Fleming v Restaurant Services Group
[2008] FMCA 455
•11 April 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FLEMING v RESTAURANT SERVICES GROUP & ORS | [2008] FMCA 455 |
| INDUSTRIAL LAW – Application for imposition of penalties for breaches of ss.400, 401 Workplace Relations Act 1996 and Workplace Relations Regulations 2006 against the Second Respondent and of s.337 Workplace Relations Act 1996 against the Third Respondent – where Second Respondent was manager of restaurant – where employee signed AWA – where employee not given Information Statement or advised of her right to consider the document for seven days – whether Second Respondent’s conduct in regard to the signing of second AWA constituted giving false and misleading information – whether actions of Second Respondent were reckless – whether they caused employee to sign AWA – whether actions of second Respondent constituted duress – where Third Respondent was director and sole shareholder of employer – where Third Respondent took no part in management of company – effect of not ensuring employee relations were conducted according to law – penalties and matters to be taken into consideration. |
| Workplace Relations Act 1996, ss.337, 400(5), 401(1), 728, 841 Corporations Act 2001, s.440D Workers Compensation Act 1987 (NSW) Workplace Relations Regulations 2006, r.8.11(1)(c), 8.12(1), 8.12(2)(c) |
| R v Lawrence (1981) 1 All ER 974 The Pharmacy Guild of Australia and Another v Australian Community Pharmacy Authority and Another (1996) 46 ALD 310 Canturi v Sita Coaches Pty Ltd (ACN 004 444 900) [2002] FCA 349 Schanka v Employment National (Administration) Pty Ltd [1999] 166 ALR 663 Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899 |
| Applicant: | INSPECTOR JOHN FLEMING |
| First Respondent: | RESTAURANT SERVICES GROUP (ABN 74 080 946 201) |
| Second Respondent: | IMRAN SULEMAN |
| Third Respondent: | ALAN JOSEPH NOOR |
| File Number: | SYG 3064 of 2007 |
| Judgment of: | Raphael FM |
| Hearing dates: | 2 & 3 April 2008 |
| Date of Last Submission: | 3 April 2008 |
| Delivered at: | Sydney |
| Delivered on: | 11 April 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Farmer |
| Solicitors for the Applicant: | Freehills |
| Counsel for the Respondent: | Mr R Warren |
| Solicitors for the Respondent: | Toomey Pegg Drevikovsky |
ORDERS
The Second Respondent pay a penalty of $250.00 for breach of s.400(5) of the Workplace Relations Act 1996.
The Second Respondent pay a penalty of $50.00 for breach of Workplace Relations Regulation 8.11(1)(c).
The Second Respondent pay the penalties referred to in Orders 1 and 2 to Ms Alice McCarthy pursuant to s.841 Workplace Relations Act 1996.
The Third Respondent pay a penalty of $10,000.00 for breaches of s.337 Workplace Relations Act 1996.
The Third Respondent pay the penalty referred to in Order 4 above to the Commonwealth pursuant to s.841 Workplace Relations Act 1996.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3064 of 2007
| INSPECTOR JOHN FLEMING |
Applicant
And
| RESTAURANT SERVICES GROUP (ABN 74 080 946 201) |
First Respondent
| IMRAN SULEMAN |
Second Respondent
| ALAN JOSEPH NOOR |
Third Respondent
REASONS FOR JUDGMENT
Introduction
This proceeding is brought under the Workplace Relations Act 1996 (Cth) (the “Act”) by a workplace inspector for various breaches of the Act and Regulations that occurred in relation to the issue of an AWA and a second or replacement AWA to an employee of the first respondent on 7 February and 23 March 2007. The first respondent was, at all material times, the employer of the employee Ms McCarthy, the second respondent was the manager of the restaurant where Ms McCarthy worked as an employee of the first respondent. The third respondent was, at all material times, the sole director and shareholder of the first respondent.
At the commencement of the hearing the third respondent advised that the first respondent had gone into voluntary administration. The applicant informed the court that it had carried out an ASIC search which confirmed this fact. The applicant accepted that the proceeding was one that was subject to s.440D of the Corporations Act 2001:
“Stay of proceedings
(1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a) with the administrator's written consent; or
(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding.”
The applicant advised the court that it did not have the administrator’s written consent and had not received the leave of the Court. The applicant accepted that this was not a prescribed proceeding. In the circumstances the action could not proceed against the first respondent. The applicant chose to continue the proceeding against the second and third respondents.
