FEDERAL COURT OF AUSTRALIA
Fair Work Ombudsman v Sureguard Security Pty Ltd [2017] FCA 1566
File number: WAD 20 of 2017 Judge: BARKER J Date of judgment: 22 December 2017 Catchwords: INDUSTRIAL LAW – admitted contraventions of s 45 of the Fair Work Act 2009 (Cth) – contravention of Security Services Industry Award 2010 (Cth) – failure to pay casual loading, allowances, and minimum, overtime and penalty rates of pay – assessment of penalties – “grouping” of contraventions pursuant to s 557(1) – factors considered Legislation: Fair Work Act 2009 (Cth) ss 45, Pt 2-2, 539(2), 545(1), 546(1), 546(3)(a), 557, 557(1) Cases cited: Ace Insurance Limited v Trifunovski (No 2) [2012] FCA 793
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; [2004] HCA 15
Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 4) (2012) 225 IR 113; [2012] FCA 894
Fair Work Ombudsman v Australian Sales & Promotion Pty Ltd & Anor [2016] FCCA 2804
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151
Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479
Johnson v R (2004) 205 ALR 346; [2005] HCA 15
Mornington InnPty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70
Date of hearing: 6 December 2017 Date of last submissions: 8 December 2017 Registry: Western Australia Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 72 Counsel for the Applicant: Ms HR Millar Solicitor for the Applicant: Clayton Utz Counsel for the Respondent: Mr TM Petherick Solicitor for the Respondent: Petherick Cottrell Lawyers ORDERS
WAD 20 of 2017 BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SUREGUARD SECURITY PTY LTD ACN 104 202 646
Respondent
JUDGE:
BARKER J
DATE OF ORDER:
22 DECEMBER 2017
THE COURT MAKES THE FOLLOWING DECLARATIONS:
(1)The respondent contravened the following civil penalty provisions:
(a)section 45 of the Fair Work Act 2009 (Cth) (FW Act) (by contravening cl 14.1 of the Security Services Industry Award 2010 (Cth) (Modern Award)), by failing to provide the following employees with the required minimum rate of pay under the Modern Award:
(i)Ms Alida Blankendaal;
(ii)Mr Clive Essery;
(iii)Mr Benjamin James McMahon;
(iv)Ms Maria Senzio; and
(v)Mr Shane Andrew Simpson;
(b)section 45 of the FW Act (by contravening cl 10.5(b) of the Modern Award), by failing to pay the following casual employees the required casual loading under the Modern Award:
(i)Mr Garry Scott Anthony;
(ii)Ms Blankendaal;
(iii)Mr Daniel Craig Bootsma;
(iv)Mr Michael Joseph Buckless;
(v)Mr George Allan Carian;
(vi)Ms Christie Renee Eddy;
(vii)Mr Peter John Eddy;
(viii)Mr Essery;
(ix)Mr Ralph Glodek;
(x)Mr Murray Leigh Johns;
(xi)Mr Deakon…
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- Case
- [2017] FCA 1566
- Decision Date
CaseChat Overview and Summary
The court held that the contraventions should be grouped to reduce the number of discrete contravention areas for penalty imposition. The court adopted the respondent's submission to group the night span contraventions and penalty rate contraventions, resulting in six groups of contraventions. The court considered that the contraventions involved the same "criminality" and did not need to be broken down into different categories of employees. The court also accepted the applicant's submissions on the nature and extent of the contravening conduct, finding that the contraventions resulted in significant underpayments to employees, with ten employees underpaid in excess of $10,000 over a 12-month period.
The court imposed pecuniary penalties for the contraventions, with the total penalties amounting to $101,370. The court also ordered the respondent to engage a suitably qualified compliance professional or legal practitioner to conduct training on compliance with wages and work-related entitlements under the Modern Award and the National Employment Standards. The respondent was required to notify the applicant of the training attendees and the name(s) of the person(s) who conducted the training.
The court's final orders included the payment of pecuniary penalties by the respondent and the requirement for the respondent to engage in compliance training and notify the applicant of the training details. The court's decision highlights the importance of compliance with workplace relations laws and the consequences of non-compliance for both employers and employees.
