Fair Work Ombudsman v Raying Holding Pty Ltd
[2015] FCCA 36
•15 January 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v RAYING HOLDING PTY LTD & ANOR | [2015] FCCA 36 |
| Catchwords: PRACTICE AND PROCEDURE – Default judgment for failure to file response or notice of address for service – declarations of breaches of the Fair Work Act 2009. |
| Legislation: Fair Work Act 2009, ss.44, 45, 116, 357, 535, 536, 546 Fair Work Regulations 2009, regs.3.33, 3.34, 3.36, 3.37 |
| Australian Building & Construction Commissioner v Abbott (No 3) [2011] FCA 340 Australian Competition & Consumer Commission v Yellow Page Marketing BV (No 2) (2011) 195 FCR 1 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | RAYING HOLDING PTY LTD ACN 144 614 175 |
| Second Respondent: | ZU NENG SHI |
| File Number: | SYG 511 of 2014 |
| Judgment of: | Judge Cameron |
| Hearing dates: | 14 August and 18 December 2014 |
| Date of Last Submission: | 18 December 2014 |
| Delivered at: | Sydney |
| Delivered on: | 15 January 2015 |
REPRESENTATION
| Counsel for the Applicant: | Ms V. McWilliam on 14 August 2014 and Ms C. Seymour of the Fair Work Ombudsman on 18 December 2014 |
| Solicitor for the Applicant: | Mr M. Davidson of the Fair Work Ombudsman |
| No appearance by or on behalf of the First Respondent |
| Solicitors for the Second Respondent: | Ren Zhou |
Upon the admissions which the First Respondent is deemed to have made consequent upon default by the First Respondent pursuant to Rule 13.03A(2) of the Federal Circuit Court Rules 2001
THE COURT DECLARES THAT:
The First Respondent has contravened the following civil remedy provisions:
(a)section 357 of the Fair Work Act 2009, by misrepresenting to Wei Hua Huang and Daying Quan that the contract under which each one was engaged to perform work for the First Respondent was a contract for services under which each of them would perform services as an independent contractor;
(b)section 45 of the Fair Work Act 2009 (by contravening clause 19 of the Meat Industry Award 2010), by failing to provide Kwok To Li, Kwok Chi Sum and Ling Hui Wang with their basic rate of pay;
(c)section 45 of the Fair Work Act 2009 (by contravening clause 15.9 of the Meat Industry Award 2010), by failing to provide Kwok To Li, Kwok Chi Sum, Ling Hui Wang and Jou Chian with their casual loading;
(d)section 45 of the Fair Work Act 2009 (by contravening clause 36.1(a) of the Meat Industry Award 2010), by failing to pay Wei Hua Huang, Daying Quan, Kwok To Li, Ho Hsuan Ching, Kwok Chi Sum, Ling Hui Wang, Hao-Cyun Sung, Po Lin Chen, Chun Jung Chiang and Jou Chian their applicable overtime rates for every hour worked as overtime;
(e)section 44 of the Fair Work Act 2009, by failing to pay Wei Hua Huang and Daying Quan for absences on public holidays during the period 3 October 2011 to 17 May 2013;
(f)subsection 535(1) of the Fair Work Act 2009, by failing, during at least the period 12 March 2011 to 5 July 2013, to make and keep employee records which included the information prescribed by regulations 3.33(2), 3.34, 3.36(1) and 3.37 of the Fair Work Regulations 2009; and
(g)subsection 536(1) of the Fair Work Act 2009, by failing to provide Kwok To Li, Ho Hsuan Ching, Kwok Chi Sum, Ling Hui Wang, Hao-Cyun Sung, Po Lin Chen, Chun Jung Chiang and Jou Chian with pay slips during at least the period 4 November 2012 to 5 July 2013.
THE COURTS ORDERS THAT:
The matter be adjourned to a date to be fixed for further hearing of the Applicant’s application for pecuniary penalties to be imposed on the First Respondent pursuant to subsection 546(1) of the Fair Work Act 2009.
The matter be listed for further directions on 6 February 2015 at 9.30am.
