Fair Work Ombudsman v Shafi Investments Pty Ltd - [2012] FMCA 1150

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v SHAFI INVESTMENTS PTY LTD & ORS

[2012] FMCA 1150

INDUSTRIAL LAW – Application under the Workplace Relations Act 1996 for declarations of contraventions of s.182(1), s.189(1), s.235(2) and s.607 and r.193.4 of the Workplace Relations Regulations – Involvement of Second and Third Respondents in contraventions – seeking payment for the employee concerned and penalties imposed on all Respondents – Application granted.

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Sch.2
National Fast Food Retail Award 2000
Workplace Relations Act 1996, s.182(1), s.189(1), s.235(2), s.607, s.719(1), s.728(2)(c)
Workplace Relations Regulations, r.19.4

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

SHAFI INVESTMENTS PTY LTD

Second Respondent:

YOUNUS MOHAMMED

Third Respondent MAHMOOD MOHAMMED

File Number:

MLG 878 of 2011

Judgment of:

Whelan FM

Hearing dates:

17 and 18 September 2012

Date of Last Submission:

18 September 2012

Delivered at:

Melbourne

Delivered on:

10 December 2012

REPRESENTATION

Counsel for the Applicant:

Mr Tracey

Solicitors for the Applicant:

Fair Work Ombudsman

Counsel for the Respondents:

Ms Myers

Solicitors for the Respondents:

Starnet Legal

ORDERS

THE COURT DECLARES:

That the First Respondent has contravened s.182(1) of the Workplace Relations Act 1996 (“the Act”) by failing to pay Mr Osman Mohammed (“the Complainant”) the basic period rate of pay in the Australian Pay and Classification Scale.
That the First Respondent has contravened s.189(1) of the Act by failing to pay the Complainant on a weekly or fortnightly basis.
That the First Respondent has contravened s.235(2) of the Act by failing to pay to the Complainant accrued leave on termination of the employment.
That the First Respondent has contravened s.607 of the Act by failing to provide the Complainant with unpaid meal breaks of at least 30 minutes duration after five hours work.
That the First Respondent has contravened r.19.4 of the Workplace Relations Regulations (“the Regulations”) by failing to keep records relating to the Complainant in accordance with Divisions 3 and 4 of the Regulations.
That the Second and Third Respondents were involved in the First Respondent’s contraventions.

THE COURT ORDERS:

That the Applicant prepare draft orders with respect to the amounts payable to the Complainant and the matter be listed to this Court for further hearing with respect to the issue of penalty.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 878 of 2011

FAIR WORK OMBUDSMAN

Applicant

And

SHAFI INVESTMENTS PTY LTD

First Respondent

YOUNUS MOHAMMED

Second Respondent

MAHMOOD MOHAMMED

Third Respondent

REASONS FOR JUDGMENT

Introduction

This is an application by the FAIR WORK OMBUDSMAN (“FWO”) (“the Applicant”) for declarations that SHAFI INVESTMENTS PTY LTD (“the First Respondent”) contravened s.182(1), s.189(1), s.235(2) and s.607 of the Workplace Relations Act (“the Act”) and r.19.4 of the Workplace Relations Regulations (“the Regulations”) and that YOUNUS MOHAMMED (“the Second Respondent”) and MAHMOOD MOHAMMED (“the Third Respondent”) were involved in the contraventions. The Applicant seeks orders that the First Respondent make certain payments to the employee concerned and that penalties be imposed on all the Respondents in accordance with the provisions of s.719(1) of the Act.
The Respondents deny the contraventions.

