Fair Work Ombudsman v Safecorp Security Group Pty Ltd & Anor
[2017] FCCA 348
•28 February 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v SAFECORP SECURITY GROUP PTY LTD & ANOR | [2017] FCCA 348 |
| Catchwords: PRACTICE AND PROCEDURE – Application by applicant for leave to reopen case – whether the evidence for which leave to adduce was sought was not adduced during applicant’s case due to error of law – whether it is otherwise in the interests of the administration of justice to grant leave to reopen – leave not granted. INDUSTRIAL LAW – Claimed involvement by director in corporate employer’s contraventions of s.45 of the FW Act and employer’s admitted contravention of s.536 of the FW Act – whether employer contravened s.45 of the FW Act – whether director involved in employer’s contraventions of s.45 and s.536 of the FW Act – director involved in employer’s contraventions – assessment of penalties. |
| Legislation: Crimes Act 1914 (Cth), ss.4AA, 4F(1) Fair Work Act 2009 (Cth), ss.12, 45, 536, 536(1), 539(1), 539(2), 546(1), 546(2), 550, 550(1), 550(2), 557(1) Federal Circuit Court Rules 2001 (Cth), rr.13.03A(2), 13.03B(2)(c) |
| Cases cited: Australian Securities and Investments Commission v Mining Projects Group Ltd & Ors (2007) 164 FCR 32 Australian Securities and Investments Commission v Rich (2006) 235 ALR 587 Becker v City of Marion Corporation [1977] AC 271 Blandy v Coverdale NT Pty Ltd ACN 102 611 423 [2008] FCA 1533 Cai v Tiy Loy & Co Ltd (No. 3) [2016] FCCA 675 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | SAFECORP SECURITY GROUP PTY LTD ACN 153 771 898 |
| Second Respondent: | JOHN LOHR |
| File Number: | SYG 2379 of 2013 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 14 May 2015, 12 June 2015 & 31 August 2015 |
| Date of Last Submission: | 31 August 2015 |
| Delivered at: | Sydney |
| Delivered on: | 28 February 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Darams |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| No appearance by or on behalf of the first respondent. | |
| Second respondent in person. | |
ORDER
The application made by the applicant for leave to reopen case is dismissed.
DECLARATIONS
Safecorp Security Pty Limited contravened s.45 of the Fair Work Act 2009 (Cth) (FW Act) by breaching clauses 15.6 and 23.3 of the Security Services Industry Award 2010 (Award) and clauses A.5.4 and A.7.3 of Schedule A to the Award as follows:
Term of award
Description
Cl.A.5.4 of Schedule A
Failure to pay casual loading
Cl.15.6
Failure to pay broken shift allowance
Cl.A.7.3 of Schedule A
Failure to pay penalties for night work
Cl.A.7.3 of Schedule A
Failure to pay penalties for permanent night work
Cl.A.7.3 of Schedule A
Failure to pay penalties for Saturday work
Cl.A.7.3 of Schedule A
Failure to pay penalties for Sunday work
Cl.A.7.3 of Schedule A
Failure to pay penalties for public holiday work
Cl.23.3
Failure to pay overtime payments for Monday to Friday overtime
Cl.23.3
Failure to pay overtime payments for Saturday overtime
Cl.23.3
Failure to pay overtime payments for Sunday overtime
Cl.23.3
Failure to pay overtime payments for public holiday overtime
Cl.A.7.3 of Schedule A
Failure to pay minimum break penalty
The first respondent contravened s.536(1) of the FW Act by failing to issue payslips to each Mr Mark Allen Garland and Mr Mark Alexander Wellstead within one working day of paying him amounts in relation to the performance of work.
The second respondent was involved in:
(a)Safecorp Security Pty Limited’s contraventions of s.45 of the FW Act referred to in the first declaration; and
(b)the first respondent’s contraventions of s.536 of the FW Act referred to in the second declaration.
ORDERS
Pursuant to s.546(1) of the FW Act, the second respondent:
(a)pay a pecuniary penalty of $5,500 for his involvement in Safecorp Security Pty Limited’s contraventions of s.45 of the FW Act referred to in declaration 1; and
(b)pay a pecuniary penalty of $2,800 for his involvement in the second respondent’s contraventions of s.536 of the FW Act referred to in declaration 2.
Pursuant to s.546(3) of the FW Act, the second respondent pay the pecuniary penalty referred to in order 5 to the Commonwealth by 28 March 2017.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2379 of 2013
| FAIR WORK OMBUDSMAN |
Applicant
And
| SAFECORP SECURITY GROUP PTY LTD ACN 153 771 898 |
First Respondent
| JOHN LOHR |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The applicant (FWO) claims the second respondent, Mr Lohr, was involved in contraventions of s.45 of the Fair Work Act 2009 (Cth) (FWAct) by the first respondent (SSG) and another company (old SSG). The FWO seeks an order that Mr Lohr pay pecuniary penalties for his claimed involvement in those contraventions. Section 45 of the FW Act provides that a “person must not contravene a term of a modern award”. The expression “modern award” is defined in s.12 of the FW Act to mean a modern award made under Part 2-3 of the Act.
The modern award of whose terms the FWO claims Mr Lohr was involved in contravening is the Security Services Industry Award 2010 (Award). The FWO claims old SSG and SSG contravened the terms of the Award, and hence s.45 of the Act, by failing to pay a number of their employees the minimum casual rates, penalty rates, and loadings that, under the Award, these companies were required to pay.
The FWO also claims Mr Lohr was involved in SSG’s contraventions of s.536(1) of the FW Act. That subsection 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.
On 7 November 2014 I made orders against SSG pursuant to r.13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules). That paragraph empowers this Court to give judgment and make orders against a respondent who is in default 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. SSG was in default because it failed to file points of defence contrary to directions I had made. The orders I made on 7 November 2014 included declarations (Declarations) that SSG contravened s.45 of the FW Act by failing to pay to a number of its employees amounts to which they were entitled under the Award.
Unlike SSG, Mr Lohr did file points of defence. Mr Lohr, who at the relevant times was the sole director of old SSG and SSG, admits these companies were bound by the Award. He does not admit, however, that the companies contravened the Award or, if they did, that he was involved in their contraventions.
I heard the FWO’s claims against Mr Lohr on 14 May 2015, after which I reserved judgment. When I was considering my judgment, however, it became apparent to me the FWO had proceeded on the assumption that the Declarations bound Mr Lohr.
On my motion, the matter was relisted before me on 12 June 2015. On that occasion, Mr Leahy, who appeared for the FWO, indicated the FWO did rely on the Declarations that SSG had contravened s.45 of the FW Act to prove her case against Mr Lohr, and that the FWO did not, therefore, tender evidence to prove those contraventions. I informed the parties that it was my view that a default judgment entered against one of two or more respondents is not binding on the respondent who is not in default. I also raised with Mr Leahy the possibility that if the Declarations are not binding on Mr Lohr, the FWO would have to apply for leave to reopen her case if she wished to tender evidence of SSG’s contraventions of s.45 of the FW Act.
At the end of the hearing of 12 June 2015, I made orders directing the FWO to file an application in a case seeking an order for leave to reopen her case, and I set the matter down for further hearing. It was contemplated that at the hearing of the application in a case, I would hear submissions about whether the Declarations bind Mr Lohr, and about whether I should grant the FWO leave to reopen her case if I were to conclude the Declarations do not bind Mr Lohr.
The FWO filed an application in a case seeking an order that she be granted leave to reopen her case, together with an affidavit made by Mr Christie, and submissions. The FWO submitted the Declarations bound Mr Lohr. The FWO also submitted, however, that if the Declarations do not bind Mr Lohr, the Court should grant the FWO leave to reopen her case and receive into evidence a third affidavit of Mr Christie, and the documents exhibited to that affidavit.
In these reasons for judgment, therefore, I consider: first, whether the Declarations bind Mr Lohr; second, if the Declarations do not bind Mr Lohr, whether the FWO should be granted leave to reopen her case; and, third, whether Mr Lohr was involved in any contravention by old SSG and SSG of the FW Act, and if so, what, if any, pecuniary penalties should be ordered against him. Before I consider these questions, it will be necessary to set out the relevant facts about which there is no, or cannot be, any dispute, identify the contraventions by old SSG and SSG in which the FWO alleges Mr Lohr was involved, and identify the evidence and other materials on which the FWO relied at the hearing of 14 May 2015.
Background
From 1 September 2006 to 31 August 2012 old SSG conducted a business of offering security services.[1] From 19 November 2010 to 31 August 2012 old SSG employed the 25 persons listed in annexure A to the statement of claim (old SSG Employees).[2]
[1] Statement of claim [2(a)], [2(e)]; Defence [2]
[2] Statement of claim [2(f)]; Defence [2]
On or around 31 August 2012 old SSG entered into external administration and ceased to employ the old SSG Employees.[3] On or around 1 September 2012 SSG commenced employing all but three of the old SSG Employees[4] in a business that offered security services.[5] From approximately 1 September 2012 until 29 January 2013 SSG employed the 42 persons listed in annexure B to the statement of claim (SSG Employees).[6]
[3] Statement of claim [3]; Defence [2]
[4] Statement of claim [4]; Defence [3]
[5] Statement of claim [5(e)]; Defence [3]
[6] Statement of claim [5(f)]; Defence [3]
Mr Lohr has been the sole director and company secretary of old SSG from 20 April 2010.[7] He was also the sole director and company secretary of SSG from 17 October 2011 to 29 January 2013, and from 25 March 2013 to 5 November 2013.[8] Mr Lohr was:
a)principally responsible for the overall direction, management and supervision of the operations of old SSG and SSG in relation to industrial instruments and arrangements;[9]
b)principally responsible for setting and adjusting pay rates and determining wages and conditions of employment of employees of old SSG and SSG;[10] and
c)involved in the engagement, rostering, supervision, and payment of the employees of old SSG and SSG.[11]
[7] Affidavit of M D Christie, 19.03.15 (Second Christie affidavit) [7(d)(i)]
[8] Second Christie affidavit, [7(d)(ii)]
[9] Statement of claim [6(c), (g)]; Defence [4]
[10] Statement of claim [6(d), (h)]; Defence [4]
[11] Statement of claim [6(e), (i)]; Defence [4]
Each of the old SSG and the SSG employees (Employees) was employed as a casual employee during the periods specified in annexures A and B to the statement of claim.[12] The Employees performed most of their work at night and on weekends,[13] and consisted of the following:[14]
a)watching, guarding, or protecting premises or other property at sites where the complex use of computer technology was not required;
b)basic crowd control or crowd control functions as defined in clauses 3, C1.2(b) and C2.3(b) of the Award;
c)being stationed at an entrance or exit of premises for the purpose of controlling the movement of persons, vehicles, goods or property coming into or exiting from the premises; and
d)using electronic equipment such as simple closed circuit television systems.
[12] Statement of claim [7(a), (b)]; Defence [5]
[13] Statement of claim [7(c)]; Defence, [5]. The FWO alleges the employees were required to perform work primarily at night and on weekends. The defence does not admit this “since some work was not at night or on weekends”.
