 3 May 2018 between Mr Taj, Ms Palmer and Mr Graeme Head, Victoria Operations Manager for Bluestar, regarding a uniform for Mr Taj;(e)An email from Ms Palmer dated 28 May 2018 addressed to ‘our security team’ advising that there was a search for new Security officers and asking recipients of the email to send any resume to the email address rosteringpacificservices@gmail.com;(f)an email from Ms Palmer to Mr Taj dated 6 June 2018 advising him that leave had been authorised;(g)an email from Ms Palmer dated 7 June 2018 on behalf of ‘Kumar and management’ advising of new pay rates for security guards;(h)an email from Ms Palmer copied to Mr Chanasery dated 7 September 2018 advising that the company does not tolerate shift changes or days off;(i)an email from Ms Palmer dated 11 September 2018 advising that annual leave would not be accepted for December;(j)an email from Ms Palmer dated 12 November 2018 to all Security officers regarding the use of mobile phones and other devices and stating that ‘you are an ambassador for Bluestar Security’; (k)emails between Mr Palmer and Mr Taj on around 16 - 17 November 2018 regarding attendance at a compulsory training session;(l)an email from Ms Palmer dated 22 May 2019 informing Mr Taj to let her know if he does not get paid because sometimes ‘Kumar doesn’t pay on time’; (m)screenshots of text messages between Mr Taj and the rostering manager of the Respondent. Some of the messages come from ‘Karrie’ but also carry the words ‘Esther Roster’;(n)invoices from Mr Taj for hours worked;(o)Mr Taj’s bank statements showing payments made to his account (I observe that it is not clear from the bank account statements alone which entity made the payments to Mr Taj in respect of his work);(p)Mr Taj’s Smartek Health identification card which identifies under his name, the company as being ‘Bluestar Security Services’.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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