Background

The Second and Third Respondents are brothers. The Second Respondent is the sole Director and shareholder of the First Respondent and also the Company Secretary. He is an Australian citizen and has been in Australia for over ten years.
In early 2008, the First Respondent purchased the franchise for a take away food outlet called ‘Ali Baba Kebabs and Wraps’ (“Ali Baba”) (“the kebab shop”) located in the Food Court of the Southland Shopping Centre in Cheltenham, a suburb of Melbourne.
The complainant, OSMAN MOHAMMED (“the Complainant”), is the first cousin of the Second and Third Respondents. Between June 2006 and December 2007 he worked for a construction company in Oman. In December 2007 he returned to India because his parents had arranged for him to marry, FAREEDA (“the Complainant’s Wife”), the sister of the Second and Third Respondents.
Early in 2008, arrangements were made for the Complainant and his wife to come to Australia. The Complainant’s wife was granted a subclass 572 Vocational Education Sector student visa and the Complainant was granted a dependent spouse visa.
Prior to taking over the ‘Ali Baba’ business in April 2008, the Second Respondent says he attended one month’s training arranged by the Franchisor. The Third Respondent also attended that training. The Third Respondent had been in India for a year before returning to Australia early in 2008. He was not employed during the time he was in India and prior to that time had been a student and a part-time taxi driver in Australia. When the Second Respondent took over the ‘Ali-Baba’ franchise, the Third Respondent commenced working in the business. It was his evidence that he worked there seven days a week on a ‘voluntary’ basis from the beginning of the business.[1] He had a month and a half off to return to India to get married and he continued to work in the business until it closed in April 2010. After the end of the 2009 financial year he received some payment for his work.
[1] Transcript of Proceedings, 18 September 2012, page 150, line 25.
The Second Respondent continued to work in his regular employment with a bank until February 2009. During that time he also worked at the kebab shop on Thursday and Friday evenings and on the weekends. After leaving his employment he visited India for a time and then worked full-time in the kebab shop.
After their arrival in Australia, the Second Respondent assisted the Complainant and his wife to obtain work permits which enabled both of them to work twenty hours per week. The Second Respondent asked the Complainant’s wife to work twenty hours per week in the kebab shop and to do ‘voluntary’ work in the shop during her school holidays.
The Complainant contends that he worked in the kebab shop on a full-time basis for seven days a week from 9 April 2008 until 29 May 2009. The Respondents contend that the Complainant was employed for a period of three weeks only in August 2008, for a total of 43 hours.