[14] Statement of claim, [8(a), (b), (c)]; Defence, [6]
The Award bound each of old SSG and SSG, and the Award covered each of the Employees.[15] Mr Lohr accepts that all Employees fell within the classification of “Security Officer Level 1”. He does not agree with the FWO’s allegations that three of the Employees were classified as “Security Officer Level 2”, or that one of those Employees and another employee were classified as “Security Officer Level 4” for any shifts completed during which they performed higher duties.[16]
[15] Statement of claim, [10-12]; Defence, [8], [9], [10]
[16] Statement of claim, [13]; Defence, [11]
The FWO calculated what she claims to be the amounts by which the Employees were underpaid on the assumption that most of them were Level 1 security officers.[17] Under item C.1.2(b) of Schedule C to the Award, “basic crowd control” is an indicative duty of a Level 1 security officer, while under item C.2.3(b), “crowd control” is an indicative duty of a Level 2 security officer. Further, “basic crowd controller” is defined in cl.3.1 of the Award to mean an employee who has less than 12 months experience as a security officer. The FWO has read affidavits made by Mr Goddard and Mr Garland. I am satisfied those affidavits show that both Mr Goddard and Mr Garland each had more than twelve months experience as security officers as at the date from which the FWO has calculated the amounts by which each of Mr Goddard and Mr Garland have been underpaid.[18]
[17] Affidavit of M D Christie, 13.11.14 (First Christie affidavit), [15(e)]. Mr Goddard and Mr Garland worked as Level 2 – Security Officers. Mr Goddard and Mr Nasir completed shifts at the Manly Council worksite which were classified as Level 4 – Security Officer work. The FWO calculated amounts on this basis.
[18] The relevant commencement dates are 19 November 2010 for Mr Goddard and 10 August 2012 for Mr Garland – see annexure “A” to the statement of claim.
Under the Award old SSG and SSG were each liable to pay to their employees the following amounts (Award amounts):[19]
[19] Statement of claim, [15]; Defence, [13]
a)the minimum wage specified for the classification into which each Employee fell minus a specified proportion of the “transitional amount”;[20]
[20] The “transitional amount” is the difference between the rate of pay in the Australian Pay and Classification Scale derived from the Security Industry (State) Award and the minimum rate of pay specified by the Award.
b)the casual loading specified in the Award minus the specified proportion of the “transitional percentage”;[21]
[21] The “transitional percentage” is the difference between the casual loading specified in the Australian Pay and Classification Scale derived from the Security Industry (State) Award and the casual loading in cl.10.5(b) of the Award.
c)a broken shift allowance where an employee was required to work a rostered shift in two periods of duty (excluding crib breaks);[22]
[22] Statement of Claim, [23], [93]; annexure C; Defence [18], [43]
d)a night shift penalty, being the amounts specified in paragraph 29 of the statement of claim;[23]
e)a penalty rate for any roster cycle where two thirds of the employee’s ordinary shifts include ordinary hours between midnight and 6.00 am (Permanent Night Shift Penalty);[24]
f)a penalty rate for ordinary hours of work performed on a Saturday (Saturday Penalty);[25]
g)a penalty rate for ordinary hours of work performed on a Sunday (Sunday penalty);[26]
h)a penalty rate for ordinary hours of work performed on a public holiday (Public Holiday Penalty);[27]
i)an overtime loading of 50% for the first two hours and a 100% loading after those two hours in addition to an employee’s ordinary time rate of pay for all work done outside the employee’s ordinary hours of work on any day from Monday to Friday;[28]
j)an overtime loading of 50% for the first two hours and a 100% loading after those two hours in addition to an employee’s ordinary time rate of pay for all work done outside the employee’s ordinary hours of work on a Saturday;[29]
k)an overtime loading of 100% in addition to an employee’s ordinary time rate of pay for all work done outside the employee’s ordinary hours of work on a Sunday;[30]
l)an overtime loading of 150% in addition to an employee’s ordinary time rate of pay for all work done outside the employee’s ordinary hours of work on a public holiday;[31] and
m)a loading for hours of work performed less than eight hours after the conclusion of a shift or overtime.[32]
[23] Statement of claim, [28], [29], [98], [99]; Defence [21], [45]
[24] Statement of claim, [34], [35], [104], [105]; Defence [23], [47]
[25] Statement of claim, [40], [41], [110], [111]; Defence, [25], [49]
[26] Statement of claim, [46], [47], [116], [117]; Defence, [27], [51]
[27] Statement of claim, [52], [53], [122], [123]; Defence, [29], [53]
[28] Statement of claim, [59], [60], [129], [130]; Defence, [31], [55]
[29] Statement of claim, [65], [66], [135], [136]; Defence, [33], [57]
[30] Statement of claim, [71], [72], [141], [142]; Defence, [35], [59]
[31] Statement of claim, [77], [78], [147], [148]; Defence, [37], [61]
[32] Statement of claim, [82], [83]; Defence, [39]. The FWO does not allege SSG failed to comply with this term of the award.
Alleged contraventions of s.45 of the FW Act
The statement of claim alleges old SSG became liable, but failed, to pay one or more of the Award amounts to the old SSG Employees. The statement of claim also alleges that SSG became liable, but failed, to pay one or more of all but one of the Award amounts to the SSG Employees.
With one exception (the payment of casual rates), the FWO prepared schedules for each class of Award amounts the FWO alleges old SSG and SSG became liable to pay the Employees. Each schedule identifies the amounts old SSG and SSG were required to pay to each Employee, the amounts that were paid to each Employee, and the difference. The schedules are annexed to the statement of claim.
In his defence, Mr Lohr admits old SSG and SSG were or are bound by the Award, and that old SSG and SSG were obliged under the Award to pay the Award amounts. Mr Lohr, however, has not admitted that old SSG or SSG failed to comply with obligations they had to pay to the Employees any of the Award amounts to which the Employees became entitled. Mr Lohr, in his defence, relies on two grounds for the non-admission. The first is that “the Second Respondent no longer has access to records”;[33] and the second is that the hourly rates on the basis of which old SSG and SSG paid employees included three of the allowances the FWO alleges the companies failed to pay.[34]
[33] Defence [17], [22], [24], [26], [28], [30], [32], [34], [36], [38], and [40]
[34] Defence [17], [20], [22]
The particular contraventions alleged in the statement of claim are as follows.
Failure to pay casual rates specified by the Award – old SSG
The FWO claims old SSG failed to pay to a number of the Employees the minimum casual rate.[35] The minimum hourly rates and casual loadings that were payable to employees who were classified as Level 1, Level 2, and Level 4 Security Officer are those specified in paragraph 16 of the statement of claim.[36] These amounts were calculated by the FWO by use of the FWO’s “Pay Check Plus database”.[37] Relevant to these reasons are the following:
[35] Statement of claim [18]-[22] annexure A; [88]-[92], annexure B
[36] Statement of claim, [16]; Defence, [13]
[37] First Christie affidavit, [13]
Level 1 - Period
Total Casual Rate
01.07.10 – 30.06.11
$19.71
01.07.11 – 30.06.12
$20.74
01.07.12 – 03.02.13
$21.70
Level 2 - Period
Total Casual Rate
01.07.10 – 30.06.11
$20.28
01.07.11 – 30.06.12
$21.33
01.07.12 – 03.02.13
$22.31
Level 4 - Period
Total Casual Rate
01.07.10 – 30.06.11
$20.98
01.07.11 – 30.06.12
$22.06
01.07.12 – 03.02.13
$23.08
The FWO alleges old SSG paid the following employees (old SSG casual loading employees) amounts calculated on the following flat rates:[38]
[38] Statement of claim, [19], Annexure A
Employee
Class.
Period
Rate
Abhishek, J.
1
03.08.12-31.08.12
$20.00
Cosentino, J.
1
20.08.12-31.08.12
$20.50
Fotofili, L
1
17.06.12-31.08.12
$20.00
Fraser, J.R.
1
19.07.12-31.08.12
$20.00
Garland, M. A.
2
10.08.12-
31.08.12
$22.00
Goddard, D.O.
2
19.11.10 – 31.08.12
$20.00
Goddard, D.O.
4
19.11.10 – 31.08.12
$20.00
Nasir, W
1
08.08.12-31.08.12
$22.00
Nasir, W
4
08.08.12-31.08.12
$22.00
Racheff, J.
1
11.08.12-31.08.12
$20.00
The FWO alleges the flat rates paid to the old SSG casual loading employees “were insufficient to meet the casual loading” old SSG was required to pay.[39] The precise amount of the underpayment for each employee is not specified. That is because the particular underpayment of each old SSG casual loading employee is part of the total claimed underpayment of each employee that is specified in annexure “N” to the statement of claim.[40]
[39] Statement of claim, [20]
[40] Statement of claim, [22]
Broken shift allowance – old SSG
There is no issue that clauses 15.6 and 15.1(a) of the Award required old SSG to pay to the old SSG Employees a broken shift allowance where an employee was required to work a rostered shift in two periods of duty (excluding crib breaks); and that the amount of the allowance was $10.85 up to 30 June 2011, $11.22 up to 30 June 2012, and $11.55 up to 30 June 2013.[41] The FWO alleges old SSG failed to pay the following broken shift allowances:[42]
[41] Statement of claim [23]; Defence, [18]
[42] Statement of Claim, [24]; annexure C
Employee
Class.
No. of broken shifts
Amount
Armstrong, S.C.
1
4
$46.20
Goddard, D.O.
2
31
$336.35
Nasir, W.
1
5
$57.75
Parwany, M.
1
1
$11.55
Penalties for night work – old SSG
There is no issue that under the Award the old SSG Employees were entitled to the payment of a night shift penalty, and that the amounts of the night shift penalty were those alleged in paragraph 29 of the statement of claim.[43] The FWO alleges that the following old SSG Employees performed work between the hours of midnight to 6.00 am or 6.00 pm to midnight, Monday to Friday, and were thus entitled to be paid, but were not paid, night shift penalties in the following amounts.[44]
[43] Statement of claim, [28], [29]; Defence [21]
[44] Statement of claim, [30], [31], annexure D
Employee
Class.
Night shift hours
Amount
Butt, U.
1
5
$11.65
Fotofili, L.
1
34
$71.02
Fraser, J.R.
1
23
$53.59
Garland, M.A.
2
32.35
$77.40
Goddard, D.O.
2
358.25
$468.88
Goddard, D.O.
4
1
$0.78
Harradine, M.A.
1
5
$11.65
Makoni, S.
1
8.5
$19.81
Parwany, M.
1
5.75
$13.40
Racheff, J.
1
5
$11.65
Sloane, S.J.
1
13.5
$31.46
Solo, A.
1
25
$58.25
The FWO alleges SSG did not pay these entitlements.[45] Mr Lohr does not admit SSG did not pay the night shift penalty rates.[46]
[45] Statement of claim, [31]
[46] Defence, [22]
Penalties for permanent night work – old SSG
It is not in issue that under the Award old SSG was required to pay the old SSG employees a penalty rate for any roster cycle where two thirds of the employee’s ordinary shifts included ordinary hours between midnight and 6.00 am (Permanent Night Shift Penalty), and that the amounts of the penalty old SSG was required to pay were those alleged in paragraph 35 of the statement of claim.[47] The FWO claims old SSG did not pay the following Permanent Night Shift Penalty amounts to the following old SSG Employees:[48]
[47] Statement of claim, [34], [35]; Defence [23]
[48] Statement of claim, [36], [37], annexure E
Employee
Class.
Night shift hours
Amount
Armstrong, S.C.
1
47.83
$154.57
Butt, U.
1
0.5
$1.62
Fraser, J.R.
1
28.32
$91.48
Goddard, D.O.
2
6.75
$7.02
Goddard, D.O.
4
4.5
$4.86
Harradine, M.A.
1
12
$38.76
Jodha, A.
1
20
$64.60
Kaivelata, E.
1
82
$264.88
Makoni, S.
1
38.5
$124.36
Mitchell, P
1
16
$51.68
Nasir, W.
1
0.5
$1.62
Nasir, W.
4
4
$13.72
Neal, T.E.C.
1
16
$51.68
Oliver, B.
1
13.5
$43.61
Parwany, M
1
35
$113.06
Racheff, J.
1
31.25
$100.94
Singh Khaira, R.