In the course of these reasons I will deal first with the history, being those facts which are not in dispute, then with the evidence to the extent that it is of importance for the purposes of making findings or upon mitigation, then with the relevant law and my findings upon it and finally the penalty.
History
There is a group of restaurants known as “Chili’s” which is the Australian franchise of an American chain. The Australian franchisee was a company known as Brinker Australia Pty Limited and its associates. In October 2006 Restaurant Services Group (“RSG”), the first respondent, took over responsibility for staff and suppliers, apparently leaving Brinker or one of its associated companies with the properties out of which the restaurants were being run and the franchise rights. Mr Noor was the sole director and shareholder of RSG. This type of American franchise restaurant relies heavily on young staff most of whom would be employed part time or as casuals. There was a high turnover of staff in the various restaurants. Chili’s, as it was known, had a head office in Wentworthville. A Chris White was employed there as the CEO and there were two other persons involved in Brinker who had some form of managerial responsibility, namely Adrian Duncan and Justin Cox. Staff at Wentworthville was very small consisting of a receptionist, a Ms Griffin, a Gavin Reynolds and Mr White. Ms Griffin had joined Chili’s in about 2002 and worked her way up to become the payroll officer. She answered to Mr White and to Mr Gavin Reynolds. Each Chili’s restaurant had a general manager and assistant managers. Mr Suleman, the second respondent, was the general manager of the Wollongong restaurant. A Mr Trent Dawson held the position of assistant manager and there was another employee known as Kelly who was a trainee assistant manager at Wollongong.
The Chili’s group employed their workforce in the restaurants through AWAs. Originally the AWAs were issued by Brinker Australia Pty Limited. Those AWAs ran from 2004 to 2007. They contained a wage rate for probationary staff. At a time unknown but probably just prior to January 2007 Chili’s were informed that the rate being offered to probationary staff was below the minimum wage. A decision was made to amalgamate the probationary wage with the Grade 1 part time wage. At a time unknown but, I suspect, at the same time as the decision on wages was made, the name of the employer or the AWA was changed from Brinker to RSG.
In mid January 2007 Alice McCarthy was dining in the Chili’s Restaurant in Wollongong. She saw an advertisement for staff wanted, completed the application form and returned it to the restaurant the next day. She was given an immediate interview by Trent Dawson and Kelly. She was told that the restaurant was looking for part time staff, that the wage rate would be $13.44 an hour and there was a minimum callout of twenty hours per fortnight. Ms McCarthy was asked to come back for a second interview which she did on 31 January 2007. When she arrived she was told that she was being offered a position as a food server, was asked to fill in a form in relation to her uniform size and was told to return on an orientation day which would be advised to her. This took place on 7 February 2007. Ms McCarthy attended with a group of about 20 persons. The orientation was run by Mr Dawson but Mr Suleman made an appearance. During the course of the morning the applicant was handed a booklet called the “Chili’s Australian Employee Orientation Handbook” and a manila folder which included an Australian Workplace Agreement. The staff were told that their rate of pay was the part time rate.
At the end of the orientation Trent Dawson referred to the AWAs. According to Ms McCarthy’s affidavit he said words to the following effect:
“This is your workplace agreement. We’ve made it to be really fair. You can get it out, have a read through it, sign it. You can give it back to us now but you have to have someone co-sign it to verify you signed it. You can sign it here if you’re over 18 and if not you can run out to the car and get your parents to sign it and bring it back in or you can bring it in the next time that you have a shift. Feel free to sign it and take it home and read it over.”
The applicant was not handed an Information Statement, nor was she told that she should have been given the agreement or have ready access to it for at least seven days before she signed it, nor was she told that she had the right to waive the seven day requirement but only if she had had a copy of the Information Statement given to her. The AWA which Ms McCarthy signed, after having read through it for approximately five to ten minutes, was made in the name of RSG and the wage rate for probationary staff was the same as the wage rate for part time staff. The attachment indicated in respect of Ms McCarthy’s position:
Age Grade Rate (per hour)
Part Time
Adult Probationary/Grade 1 $13:44
Adult Grade 2 $13:92The AWA that she signed had a clause dealing with period of operation stating:
“This AWA shall take effect as at 1 March 2004 or, the day after the approval notice is issue by the Employment Advocate, (whichever is the later) and expire on 1 March 2007. After the AWA has expired, either party, after giving two days written notice to the other, may file a termination notice with the Employment Advocate under s.170VM(6).”
