Fair Work Ombudsman v Step Ahead Security Services Pty Ltd - [2016] FCCA 1482

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v STEP AHEAD SECURITY SERVICES PTY LTD & ANOR

[2016] FCCA 1482

Catchwords:
INDUSTRIAL LAW – Application for imposition of pecuniary penalties – contravention of Award entitlements to basic rate of pay and loadings – penalties imposed.

Legislation:

Acts Interpretation Act 1901(Cth), ss. 15AB(1)(a), 15AB(1)(b)

Explanatory Memorandum to the Fair Work Bill 2008, paras 2176, 2177

Fair Work Act 2009 (Cth) ss. 3(b), 45, 529(2), 539(1), 545(1), 545(2), 550(1), 557(1), 557(2)

Security Services Industry Award 2010
Workplace Relations Act1996 (Cth), ss.719, 728

Cases cited:

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Fair Work Ombudsman v Alarcorp Pty Ltd [2013] FCCA 1748

Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153
Scotto v Scala Bros Pty Ltd & Anor [2014] FCCA 2374
Sponza v Coal Face Resources Pty Ltd [2015] FCCA 114025
Zhu v The Treasurer of New South Wales (2004) 218 CLR 530

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

STEP AHEAD SECURITY SERVICES PTY LTD

Second Respondent:

OWEN IVOR JENNINGS

File Number:

SYG 2530 of 2015

Judgment of:

Judge Jarrett

Hearing date:

31 March 2016

Date of Last Submission:

31 March 2016

Delivered at:

Brisbane

Delivered on:

17 June 2016

REPRESENTATION

Counsel for the Applicant:

Mr Taylor QC

Solicitors for the Applicant:

Office of the Fair Work Ombudsman

The Second Respondent appeared, with leave, for the first respondent.

The Second Respondent appeared in person

ORDERS

THE COURT DECLARES THAT:

the First Respondent contravened the following civil penalty provisions :
(a)s.45 of the Fair Work Act 2009 (Cth), by contravening clauses 14.1 and A.2.5 of Schedule A to the Security Services Industry Award 2010, by failing to provide four of its employees with the required minimum rate of pay under the Award;
(b)s.45 of the Fair Work Act 2009 (Cth) by contravening clauses 10.5(b) and A.5.4 to Schedule A of the Security Services Industry Award 2010, by failing to pay eight of its employees the required casual loading under the Award;
(c)s.45 of the Fair Work Act 2009 (Cth) (by contravening clauses 22.3 and A.5.4 of Schedule A to the Security Services Industry Award 2010, by failing to pay eight of its employees the required Night Span Penalty under the Award;
(d)s.45 of the Fair Work Act 2009 (Cth) by contravening clauses 22.3 and A.5.4 of Schedule A of the Security Services Industry Award 2010, by failing to pay to seven of its employees the required Saturday Span Penalty under the Award;
(e)s.45 of the Fair Work Act 2009 (Cth) by contravening clauses 22.3 and A.5.4 of Schedule A to the Security Services Industry Award 2010, by failing to pay seven of its employees the required Sunday Span Penalty under the Award;
(f)s.45 of the Fair Work Act 2009 (Cth) by contravening clauses 22.3 and A.5.4 of Schedule A to the Security Services Industry Award 2010, by failing to pay five of its employees the required…

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: [2016] FCCA 1482
Decision Date: 17 June 2016

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Step Ahead Security Services Pty Ltd (Step Ahead) in the Federal Circuit Court of Australia. The dispute concerned Step Ahead's alleged contravention of the *Fair Work Act 2009* (Cth) (the Act) by failing to pay its employees, who were engaged as security guards, the minimum wages and entitlements owed to them under the relevant award and enterprise agreement. The FWO sought pecuniary penalties for these alleged contraventions.

The primary legal issue before the Court was whether Step Ahead had contravened the Act by failing to pay its employees the correct minimum wages and entitlements. This involved determining the correct interpretation and application of the *Security Services Industry Award 2010* and the *Step Ahead Security Services Pty Ltd Enterprise Agreement 2011* to the employees' work, and whether the payments made by Step Ahead met these obligations. The Court also had to consider whether the contraventions were serious enough to warrant the imposition of pecuniary penalties.

Judge Jarrett found that Step Ahead had indeed contravened the Act by failing to pay its employees the minimum wages and entitlements as required by the award and enterprise agreement. The Court's reasoning focused on the specific duties performed by the employees and how these duties corresponded to the classifications and pay rates stipulated in the award and agreement. Step Ahead's argument that certain payments constituted allowances that offset the underpayment was rejected, as the Court determined these payments were not properly characterised as such under the relevant instruments. The Court applied the principles of statutory interpretation to the award and agreement, and the general principles regarding the calculation of minimum entitlements under the Act.

Consequently, the Court ordered Step Ahead to pay pecuniary penalties totalling $10,800 for the contraventions. Step Ahead was also ordered to rectify the underpayments to its employees, with the amount to be determined by the FWO.

Orders