The evidence

Evidence for the Applicant was given by two FWO Inspectors, the Complainant and MS EFFIE GIANNAKIS (“Ms Giannakis”) an employee of the First Respondent from April 2008 to January 2009.
Original carriage of the matter, for the FWO, was had by MR ROGER YATES (“Mr Yates”), who retired as an FWO Inspector in January 2012.
The FWO received the original complaint from the Complainant in October 2009. He was interviewed by Mr Yates in March 2010 and Ms Giannakis also provided a statement at that time to the FWO. In April 2010, the Second Respondent attended an interview with the FWO and also produced some documents.
After rectification of the underpayment for the period the Second Respondent admitted the Complainant had worked, the FWO notified the Second Respondent, in June 2010, that the investigation was closed. Mr Yates explained the re-opening of the investigation in May 2011 on a change of policy within the FWO, with respect to proceeding on the basis of oral evidence only.
The Complainant’s evidence was that he arrived in Australia on 1 April 2008. He was asked by the Second and Third Respondents to work in the ‘Ali Baba’ shop and he agreed because he needed a job and wanted to help them with their new business. He stated that he commenced work on 9 April 2008 and travelled to and from work each day with the Third Respondent. They arrived each day from Saturday to Wednesday at between 8.45am and 9.00am and left at 6.00 – 6.30pm. On Thursday and Friday they left at 10.00 – 10.30pm. He generally worked every day from open to close and had one day off (usually a Wednesday) in the first week of each month. In his record of interview with the FWO, the Complainant stated that he thought his day off was a Tuesday.[2] In his oral evidence, the Complainant stated that his day off was Wednesday because that was the day his Wife did not go to school.[3]
[2] Exhibit A1, Affidavit of Sally McLeod sworn 25 May 2012 at page 168.
[3] Transcript of Proceedings, 17 September 2012, page 72, lines 37-38.
The Complainant stated that he was not paid anything at all until 15 July 2008 and that he was then only paid for a 20-hour week. He and his Wife were both paid for 20 hours at $14.50 per hour and received $512.00 per week after tax which was deposited in a joint bank account. The Second Respondent initially offered to pay them $1,700.00 per month, but he said that this was not enough to cover their bills, pay the Complainant’s Wife’s school fees and send money back to his family. The payments were not always regular.
The Complainant stated that he started looking for other jobs, mostly on-line during the evenings. He did not work full-time hours for a few weeks in August 2008 because he was trying to get another job. He worked ‘short hours’ but not 11 or 12 hours.[4] The Complainant claimed that other than that period, he only had two or three days off work.
[4] Transcript of Proceedings, 17 September 2012, page 74, lines 34-35.
It was the Complainant’s evidence that there was a roster on a wooden notice board behind the door in the shop that was made each week for the coming week. The roster was written by the Third Respondent. The Complainant’s name and the Third Respondent’s name usually appeared with ‘O/C’ (“open to close”) next to them.[5] The Second Respondent did the rosters for probably the first month.[6]
[5] Transcript of Proceedings, 17 September 2012, page 71, lines 11-12.
[6] Transcript of Proceedings, 17 September 2012, page 71, lines 41-42.
The Complainant stated that the Second Respondent paid the Complainant’s Wife’s school fees for the first semester, but that after that they were paid from the couple’s joint bank account.[7]
[7] Transcript of Proceedings, 17 September 2012, page 87.
The Complainant understood that the two brothers were partners in the business. The Third Respondent made the day-to-day decisions when the Second Respondent was not there, although he used to call the Second Respondent at work or the Second Respondent would call him a couple of times a day. The Third Respondent counted the till and did the banking. Both the Third Respondent and the Second Respondent would interview new staff and the Third Respondent would do the training.
The Complainant says he left the employment at the end of May, beginning of June 2009, after he and his Wife left the house that they had been living in with her brothers. The Complainant said that the Second Respondent told him that they did not need him any more and that they did not want to see him near the shopping centre.
The Complainant gave detailed evidence of the shop and the tasks he performed in the business.[8] He stated that he only took one break of about 10-15 minutes per day when he would eat a kebab in the shop.[9]
[8] Transcript of Proceedings, 17 September 2012, pages 57-63.
[9] Transcript of Proceedings, 17 September 2012, page 66, lines 1-7.
Ms Giannakis was originally an employee of Mr DILIP BHATT (“Mr Bhatt”) who owned the ‘Ali Baba’ franchise prior to its purchase by the First Respondent. She managed the shop prior to the change of ownership and continued to work for the First Respondent after the business changed hands until 16 January 2009 when she says she resigned after she says the Third Respondent told her they were paying her “too much”.[10]
[10] Transcript of Proceedings, 17 September 2012, page 16, lines 13-15.
Ms Giannakis stated that for the first week under the new ownership the previous rosters were continued. After that her hours were changed. The rosters were updated on a Thursday by either the Second or Third Respondent. Initially the Respondents did not pay wages on the correct pay day. Ms Giannakis also said that she refused to work weekends after she was not paid the correct wages for the first weekend,[11] but later agreed that she did work on one weekend after that time.[12]
[11] Transcript of Proceedings, 17 September 2012, page 24, lines 21-24.
[12] Transcript of Proceedings, 17 September 2012, page 27, lines 40-41.
Ms Giannakis first met the Complainant on 10 April 2008. She stated that she never saw him take a proper lunch break.[13] In June 2008, the Complainant told her that he had not been paid by the Respondents for the past two months. The Complainant also told her that he and his Wife were each being paid for 20 hours per week and that he got paid randomly.
[13] Transcript of Proceedings, 17 September 2012, page 18, lines 21-22.
Ms Giannakis stated that the Complainant worked every day that she worked and was rostered from opening to closing. She could only recall two or three days that the Complainant did not work.
It was the evidence of Ms Giannakis that the Third Respondent was the shop Manager when the Second Respondent was not there.[14] Ms Giannakis described the tasks the Complainant performed when he was working in the kebab shop.