1
131
$423.14
Mr Lohr does not admit old SSG did not make these payments.[49]
[49] Defence, [24]
Penalties for Saturday work – old SSG
There is no issue that old SSG was required under the Award to pay to its employees a penalty rate for ordinary hours of work performed on a Saturday (Saturday Penalty), and that the amounts payable were those specified in paragraph 41 of the statement of claim.[50] The FWO claims, however, that the following employees performed ordinary hours of work on a Saturday, but old SSG failed to pay them a Saturday Penalty.[51]
[50] Statement of claim, [40], [41]; Defence, [25]
[51] Statement of claim, [42], [43]; Annexure F
Employee
Class.
Saturday hours
Amount
Armstrong, S.C.
1
19
$102.22
Butt, U.
1
4
$21.52
Deol, H.S.
1
13
$69.94
Fotofili, L.
1
8
$27.92
Fraser, J. R.
1
1
$5.38
Garland, M. A.
2
23.5
$129.95
Goddard, D. O.
2
370.83
$1,317.80
Goddard, D. O.
4
8.5
$15.22
Harradine, M.A.
1
19.5
$104.91
Jakusic, A. V.
1
4
$21.52
Jodha, A.
1
15.5
$83.40
Kaivelata, E.
1
20.5
$110.29
Lapa, F.
1
4.5
$24.21
Makoni, S.
1
21
$112.98
Mitchell, P.
1
18.75
$100.89
Nasir, W.
1
8
$43.04
Nasir, W.
4
23
$131.56
Neal, T. E. C.
1
16.25
$87.43
Oliver, B.
1
4.5
$24.22
Parwany, M.
1
20.5
$110.29
Racheff, J.
1
5
$26.90
Singh Kang S.
1
17
$91.46
Singh Khaira R.
1
44
$236.72
Solo, A.
1
7
$37.66
Young, K. M.
1
4
$21.52
Mr Lohr does not admit old SSG failed to make these payments.[52]
[52] Defence, [26]
Penalties for Sunday work – old SSG
The Award required old SSG to pay those of its employees who worked ordinary hours on Sundays a penalty rate for those hours; and the rates it was required to pay are those specified in paragraph 47 of the statement of claim.[53] The FWO claim that old SSG failed to pay the following employees the Sunday penalty rate:[54]
[53] Statement of claim, [46], [47]; Defence, [27]
[54] Statement of claim,[48], [49]; Annexure G
Employee
Class.
Sunday hours
Amount
Armstrong, S.C.
1
13
$139.88
Deol, H.S.
1
7.75
$83.39
Fotofili, L.
1
24
$243.08
Garland, M. A.
2
0.25
$2.77
Goddard, D. O.
2
441.5
$2,812.22
Goddard, D. O.
4
5
$17.95
Harradine, M.A.
1
10.25
$110.29
Jakusic, A. V.
1
0.75
$8.07
Jodha, A.
1
8.5
$91.46
Kaivelata, E.
1
17.75
$190.99
Lapa, F.
1
5
$53.80
Makoni, S.
1
26
$279.76
Mitchell, P.
1
3
$32.28
Nasir, W.
1
15.75
$169.47
Nasir, W.
4
15
$171.60
Neal, T. E. C.
1
7
$75.32
Oliver, B.
1
5
$53.80
Parwany, M.
1
9.75
$104.91
Racheff, J.
1
4.25
$45.73
Singh Kang S.
1
9.75
$104.91
Singh Khaira R.
1
38.75
$416.95
Young, K. M.
1
0.75
$8.07
Mr Lohr does not admit old SSG failed to make these payments.[55]
[55] Defence, [28]
Public holiday work – old SSG
The award obliged old SSG to pay a penalty rate for ordinary hours of work performed on a public holiday. The penalty rates that were payable for level 2 security officers are specified in paragraph 53 of the statement of claim.[56] The FWO claims that on six occasions from 3 October 2011 to 25 April 2012 Mr Goddard performed work on a public holiday entitling him to be paid Public Holiday Penalty rates. The public holidays it is alleged Mr Goddard worked, and the amounts he was entitled to be paid for those days, are set out in annexure “H” to the statement of claim. The FWO alleges the payments old SSG made were insufficient to meet the entitlement to the Public Holiday Penalty payable to Mr Goddard under the Award.[57] The statement of claim does not identify the amount of the underpayment because it is included in annexure “N” with other amounts Mr Goddard had not been paid.[58]
[56] Statement of claim, [52], [53]; Defence, [29]
[57] Statement of claim, [56]
[58] Statement of claim, [58]
Monday to Friday overtime payments – old SSG
It is common ground that the Award obliged old SSG to pay an overtime loading of 50% for the first two hours and 100% after the first two hours in addition to the employees’ ordinary time rate of pay for work done outside the employees’ ordinary hours of work on a Monday to a Friday.[59] It is also common ground that the rates old SSG was required to pay are those set out in paragraph 60 of the statement of claim,[60] and that the relevant old SSG employees worked the overtime hours specified in annexure “I” to the statement of claim.[61] The FWO alleges old SSG did not pay these employees any overtime loadings for the work specified in annexure “I”.[62] Mr Lohr does not admit old SSG did not make these payments.[63]
[59] Statement of claim, [59]; Defence, [31]
[60] Statement of claim, [60]; Defence, [31]
[61] Statement of claim, [61]; Defence, [31]
[62] Statement of claim, [62]
[63] Defence, [32]
Saturday overtime– old SSG
It is accepted old SSG was required to pay old SSG Employees an overtime loading of 50% for the first two hours and 100% after the first two hours in addition to the employees’ ordinary time rate of pay for work done outside the employees’ ordinary hours of work on a Saturday.[64] It is also common ground that the rates old SSG was required to pay are those set out in paragraph 66 of the statement of claim.[65] The FWO alleges old SSG employees worked the overtime hours specified in annexure “J” to the statement of claim.[66] The FWO alleges old SSG did not pay these employees any overtime loadings for the work specified in annexure “J”.[67] Mr Lohr does not admit old SSG did not make these payments.[68]
[64] Statement of claim, [65]; Defence, [33]
[65] Statement of claim, [66]; Defence, [33]
[66] Statement of claim, [67]; Defence, [31]
[67] Statement of claim, [68]
[68] Defence, [34]
Sunday overtime – old SSG
It is accepted old SSG was required to pay old SSG Employees an overtime loading of 100% in addition to the employees’ ordinary time rate of pay for work done outside the employees’ ordinary hours of work on a Sunday.[69] It is also common ground that the rates old SSG was required to pay are those set out in paragraph 72 of the statement of claim.[70] The FWO alleges old SSG employees worked the overtime hours specified in annexure “K” to the statement of claim.[71] The FWO alleges old SSG did not pay these employees any overtime loadings for the work specified in annexure “K”.[72] Mr Lohr does not admit old SSG did not make these payments.[73]
[69] Statement of claim, [71]; Defence, [35]
[70] Statement of claim, [72]; Defence, [35]
[71] Statement of claim, [73]; Defence, [36] (not admitted)
[72] Statement of claim, [74]
[73] Defence, [36]
Public holiday overtime payments – old SSG
It is common ground old SSG was required to pay old SSG Employees an overtime loading of 150% in addition to the employees’ ordinary time rate of pay for all work done outside the employees’ ordinary hours of work on a public holiday;[74] The FWO alleges Mr Goddard performed the work specified in annexure “L” which attracted these overtime loadings,[75] entitling Mr Goddard to be paid $43.33 an hour,[76] but old SSG paid Mr Goddard $40 per hour.[77] Mr Lohr does not admit old SSG did not make these payments.[78]
[74] Statement of claim, [77]; Defence, [37]
[75] Statement of claim, [78]
[76] Statement of claim, [79]
[77] Statement of claim, [79]
[78] Defence, [38]
Minimum break penalties – old SSG
It is common ground old SSG was required to pay the old SSG Employees a loading for hours of work performed less than eight hours after the conclusion of a shift or overtime,[79] and the amounts it was required to pay are those set out in paragraph 83 of the statement of claim.[80] The FWO alleges Mr Goddard worked the hours referred to in annexure “M”, being hours he worked less than eight hours after the conclusion of a shift or overtime, but old SSG failed to pay to Mr Goddard the minimum break penalty rates.[81] Mr Lohr does not admit old SSG did not make these payments.[82]
[79] Statement of claim, [82]; Defence, [39]
[80] Statement of claim, [83]; Defence, [39]
[81] Statement of claim, [84], [85]
[82] Defence, [40]
Failure to pay casual rates specified by the Award – SSG
It is common ground that the minimum hourly rates and casual loadings that were payable to employees who were classified as Level 1, Level 2, and Level 4 Security Officer are those specified in paragraph 16 of the statement of claim.[83] These amounts were calculated by the FWO by use of the FWO’s “Pay Check Plus database”.[84] Relevant to these reasons are those I have set out in paragraph 22 of these reasons.
[83] Statement of claim, [16], [88]; Defence, [13]
[84] First Christie affidavit, [13]
SSG was required to pay the SSG employees a casual leave loading for each hour worked. SSG paid the SSG Employees the flat rates of pay listed in column 4 of annexure B. Those flat rates of pay were insufficient to meet the casual loading SSG was required to pay those SSG employees. [85] Mr Lohr does not admit SSG did not make these payments.[86]
[85] Statement of claim, [90]
[86] Defence, [42]
Broken shift allowance – SSG
There is no issue that clauses 15.6 and 15.1(a) of the Award required SSG to pay to the SSG Employees a broken shift allowance where an employee was required to work a rostered shift in two periods of duty (excluding crib breaks); and that the amount of the allowance was 1.62% of the standard rate.[87] The FWO alleges that SSG failed to pay the following broken shift allowances:[88]
[87] Statement of claim [93]; Defence, [18], [43]
[88] Statement of Claim, [24], [94], [95]; annexure C,
Employee
Class.
Nos. of broken shifts
Amount
Armstrong, S.C
1
23
$265.65
Nasir, W.
1
45
$519.75
Sildir, T.
1
8
$92.40
Villella, A. N.
1
3
$34.65
Mr Lohr does not admit SSG did not make these payments.[89]
[89] Defence, [44]
Penalties for night work – SSG
There is no issue that under the Award the SSG Employees were entitled to the payment of a night shift penalty, and that the amounts of the night shift penalty were those alleged in paragraph 29 of the statement of claim.[90] The FWO, however, alleges that the following SSG Employees performed work between the hours of midnight to 6.00 am or 6.00 pm to midnight, Monday to Friday, and were thus entitled to be paid the night shift penalty.[91]
[90] Statement of claim, [28], [29], [98], [99]; Defence [21], [45]
[91] Statement of claim, [100], annexure D
Employee
Class.
Night shift hours
Amount
Abhishek, J.
1
4
$9.32
Brenner, J. T.
1
215.67
$502.52
Fotofili, L.
1
11.67
$27.18
Fraser, J. R.
1
12
$37.28
Garland, M. A.
2
92.25
$221.40
Harradine, M. A.
1
106.75
$248.75
Imam, K. T.
1
23.92
$55.73
Janssen, S. M.
1
5
$11.65
Lapa, F
1
20
$46.60
Parwany, M.
1
53
$123.51
Sharp, D. A.
1
13
$30.29
Shea, G. C.
1
7.95
$18.52
Sildir, T.
1
58.92
$137.30
Sloane, S. J.
1
47.75
$111.84
Taufa, O.
1
402.75
$938.51
Tuifua, V.
1
5
$11.65
Vaka, G. A.
1
72.92
$169.92
Villella, A. N.
1
21
$48.93
Wardell-Broadman, Z.