The parties have liberty to apply.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 511 of 2014
| FAIR WORK OMBUDSMAN |
Applicant
And
| RAYING HOLDING PTY LTD ACN 144 614 175 |
First Respondent
| ZU NENG SHI |
Second Respondent
REASONS FOR JUDGMENT
Background
These proceedings were brought by the Fair Work Ombudsman (“Ombudsman”) under the Fair Work Act 2009 (“FW Act”) in respect of ten alleged employees (“Abattoir Workers”) of the first respondent (“Raying Holding”). Raying Holding is the operator of a labour hire business which supplied employees to an abattoir in Scone, New South Wales. The Abattoir Workers performed work on behalf of Raying Holding as labourers within the abattoir’s slaughtering, boning and despatch operations.
The Ombudsman commenced these proceedings by filing an application and statement of claim on 4 March 2014. The affidavits of Jenna Elizabeth Pervan affirmed on 19 September 2014 and of Morrie Fahd sworn on 10 March 2014 and filed on 24 July 2014 satisfy me that the application and statement of claim were served on Raying Holding no later than 22 August 2014. Raying Holding has not filed a notice of address for service or a response.
On 24 July 2014 the Ombudsman filed an application in a case seeking orders that default judgment be entered against Raying Holding pursuant to r.13.03B(2)(c) of the Federal Circuit Court Rules 2001 (“Rules”) and that the matter be adjourned to a date to be fixed for a further hearing concerning the imposition of pecuniary penalties pursuant to s.546(1) of the FW Act. The Ombudsman sought declarations that Raying Holding:
a)contravened s.357 of the FW Act by misrepresenting to Wei Hua Huang and Daying Quan that the contract under which each was engaged to perform work for Raying Holding was a contract for services under which each of them would perform services as an independent contractor;
b)contravened s.45 of the FW Act by failing to provide Kwok To Li, Kwok Chi Sum and Ling Hui Wang their basic rate of pay, in contravention of cl.19 of the Meat Industry Award 2010 (“Modern Award”);
c)contravened s.45 of the FW Act by failing to provide Kwok To Li, Kwok Chi Sum, Ling Hui Wang and Jou Chian with their casual loading, in contravention of cl.15.9 of the Modern Award;
d)contravened s.45 of the FW Act by failing to pay the Abattoir Workers their applicable overtime rates for every hour worked as overtime, in contravention of cl.36(1)(a) of the Modern Award;
e)contravened s.44 of the FW Act by failing to pay Wei Hua Huang and Daying Quan for absences on public holidays during the period 3 October 2011 to 17 May 2013;
f)contravened s.535(1) of the FW Act by failing, during at least the period 12 March 2011 to 5 July 2013, to make and keep employee records which included the information prescribed by regs.3.33(2), 3.34, 3.36(1) and 3.37 of the Fair Work Regulations 2009 (“FW Regulations”); and
g)contravened s.536(1) of the FW Act by failing to provide Kwok To Li, Ho Hsuan Ching, Kwok Chi Sum, Ling Hui Wang, Hao-Cyun Sung, Po Lin Chen, Chun Jung Chiang and Jou Chian (“the Casual Abattoir Workers”) with pay slips during at least the period 4 November 2012 to 5 July 2013.
Applicant’s allegations
The applicant’s allegations, as contained in the statement of claim filed on 4 March 2014, are relevantly summarised below.
Classification and status
The table below contains the names, area of abattoir operations, relevant period of work, employment status and award coverage for each of the Abattoir Workers as alleged by the Ombudsman.
Name
Area of operations
Relevant period of work
Employment Status
Award Level
Wei Hua Huang
Slaughtering
12 March 2011 to present
Full-time
Meat Industry Level 2
Daying Quan
Boning
4 August 2011 to present
Full-time
Meat Industry Level 2
Kwok To Li
Boning
17 November 2012 to 17 May 2013
Casual
Meat Industry Level 1 from 17 December 2012 to 22 March 2013 and Meat Industry Level 2 from 23 March 2013 to 26 April 2013
Ho Hsuan Ching
Despatch
17 November 2012 to 14 June 2013
Casual
Meat Industry Level 1
Kwok Chi Sum
Boning
15 December 2012 to 17 May 2013
Casual
Meat Industry Level 2
Ling Hui Wang
Slaughtering
4 November 2012 to 5 July 2013
Casual
Meat Industry Level 3
Hao-Cyun Sung
Despatch
4 November 2012 to 28 June 2013
Casual
Meat Industry Level 2
Po Lin Chen
Slaughtering
17 February 2013 to 21 June 2013
Casual
Meat Industry Level 2
Chun Jung Chiang
Despatch
24 February 2013 to 5 July 2013
Casual
Meat Industry Level 1
Jou Chian
Boning
5 January 2013 to 19 April 2013
Casual
Meat Industry Level 1
The Ombudsman alleged that the Abattoir Workers were employees of Raying Holding, primarily because that company directed the hours they worked, allocated them to the area of operations in which they worked, determined the level and form of their remuneration, arranged and paid for their training and immunisations prior to them commencing employment, paid them for the hours worked each week and did not require them to invoice it to ensure they were paid.