[14] Transcript of Proceedings, 17 September 2012, page 30, lines 17-19.
Ms Giannakis produced to the FWO a diary which set out the days and hours that she worked. She also wrote other things in the diary such as doctor’s appointments. In cross-examination she denied that she wrote down things ‘afterwards’ but later agreed that she had recorded the date that the Complainant started a few months after the event.[15]
[15] Transcript of Proceedings, 17 September 2012, page 31, lines 35-36.
Ms Giannakis contended that health regulations required that two people were present in the shop at open and close.[16] These times were 9.30am to 5.30pm, except on Thursdays and Fridays when close was 9.30pm.
[16] Transcript of Proceedings, 17 September 2012, page 21, lines 33-43.
Ms Giannakis claimed that she was not paid the proper loading for weekend work the first weekend she was rostered which is why she told the Third Respondent that she would not work it again. She was pretty sure that she had not worked another weekend, but later conceded that she did a “one off” weekend and was paid the correct rate on that occasion.[17]
[17] Transcript of Proceedings, 17 September 2012, page 27, lines 40-41.
Ms Giannakis denied that she was dismissed because the Third Respondent saw her take money out of the till.[18] She agreed that she had lent the Complainant money after he had left the kebab shop and that there was no obligation on him to repay the money.[19] She denied spending time with the Complainant after she finished work. She also denied kissing the Complainant.[20] She agreed that she had driven him from the police station to his place to help him collect his belongings after he and his wife separated.[21]
[18] Transcript of Proceedings, 17 September 2012, page 31, lines 5-10.
[19] Transcript of Proceedings, 17 September 2012, page 33, lines 32-33.
[20] Transcript of Proceedings, 17 September 2012, page 34, line 43.
[21] Transcript of Proceedings, 17 September 2012, page 35, lines 39-40.
The Second Respondent stated that he had agreed to the Complainant coming to the shop in order to improve his English and to learn Australia’s culture and way of life.[22] He stated that he was responsible for drawing up the rosters and the Complainant’s name only appeared on the roster for three weeks in August 2008. Only he and the Third Respondent were recorded on the roster as working ‘O/C’. He could not have employed the Complainant in April 2008 as he did not have a work permit until July.
[22] Transcript of Proceedings, 18 September 2012, page 112, lines 44-47.
The Second Respondent claimed that he had paid the Complainant’s Wife $29.00 per hour and that the pay envelopes were given to her. She gave them to the Complainant to deposit in their joint account.
The Second Respondent denied that the Third Respondent was ever the shop manager. He stated that Ms Giannakis was always paid her correct entitlements and that she had been unhappy about the reduction in her hours after he took on the business. He also claimed that he had seen Ms Giannakis and the Complainant kissing in the fridge.
The Second Respondent agreed that he had offered to help the Complainant out with accommodation and food. He applied for a work visa for the Complainant online. He denied that the Third Respondent had any involvement in the business. He had just got back from India and did not have a job so he asked him to help out. He, the Second Respondent, was responsible for hiring and training staff and for payment of wages.[23] He did the pay envelopes and the rosters. He constantly rang the Third Respondent to check what was happening at the shop.
[23] Transcript of Proceedings, 18 September 2012, page 138, lines 5-6.
The Second Respondent explained that the rosters produced to the FWO and the Court were re-written rosters which he did every three months when he gave them to the bookkeeper.[24] The original rosters had been destroyed. The rosters were the only record of when people worked.
[24] Transcript of Proceedings, 18 September 2012, page 117, line 17.
He stated that the Complainant would help out in the shop when he wanted to, but would otherwise wander around the shopping centre and come back to get a lift home.[25] He agreed that the Complainant came into the shop pretty much from the start in April 2008.
[25] Transcript of Proceedings, 18 September 2012, page 117, lines 37-46.
The Second Respondent claimed that the Third Respondent only gave directions to other employees under his instructions. He stated that the Third Respondent was a casual employee, but corrected this to say he was paid for some hours but the work was mainly voluntary. He told the Third Respondent that if the business did well he could have a share.[26] The Third Respondent wanted to help him out because he was his brother.
[26] Transcript of Proceedings, 18 September 2012, page 126, lines 2-3.
The Second Respondent stated that no one had a written contract of employment. He denied that health regulations required two people to be present at the opening and the closing of the shop. He agreed that employees had to have food handling certificates, but stated that he did not have one.[27]
[27] Transcript of Proceedings, 18 September 2012, page 132, line 1.
The Second Respondent stated that Ms Giannakis was dismissed because the Third Respondent saw her stealing from the till. He also stated that the Third Respondent had seen the Complainant stealing from the till, but that he had not stopped him from coming to the shop after that. He denied changing the rosters to delete the Complainant’s name.[28] He denied having a conversation with the Complainant about not being paid.[29] He denied that the Complainant was charged rent for the house.[30] He denied that he was boss of the household.[31] He agreed that he was aware that the Complainant did not have much money when he arrived in Australia and wanted to work.[32] He denied that the Complainant paid his wife’s school fees saying she paid them from her wages.[33]
[28] Transcript of Proceedings, 18 September 2012, page 142, lines 15-16.
[29] Transcript of Proceedings, 18 September 2012, page 143, lines 18-19.
[30] Transcript of Proceedings, 18 September 2012, page 143, line 29.
[31] Transcript of Proceedings, 18 September 2012, page 146, line 19.
[32] Transcript of Proceedings, 18 September 2012, page 146, line 24.
[33] Transcript of Proceedings, 18 September 2012, page 147, line 3.
The Third Respondent gave evidence that he was not involved in the purchase of the kebab shop franchise and never had any interest in the business. He agreed with his brother that he would assist him in developing the business with a view to ultimately having a share in it. He agreed to work on a voluntary basis.