1
18.25
$42.52
The FWO alleges SSG did not pay to these employees these entitlements.[92] Mr Lohr does not admit SSG did not pay these amounts.[93]
[92] Statement of claim, [101]
[93] Defence, [46]
Penalties for permanent night work – SSG
It is not in issue that under the Award SSG was required to pay SSG employees a penalty rate for any roster cycle where two thirds of the employee’s ordinary shifts include ordinary hours between midnight and 6.00 am (Permanent Night Shift Penalty), and that the amounts of the penalty SSG was required to pay were those alleged in paragraph 35 of the statement of claim.[94] The FWO, however, alleges SSG did not pay the Permanent Night Shift Penalty to the following SSG Employees:[95]
[94] Statement of claim, [34], [35], [104], [105]; Defence [23], [47]
[95] Statement of clam [106], annexure E
Employee
Class.
Night shift hours
Amount
Armstrong, S. C.
1
269.32
$870.30
Benfield, D. J.
1
25
$80.75
Garland, M. A.
2
6
$19.92
Hala, T. H.
1
4
$12.92
Harradine, M. A.
1
34.75
$112.24
Imam, K. T.
1
3
$9.69
Jakusic, A. V.
1
20
$64.60
Jamal, D.
1
12
$38.76
Janssen, S. M.
1
4.83
$15.60
Kaivelata, E.
1
478.33
$1,545.13
Makoni, S.
1
244.75
$790.63
Mitchell, P.
1
4
$12.92
Nasir, W.
1
0.5
$1.62
Nasir, W.
4
26
$89.18
Neal, T. E. C.
1
11.5
$37.15
Oliver, B.
1
17
$54.91
Parwany, M.
1
122
$394.10
Racheff, J.
1
91
$293.95
Roberts, A. B.
1
203.67
$657.93
Sharp, D. A.
1
33
$106.59
Shea, G. C.
1
15
$48.45
Sildir, T.
1
35.75
$115.48
Singh Khaira, R.
1
471.92
$1,524.38
Sloane, S. J.
1
5.25
$16.96
Solo, A.
1
11
$35.53
Talarico, J.
1
5
$16.15
Taufa, O.
1
40.5
$130.82
Vaka, G. A.
1
116.91
$377.67
Villella, A. N.
1
180.75
$583.90
Wellstead, M. A.
2
16.25
$53.95
The FWO alleges SSG did not pay to these employees these entitlements.[96] Mr Lohr does not admit SSG did not pay these amounts.[97]
[96] Statement of claim, [107]
[97] Defence, [48]
Penalties for Saturday work – SSG
There is no issue that SSG was required under the Award to pay to its employees a penalty rate for ordinary hours of work performed on a Saturday (Saturday Penalty), and that the amounts payable were those specified in paragraph 41 of the statement of claim.[98] The FWO claims, however, that the following employees performed ordinary hours of work on a Saturday, but SSG failed to pay them a Saturday Penalty.[99]
[98] Statement of claim, [40], [41], [110], [111]; Defence, [25], [49]
[99] Statement of claim, [112], [113]; Annexure “F”
Employee
Class.
Saturday hours
Amount
Armstrong, S. C.
1
116.25
$625.45
Benfield, D. J.
1
19.25
$103.57
Brenner, J. T.
1
162.2
$872.64
Deol, H. S.
1
24
$129.12
Fotofili, L.
1
5.33
$28.69
Fraser, J. R.
1
4
$21.52
Garland, M. A.
2
83
$459.00
Hala, T. H.
1
6
$32.28
Harradine, M. A.
1
122.75
$660.44
Imam, K. T.
1
35.33
$190.51
Israel, K. W.
1
4
$21.52
Jakusic, A. V.
1
37.5
$201.76
Jamal, D.
1
7
$37.66
Janssen, S. M.
1
15.83
$85.17
Jodha, A.
1
4
$21.52
Kaivelata, E.
1
125.25
$673.85
Lapa, F.
1
21.75
$117.02
Makoni, S.
1
148.25
$797.59
Mitchell, P.
1
4.75
$25.56
Nasir, W.
1
93.91
$505.25
Nasir, W.
4
133
$760.76
Neal, T. E. C.
1
33.75
$181.58
Oliver, B.
1
6.25
$33.63
Parwany, M.
1
118.5
$637.54
Roberts, A. B.
1
86
$462.70
Sharp, D. A.
1
42
$225.98
Shea, G. C.
1
13.05
$70.21
Sildir, T.
1
110.24
$593.11
Singh Kang, S.
1
8
$43.04
Singh Khaira, R.
1
147.75
$794.90
Solo, A.
1
14.75
$79.36
Talarico, J.
1
0.75
$4.04
Taufa, O.
1
119.75
$644.28
Terrill, R.
1
7.5
$40.35
Vaka, G. A.
1
84.75
$455.98
Villella, A. N.
1
117.5
$632.15
Wardell-Broadman, Z.
1
19.5
$104.91
Wellstead, M. A.
2
11
$60.83
Mr Lohr does not admit SSG did not pay these amounts.[100]
[100] Defence, [50]
Penalties for Sunday work – SSG
There is no issue the Award required SSG to pay those of its employees who worked ordinary hours of work on a Sunday a penalty rate for those hours (Sunday penalty); and the rates it was required to pay are those specified in paragraph 47 of the statement of claim.[101] The FWO claims that SSG failed to pay the following employees the Sunday penalty:[102]
[101] Statement of claim, [46], [47], [116], [117]; Defence, [27], [51]
[102] Statement of claim, [119]; Annexure G
Employee
Class.
Sunday hours
Amount
Armstrong, S. C.
1
39.25
$422.33
Benfield, D. J.
1
6.25
$67.25
Brenner, J. T.
1
80.63
$889.10
Deol, H. S.
1
13
$139.88
Fotofili, L.
1
8.5
$91.46
Garland, M. A.
2
6.75
$74.75
Hala, T. H.
1
2
$21.52
Harradine, M. A.
1
80.5
$866.18
Imam, K. T.
1
41.83
$450.09
Israel, K. W.
1
1.5
$16.14
Jakusic, A. V.
1
7.25
$78.01
Janssen, S. M.
1
0.17
$1.83
Jodha, A.
1
0.5
$5.38
Kaivelata, E.
1
73
$785.48
Lapa, F.
1
1.75
$18.83
Makoni, S.
1
142.75
$1,535.99
Mitchell, P.
1
0.75
$8.07
Nasir, W.
1
93.45
$1,005.52
Nasir, W.
4
110
$1,258.40
Neal, T. E. C.
1
13.25
$142.57
Parwany, M.
1
70.5
$758.58
Racheff, J.
1
5
$53.80
Roberts, A. B.
1
79.75
$858.11
Sharp, D. A.
1
30
$322.80
Shea, G. C.
1
1
$10.76
Sildir, T.
1
127
$1,366.52
Singh Kang, S.
1
4
$43.04
Singh Khaira, R.
1
148.75
$1,600.55
Solo, A.
1
6
$64.56
Taufa, O.
1
62
$667.12
Terrill, R.
1
1.5
$16.14
Vaka, G. A.
1
84.17
$905.67
Villella, A. N.
1
130.75
$1,406.87
Wardell-Broadman, Z.
1
12.67
$136.33
Wellstead, M. A.
2
10.75
$119.01
Mr Lohr does not admit SSG did not pay these amounts.[103]
[103] Defence, [52]
Public holiday work – SSG
There is no issue the Award obliged SSG to pay SSG employees a penalty rate for ordinary hours of work performed on a public holiday (Public Holiday penalty). The penalty rate that was payable for a level 1 security officer is specified in paragraph 123 of the statement of claim.[104] The FWO claims that SSG failed to pay the following employees the Public Holiday penalty:[105]
[104] Statement of claim, [52], [122], [123]; Defence, [29], [53]
[105] Statement of claim, [124], Annexure H
Employee
Class.
Public Holiday Hours
Amount
Armstrong, S. C.
1
21
$338.94
Harradine, M. A.
1
6.5
$104.91
Jakusic, A. V.
1
0.75
$12.11
Kaivelata, E.
1
17.5
$282.45
Makoni, S.
1
11.25
$181.58
Parwany, M.
1
0.25
$4.04
Racheff, J.
1
7.25
$117.02
Roberts, A. B.
1
10
$161.40
Singh Khaira, R.
1
5
$80.70
Solo, A.
1
0.42
$6.78
Taufa, O.
1
8
$129.12
Vaka, G. A.
1
6
$96.84
Villella, A. N.
1
4.25
$68.60
Wardell-Broadman, Z.
1
0.5
$8.07
Mr Lohr does not admit SSG did not pay these amounts.[106]
[106] Defence, [54]
Monday to Friday overtime payments – SSG
It is common ground that the Award obliged SSG to pay SSG employees an overtime loading of 50% for the first two hours and 100% after the first two hours in addition to the employees’ ordinary time rate of pay for work done outside the employees’ ordinary hours of work on a Monday to a Friday.[107] It is also common ground that the rates SSG was required to pay are those set out in paragraph 60 of the statement of claim.[108] The FWO alleges the relevant SSG employees worked the overtime hours specified in annexure “I” to the statement of claim.[109] The FWO alleges SSG did not pay these employees any overtime loadings for the work specified in annexure “I”.[110] Mr Lohr does not admit old SSG did not make these payments.[111]
[107] Statement of claim, [129]; Defence, [55]
[108] Statement of claim, [130]; Defence, [55]
[109] Statement of claim, [131]
[110] Statement of claim, [132]
[111] Defence, [56]
Saturday overtime – SSG
It is accepted SSG was required to pay SSG Employees an overtime loading of 50% for the first two hours and 100% after the first two hours in addition to the employees’ ordinary time rate of pay for work done outside the employees’ ordinary hours of work on a Saturday.[112] It is also common ground that the rates SSG was required to pay are those set out in paragraph 66 of the statement of claim.[113] The FWO alleges four SSG employees worked the overtime hours specified in annexure “J” to the statement of claim.[114] The FWO alleges SSG did not pay these employees any Saturday overtime loadings for the work specified in annexure “J”.[115] Mr Lohr does not admit SSG did not make these payments.[116]
[112] Statement of claim, [135]; Defence, [57]
[113] Statement of claim, [66], [136]; Defence, [57]
[114] Statement of claim, [137]
[115] Statement of claim, [138]
[116] Defence, [58]
Sunday overtime – SSG
It is accepted SSG was required to pay SSG Employees an overtime loading of 100% in addition to the employees’ ordinary time rate of pay for work done outside the employees’ ordinary hours of work on a Sunday.[117] It is also common ground that the rates SSG was required to pay are those set out in paragraph 72 of the statement of claim.[118] The FWO alleges seven SSG employees worked the overtime hours specified in annexure “K” to the statement of claim.[119] The FWO alleges SSG did not pay these employees any Sunday overtime loadings for the work specified in annexure “K”.[120] Mr Lohr does not admit SSG did not make these payments.[121]
[117] Statement of claim, [141]; Defence, [59]
[118] Statement of claim, [142]; Defence, [59]
[119] Statement of claim, [143]; Defence, [60] (not admitted)
[120] Statement of claim, [144]
[121] Defence, [60]
Public holiday overtime payments – SSG
It is common ground SSG was required to pay SSG Employees an overtime loading of 150% in addition to the employees’ ordinary time rate of pay for all work done outside the employees’ ordinary hours of work on a public holiday;[122] and that the rates old SSG was required to pay are those set out in paragraph 148 of the statement of claim.[123] The FWO alleges Mr Armstrong and Mr Singh Khaira performed the work specified in annexure “L” which attracted these overtime loadings,[124] but SSG paid Mr Armstrong and Mr Singh Khaira at the rate of $37.50 per hour.[125] Mr Lohr does not admit SSG did not make the payments it ought to have made to these employees.[126]
[122] Statement of claim, [147]; Defence, [61]
[123] Statement of claim, [148]; Defence, [61]
[124] Statement of claim, [149]
[125] Statement of claim, [150]
[126] Defence, [62]
Evidence tendered at May 2015 hearing
The principal evidence on which the FWO relied at the hearing of 14 May 2015 is an affidavit made by Mr Christie on 13 November 2014 (first Christie affidavit) and an affidavit made on 19 March 2015 (second Christie affidavit), together with the documents exhibited to those affidavits. Mr Christie is an inspector employed by the Office of the FWO.