Ms McCarthy signed the signature page of the AWA and gave it either to Mr Dawson or Mr Suleman. On 19 February 2007 she received a letter from the office of the Employment Advocate confirming that the AWA had been lodged. She did her first shift at Chili’s Restaurant on 9 March 2007.
The process by which AWAs were distributed from head office to the branch restaurants was by email. They were then printed off by the manager at the restaurant and given to the staff to sign. The manager then countersigned and returned the countersignature page to head office for filing with the office of the employment advocate. On 20 February 2007 Nikki Griffin sent an email to Chili’s Wollongong which was picked up by Mr Suleman on his computer. The email [Ex 1] reads:
“Hi Team Wollongong
As you are already aware the current AWA expires at the end of February 2007.
Attached is the new AWA which all new staff will have to receive a copy of upon orientation. (delete the old AWA off your computer to avoid any mix ups in future orientations)
All existing staff who have already signed the 04-07 AWA will need to sight the new AWA and sign the back signatories page. (you do not need to print the whole document for them) I would suggest that you print out an AWA for the restaurant and keep it in a common place where all staff can view it before being asked to sign the signatories’ page.
Also attached is a list of all current employees as per the payroll system, each employee listed will need to complete the back signatories page of the new AWA. If any employees listed no longer work at the restaurant please complete Termination forms for them.
Please call me if you have any questions.”
After he received the email Mr Suleman telephoned Nikki Griffin. He asked her what the changes to the new AWA were. Although the words which he said she used and she says she used differ slightly I am satisfied that the gist of the conversation was that there were three changes. The first was that the name of the employing party on the AWA had been changed from Brinker to RSG. The second was that the old agreement had expired or was about to expire and the new one ran from the expiry date. The third was that there was no longer a probationary pay rate, it was the same as the Grade 1 part time rate. Following the telephone conversation Mr Suleman sent an email to Ms Griffin asking for written confirmation of the changes and she recalled responding to him confirming that the three changes abovementioned were the three changes to the AWA.
On 23 March 2007 Ms McCarthy and another employee, Jake Livissianos, went into the manager’s office to sign their timesheets. Whilst there they were asked to sign the second AWA. Ms McCarthy did so. She was not given another Information Statement. She was not told that she did not have to sign the second AWA. She was not told that she could have seven days to consider the document.
The second AWA was issued by the employer RSG. It indicated that it commenced on 1 March 2007 and expired on 1 March 2010. The pay rate for probationary/Grade 1 part time employees was the same as the pay rate contained in the first AWA. Mr Suleman witnessed the signature and sent the signed page back to Ms Griffin for filing with the Employment Advocate.
Evidence
I heard evidence from Ms McCarthy, Mr Noor, Mr Suleman and Ms Griffin. It is fair to say that most of the differences in the evidence of the witnesses were ones of degree rather than being of a substantive nature. Ms McCarthy said that Mr Suleman was present at the orientation day and handed out the manila envelopes in which all of the documentation including the AWA had been placed. Mr Suleman denied that he had done this. He said that he had just come in and introduced himself as the general manager which was something he always did at orientation days. I am prepared to accept that the substantive part of the orientation including the introduction to the AWA, was carried out by Mr Dawson and not by Mr Suleman. However, it was Mr Suleman who placed his signature on the AWA signature form. Ms McCarthy agreed under cross examination that she took the first AWA home but then she only read the sections which she thought applied to her. At the time Ms McCarthy was requested to sign the second AWA she had only been working for a short time and had not yet received any pay. The information that the pay grade for probationary staff had increased was therefore of interest to her. It is a fact that in the AWA a probationary staff member is described as a person within the first three months of their employment and it was open to Ms McCarthy to have thought that she was a probationary member of staff even though she was told by Mr Dawson that she was a part time Grade 1 person.
Ms McCarthy agrees that she received some prior indication that there was to be a second AWA. In her affidavit she said there was a verbal statement from Mr Suleman “You have to sign a new AWA and you have to do it before the end of your shift”. However, in cross examination she agreed that Mr Suleman did not say “you must sign this” or “I want you to sign this”. There is agreement that when Ms McCarthy came to sign off after her shift she was asked by Mr Suleman to sign the new AWA signature page. I am satisfied that someone, possibly Mr Livissianos, asked Mr Suleman what the changes were in the document. Ms McCarthy remembered Mr Suleman saying that there were changes to the pay rate for people on the probationary pay rate and Grade 1 so that they now had the same rates of pay but in her affidavit did not appear to recall any other change. Under cross examination she told the court that Mr Suleman had said the old probationary pay rates no longer apply. Whilst she did not remember Mr Suleman saying words to the effect that AWAs have a shelf life of three to five years so a new one was needed she did not deny that it was said and I am satisfied from the fact that Mr Suleman wrote the emails and had the telephone conversation with Ms Griffin that I have previously referred to that he did say words to that effect. I believe he also said that the new AWA had RSG’s name on the front. Although Ms McCarthy states in her affidavit that she was concerned that if she did not sign the AWA she would not be employed by Chili’s Restaurant any longer [Affidavit 74] she accepted that Mr Suleman never said to her words to the effect:
“If you don’t sign this you are no longer employed.”