The Third Respondent stated that the Complainant did travel to work with him on many occasions because he did not want to stay at home. He stated that the only time the Complainant worked at the shop was in August 2008. The Complainant’s Wife worked on weekends and on Fridays and some other days during school holidays.
It was the Third Respondent’s evidence that the Second Respondent was responsible for rosters, payment of staff, and other managerial responsibilities including banking.[34] He worked in the shop from 5.00pm on Thursday and Friday and also on the weekends. The Third Respondent usually arrived at the shop at 9.30am and left at 5.15pm. In the absence of the Second Respondent he looked after the shop and placed orders with suppliers.
[34] Transcript of Proceedings, 18 September 2012, pages 155-156.
The Third Respondent stated that Ms Giannakis was dismissed because he caught her stealing. He saw her put a $50.00 note in her pocket and called the Second Respondent.[35] The Second Respondent told him to tell her to leave or he would call the police. She left.[36]
[35] Transcript of Proceedings, 18 September 2012, page 156, lines 29-30.
[36] Transcript of Proceedings, 18 September 2012, page 156, lines 40-41.
The Third Respondent stated that the Second Respondent paid the bills on the house and managed the bills.[37] The house was owned. (It would appear that the house was owned by the Third Respondent).[38]
[37] Transcript of Proceedings, 18 September 2012, page 150, lines 27-28.
[38] Exhibit R2, Affidavit of Younus Mohammed sworn 17 September 2012, at paragraph 11.
The Third Respondent denied that the Complainant assisted in the shop in any way.[39] He would just talk to him while he worked and when it got busy he would go out. He came and went as he wanted. He claimed that he saw the Complainant putting money in his pocket and the till was short at the end of the day.[40] He did not say anything to the Complainant but told the Second Respondent.
[39] Transcript of Proceedings, 18 September 2012, page 152, line 37.
[40] Transcript of Proceedings, 18 September 2012, page 154, lines 2-4.
The Third Respondent agreed that he anticipated becoming a partner or shareholder in the business. He knew how well the shop was doing because he counted the till. He denied that the Complainant’s name ever appeared on the roster with ‘O/C’ next to it.[41] He agreed that it saved the Second Respondent money to have him working there for no wages. He at one stage in answer to a question said – “I was the senior manager”.[42]
[41] Transcript of Proceedings, 18 September 2012, page 167, line 25.
[42] Transcript of Proceedings, 18 September 2012, page 169, line 35.
The Third Respondent denied that he wore a black shirt – which was the colour for a manager – saying he wore an orange shirt[43] (like the one the Complainant produced as his work shirt).[44]
[43] Transcript of Proceedings, 18 September 2012, page 171, lines 21-23.
[44] Exhibit A9, Orange shirt bearing Ali Baba logo.