According to that evidence, on 10 December 2012, Mr Christie commenced work on a workplace complaint received from Mr Goddard, an employee of SSG.[127] Mr Christie issued to old SSG and SSG a notification of investigation letter and two notices to produce calling for documents relating to the employment of employees of old SSG and SSG.[128] The notices to produce were not complied with by the dates specified in the notices.[129]
[127] First Christie affidavit, [5]
[128] First Christie affidavit, [5]
[129] First Christie affidavit, [7]
On 1 February 2013, after he sent to Mr Lohr letters dated 18 January 2013, Mr Christie met with Mr Lohr and handed to him two further notices to produce, one addressed to old SSG and one addressed to SSG.[130] Mr Lohr produced to Mr Christie a list of 34 staff members engaged by SSG,[131] and a small selection of rosters, timesheets, and payslips relating to employees of SSG.[132] Between 1 and 12 February 2013 Mr Christie prepared preliminary underpayment calculations based on the records Mr Lohr provided, and he formed the view that underpayments had occurred.[133]
[130] First Christie affidavit, [9]
[131] First Christie affidavit, [9(c)(i)]; exhibit MDC-1 tab 9
[132] First Christie affidavit, [9(c)(ii)]; exhibit MDC-1 tab 10
[133] First Christie affidavit, [10]; exhibit MDC-1 tab 11
On or about 12 February 2013 another inspector, Inspector Domino, took over the investigation of SSG. Inspector Domino met Mr Lohr on 22 February 2013 and received two classes of documents. These were provided in answer to the notices to produce Mr Christie had given Mr Lohr at their meeting on 1 February 2013.[134] First, there is what Mr Christie describes as “timesheets relating to work performed by Safecorp Employees”.[135] Mr Christie exhibited the following:
a)Four sheets titled “HARBORD BEACH HOTEL Security Time Sheet” covering the period 9 August 2012 to 2 September 2012.
b)Four sheets titled “HARBORD DIGGERS Security Time Sheet” covering the period 6 August 2012 to 3 September 2012.
c)Four sheets titled “Farrell’s Basement Security Time Sheet” covering the period 9 August 2012 to 1 September 2012.
d)Four sheets titled “CHARLIE BAR Security Time Sheet” covering the period 10 August 2012 to 1 September 2012.
e)One sheet titled “MANLY SKIFF CLUB Security Time Sheet” covering the period 31 August 2012 to 2 September 2012.
f)Two sheets titled “MANLY BOWLING CLUB Security Time Sheet” covering the period 6 August 2012 to 26 August 2012.
g)Four sheets titled “STEYNE HOTEL Security Time Sheet” covering the period 6 August 2012 to 2 September 2012.
[134] First Christie affidavit, [12(a)(ii)]
[135] First Christie affidavit, [12(a)(ii)A.]; exhibit MDC-1 tab 13
The second class of documents Ms Domino received were “payslips relating to work performed by Safecorp Employees”.[136] Each of the payslips is in the same form. They identify, among other things, the name of the employee, and, for each employee, the pay period, the hours worked, and, with the exception of payslips issued to Mr Lohr and Rachel Lohr (which I infer was Mr Lohr’s wife), the hourly rate. It appears Mr Christie exhibited payslips that record the following information:
[136] First Christie affidavit, [12(a)(ii)B.]; exhibit MDC-1 tab 14
Employee
Pay period
Rate
Mitchell, P.
06.08.12-02.09.12
$25.00
Singh Kang, S.
06.08.12-02.09.12
$25.00
Jennison, S.
06.08.12-02.09.12
$27.00
Sloane, S.
06.08.12-02.09.12
$23.00
Makoni, S.
06.08.12-02.09.12
$25.00
Armstrong, S.
06.08.12-02.09.12
$25.00
Sramek, T.
20.08.2012-02.09.12
$25.00
Butt, U.[137]
06.08.12-19.08.12
$23.00
Neal, T.
06.08.12-02.09.12
$25.00
Fraser, J.
06.08.12-02.09.12
$20.00
Racheff, J.
06.08.12-02.09.12
$20.00
Deol, H. S.
06.08.12-02.09.12
$25.00
Young, K.
06.08.12-19.08.12
$25.00
Cosentino, J.
20.08.12-02.09.12
$20.50
Parwany, M.
06.08.12-02.09.12
$25.00
Karas, M.
20.08.12-02.09.12
$25.00
Jodha, A.
06.08.12-02.09.12
$20.00
Jakusic. A.
20.08.12-02.09.12
$22.00
Benfield, D.
20.08.12-02.09.12
$25.00
Lapa, F.
06.08.12-02.09.12
$25.00
Kanibelata, E.
06.08.12-02.09.12
$25.00
Nasir, W.
06.08.12-02.09.12
$22.00
Garland, M.
06.08.12-02.09.12
$22.00
Silder, T.
20.08.12-02.09.12
$25.00
Taufa, O.
06.08.12-02.09.12
$25.00
Oliver, B.
06.08.12-02.09.12
$25.00
Harradine, M.
06.08.12-02.09.12
$25.00
Tuifua, M.
06.08.12-02.09.12
$25.00
[137] Mr Butt was also paid a “lockup” rate of $40.00.
On 26 February 2013 Inspector Domino received from Mr Goddard time sheets[138] and hand written notebooks.[139] The time sheets relate to work Mr Goddard performed at the Manly Skiff Club from 1 July 2011 to 26 August 2012.
[138] First Christie affidavit, [12(b)(i)]; exhibit MDC-1 tab 16
[139] First Christie affidavit, [12(b)(ii)]; exhibit MDC-1 tab 17
From 26 February 2013 to 5 March 2013 Inspector Domino issued notices to produce to ten clients of old SSG and SSG. Mr Christie exhibited to his affidavits the following documents:
a)Invoices issued by old SSG to the following customers and for the following periods:[140]
[140] First Christie affidavit, [12(c)]; exhibit MDC-1 tabs 18-27
Client
Period
Charlie Bar (Novotel Sydney Manly Pacific)
03.08.12 - 01.09.12
Steyne Hotel, Manly
19.08.12 - 27.08.12
Skiff Sailing Club
17.08.12 - 02.09.12
The Village Balgowlah BMC
07.06.12 - 31.08.12
Manly Bowling Club
30.07.12 - 02.09.12
Harbord Bowling & Recreation Club
20 and 21 July 2102
Miramare Gardens
04.08.12 - 27.10.12
McDonalds, Warriewood
06.07.12 - 11.08.12
Willoughby Council
20.07.12 & 31.08.12
Manly Council
28.10.11 - 08.09.12
b)Security and CCTV Control Room Guidelines and security diary Ms Domino received from Manly Council recording notes taken by old SSG employees while working in the Manly Council CCTV Control Room.[141]
[141] First Christie affidavit, [12(d)]; exhibit MDC-1 tabs 28 and 29
On 21 March 2013 Inspector Domino received further documents from Mr Lohr in response to the notice to produce that was provided to Mr Lohr on 22 February 2013. These documents included timesheets of work performed by old SSG employees for the following venues and periods:[142]
[142] First Christie affidavit, [12(f)]; exhibit MDC-1 tab 32
Venue
Period
Charlie Bar
17.08.12 - 01.09.12
Farrell’s Basement
09.08.12 - 01.09.12
Harbord Beach Hotel
09.08.12 - 02.09.12
Harbord Diggers
06.08.12 - 03.09.12
Steyne Hotel
13.08.12 - 02.09.12
Manly Bowling Club
20.08.12 - 26.08.12
Manly Skiff Club
31.08.12 - 02.09.12
Mr Christie then dealt with the calculation of the underpayments. First, Mr Christie noted Inspector Domino conducted or caused to be conducted searches of a data system maintained by the FWO known as the “Pay Check Plus database”.[143] Mr Christie described that database as a “publically available search tool which extracts information about applicable Modern Award rates of pay”.[144] Mr Christie exhibited a number of documents generated from the PSP database in relation to the Award.[145] The documents identify as of 1 July 2011 and 1 July 2012 the various amounts that were payable under the Award to each of Security Officer levels 1 and 2. The amounts include the hourly casual rates, penalty rates, and broken shift allowances.
[143] First Christie affidavit, [13]
[144] First Christie affidavit, [13]
[145] First Christie affidavit, [13]; exhibit MDC-1 tab 33
Second, Mr Christie looked at the underpayment calculations Inspector Domino caused to be prepared. Mr Christie says these calculations were the basis for the amounts claimed in the statement of claim, and described in the schedules that are annexed to the statement of claim.[146] Mr Christie said the calculations:[147]
a)are based on the time and wage records received from Mr Lohr, Mr Goddard, and clients of old SSG, as set out earlier in his affidavit, and which I have already summarised;
b)compare the amounts actually paid to the old SSG Employees with the amounts they were entitled to receive under the Award;
c)the time and wage records referred to in (a) indicate the old SSG Employees were principally engaged to provide “crowd control”;
d)under Schedule C to the Award, crowd control duties may be performed either by a Security Officer – Level 1 (basic crowd control) or a Security Officer – Level 2 (crowd control); and
e)subject to two exceptions, the calculations were performed on the basis that all employees fell within the classification of Security Officer Level 1.
[146] First Christie affidavit, [14]
[147] First Christie affidavit, [15]
The first of the two exceptions to which Mr Christie referred relates to Mr Goddard and Mr Garland. Each of Mr Goddard and Mr Garland had more than twelve months’ experience as Security Officers. Under Schedule C to the Award, a security officer with greater than twelve months experience may undertake crowd control duties as a Security Officer – Level 2. The second exception relates to those employees (Mr Goddard and Mr Nasir) who worked in the Manly Council CCTV Control Room. Those employees fall within the classification of Security Officer – Level 4.
It will be seen that the calculations referred to by Mr Christie only relate to underpayments by old SSG; and the documents that are exhibited to the First Christie affidavit are limited to time and wage records issued by old SSG.
Are the Declarations binding on Mr Lohr?
Counsel for the FWO submitted Mr Lohr is bound by the Declarations. Counsel relied on the following matters:[148]
a)Mr Lohr was given notice of the application for default judgment, but he elected not to appear and oppose that application;
b)the Declarations are final, binding and conclusive as to SSG’s contraventions of the FW Act;
c)Mr Lohr was properly joined as a party and is bound by the Declarations.
[148] Applicant’s Further Outline of Submissions on Liability and Penalty (Further FWO Submissions), [50]
Counsel also relied on what undoubtedly are correct propositions of law. At least where default judgment has been entered for a defendant’s failure to plead to a statement of claim, the defendant in default, by failing to plead, is deemed to have admitted each allegation made in the statement of claim;[149] a positive declaration gives rise to a res judicata and to issue estoppel;[150] and a default judgment gives rise to an issue estoppel to the same extent as a judgment entered after a contested hearing.[151] These principles, however, say nothing about whether a default judgment entered against one of two respondents in circumstances where the other respondent has filed a defence is binding on the party who filed a defence.
[149] Further FWO Submissions, [41], [42], referring to, among others, the judgment of Kiefel J (as her Honour then was) in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (2006) 236 ALR 665 at [36] and [44]
[150] Further FWO Submissions, [44], referring to, among other cases, Becker v City of Marion Corporation [1977] AC 271
[151] Further FWO Submissions, [45], referring to, among other cases, Timberland Property Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd; Oaklands Property Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd [2011] NSWSC 466 at [9]-[10] (Barrett J (as his Honour then was)
The starting point in determining whether the Declarations are binding on Mr Lohr is the text of r.13.03B(2)(c) of the FCC Rules, being the rule pursuant to which I made the Declarations. The text is as follows (emphasis added):
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; . . . .