Mr Suleman said that the second AWA had been pinned up in the staffroom and was on his desk when he was asking Ms McCarthy and Mr Livissianos to sign it. I accept that when Mr Suleman pointed out to Ms McCarthy and Mr Livissianos that the pay rates had changed for probationary staff Mr Livissianos said words to the effect “I hope it means we get more” and that thereafter both Mr Livissianos and Ms McCarthy laughed and signed the blank signature pages.
The only change in the second AWA that Ms McCarthy signed from her first AWA was the period of its operation.
The only other matter that was seriously in contention was Mr Noor’s involvement. Mr Noor told the court that he knew the people behind Brinkers very well and had known them for years. He had been involved in running restaurants, nightclubs and licensed premises in the past. He said that they had approached him in mid 2006 because Brinker Operations was running into problems with its suppliers. They suggested to him that he form a new company that would take over the running of the suppliers and staff of the Chili’s Restaurants group. He said that he agreed to do this on the basis that they promised him that staff would be paid and suppliers would be paid. He had no real interest in the business at all but did what he did because it was suggested to him that the Chili’s group would “go public” and he would make money on the sale of the shares. He said that he hardly came into the office at all until well after the events which are the subject of these proceedings. He only came into the office then because the company was failing and he decided to take control. The company did fail and both Mr Suleman and Ms Griffin were left unemployed and owed a considerable amount of money by way of entitlements. Mr Noor said that he left the running of the business to Mr White. Mr Noor said he had no knowledge of AWAs. The last time he employed staff AWAs had not been in existence. He assumed that Mr White and the other Brinker people would ensure that the law was complied with. He was out of the country much of the time. He said that the three controllers of Chili’s were all ex chartered accountants, one of whom was in London. Mr Noor agreed that he was the person named in the forms that were sent to the employment advocate with the signed AWAs. These forms are found on page 67-70 of the affidavit of Mr Forbes. They were completed by Ms Griffin and declare that the information in the declaration is true and that the employer has complied with the relevant provisions of Part 8 of the Act by giving the employee the agreement or ready access to it for at least seven days before it was signed and giving the employee a copy of the information statement. Mr Noor agreed that he did none of those things nor could he say that they were done on his behalf.
Ms Griffin was cross examined about Mr Noor’s involvement in the company. To my mind she confirmed what Mr Noor had said. He was very rarely in the office at the relevant times and gave no orders relating to the AWAs or employment of staff. She confirmed that the company was really run by Mr White and Mr Reynolds.
The breaches and the law
In paragraph 39 of the Statement of Claim there is an allegation against the second respondent of breach of s.400(5) of the Act by the application or intended application of duress. In paragraph 41 of the Statement of Claim there is an allegation of contravention of s.401(1) of the Act by the second respondent in relation to the making of false and misleading statements. As the alleged making of the false and misleading statements constitute part of the alleged duress I shall deal first with this aspect of the matter. The allegations against the second respondent in this regard are pleaded as follows:
“[41] By reason of the matters pleaded in paragraphs 20 to 32 above, the Second Respondent contravened section 401(1) of the WR Act in relation to the Second AWA in that:
(a) he made false and/or misleading statements to the Employee: and
(b) he was reckless as to whether the statements were false and/or misleading; and
(c) the making of the statements caused the Employee to make a workplace agreement.
Particulars
(i) The Second Respondent was reckless as to whether the statements made to the Employee were false and/or misleading because he:
- was aware of a substantial risk that the statements made by him were false and/or misleading; and
- in the circumstances known to the Second Respondent (namely, that in the absence of any other information at all as to the proposed content of the Second AWA, the false and/or misleading statements would be likely to be relied up on by the Employee and cause her to enter into the Second AWA), it was unjustifiable to take that risk.