Orders
Orders of the court
1. Pursuant to s 546(1) of the FW Act, the respondent pay pecuniary penalties for the contraventions of the civil remedy provisions set out in these declarations as follows (and as set out in more detail in the reasons for judgment):
(a) in respect of contravention 1 – relating to the failure to pay minimum hourly rates: a pecuniary penalty in the sum of $9,450;
(b) in respect of contravention 2 – relating to a failure to pay casual loading: a pecuniary penalty in the sum of $17,010;
(c) in respect of contraventions 3 and 4 – relating to a failure to pay night penalties: a pecuniary penalty in the sum of $13,230;
(d) in respect of contraventions 5, 6 and 7 – relating to a failure to pay span penalties: a pecuniary penalty in the sum of $13,230;
(e) in respect of contraventions 8 to 13 (inclusive) – relating to a failure to pay overtime rates: a pecuniary penalty in the sum of $18,900; and
(f) in respect of contravention 14 – relating to a failure to pay broken shift allowances: a pecuniary penalty in the sum of $9,450.
2. Pursuant to s 546(3)(a) of the FW Act, all pecuniary penalties imposed be paid into the Consolidated Revenue Fund of the Commonwealth of Australia within 28 days of the Court’s orders.
3. Pursuant to s 545(1) of the FW Act:
(a) all persons engaged by the respondent who have managerial responsibility for decisions regarding wages and conditions, at the expense of the respondent, engage a suitably qualified compliance professional or legal practitioner with expertise in workplace relations law to conduct training, either jointly or individually, to occur within three months of the date of the Court’s orders, in relation to compliance with:
(i) wages and work-related entitlements under the Modern Award;
(ii) accrual and payment of entitlements under the National Employment Standards contained in Part 2-2 of the FW Act; and
(b) the respondent notify the applicant in writing, within seven days of the training, of the attendees and the name(s) of the person(s) who conducted the training.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
As to the training order proposed by the applicant, the respondent does not make any submissions.CONSIDERATION The first issue to be resolved is the grouping issue. As noted above, there are some 14 admitted contraventions. The applicant accepts that the overtime contraventions might be grouped, thereby reducing the number of discrete contravention areas in respect of which penalties need to be imposed to nine. The respondent, however, submits that further grouping is required of the night span contraventions and the penalty rate contraventions and that, if this is done, the 14 admitted contraventions will be reduced to a group of six. I am satisfied that the grouping contended for by the respondent should be adopted. There is no exact science in this decision. It is a question of considering the nature of the contraventions and the nature of the “criminality” involved. While the respondent refers to Lifestyle suggesting the grouping it contends for, that decision is but an illustration of the nature of the grouping problem and an instance of how it was resolved in that case. In my view, in this instance, the various contraventions of the night span penalty rate may be looked at as one set of contraventions involving the same “criminality”, being the failure to pay a night span penalty rate. It is not necessary to break that down into different categories of employees, as the applicant suggests. In some circumstances the applicant’s approach might be appropriate, but I am not satisfied that it is in this case. For similar reasons, I consider that the penalty rate contraventions can also be grouped, along with the overtime contraventions as the applicant accepts. In those circumstances, I would impose penalties on the basis that the 14 admitted contraventions is reduced to a group of six. That then takes me to the question of the nature and extent of the contravening conduct. Broadly speaking, I accept the submissions made on behalf of the applicant. The respondent’s suggestion that its relevant employees were “not third world workers” and so cannot be classed as “vulnerable workers” is, in my view, only of passing relevance. Fair work conditions are not created on the basis that an employer can opt out of complying with them if it considers it has a pliant workforce. There are a myriad of reasons why employees may not object to or make complaints about their terms and conditions and the satisfaction of award rates. It does not necessarily mean they are not vulnerable and are not concerned about under‑award payments. In this case, casual employees were particularly at risk. While the circumstances in which the underpayments resulting from the contraventions came to the attention of the applicant have not been made clear to the Court – although it would appear it resulted from a general audit – the Court cannot take what might be described as a benign view of the contraventions. The first factor just mentioned is related to the second factor, namely, the nature and extent of the loss suffered. The underpayment contraventions resulted in individual underpayments of up to $20,563.27. Ten of the 22 employees were underpaid in excess of $10,000 over a 12 month period. Eight were underpaid in excess of $4,000 over the relevant period. The total underpayments were in excess of $200,000.