Rule 13.03A(2) of the FCC Rules defines when “a respondent is in default”; and that consists of seven things “the respondent” may fail to do (at least where the respondent has not satisfied the applicant’s claim).
It will be seen that the power to give judgment that is conferred by r.13.03B(2)(c) of the FCC Rules is engaged when “a respondent” is in default; and the power, when engaged, is to give judgment against “the respondent”, that is, the respondent who is in default. The rule does not authorise the Court to give judgment against a respondent who is not in default. In those circumstances, the deemed admissions by the defaulting respondent that arises on the giving of default judgment against that respondent cannot operate as a deemed admission by the respondent who has not defaulted.
There are at least two considerations that support the plain meaning of the text of r.13.03B(2)(c) of the FCC Rules. First, where the non-defaulting respondent has filed a defence that has put in issue one or more of the allegations made in the statement of claim, there would be no room for any deemed admission to operate in relation to the allegations made in the statement of claim the non-defaulting respondent has not admitted or denied. That is because the non-defaulting respondent will have expressly identified the allegations the respondent does not admit. Second, if, as the FWO submits, the non-defaulting respondent who has been notified of an application for default judgment against the defaulting respondent should oppose the giving of a default judgment if he or she wishes to avoid being deemed to admit allegations made against the defaulting respondent, it must follow that where such respondent has an arguable defence the Court will be bound not to grant default judgment against the defaulting respondent until after the claims against the non-defaulting respondent has been heard and decided. That is not a result that could reasonably be imputed to the framers of the FCC Rules.
Thus, to the extent the FWO did not adduce evidence of SSG’s contraventions of s.45 of the FW Act, it will be necessary for her to apply for leave to reopen her case.
Application for leave to reopen
The FWO seeks leave to reopen her case to rely on the affidavit of Mr Christie made on 10 July 2015 (third Christie affidavit), and the documents exhibited to that affidavit. Before I consider whether I should grant leave to reopen, it will be useful to summarise the additional evidence, and the principles I should apply.
The third Christie affidavit
Mr Christie confirmed that the documents that had been exhibited to the first Christie affidavit were limited to time and wage records for the period in which old SSG operated, namely, 19 November 2010 to 31 August 2012.[152] Mr Christie, however, deposes that inspectors obtained time and wage records relating to the SSG Employees for the period from 1 September 2012 to 3 February 2013.[153] These documents have been exhibited to the third Christie affidavit.
[152] Third Christie affidavit, [8]
[153] Third Christie affidavit, [9] – [13]
Mr Christie then referred to the calculations contained in the first Christie affidavit by which the amounts specified at paragraphs 153-155 of, and annexures “C” to “N” to, the statement of claim have been arrived at. Mr Christie deposes that these calculations were:
a)based on the time and wage records the FWO received in the course of her investigation; and
b)the calculations compared the amounts paid to the Employees as revealed by the time and wage documents with the amounts the Employees ought to have been paid under the Award for the time specified in the time and wage records.[154]
[154] Third Christie affidavit, [14]
Mr Christie further deposed to Inspector Domino having requested the FWO’s “Centralised Calculations Team” (CCT) to prepare calculations. The CCT prepared calculations that are set out in 45 spreadsheets, being one spreadsheet for each Employee.[155] Mr Christie illustrated what was contained in the spreadsheets by reference to one employee, Mr Sloane.[156] Mr Christie identifies the columns of the spreadsheets from which have been obtained the amounts contained in the schedules that are attached to the statement of claim.[157] Finally, Mr Christie says, based on the time and wage records relating to the employees identified in paragraph 20 of the statement of claim and the spreadsheets, he concluded those employees were paid at flat rates ranging from $20 to $25 per hour for all work they had performed; and that, on comparing those rates with the casual loading provided for under the Award, he concluded the flat rates the employees were paid were less than the casual loading rates provided for by the Award.[158]
[155] Third Christie affidavit, [15]-[16]
[156] Third Christie affidavit, [17]
[157] Third Christie affidavit, [18], [19]
[158] Third Christi affidavit, [20], [21]
Principles
The notion of “reopening a case” presupposes a distinct system of procedure for the conduct of trials. That is the system which prevailed in the conduct of trials at common law and which, for the most part, prevails in the conduct of trials in Australia today, both criminal and civil. Under that system – which Wigmore names “antiphonal”[159] – evidence is presented to the court by the parties in a particular order. First, the party bearing the onus of proof on at least one issue (A) must present all of A’s evidence and complete, that is, “close”, A’s case before the other party (B) can be expected to adduce evidence in B’s own case. Second, if B elects to call evidence, B must also present all of the evidence on which B intends to rely.
[159] Wigmore, J. H., Evidence in Trials at Common Law revised by J H Chadbourn, 1976, Vol 6 at page 647
This system of procedure is underpinned by a rule of practice, which is often referred to as “the rule against splitting a case”, that applies both to criminal and civil trials, although the vigour with which the rule is applied differs substantially according to whether the proceeding is criminal or civil.[160] The rule in criminal cases was stated by Gibbs CJ and Wilson J in R v Chin:[161]
The general principle is that the prosecution must present its case completely before the accused is called upon for his defence. Although the trial judge has a discretion to allow the prosecution to call further evidence after evidence has been given for the defence, he should permit the prosecution to call evidence at that stage only if the circumstances are very special or exceptional and, generally speaking, not if the occasion for calling the further evidence ought reasonably to have been foreseen. The principle applies where the prosecution seeks to call evidence to rebut matters raised for the first time by the defence; if the rebutting evidence was itself relevant to prove the prosecution case (unless, perhaps, it was no more than marginally, minimally or doubtfully relevant: Reg. v. Levy and Tait (1966) 50 Cr.App.R 198, at p. 202) and the need to give it could have been foreseen it will, generally speaking, be rejected. The principle would not prevent the prosecution from giving in reply evidence directed to an issue the proof of which did not lie on the prosecution, such as insanity, or from rebutting evidence of the accused’s good character, provided that the prosecution had not anticipated the raising of an issue of this kind and led evidence with regard to it, for the prosecution must not split its case on any issue. Also, it has been held that evidence may be given in reply to prove some purely formal matter the proof of which was overlooked in chief.
[160] “But the rules are likely to be applied less strictly in civil cases. As in criminal cases, the court in civil cases has a discretion, but one which will be more liberally exercised.” (Heydon, J. D., Cross on Evidence Tenth Australian edition, LexisNexis Butterworths at [17720])
[161] (1985) 157 CLR 671 at pages 676-7
The rule is based on fairness to the accused:[162]
The relevant principle is essentially one of fairness. The accused is entitled to know the case which he has to meet so that he may have adequate opportunity to determine what questions he may wish to ask in cross-examination, what evidence, if any, he may wish to call and what objections, if any, he may wish to raise in the case against him. Ordinarily the depositions upon which he is committed for trial will provide him with this information in advance and if the prosecution intends to call additional evidence it is required to give notice of its intention to do so. The whole procedure would be undermined if the prosecution were permitted, save in exceptional circumstances, to call evidence in support of its case after the close of the case for the defence.
[162] R v Chin (1985) 157 CLR 671 at pages 685-6 (Dawson J)
The position in civil cases was summarised by Kenny J in Inspector-General in Bankruptcy v Bradshaw:[163]
[163] [2006] FCA 22 at [24], [26]
The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are:
(1) fresh evidence
(2) inadvertent error
(3) mistaken apprehension of the facts
(4) mistaken apprehension of the law
. . . .
[T]he overriding principle requires that the Court consider whether, taken as a whole, the justice of the case favours the grant of leave to re-open.
These principles, however, were stated in a civil proceeding that did not involve a claim for a pecuniary penalty. The question is whether Bradshaw represents the approach that should be taken when considering whether to grant leave to reopen a case in proceedings where a pecuniary penalty is claimed. The starting point is the principle that a proceeding for the recovery of a pecuniary penalty, such as that provided for by the FW Act, is a civil proceeding, and that “the applicable procedure and standard of proof [are] civil procedure and proof on the balance of probabilities as opposed to criminal procedure and proof beyond reasonable doubt”.[164]
[164] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [17]
That a proceeding for the recovery of a penalty is a civil proceeding, however, does not necessarily mean that such proceeding is conducted like any other ordinary civil proceeding. That is so because the exposure of a respondent who is a natural person to an order for the payment of a pecuniary penalty entitles such person to certain procedural protections that are not otherwise available to a respondent in civil proceedings where a pecuniary penalty is not claimed; and those protections arise from the need to give effect to the privilege against exposure to penalties (penalty privilege). The penalty privilege, when claimed, entitles a (natural) person to resist being compelled to expose himself or herself to a pecuniary penalty. The privilege “is one of a trilogy of privileges that bear some similarity with the privilege against incrimination. (The other two privileges are the privilege against exposure to forfeiture and the privilege against exposure to ecclesiastical censure)”;[165] and the penalty privilege “serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it”.[166]
[165] Rich v Australian Securities & Investments Commission (2004) 220 CLR 129 at [23]
[166] Rich v Australian Securities & Investments Commission (2004) 220 CLR 129 at [24]
One procedural protection that arises from the penalty privilege – at least where “the whole and avowed object of the proceedings is the infliction of the penalty”[167] - is that an order for discovery should not be made against a respondent who claims the privilege.[168] Another protection is that considered by Finkelstein J in Australian Securities and Investments Commission v Mining Projects Group Ltd & Ors.[169] His Honour found that a respondent to a proceeding for a civil penalty who wishes to rely on affirmative facts for his or her defence need not plead such affirmative facts until after the applicant had closed its case.
[167] R v Associated Northern Collieries (1910) 11 CLR 738 at page 742 (Isaacs J)
[168] Rich v Australian Securities & Investments Commission (2004) 220 CLR 129 at [39] referring to R v Associated Northern Collieries (1910) 11 CLR 738 at 747
[169] (2007) 164 FCR 32
It has been held that the principles governing leave to reopen, when applied to proceedings in which pecuniary penalties are claimed, should take into account that fact. In Re HIH Insurance Ltd (in prov liq: Australian Securities and Investments Commission v Adler[170] the applicant (ASIC), over the objection of the defendants, sought to read two affidavits in reply. Santow J said:[171]
I do accept the Defendants’ contention that the Plaintiff, being ASIC must act in the public interest rather than self-interest in pursuing civil penalties of this sort, with the corollary that the Court's discretion must necessarily take that factor into account as it must the overriding requirement of fairness in what is essentially a civil prosecution. . . .
It will be appreciated that the rule against splitting thus has a public interest dimension in terms of prosecutorial fairness which still leaves such discretion as the Court has to be more liberally exercised than in criminal cases but nonetheless with a proper regard for the seriousness of the civil penalties involved. . .
[170] (2001) 40 ACSR 214
[171] (2001) 40 ACSR 214 at [8] and [9]
Austin J, in Australian Securities and Investments Commission v Rich, approved Santow J’s approach:[172]
It seems to me that the approach taken by Santow J in Adler is consistent with the High Court’s approach in Rich. The court treats an ASIC civil penalty case in which a declaration of contravention is sought as a proceeding subject to the civil rules of evidence and procedure, but when exercising its discretion in evidentiary and procedural matters, the court has regard to the nature of the proceeding as a civil penalty proceeding and the seriousness of the consequences of granting the relief sought (including disqualification orders that have a penal effect).
[172] (2006) 235 ALR 587 at [15]
There is another matter that has been held to be relevant to whether leave to reopen should be granted; and this relates to whether the application is made after judgment has been reserved. In Marriner v Australian Super Developments Pty Ltd, the Court of Appeal of Victoria said:[173]
Where a case has been closed and judgment reserved, exceptional circumstances will be required for a court to allow the case to be reopened. This rule applies with even greater force where reasons for judgment have already been delivered but final orders have not yet been made. The rule is necessary to ensure finality in litigation and the efficient administration of justice, and to avoid a reopened hearing being ‘bedevilled by arguments about … the scope of the re-opened proceeding’.