The Ombudsman alleged that Wei Hua Huang and Daying Quan were engaged as full-time employees on a permanent basis on the grounds that their pay slips provided for the payment of an annualised salary, they both generally worked at least thirty-eight hours a week five days a week, they both had been employed by Raying Holding since mid-2011 and they were both permanent residents and it was Raying Holding’s practice to offer permanent employment to permanent residents. The remaining employees were alleged to have been engaged by Raying Holding as short-term casual employees primarily because they were paid an hourly rate of pay, were visa-holders not permanent residents and had only worked for Raying Holding on a short term basis over a number of months.
Misrepresentation
The Ombudsman alleged that Raying Holding contravened s.357(1) of the FW Act by misrepresenting to Wei Hua Huang and Daying Quan that their employment contracts were independent contracting arrangements. The Ombudsman alleged that from early to mid-2011 until May 2013 Raying Holding required both of those employees to maintain Australian Business Numbers, did not withhold income tax from payments made to them, did not make superannuation guarantee payments in respect of either of them and on occasion created “recipient-generated” tax invoices for them.
Underpayments
The Ombudsman alleged that, at all relevant times, the Modern Award covered Raying Holding in respect of its employment of the Abattoir Workers. The Modern Award is expressed to cover employers in the “meat industry” and their employees in the classifications listed in sch.B to the Modern Award. The Ombudsman alleged that pursuant to cl.4.2 of the Modern Award, Raying Holding’s business operated in connection with and provided labour to a “meat processing establishment” and therefore fell within the award’s scope.
The Ombudsman alleged that during the relevant period, Raying Holding:
a)failed to pay Kwok To Li and underpaid Kwok Chi Sum and Ling Hui Wang their minimum wages (of $16.88 per hour, $16.88 per hour and $16.73 per hour respectively) for the hours they worked and to which they were entitled to under cl.19.1 of the Modern Award (as amended by the Transitional Provisions in sch.A to the Modern Award);
b)failed to pay Kwok To Li, Kwok Chi Sum and Ling Hui Wang and paid an insufficient amount to Jou Chian for casual loading and thereby breached cl.15.9(b) of the Modern Award; and
c)failed to pay the Abattoir Workers their applicable overtime rates for every hour worked as overtime, contravening cl.36(1)(a) of the Modern Award.
The Ombudsman alleged that those breaches of the Modern Award were also contraventions of s.45 of the FW Act.
The Ombudsman further alleged that Raying Holding failed to pay Wei Hua Huang and Daying Quan for absences on public holidays during the period 3 October 2011 to 17 May 2013, thereby contravening ss.44 and 116 of the FW Act.
The Ombudsman alleged that Raying Holding underpaid the Abattoir Workers as follows:
Abattoir Worker
Total Underpayment
Wei Hua Huang
$4,102.35
Daying Quan
$10,257.77
Jou Chian
$2,831.59
Kwok To Li
$4,720.15
Kwok Chi Sum
$3,038.63
Ling Hui Wang
$1,231.86
Ho Hsuan Ching
$7,533.52
Hao-Cyun Sung
$6,003.19
Po Lin Chen
$347.41
Chun Jung Chiang
$1,608.02
TOTAL
$41,674.49
The Ombudsman submitted that the underpayments had been rectified.
Records and pay slips
The Ombudsman alleged that from at least 12 March 2011 to 5 July 2013, Raying Holding failed to make or keep records in relation to the Abattoir Workers which included required information as to hours worked, overtime hours worked, leave and superannuation contributions, contrary to its obligations under s.535 of the FW Act.