The submissions

The Respondents submit that the onus lies with the Applicant to establish that the Complainant was an employee. The Respondents do not dispute that the Complainant spent a lot of time at the kebab shop between April 2008 and May 2009, but deny that he was an employee except for a few weeks in August 2008.
The Respondents submit that an employment relationship only exists if the employee has entered into a contract of service with the employer with the mutual intention of creating legal relations. Here there was no mutual intention. Where there is a family arrangement involving the undertaking of tasks in a work environment it suggests that there was no intention to create legal relations. Apart from the period of a few weeks in August 2008, any activities the Complainant undertook were done without any expectation of payment and arose out of the personal relationship the Complainant had with his wife and his brothers-in-law. The Complainant made no complaint about the arrangement between April 2008 and May 2009. It was only after the Complainant’s Wife involved the police and sought an intervention order that any complaint was made.
The Respondents submit that the Complainant’s version of events have differed with respect to when he worked, how many days he had off and which days he had off. His evidence regarding the hours of operation of the shop are exaggerated. His evidence was not supported by the rosters or any other evidence. It was mainly a lunch-time trade. Further, the Applicant has not produced a single pay envelope which the Complainant says he received. The evidence that he applied for ‘thousands’ of jobs does not sit with his evidence that he was working seven days per week.
The Respondents also attacked the evidence of Ms Giannakis on the basis of, her personal antipathy toward the Respondents, the circumstances under which she left the employ of the First Respondent and contradictions in her evidence about:
·not being paid properly for weekend work;
·only working one weekend after the First Respondent took over;
·the timing of the dairy entry about when the Complainant started work; and
·her evidence that the Complainant never had a day off, except two days when he was sick.
The Respondents submit that Ms Giannakis had a close relationship with the Complainant and lent him thousands of dollars without expecting repayment.
The Respondents also criticised the FWO’s conduct of the matter, in particular, their failure to contact other employees of the business and the long delay between when the Respondents were informed that the matter was closed and that it was reopened.
The Respondents contend that the rosters produced by the Second Respondent support the Respondents’ case. The evidence concerning the payment of superannuation on behalf of the Complainant is consistent with the rosters, as is the group certificate provided to the Complainant. Further, this was a small business which did not need the level of staffing suggested.
In relation to the Third Respondent, the Respondents submit that he was neither knowingly concerned or an intentional participant. The business was owned and run by the Second Respondent. He was the decision-maker and the Third Respondent deferred to him. He merely followed directions.
The Applicant submits that their written submission which addressed the issue of the applicable legislation and the Applicant’s standing were not challenged by the Respondents. With respect to the evidence the Applicant submits that the Complainant’s evidence was very direct and was supported by Ms Giannakis. His evidence of the tasks he performed was more plausible than the proposition of the Respondents that he stood about in a small shop effectively doing nothing for lengthy periods of time. It is inconsistent with the view of the Second Respondent that family can work for free.
The Applicant submits that the Complainant requested to be paid. He told Ms Giannakis that he was not being paid. He said that once rent was taken out he had nothing to send home to his family. He was paid intermittently – and this is evidenced by the bank statements.
The evidence about him applying for thousands of jobs is perfectly plausible, sitting at the computer each night, doing everything to get a job which is not exploitative.
The Applicant submitted that Ms Giannakis had nothing to gain. She gave up her time to give evidence and to support the Complainant. She saw a situation where a new immigrant was being exploited by people who had power over him. They were providing a roof over his head. He had no money. It was very clear that he was working for them. The accusations made by the Second and Third Respondent were simply an attempt to denigrate her. The allegations about stealing money are unbelievable. The reference from Mr Bhatt and her performance as a witness reveal her to be a person of good character who saw an injustice and has given evidence of what she saw.
The Applicant submits that by contrast the evidence of the Second Respondent was evasive and inconsistent. When he referred to the Complainant and Ms Giannakis ‘working together’, it was not a slip, but a reflection of the reality of what occurred.[45] An important feature of the case is the failure of the Respondents to keep records. It is not only unlawful, but should lead to an adverse inference being drawn against them that any records they did have would not assist their case. The Court should find that the rosters that were submitted by the Third Respondent to the FWO had been changed in order to advance the Respondents’ position.
[45] Transcript of Proceedings, 18 September 2012, p.179, lines 34-44.
The Applicant submits with respect to the Third Respondent that he was the manager when his brother was not there. He checked the till. He took an interest in the business. He was a potential partner. His evidence that he was just an employee and did not care about these matters is implausible. He was aware of the essential elements that constituted these contraventions.