[173] Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 at [185], referring to Spotlight Pty Ltd v NCON Australia Ltd (2012) 46 VR 1, 5 – 6, [17]–[18].
Should leave to reopen be granted?
The evidence contained and referred to in the third Christie affidavit is not fresh evidence. Further, the FWO did not fail to tender the third Christie affidavit through inadvertence; her decision not to tender that evidence was based on the view that the Declarations were binding on Mr Lohr and, for that reason, it was not necessary for the FWO to adduce in her case against Mr Lohr evidence of the contraventions referred to in the Declarations.
Can it be said that the FWO’s decision not to tender the evidence contained in the third Christie affidavit was based on a misapprehension of the law? In one sense, it can be said the FWO misapprehended the law. The FWO was of the view, contrary to what I found, that a default judgment against one of two respondents is binding on the non-defaulting respondent. But this misapprehension of the law, however, is not the sort of misapprehension of the law that is relevant to the exercise of the discretion to grant leave to reopen a case. At the hearing of 14 May 2015 there was an exchange between counsel for the FWO and me which, in my opinion, ought reasonably to have alerted the FWO that I was of the view the FWO was required to prove by evidence SSG’s contraventions of the FW Act in which it was alleged Mr Lohr was involved:[174]
[174] Transcript, 14 May 2015, T3.15-T4.10
HIS HONOUR: Yes. So you’re not assuming you do not have to prove the first respondent’s contraventions in your claim against Mr Lohr?
MR DARAMS: Well, we would say that those contraventions have been made and orders have been declared to that effect.
HIS HONOUR: But how is that binding on Mr Lohr?
MR DARAMS: Well, we will come to the evidence ‑ ‑ ‑
HIS HONOUR: Yes.
MR DARAMS: ‑ ‑ ‑ that can demonstrate in addition, but we would say the fact that the court has already declared contraventions, the issue of ‑ ‑ ‑
HIS HONOUR: But only as against ‑ ‑ ‑
MR DARAMS: The first respondent, so ‑ ‑ ‑
HIS HONOUR: Respondent, and that’s not binding on Mr Lohr, is it?
MR DARAMS: We will have to prove that he was involved in those contraventions.
HIS HONOUR: Yes, which means you have to then prove the contraventions.
MR DARAMS: Yes.
HIS HONOUR: Yes.
MR DARAMS: Yes.
HIS HONOUR: Well, I think that’s – and I think you’ve got the evidence there, but the way I read your submissions was that you didn’t have to worry about that. I think you do ‑ ‑ ‑
MR DARAMS: Yes. Well, for abundant caution then ‑ ‑ ‑
HIS HONOUR: I think you do have to worry about that.
MR DARAMS: Yes. Well, we will take – well, it’s obviously the evidence that has been relied upon in that respect, so we will take you to that.
HIS HONOUR: Yes. All right. . . . .
In other words counsel for the FWO was aware there was a different view to the one he was advancing about whether judgment against a defaulting respondent is binding on a non-defaulting respondent; yet the FWO persisted with her submissions that default judgment against a defaulting respondent was binding on the non-defaulting respondent to the extent of allegations that were made against both respondents. All that has happened is I have not accepted the FWO’s submissions.
That this does not constitute any relevant misapprehension of the law is supported by the following passage from the judgment of Kenny J in Bradshaw:[175]
The present is not a case of new evidence, inadvertent error or mistaken apprehension of the facts. Further, I accept that, as counsel for the respondents submitted, this was not a case of mistaken apprehension of the law, because the applicants knew the substance of the respondents’ case, which depended on an understanding of the law that differed from their own. That is, with full knowledge that there was another view of the law to theirs, the applicants decided not to attempt to present the evidence that was relevant and necessary if the Court accepted the respondents’ case and not theirs. . . . There could have been no misapprehension on the applicants’ part about the respondents’ position as to the law. All that has happened is that the Court has accepted the respondents’ submissions on the bond in preference to their own. I accept that, as counsel for Ace contended, the principle of finality of litigation should preclude the Court from regarding this circumstance as a relevant ‘misapprehension’ on an application for leave to re-open.
[175] [2006] FCA 22 at [25]
Mr Lohr gave evidence at the hearing. He referred to his having submitted AWAs before the FW Act came into effect and his receiving correspondence from the industry association. Mr Lohr said that looking through the documents “was quite daunting”, that, going through them, Mr Lohr found it “really hard to understand for myself”, but he could not afford advice. Mr Lohr further said:[196]
So we continued on thinking - my honest thought was the base rates in the agreement at that time was 16, 17 dollars, thinking paying between that 25 to 30 dollars per hour would cover that gap of any penalties and so on. The majority of the staff were on that $25. And that was made up from individual discussion with the employee to say, “Look, this is the rate.” Come to an agreement and that was how they actually got paid their rate. Some of those guys were on 13, 14 dollars previously with other companies. So paying them the rates that we had negotiated was happy by all. At no time did any of them complain. If there was a pay rise involved they would negotiate that again and they - and agree on whatever rate they were on. And that's what I - yes. Like, so I did get correspondence of the current legislations but, again, just so daunting. And I honestly thought the rates I was paying would be significant enough to cover whatever gaps there were.
[196] T31.20-35 (14.05.2015)
I do not understand Mr Lohr to have given evidence that he was unaware that an award applied to old SSG and its employees. On the contrary, the effect of Mr Lohr’s evidence is that he was aware there was an award, but he was unable to understand its terms; and that he agreed with the old SSG Employees a flat rate Mr Lohr believed would cover their legal entitlements.
Findings
I find Mr Lohr was the person who made the decision on behalf of old SSG about the rate at which old SSG would pay old SSG Employees, and that he approved and authorised the payments made to old SSG Employees for the work they performed on the basis of that rate. To that extent, therefore, Mr Lohr participated in old SSG’s failing to pay the old SSG Employees the amounts specified in the annexures to the statement of claim.
I also find that, although Mr Lohr may not have been aware of the specified rates that were payable under the Award, he was aware there was an award that applied to old SSG. I accept Mr Lohr’s evidence that he found it difficult to determine what rates were payable for different classes of work. I also accept his evidence that he decided to pay the old SSG Employees the flat rate believing that payment on the basis of the flat rate would be sufficient to cover the amounts payable under such award as applied to the old SSG Employees.
On the basis of these findings, therefore, I find that Mr Lohr was involved in old SSG’s contravention of s.45 of the FW Act.
Contravention of s.536 of FW Act
The FWO claims SSG breached s.536 of the FW Act by failing to give pay slips to Mr Garland and Mr Wellstead within one working day of paying an amount to them in relation to the performance of work.[197] The FWO relies on the affidavit of Mr Garland.[198] He deposes to having been employed by old SSG on a casual basis from early 2010 until September 2012, and by SSG, also on a casual basis, from September 2012 to February 2013. Mr Garland further deposes he had not received a pay slip during his employment with those companies. Mr Lohr did not challenge this evidence.
[197] Statement of claim, [156]-[158]
[198] Affidavit of M A Garland, 13.11.2014
I find that SSG contravened s.536(1) of the FW Act by failing to provide to Mr Garland and Mr Wellstead pay slips. Further, given Mr Lohr’s admitted involvement in the management of SSG, and in particular, his being responsible for engaging, rostering, supervising, and paying SSG Employees, I find Mr Lohr was aware he did not provide any payslips to Mr Garland and Mr Wellstead. Thus, I find Mr Lohr was involved in SSG’s contravention of s.536 of the FW Act.
The FWO does not in her statement of claim allege old SSG failed to provide payslips to old SSG Employees. That is so even though Mr Garland has deposed he did not receive a payslip while employed by old SSG, and even though the FWO has read an affidavit by Mr Goddard, a former employee of old SSG, who deposed he had only received one payslip while he was employed by old SSG.[199]
Assessing the appropriate penalty for involvement in old SSG’s contraventions of s.45
[199] Affidavit of D O Goddard, 13.11.2014, [14]
Grouping under s.557
The first step in assessing a penalty is to identify the relevant contraventions.
A contravention of s.45 of the FW Act occurs on each occasion a term of the Award is not complied with.[200] Subsection 557(1) of the FW Act, however, must be considered. It provides:
For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b)the contraventions arose out of a course of conduct by the person.
[200] See, for example, Blandy v Coverdale NT Pty Ltd ACN 102 611 423 [2008] FCA 1533 at [56]
As I have concluded elsewhere,[201] s.557(1) of the FW Act does not apply to contraventions of different terms of modern awards, even if such contraventions arise out of a course of conduct, and even if the contraventions affect only one person. Subsection 557(1) of the FW Act, however, applies to the multiple contraventions of the one term of a modern award, even where the contravention may affect two or more persons. In those circumstances, old SSG’s multiple contraventions of the terms of the Award should be grouped according to the terms of, or, more specifically, according to the distinct obligations imposed by the Award, old SSG contravened. These are as follows:
[201] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
Term of award
Description
Cl.A.5.4 of Schedule A
Failure to pay casual loading
Cl.15.6
Failure to pay broken shift allowance
Cl.A.7.3 of Schedule A
Failure to pay penalties for night work
Cl.A.7.3 of Schedule A
Failure to pay penalties for permanent night work
Cl.A.7.3 of Schedule A
Failure to pay penalties for Saturday work
Cl.A.7.3 of Schedule A
Failure to pay penalties for Sunday work
Cl.A.7.3 of Schedule A
Failure to pay penalties for public holiday work
Cl.23.3
Failure to pay overtime payments for Monday to Friday overtime
Cl.23.3
Failure to pay overtime payments for Saturday overtime
Cl.23.3
Failure to pay overtime payments for Sunday overtime
Cl.23.3
Failure to pay overtime payments for public holiday overtime
Cl.A.7.3 of Schedule A
Failure to pay minimum break penalty
Maximum penalty
Under s.546(2) of the FW Act, the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”. The maximum penalty units specified in the table in s.539(2) of the FW Act for the contravention of s.45 is 60 penalty units. The maximum penalty units for which Mr Lohr is liable for his involvement in each of old SSG’s contraventions of s.45 of the FW Act, therefore, is 60 penalty units.
Under s.12 of the FW Act and s.4(1) of the WR Act, “penalty unit” has the meaning given by s.4AA of the Crimes Act 1914 (Cth) (Crimes Act). Up to 27 December 2012, s.4AA(1) of the Crimes Act defined penalty unit to mean $110. Item 7 of Schedule 3 to the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth) (Amending Act) amended s.4AA to define penalty unit to mean $170. Item 9 of Schedule 3 provided that the amendment made by item 7 of that Schedule applies “in relation to an offence committed after the commencement of this item”. The amendment took effect on 28 December 2012. Also relevant is s.4F(1) of the Crimes Act which provides that, where a provision of a law of the Commonwealth increases the penalty or maximum penalty for an offence, the penalty or maximum penalty as increased applies only to offences committed after the commencement of that provision.
Given that the only contraventions of s.45 of the FW Act with which I am concerned are those committed by old SSG, and since old SSG ceased business by August 2012, the relevant penalty unit is $110. Accordingly, $6,600 is the maximum amount of the penalty to which Mr Lohr is liable for his involvement in each of old SSG’s contraventions of s.45 of the FW Act.
One transaction principle
As I have noted elsewhere,[202] even where s.557(1) of the FW Act does not apply, it may be permissible when assessing a pecuniary penalty to consider whether a person’s multiple contraventions occurred as part of a single course of conduct. It may be permissible under a sentencing principle that is referred to as the “one transaction principle”. Owen JA stated that principle in Royer v Western Australia as follows:[203]
At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.
