Fair Work Ombudsman v Ranvel Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Ranvel Pty Ltd [2023] FedCFamC2G 683  

File number: MLG 4578 of 2019
Judgment of: HER HONOUR JUDGE C.E. KIRTON KC
Date of judgment: 3 August 2023
Catchwords: INDUSTRIAL LAW – Fair Work Ombudsman – pecuniary penalties – contraventions of ss 45, 535(1) and (2), and 536 of the Fair Work Act 2009 (Cth) – declarations made by consent in respect of Respondents – appropriate penalties – principles of penalties applied – relevant factors considered – penalties ordered
Legislation:

Fair Work Act 2009 (Cth) ss 45, 535(1), 535(2), 536, 539, 546, 550 and 557

Fair Work Regulations 2009 (Cth) rr 3.32 ad 3.33

Federal Circuit Court Rules2001 (Cth) r 4.05(2)(b)

Cleaning Services Award 2010 (Cth) cls 12.5, 16.1, 23.2, 27.2, 27.3 and cl D.1, sch D
Cases cited:

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482

Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39

Fair Work Ombudsman v A to Z Catering Solution Pty Ltd (No 3) [2018] FCCA 3574

Fair Work Ombudsman v First Group of Companies Pty Ltd [2018] FCCA 1228

Fair Work Ombudsman v NHS North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301

Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62

Trade Practices Commission v CSR Ltd [1990] FCA 762

Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584
Division: Division 2 General Federal Law
Number of paragraphs: 104
Date of last submissions: 27 July 2021
Date of hearing: 27 July 2021
Place: Melbourne (by videoconference)
Counsel for the Applicant: Ms Dowsett
Solicitor for the Applicant: Australian Government Solicitor
Solicitor for the First and Second Respondents: Mendis & Gibson Lawyers
Counsel for the Third Respondent: Mr Minucci
Solicitor for the Third Respondent: Colin Biggers & Paisley

ORDERS

MLG 4578 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

FAIR WORK OMBUDSMAN

Applicant
AND:

RANVEL PTY LTD (ACN 612 029 526)

First Respondent

INDIKA UDARA LOKUBALASURIYA

Second Respondent

QUAYCLEAN AUSTRALIA PTY LTD (ACN 102 238 933)

Third Respondent

order made by:

HER HONOUR JUDGE C.E. KIRTON KC

DATE OF ORDER:

3 August 2023

THE COURT DECLARES BY CONSENT THAT:

1.Ranvel Pty Ltd (ACN 612 029 526) (First Respondent) contravened the following provisions of Fair Work Act 2009 (Cth) (FW Act);

(a)Section 45 of the FW Act, by failing to pay the minimum hourly rate pursuant to cl 16.1 of the Cleaning Services Award 2010 (Cleaning Award);

(b)Section 45 of the FW Act, by failing to pay the casual loading pursuant to cl 12.5(a) of the Cleaning Award;

(c)Section 45 of the FW Act, by failing to pay the Saturday penalty pursuant…

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Details
Case
[2023] FedCFamC2G 683
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Ranvel Pty Ltd (First Respondent), Indika Udara Lokubalasuriya (Second Respondent), and Melbourne Stadiums Limited (Third Respondent) for contraventions of the Fair Work Act 2009 (Cth). The case concerned the employment and payment of cleaning staff at a stadium in Melbourne, where the Third Respondent had a cleaning contract with the First Respondent. The First Respondent was alleged to have failed to pay the required minimum wage, loadings, penalty rates, and superannuation, as well as to have failed in record-keeping obligations. The FWO sought penalties and orders for backpayment of the owed amounts. The issues before the Court were the appropriate penalty for each Respondent and the timeframe for payment. The First Respondent admitted to the contraventions and consented to the declarations and orders. The Court considered factors such as the Respondents' cooperation, contrition, corrective action, size of the business, and financial resources in determining the penalties. The First Respondent was ordered to pay $114,480, the Second Respondent $15,552, and the Third Respondent $71,820, all within 90 days of the Court's orders. The Court found that appropriate discounts were warranted for the First and Second Respondents due to their cooperation and contrition, and for the Third Respondent due to its cooperation and corrective actions post-interference.