Conclusions

The Respondents do not dispute that pursuant to item 11(1) of Part 3 of Schedule 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (“the Transitional Act”), the provisions of the Workplace Relations Act continued to apply during the period 9 April 2008 to 29 May 2009. The First Respondent was therefore bound in relation to the employment of the Complainant by the Australian Fair Pay and Conditions Standard (“AFPCS”) under Part 7 of the Act and a preserved Australian Pay and Classification Scale (“APCS”) derived from the National Fast Food Retail Award 2000. Further it is not disputed that the Complainant was properly classified as a Retail Employee Grade 1 under the APCS.
The Applicant alleges that the Respondents contravened:
·s.182(1) of the Act by failing to pay the basic period rate of pay in the APCS;
·s.189(1) of the Act by failing to pay the Complainant on a weekly or fortnightly basis;
·s.235(2) of the Act by failing to pay to the Complainant accrued leave on termination of the employment;
·s.607 of the Act by failing to provide the Complainant with unpaid meal breaks of at least 30 minutes duration after five hours work; and
·r.19.4 of the Regulations by failing to keep records relating to the Complainant in accordance with Divisions 3 and 4 of the Regulations.
The Respondents’ defence to the contraventions of the Act is that the Complainant was not employed during the period alleged. There appears to be no real defence to the allegation of a failure to keep the records required by the Regulations as the Second Respondent has admitted that the only records of the hours worked by employees were the rosters, the originals of which have been destroyed, and no employees appear to have been provided with pay slips specifying the matters required by the Regulations.
In essence the matter comes down to an assessment of the credibility of the witnesses, on the one hand the Complainant and Ms Giannakis and on the other hand the Second and Third Respondents.
The Complainant is a young man who entered into an arranged marriage with the sister of the Second and Third Respondents and came to Australia as a dependent spouse of his wife who had a student visa. It is apparent that he had little resources outside of the family and was dependent on the Second and Third Respondents for accommodation. It is evident that he had little knowledge of Australian law with respect to employment and it was the Second Respondent who undertook the steps necessary for both the Complainant and his wife to obtain working visas. I am satisfied, that at least initially, the Complainant understood that he would be expected to assist in the family’s business and that was precisely what he did.
I am further satisfied that the Complainant also expected to be paid, although there was initially no agreement about how much he would be paid and he had no knowledge of the legal requirements associated with the payment of wages under Australian employment law. He became concerned after he had received no payment despite working for the Respondents for some months and upon receiving advice from Ms Giannakis approached the Second and Third Respondents about payment. I do not accept the evidence of the Second Respondent that the money deposited into the joint account held by the Complainant and his wife were wages only for the Complainant’s Wife, or that the Complainant’s Wife was being paid $29.00 per hour – twice the rate being paid to other employees.
I accept that the Complainant worked in the kebab shop for six or seven days a week and that he attended the shop each of those days with the Third Respondent and returned home with him each evening. I am satisfied that he took a day off from work once a month during term time on the day that his wife had no classes and took some additional time off in August 2008 to look for alternative employment.
I accept the Complainant’s evidence that he spent most evenings applying for jobs on the internet, although I also accept that ‘thousands’ of job applications is an exaggeration.
It is not plausible that the Complainant spent over a year going most days to the kebab shop and never doing any work, according to the Third Respondent, or just “he used to help out sometimes, if he wants to”,[46] according to the Second Respondent. Further, I do not accept that he spent his days wandering around the Southland Shopping Centre. He showed a detailed knowledge of the shop layout and the daily routine, which I consider he could only have known and remembered so clearly if it had been the routine he carried out most days of the week for over 12 months.
[46] Transcript of Proceedings, 18 September 2012, page 118, lines 2-3.
The failure of the Complainant to make any formal complaint until some time after his employment ceased is also understandable. He was entirely dependent upon the Second and Third Respondent’s family for accommodation, money and his very right to be present in Australia. To disturb that could lead to his deportation and would certainly leave him financially vulnerable.
The allegations made by the Second and Third Respondents about the Complainant stealing money from the till and being ‘too friendly’ with Ms Giannakis are, I am satisfied, baseless and designed merely to besmirch the character of both the Complainant and Ms Giannakis. It is not believable that the Respondents would have ignored evidence of the Complainant stealing from them, said nothing to him, and allowed him to continue to spend time in the shop.
I accept that there were some inconsistencies in the Complainant’s evidence. He gave evidence to the Court over three years after the events and almost three years after making his initial complaint. He had in the intervening period spent some time in detention. Some of his statements such as making ‘thousands’ of job applications and ‘never’ having a day off, I accept, are exaggerations. Essentially, however, I accept the veracity of the Complainant’s evidence that he worked from open to close on six or seven days per week and was paid $14.50 per hour for a 20-hour week. I accept that he took one day off per month. I accept that his actual hours were about eight to nine hours on Saturday, Sunday, Monday and Tuesday and 12 to 13 hours on Thursday and Friday. I further accept the Complainant’s evidence that he did not take a structured meal break (or breaks) but was able to rest when it was not busy and make himself something to eat, which he ate in the back of the shop.
I accept that the only record of the Complainant’s actual hours of work was contained on the rosters displayed on the noticeboard in the shop and that the Complainant and the Complainant’s Wife were given only one pay envelope, which did not provide the details required by the Regulations.
Ms Giannakis impressed me as an open and honest witness. She worked for the previous owner of the kebab shop franchise and produced a reference from him, which attested to her honesty and integrity. She had managed the shop for a time and had a clear understanding of its operation.
While there were some contradictions in her evidence I accept that these are minor in importance and probably reflect the problems of recalling events some years after they occurred. I accept that she probably recorded the date the Complainant started after he spoke to her about not being paid. I accept that she felt some compassion for the Complainant, who she saw as being exploited by the Second and Third Respondents and her assistance to him was based on kindness and not on either an inappropriate relationship with him or her antipathy towards the Second and Third Respondents.
Moreover, I do not accept that she ceased her employment with the First Respondent because of an act of dishonesty. I have no doubt that she came into conflict with the Third Respondent, whom she regarded as the manager of the shop. It may not be coincidental that the incident with the Third Respondent which led to her leaving was shortly before the Second Respondent commenced to work full-time in the shop. Her knowledge of matters such as when wages should be paid and the application of penalty rates appears to have exceeded that of either of the Second and Third Respondents. I accept her evidence that the rosters she saw in the shop had the Complainant’s name with ‘O/C’ written next to it.
I am satisfied that despite the legal relationship between the First and Second Respondent, the kebabs franchise was essentially a family business of which the Second Respondent was the head. The business was set up with the intention of providing an income for both the Second Respondent and his brother, the Third Respondent. Both his sister and her husband were expected to ‘help out’, with the Complainant’s Wife and the Complainant being paid for the hours allowable on their visas, once these had been obtained.
I am satisfied that the Complainant worked in the shop prior to being granted a working visa and after obtaining a visa worked hours in excess of those permitted. The Second Respondent was essentially running the business whilst being paid to work somewhere else. He used envelopes from the bank to pay his employees in cash. He failed to keep proper records of the hours the employees worked and I am satisfied that the rosters produced to the FWO and the Court were a fabrication created after the event. The Second Respondent showed a total disregard for employment laws. He agreed that people working in the shop had to have food handling certificates, but stated that he did not have one, which also indicates a disregard for health regulations.
The evidence of the Second Respondent, that he paid his sister, the Complainant’s Wife, twice the rate paid to other employees, and his reasons for doing so was not credible. Nor do I accept his evidence that the Third Respondent, who had not worked for over a year prior to working in the kebab shop, had worked there for over 12 months for seven days a week, without any remuneration at all.
The evidence of the Third Respondent was equally implausible. He denied having any role in the management of the business, but agreed that he counted the till, ordered supplies and trained staff. He denied having any interest in the business but showed a knowledge of how the business was going and was vague about how the business was run while the Second Respondent was in India. I am satisfied that the Third Respondent must have received some financial benefit from the business in order to have been able to sustain himself and meet the normal expenses of daily living. He also was able to go to India for several weeks. He clearly anticipated his contribution to the business being formally recognised at some point.
I do not accept the evidence of the Third Respondent that he saw the Complainant take money from the till. Nor do I accept that he saw Ms Giannakis take money also. These allegations appear to be an after the event attempt to discredit the Complainant and Ms Giannakis.

