Fair Work Ombudsman v Shah - [2014] FCCA 270

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v SHAH

[2014] FCCA 270

Catchwords:
INDUSTRIAL LAW – Penalties – where matter finalised by agreement – assessment of penalties.

Legislation:

Fair Work Act 2009 (Cth), ss.44, 45, 99, 116, 323, 546, 550, 559

Wells v Locarno Management Pty Ltd [2008] FCA 1034
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Kelly v Fitzpatrick (2007) 166 IR 14
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550

Applicant:

FAIR WORK OMBUDSMAN

Respondent:

TUFIQ SHAH

File Number:

SYG 1324 of 2013

Judgment of:

Judge Raphael

Hearing date:

11 February 2014

Date of Last Submission:

11 February 2014

Delivered at:

Sydney

Delivered on:

11 February 2014

REPRESENTATION

Solicitors for the Applicant:

Fair Work Ombudsman

For the Respondent:

In Person

ORDERS

The Respondent, Mr Tufiq Shah, was involved in each of the contraventions committed by General Practice Support Services Pty Ltd (In Liquidation) (ACN 082 708 147) (GPSS) (within the meaning of subsection 550(1) of the Fair Work Act 2009 (Cth) (FW Act)) as set out below:
(a)section 44 of the FW Act by failing to pay Ms Seed, Ms Ballantyne, Ms Anderson, Ms Sutherland, Ms Brown, Ms Harbeck and Ms Stefanovic their annual leave entitlements during the Employment Period in contravention of subsection 90(2) of the FW Act;
(b)section 45 of the FW Act by virtue of contravening subclause 14.3 of the Health Professional and Support Services Award 2010 (Health Modern Award), in failing to pay Ms Seed an amount sufficient to meet her minimum rate of pay entitlement;
(c)section 45 of the FW Act by virtue of contravening subclause 22.2 of the Health Modern Award in failing to make superannuation contributions to superannuation funds for the benefit of Ms Seed, Ms Ballantyne, Ms Harbeck and Ms Stefanovic;
(d)section 45 of the FW Act by virtue of contravening clause 14 of the Nurses Award 2010 (Nurses Modern Award), in failing to pay Ms Sutherland and Ms Brown an amount sufficient to meet the minimum rate of pay entitlement;
(e)section 45 of the FW Act by virtue of contravening subclause 20.2 of the Nurses Modern Award in failing to pay superannuation contributions to superannuation funds for the benefit of Ms Sutherland and Ms Brown;
(f)section 45 of the FW Act by virtue of contravening clause 14 of the Medical Practitioners Award 2010 (Medical Modern Award), in failing to pay Dr Dowsett and Dr Ee an amount sufficient to meet the minimum rate of pay entitlement;
(g)section 45 of the FW Act by virtue of contravening subclause 19.2 of the Medical Modern Award in failing to make superannuation contributions to superannuation funds for the benefit of Dr Dowsett and Dr Ee;
(h)section 44 of the FW Act by failing to pay Ms Brown personal/carer’s leave during the Employment Period in contravention of section 99 of the FW Act;
(i)section 44 of the FW Act by failing to pay Ms Seed, Ms Ballantyne, Ms Sutherland…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FCCA 270
Decision Date: 11 February 2014

CaseChat Overview and Summary

The Federal Circuit Court of Australia heard a matter between the Fair Work Ombudsman and Mr. Shah. The dispute concerned alleged contraventions of the *Fair Work Act 2009* (Cth) by Mr. Shah, who was the sole director and shareholder of a company that failed to pay its employees their entitlements under the National Employment Standards. The Fair Work Ombudsman sought to hold Mr. Shah personally liable for these contraventions.

The central legal issue before the Court was whether Mr. Shah had engaged in conduct that constituted a contravention of section 550 of the *Fair Work Act*, which deals with accessory liability. Specifically, the Court had to determine if Mr. Shah had aided, abetted, counselled, or procured the company's contraventions of the National Employment Standards, or if he had been knowingly concerned in, or party to, those contraventions.

Judge Raphael found that Mr. Shah was indeed knowingly concerned in, and a party to, the company's contraventions. The Court reasoned that Mr. Shah, as the sole director and shareholder, had ultimate control over the company's financial affairs and decision-making. Evidence showed that he was aware of the employees' entitlements and the company's inability or unwillingness to pay them, yet he continued to operate the business without making provision for these payments. The Court applied the principles of accessory liability, finding that Mr. Shah's active involvement and knowledge rendered him personally liable for the company's breaches of the *Fair Work Act*. Consequently, the Court ordered Mr. Shah to pay pecuniary penalties for his contraventions.

Orders