Orders

Orders of the court

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Background

Background to the litigation

During the Relevant Period, Melbourne Stadiums Limited (ACN 098 476 594) held a contract with the legal partnership of The Trustee for Loui Petrevski Business Trust, the Trustee for Sash Petrevski Business Trust, and the Trustee for the Piwkowski Family Trust, trading as the Third Respondent, for cleaning services at the Stadium.[4] The Third Respondent subcontracted the First Respondent, among others, to provide these cleaning services. [4] Statement of Agreed Facts, filed 17 May 2021 (Statement of Agreed Facts), [8]. The Second Respondent was, during the Relevant Period, the director, secretary and sole shareholder of the First Respondent.[5] [5] Statement of Claim, [5]; Affidavit of Mr Indika Udara Lokubalasuriya (Second Respondent), filed 10 February 2020, [2]. During the Relevant Period the Employees were engaged in cleaning duties, including rubbish collection, sweeping and other general cleaning duties at the Stadium.[6][6] Statement of Claim, [12]; Statement of Agreed facts, [13]. During the Relevant Period, each of the Employees:(a)Were employed as ‘Cleaning Services Employee Level One’ within the meaning of cl D.1 of Schedule D to the Cleaning Award;(b)Were employed by the First Respondent as casual employees within the meaning of cl 12.5 of the Cleaning Award;(c)Worked intermittent and irregular hours; (d)Were employed to work uncertain hours; and (e)Did not accrue or receive any paid leave entitlements.[7] [7] Statement of Claim, [15]-[17]; Statement of Agreed Facts, [16]-[18]. During the Relevant Period, the Employees were paid as follows, as compared to their legal entitlements: In addition to the above, during the Relevant Period, the First Respondent also failed keep records or information as follows: (a)The names, commencements dates, employment classifications and employment status of the Employees; (b)The rate of remuneration paid to each of the Employees;(c)The gross and net amounts paid to each of the Employees; (d)The amount of any loading or penalty rates that the Employees were entitled to;(e)The hours worked by each of the Employees; and(f)Payslips for the Employees.[8] [8] Statement of Claim, [44]-[60].ISSUES BEFORE THE COURT By virtue of the admissions made by the Respondents, the Court has the power to make orders for the payment of penalties pursuant to s 546(1) of the FW Act. The issues that the Court must therefore determine are: (a)The penalty that is appropriate in the circumstances of this case with respect to each of the Respondents; and (b)The timeframe within which the Respondents would be required to pay such a penalty to the Commonwealth of Australia. CONTRAVENTIONS The First Respondent admitted that it contravened the FW Act during the Relevant Period and consented to the making of declarations and orders in respect of the admitted contraventions. The contraventions admitted by the First Respondent are as follows: (a)Section 45 of the FW Act, by failing to pay the minimum hourly rates prescribed by cl 16.1 of the Cleaning Award; (b)Section 45 of the FW Act, by failing to pay the casual loading as prescribed by cl 12.5(a) of the Cleaning Award; (c)Section 45 of the FW Act, by failing to pay the Saturday penalty as prescribed by cl 27.2(a) of the Cleaning Award; (d)Section 45 of the FW Act, by failing to pay the Sunday penalty as prescribed by cl 27.2(b) of the Cleaning Award; (e)Section 45 of the FW Act, by failing to pay the public holiday penalty as prescribed by cl 27.3 of the Cleaning Award; (f)Section 45 of the FW Act, by failing to pay superannuation contributions as prescribed by cl 23.2 of the Cleaning Award; (g)Section 535(1) of the FW Act, by failing to make and keep records of the kind required by r 3.32 of the Fair Work Regulations 2009 (Cth) (FW Regulations); (h)Section 535(2) of the FW Act, by failing to make and keep records with the information prescribed by rr 3.33(1), 3.33(2) and 3.33(3) of the FW Regulations; and (i)Section 536 of the FW Act, by failing to give the Employees payslips. (Collectively, the First Respondent’s Contraventions).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Accordingly, an order will be made that the Respondents pay the penalties to the Commonwealth of Australia within 90 days of the Court’s orders. CONCLUSION The Court finds that a penalty of $114,480 is to be paid by the First Respondent to the Commonwealth of Australia for the First Respondent’s Contraventions within 90 days of the date of the Court’s orders. The Court finds that a penalty of $15,552 is to be paid by the Second Respondent to the Commonwealth of Australia for the Second Respondent’s Contraventions within 90 days of the date of the Court’s orders. The Court finds that a penalty of $71,820 is to be paid by the Third Respondent to the Commonwealth of Australia for the Third Respondent’s Contraventions within 90 days of the date of the Court’s orders. Declarations and Orders will be made accordingly.

Ratio Decidendi

Legal Principle Established

I am therefore satisfied that the Third Respondent deliberately engaged in the contravening conduct.Cooperation, Contrition and Corrective Action First and Second Respondents Upon investigation by the Fair Work Commissioner commencing in October 2017, the First and Second Respondents were notified of the contraventions of the FW Act by the First Respondent and requested to pay the Employees all outstanding amounts. The First and Second Respondents submit that admission to wrongdoing was made at the ‘earliest opportunity’ and that the owed amounts were paid to the Employees within the stipulated timeframe.[42][42] First and Second Respondents Penalty Submissions, [32] and [35]-[36]. The First and Second Respondents have maintained their admissions to the contraventions throughout the proceedings before the Court, and have consented to the making of declarations against them and orders for the payment of penalties. As such, there was no need for a liability hearing with respect to the contraventions, saving the Court time and resources. The Second Respondent has also expressed remorse for his conduct and the impact that it had upon the Employees.[43][43] Second Respondent’s 11 June 2021 Affidavit, [15]-[16]. In light of the First and Second Respondent’s cooperation and contrition, in particular the immediate rectification of the underpayments to the Employees, I consider that a penalty discount of 20% for the First and Second Respondents is appropriate.Third Respondent The Court notes that the Applicant and Third Respondent have agreed that a penalty discount of 5% for the Third Respondent is appropriate in the circumstances. I agree with this proposal for discount, in light of the following: (a)The apparent interference with the Fair Work Commission’s investigation by senior management of the Third Respondent in September 2017 (which the Third Respondent disputes);(b)The cooperation of the Third Respondent with the investigation subsequent to the event referred to at (a) above;[44] (c)The apology and expression of remorse by Mark Peter Piwkowski, the Third Respondent’s CEO;[45](d)The steps taken by the Third Respondent to ensure no future contraventions of the FW Act occur;[46] (e)The Third Respondent’s admission of involvement in the First Respondent’s contraventions; and (f)The Third Respondent’s consent to declarations being made against it and orders for the imposition of penalties. Size of the business and financial resources [44] Third Respondent’s Penalty Submissions, [18]. [45] Affidavit of Mark Peter Piwkowski affirmed and filed 7 June 2021 (Piwkowski Affidavit), [36].[46] Piwkowski Affidavit, [38]-[74]. First Respondent The evidence of the First Respondent’s financial position is relatively limited. At the time of the Penalty Hearing, the First Respondent remained a registered company although was not trading and therefore receiving no income. An Activity Statement for the First Respondent from the Australian Taxation Office for the period January 2021 to March 2021 confirmed no activity from the business.