(ii) Given the circumstances, including the proximity in time between the making of the statements and the signing of the Second AWA, the making of the statements by the Second Respondent caused the Employee to enter into the workplace agreement.”
I have found that Mr Suleman enquired of the changes to the AWA and was told that there were three, the name on the document, the period of operation and the pay rates. I am satisfied that Mr Suleman told Ms McCarthy that the pay rate had changed. But it had not. I am satisfied that Mr Suleman told Ms McCarthy that the period of operation was from three to five years but did not give her the information contained in clause 3 of the agreement:
“3. Period of Operation
This AWA shall take effect as at the 1st March 2007 or, the day after the approval notice is issued by the Employment Advocate, (whichever is the later) and expire on the 1st March 2010. After the AWA has expired, either party, after giving two days’ written notice to the other, may file a termination notice with the Employment Advocate under s170VM(6).”
I am satisfied that Mr Suleman told Ms McCarthy that the name on the front page of the document had changed from Brinker to RSG.
Section 401 of the Act is in the following form:
“False or misleading statements
(1) A person contravenes this section if:
(a) the person makes a false or misleading statement to another person; and
(b) the person is reckless as to whether the statement is false or misleading; and
(c) the making of that statement causes the other person:
(i) to make, approve, lodge, vary or terminate a workplace agreement; or
(ii) not to make, approve, lodge, vary or terminate a workplace agreement.
(2) Subsection (1) is a civil remedy provision.”
The first statement that the name of the employer had changed from Brinker to RSG was false. The name had never changed from the document that Ms McCarthy signed. Ms McCarthy does not recall Mr Suleman saying anything about the name change. I am satisfied that the making of the statement did not cause Ms McCarthy to make the AWA. The second statement related to the pay rates. The pay rates had not changed from the first AWA. It is clear from the evidence from Ms McCarthy that it was the change in pay rates that caused her to sign the document. She thought she was going to get a pay rise. The statement was false. The question is, was it made recklessly? Mr Suleman argues that the statement was not made recklessly. He says that when he received advice that the company wanted the staff to sign the second AWA he specifically asked Ms Griffin what the changes were. He was told what the changes were and he sent her an email asking her to confirm this which she did. Mr Suleman argues that this is not the act of a reckless person. What he did not do was to compare the second AWA with the first. Had he done so he would have found that the only change was to the period of operation,
“The ordinary meaning of the word “reckless” in the English language is “careless”, “heedless”, “inattentive to duty”, literally, of course it means “without reck”. “Reck” is simply an old English word, now, perhaps obsolete, meaning “heed”, “concern” or “care” R v Bates [1952] 2 ALL ER 842 at [845-846] per Donovan J.”
The meaning of the term was elegantly described by Lord Hailsham in R v Lawrence (1981) 1 All ER 974 at [978]:
“It only surprises me that there should have been any question regarding the existence of mens rea in relation to the words “reckless”, “recklessly” or “recklessness”. Unlike most English words it has been in the English language as a word in general use at least since the eight century AD almost always with the same meaning, applied to a person or conduct evincing a state of mind stopping short of deliberate intention, and going beyond the mere inadvertence, or, in its modern though not etymological and original sense, mere carelessness. The Oxford English Dictionary quotes several examples from Old English, many from the Middle English period, and many more from modern English. The word was familiar to the Venerable Bede, to Shakespeare. In its alternative and possibly older pronunciation, and etymologically incorrect spelling (wretchless, wretchlessly, wretchlessness) it was known to the authors of the Articles of Religion printed in the book of Common Prayer. Though its pronunciation has varied, so far as I know its meaning has not. There is no separate legal meaning to the word.”