The only evidence which appears to provide some support for the Respondents’ case is the statement of the superannuation payments made on the Complainant’s behalf in February 2009, but covering the period 28 June 2008 to 26 September 2008 and the rosters produced by the Second Respondent.
I have already indicated that I do not accept that the rosters produced represent an accurate reproduction of the rosters displayed in the shop. The superannuation payments, however, indicate that for a period, coinciding with the rosters produced, superannuation was paid on the Complainant’s behalf.
The evidence shows that the Complainant obtained a work visa in July 2008. It was about this time that he also spoke to the Second Respondent about not being paid. In his evidence in support of his visa application, the Complainant also stated that it was about this time that he obtained an interview for a job as a rigger. I can only surmise that the Respondents saw some advantage in putting the Complainant ‘on the books’ for a period of time. Their own evidence about why the employment ‘commenced’ and ‘ceased’ is not convincing.
Overall, I find the evidence of the Complainant and Ms Giannakis to be more credible than that of the Second and Third Respondent.
The First Respondent acted through the Second Respondent. He was directly and knowingly involved in the contraventions.
While legally the Third Respondent had no direct interest in the First Respondent, he was involved in the day-to-day decision-making necessary to operate the business during the period that the Second Respondent was working in a full-time job elsewhere and while he was overseas. He was clearly aware that the Complainant was working in the shop for hours, in many respects, commensurate with his own. Further, I am satisfied that he was aware of what money the Complainant and the Complainant’s Wife were being paid and that this was not consistent with the hours being worked.
I am satisfied that within the terms of s.728(2)(c) the Third Respondent was involved in the contravention being a person who “has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention”.
I am satisfied that the Third Respondent was not only aware of the fact that the Complainant was working and not being paid in accordance with the hours worked, but that he supported the Second Respondent in how he operated the business.
For these Reasons I am satisfied that the First Respondent contravened s.182(1), s.189(1), s.235(2) and s.607 of the Act and r.19.4 of the Regulations and that the Second and Third Respondents were involved in the First Respondent’s contraventions.
The Applicant is to provide draft Orders with respect to the amounts payable to the Complainant and the matter is to be relisted to deal with the matter of penalty.

I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Whelan FM

Date: 10 December 2012