The Ombudsman also alleged that from at least 4 November 2012 to 5 July 2013, Raying Holding failed to issue pay slips to the Casual Abattoir Workers, contravening s.536 of the FW Act.
Relevant law
Contraventions of National Employment Standards and Modern Awards
Sections 44 and 45 of the FW Act relevantly provide:
44Contravening the National Employment Standards
(1)An employer must not contravene a provision of the National Employment Standards.
…
45Contravening a modern award
A person must not contravene a term of a modern award.
Misrepresentation
Section 357 of the FW Act provides:
357 Misrepresenting employment as independent contracting arrangement
(1)A person (the employer) that employs, or proposes to employ, an individual must not represent to the individual that the contract of employment under which the individual is, or would be, employed by the employer is a contract for services under which the individual performs, or would perform, work as an independent contractor.
(2)Subsection (1) does not apply if the employer proves that, when the representation was made, the employer:
(a) did not know; and
(b) was not reckless as to whether;
the contract was a contract of employment rather than a contract for services.
Underpayments
The Modern Award relevantly provided:
15.9A casual employee, for each ordinary hour worked or part thereof, will be paid at the rate of:
(a)1/38th of the appropriate weekly rate prescribed in clause 19—Minimum Wages; plus
(b) a casual loading of 25% based on that hourly rate.
…
36.1Entitlement to overtime and payment
(a)All time worked outside ordinary working hours as prescribed in clause 31—Hours of work (or in the case of a shiftworker, outside the hours rostered as ordinary shiftwork hours in accordance with clause 34—Rostering) will be deemed to be overtime and be paid for at time and a half for the first three hours and double time thereafter.
Clause 19.1 of the Modern Award provided for wage rates.
Records and pay slips
Section 535 of the FW Act relevantly provides:
535 Employer obligations in relation to employee records
(1)An employer must make, and keep for 7 years, employee records of the kind prescribed by the regulations in relation to each of its employees.
(2) The records must:
(a)if a form is prescribed by the regulations—be in that form; and
(b) include any information prescribed by the regulations.
…
Regulations 3.33(2), 3.34, 3.36(1) and 3.37 of the FW Regulations require an employer to keep records relating to the hours worked by casual employees, the number of overtime hours worked by employees, details of any leave taken or accrued by employees and details of any superannuation contributions made for employees.
Section 536(1) of the FW Act provides that an employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
Order or judgment on default
A respondent to an application filed in this Court is required by r.4.03 of the Rules to file and serve a response within fourteen days of being served with the application. Rule 6.01 relevantly requires a party to a proceeding to give an address for service by filing a document including an address for service or by filing a notice of address for service.
Rule 13.03A of the Rules relevantly provides:
When a party is in default
…
(2)For rule 13.03B, a respondent is in default if the respondent:
(a) has not satisfied the applicant’s claim; and
(b) fails to:
(i) give an address for service before the time for the respondent to give an address has expired; or
(ii) file a response before the time for the respondent to file a response has expired; or
…
Rule 13.03B of the Rules relevantly provides:
Orders on default
…
(2) If a respondent is in default, the Court may:
…
(c)if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant; or
(d)give judgment or make any other order against the respondent; or
…
Consideration
I am satisfied that the Ombudsman appears entitled on the statement of claim to the declaratory relief she seeks: Australian Building & Construction Commissioner v Abbott (No 3) [2011] FCA 340; Australian Competition & Consumer Commission v Yellow Page Marketing BV (No 2) (2011) 195 FCR 1. I find, by reason of Raying Holding’s failure to give an address for service or to file a response within fourteen days of having been served with the application and statement of claim, that Raying Holding is in default for the purposes of r.13.03A of the Rules. In all the circumstances, and in particular the desirability of the Court demonstrating its disapproval of the conduct in question, I am satisfied that it is appropriate to grant the Ombudsman the relief she seeks in her application in a case.
Conclusion
The Ombudsman will have the declarations she seeks and the matter will stand over to a date to be fixed for a hearing on what, if any, penalties are appropriate to be imposed on the first respondent.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Associate:
Date: 15 January 2015
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