[202] Cai v Tiy Loy & Co Ltd (No. 3) [2016] FCCA 675 at [39]- [44]
[203] [2009] WASCA 139 at [22]
The principle was stated by Lockhart J in the context of the imposition of penalties for contraventions of provisions of the Trade Practices Act 1974 (Cth) in Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd:[204]
Guidance is given in the field of sentencing for criminal offences by the well-known principle that where several offences are heard together and arise out of the same transaction it is a sound working rule that the sentences imposed for those offences should be made concurrent; it is inappropriate to sentence consecutively when the offences were all really involved in the same episode . . .
[204] [1980] ATPR ¶40-161 at 42,277
The one transaction principle was held to be relevant to the assessment of penalties under the Building and Construction Industry Improvement Act 2005 (Cth) which did not contain an equivalent provision to s.557(1) of the FW Act;[205] and in Sayed v Construction, Forestry, Mining and Energy Union,[206] Mortimer J held the principle applied to the assessment of penalties for contraventions of civil remedy provisions to which s.557(1) of the FW Act does not apply. After setting out a passage from the judgment of Wells J in Attorney-General (SA) v Tichy,[207] Mortimer J said:[208]
In fixing a penalty, just as imposing a sentence, the aim is, as Wells J observed, to “mould a just sentence for the conduct” found to have occurred, and where there are “truly two or more incursions into criminal conduct” to punish these incursions separately.
[205] See, for example, Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 (Moore, Middleton, Gordon JJ); Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 (Moore, Middleton, Gordon JJ); Sayed v Construction, Forestry, Mining and Energy Union[2015] FCA 338 at [31] (Mortimer J)
[206] [2015] FCA 338 at [31]
[207] (1982) 30 SASR 84 at pages 92-93
[208] [2015] FCA 338 at [34]
As I have already found, the application of s.557(1) of the FW Act results in old SSG having engaged in 12 contraventions of s.45 and Mr Lohr’s being involved in those contraventions. The source of the contraventions, however, is the same. It consists in Mr Lohr concluding that paying employees a flat rate of $25 an hour would be sufficient to discharge old SSG’s obligations under whatever award applied to its employees. The acts constituting each of the 12 contraventions were also the same, namely, paying amounts calculated solely by reference to the $25 per hour rate without Mr Lohr making any attempt to calculate the precise amounts for which each old SSG Employee became entitled, depending on the day and time of day that employee performed work. For these reasons, I am of the opinion that old SSG’s 12 contraventions should be treated as one contravention; and I propose, therefore, to assess the penalty for Mr Lohr’s involvement in old SSG’s 12 contraventions of s.45 of the FW Act as if they constituted one contravention.
Assessing penalties – approach
The approach of most courts in assessing penalties for single contraventions of the FW Act is to take into account the factors that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd.[209] These factors are: the nature and extent of the conduct which led to the breaches; the circumstances in which that conduct took place; the nature and extent of any loss or damage sustained as a result of the breaches; whether there had been similar previous conduct by the party committing the breach; whether the breaches were properly distinct or arose out of the one course of conduct; the size of the business enterprise involved; whether or not the breaches were deliberate; whether senior management was involved in the breaches; whether the party committing the breach had exhibited contrition; whether the party committing the breach had taken corrective action; whether the party committing the breach had cooperated with the enforcement authorities; the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and the need for specific and general deterrence.
[209] [2007] FMCA 7. In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 at [14] Tracey J adopted this same list of factors as “potentially relevant and applicable”.
Although any one or more of these factors may be relevant to the assessment of a pecuniary penalty in any given case, “courts have warned against the use of checklists because they give rise to the risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention”.[210] With these reservations in mind, I propose to consider the factors identified in Mason that are relevant to the circumstances of this case.
[210] Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977; (2010) 199 IR 373 at [10] (Barker J)
Nature, circumstances, and extent of the conduct which led to the breaches
As I have already noted, the conduct that led to Mr Lohr’s involvement in old SSG’s breaches of s.45 of the FW Act was his decision not to attempt to calculate each employee’s entitlement under whatever award applied to old SSG’s employees, but to set a fixed rate in the belief the payment of the flat rate would satisfy old SSG’s obligations to its employees, and to pay the old SSG Employees at that rate, rather than at the rates provided for by the Award. Although it cannot be said Mr Lohr made the decision to pay a flat rate of $25 an hour because he was aware this would result in the old SSG Employees being paid less than they were entitled to be paid under the award that applied to them, his decision was nevertheless reckless. Knowing, as I have found, that an award applied to the old SSG Employees, Mr Lohr decided to pay the old SSG Employees at a rate which he did not know would satisfy old SSG’s obligations under such award. That is a consideration that leads to assessing a penalty at the higher end of the scale.
Further, the conduct that constituted Mr Lohr’s involvement in old SSG’s contraventions was extensive. The conduct affected 25 employees of old SSG; and the conduct took place over a long period. These, too, are factors that weigh in favour of assessing a penalty at the higher end of the scale.
Nature and extent of any loss or damage sustained as a result of breaches
The old SSG Employees are 25 in number. Five were underpaid by amounts that were less than $20; six were underpaid by amounts of between $20 and $100, five were underpaid by amounts of between $100 and $200, five were underpaid by amounts of between $200 and $300, two were underpaid by amounts of between $300 and $500, and one was underpaid $616.38. One employee, Mr Goddard, was underpaid by $9,756.27. Although some of the underpayments are relatively insignificant, most are not insignificant and some, and particularly the underpayment in the case of Mr Goddard, are significant. These are matters that weigh in favour of assessing a penalty at the higher end of the scale.
Similar previous conduct
As I have already noted, a complaint had been made by one employee of old SSG of which Mr Lohr was aware. That complaint appears to have been resolved. There is nothing in the evidence before me about the circumstances in which the complaint arose, and I do not, therefore, place any weight on the previous complaint.
Whether breaches deliberate
I have accepted Mr Lohr’s evidence that he found it difficult to determine what rates were payable for different classes of work, and that he decided to pay the old SSG Employees the flat rate of $25 per hour because he believed that the flat rate would be sufficient to cover the amounts payable under such award as applied to the old SSG Employees. Although this cannot be considered to be a deliberate flouting of the Award by Mr Lohr, his conduct was deliberate in the sense he was aware an award applied to the old SSG Employees, yet he decided to pay the employees at a rate which he did not know would be sufficient to discharge old SSG’s obligations under such award. These matters weigh in favour of assessing the penalty at the higher end of the scale.
Specific and general deterrence
There is nothing in the evidence that suggests the penalty should be assessed to specifically deter Mr Lohr from further contravening the FW Act. General deterrence, however, is another matter. The penalty should be set to signal to employers generally the importance of complying with the FW Act in general and with complying with awards that cover them and their employees. In the particular circumstances of this case, it is important to signal to employers of limited financial means that they will not be excused from doing that which is necessary for acquainting themselves with the awards and the terms of the awards that cover them and their employees. The need for general deterrence, therefore, weighs in favour of assessing the penalty at the higher end of the scale.
Size of business entity involved
It is accepted old SSG is no longer trading; and I infer from the evidence that is available to me, and in particular the evidence Mr Lohr gave at the hearing, that old SSG was a small business with limited financial resources. That factor, however, is not relevant because the question that is before me is the assessment of the pecuniary penalty Mr Lohr should pay. There is no evidence of Mr Lohr’s financial circumstances. Even if, however, there was evidence that showed Mr Lohr had limited financial means with which to pay a penalty, I would have given that factor very little weight having regard to the other matters, and in particular, the need for general deterrence.
Other matters
There is no evidence Mr Lohr has attempted to take corrective action; and there is no evidence that Mr Lohr has exhibited contrition, or that he has cooperated to any significant degree with the FWO. These matters, therefore, are not available to Mr Lohr to mitigate the effect of the other factors I have identified.
Assessment
Having regard to all of these matters, I am of the opinion that the penalty should be assessed at the higher end of the scale. I consider that $5,500 is an appropriate amount, and propose to make an order requiring Mr Lohr to pay a pecuniary penalty of $5,500 for his involvement in old SSG’s contraventions of s.45 of the FW Act.
Penalty for contravention of s.536
The penalty that applies to an individual’s contravention of s.536 of the FW Act is 30 penalty units which, given that most of the contraventions occurred before 28 December 2012, translates to a maximum penalty of $3,300.[211]
[211] The penalty unit after 28 December 2012 was increased to $170 which means that the maximum penalty for a contravention of s.536 of the FW Act after 28 December 2012 is $5,100. In my opinion, SSG’s contraventions of s.536 are contraventions to which s.557(1) of the FW Act applies. For reasons I have given elsewhere (Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626 at [52]-[58]), the penalty that should apply to SSG’s contraventions is that which applied when SSG engaged in the second contravention of s.536(1) that constituted the course of conduct to which s.557(1) of the FW Act applies. That occurred before 28 December 2012.
SSG contravened s.536 every time it failed to provide a pay slip to Mr Garland and Mr Wellstead within one working day of paying them amounts in relation to the performance of work. I find that these contraventions were engaged in by one person – Mr Lohr - acting as the mind or agent of SSG, and that the contraventions arose out of a course of conduct. Accordingly, s.557(1) of the FW Act applies with the effect that there is only a single contravention by SSG, and, therefore, by Mr Lohr, of s.536 of the FW Act in relation to SSG’s failure to provide pay slips to Mr Garland and Mr Wellstead within one working day of paying them amounts in relation to the performance of work.
SSG’s contraventions, and, hence, Mr Lohr’s involvement in those contraventions of s.536, occurred from September 2012 to February 2013. That is an extensive period. I find Mr Lohr was aware of SSG’s obligations to provide pay slips. The basis of my finding is that Mr Garland deposed to his not having received any pay slips when he was employed by SSG and Mr Lohr was responsible for engaging, rostering, supervising, and paying the employees of SSG.[212] It follows, therefore, that Mr Lohr deliberately did not provide pay slips. There is no evidence Mr Garland suffered any loss due only to SSG’s not providing him with pay slips. There is nothing to suggest the penalty to be assessed should incorporate an element for specific deterrence. The amount of the penalty, however, should reflect general deterrence. The amount of the penalty should signal that it is important for employers to comply with their obligations to provide payslips. There is no evidence of contrition.
[212] Statement of claim [6(e), (i)]; Defence [4]
In my opinion, these factors weigh in favour of assessing a penalty at the higher end of the scale. In all the circumstances, I am of the opinion that $2,800 is appropriate. I propose to order that Mr Lohr pay a pecuniary penalty in the amount of $2,800 for his involvement in SSG’s contravention of s.536(1) of the FW Act.
Disposition
I propose to make declarations that Mr Lohr was involved in old SSG’s contraventions of s.45 and SSG’s contravention of s.536 of the FW Act. I also propose to order that Mr Lohr pay pecuniary penalties in the amounts of $5,500 and $2,800 respectively for his involvement in old SSG’s contraventions of s.45 of the FW Act and in SSG’s contravention of s.536 of the FW Act respectively.
The FWO seeks an order that Mr Lohr pay to the old SSG Employees the pecuniary penalties I may order. Given the number of old SSG Employees, the relatively small amounts owing to a number of those Employees, and that the total amount of the pecuniary penalties I propose to order Mr Lohr pay is less than the total amount of the underpayments, it would not be practicable for Mr Lohr to comply with such order. He would have to seek out the address of each of the old SSG Employees, and he will have to calculate the pro rata amount that should be paid to each such employee. I do not, therefore, propose to order that Mr Lohr pay the pecuniary penalties that I will order to the old SSG Employees. I propose to order that Mr Lohr pay the pecuniary penalties to the Commonwealth within 28 days of my making orders.
I certify that the preceding one hundred and fifty-six (156) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Date: 28 February 2017
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