In the same case Lord Diplock opined:
“Recklessness on the part of a doer of an act does presuppose that there is something in the circumstances that would have drawn the attention of an ordinary prudent individual to the possibility that his act was capable of causing the kind of serious harmful consequences that the section which creates the offence was intended to prevent and that the risk of those harmful consequences occurring was not so slight that just an ordinary prudent individual would feel justified in treating them as negligible. It is only when this is so that the doer of the act is acting “recklessly” if, before doing the act, he fails to give any thought to the possibility of there being any such risk or, having recognised that there was such a risk, he nevertheless goes on to do it.” [At 982]
In The Pharmacy Guild of Australia and Another v Australian Community Pharmacy Authority and Another (1996) 46 ALD 310 much importance was placed upon the measurement of distances between two pharmacies. There was a requirement to find the shortest route. The route was measured by a Mr Boxall on the instructions of a Mr Levis. One of the possible ways of measuring the distance was excluded by Mr Levis because he considered that it terminated at a river without a bridge. In fact the road proceeded along a step path which allowed access over the river by a footbridge:
“Mr Levis initially gave evidence that he had examined the fairly large scale map of the Sutherland Shire at the Sutherland Library and obtained information therefrom in respect of the route from Jannali to Kareela. … Mr Levis agreed that he had never walked the Box Road route between Jannali and had not made an inspection of the area adjacent to Box Road near the river to check if there was a bridge across the river. He did, I find, rely entirely on the street directory and his own general knowledge of the area such as it was in asserting to Mr Candy that “Box Road terminates at the river without a bridge”. It may well be that Mr Levis’ facsimile transmission of 14 June 1995 was misleading in that it suggested that Mr Levis had personal knowledge of matters in fact not known to him but I am not able to find that Mr Levis knew that the statement contained in the facsimile transmission to be false. Was he reckless, careless whether it be true or false in the sense that he lacked an honest belief in its truth? Derry v Peek (1889) 14 APP CAS 337 per Lord Herschell at [374]. I do not consider that the evidence is sufficient to support such a finding although I am satisfied that Mr Levis made the statement without reasonable grounds, I am not satisfied that he made it fraudently.”
I am of the view that Mr Suleman’s actions could not be described as reckless insofar as they could not be described as not caring whether they were true or false. Mr Suleman made enquiries. Like Mr Levis they may not have been perfect but they were made in good faith. He acted upon the information that he was given. He may have been careless in not checking the documents himself but he had no reason to disbelieve what Ms Griffin had told him and he even got her to confirm it in writing.
The third statement related to the period of operation of the AWA. I have found that Mr Suleman did say words to the effect that the new AWA had a shelf life of three to five years. To the extent that this statement did not accurately reflect the actual term, being three years from March 2007, it was misleading. However, I am of the view for the same reasons as given above that the statement was not made recklessly by Mr Suleman and I would go further and say that in my view the statement did not cause Ms McCarthy to make the AWA. I say this because my understanding of Ms McCarthy’s evidence is that the influencing factor in signing the AWA was the information concerning the pay rate for probationers.
In these circumstances I would not make a finding that Mr Suleman contravened s.401 of the Act.
The claim against Mr Suleman under s.400(5) of the Act is described in the Amended Statement of Claim in the following way:
“By reason of the matters pleaded in paragraphs 8 to 32 above, the Second Respondent contravened s.400(5) of the Workplace Relations Act 1996 in that the Second Respondent applied duress to the Employee in connection with the Second AWA in that the Second Respondent applied, and intended to apply, illegitimate pressure to the Employee in connection with an AWA or a proposed AWA.
(i)The Employee was 21 years of age and had limited experience in the workforce.
(ii)The Second Respondent asked the Employee to sign the Second AWA at the end of the Employee’s shift when the Employee was tired, hungry and anxious to get home.
(iii)There was another employee present who was waiting to witness the Employee’s signature on the Second AWA.
(iv)The Second Respondent, in breach of section 401(1) of the WR Act, made false and/or misleading representations (as pleaded in paragraphs 20 and 21 above) in relation to the reason that the Second Respondent required the Employee to enter into the Second AWA.
(v)The Second Respondent, in breach of section 401(1) of the WR Act, made false and/or misleading representations (as pleaded in paragraphs 20 and 21 above) in relation to the content of the Second AWA.
(vi)The Employee was asked by the Second Respondent to sign the Second AWA immediately, in breach of the requirement in the WR Act that all employees must be given at least 7 days’ read access to a workplace agreement before it is approved.
(vii)The Employee was not provided with an ‘Information Statement for Employees’ in relation to the Second AWA in breach of section 337(2) of the WR Act.
(viii)Before signing the Second AWA, the Employee was not informed of the effect of the AWA and her rights in relation to it including:
-that once an AWA started to operate, it replaced any award or workplace agreement that would otherwise apply to her employment;
-that an AWA overrides employment conditions in New South Wales laws;
-that she had the right to appoint a bargaining agent to assist her or represent her in making an AWA;
-that she could choose to sign, or not to sign, the Second AWA; and
-any of the other matters that would ordinarily appear in the ‘Information Statement for Employees’.
(ix)The Employee was asked by the Second Respondent to sign a blank signatory page and at no stage either before or after signing the Second AWA (and until her employment with the First Respondent ended) did the Employee see a complete copy of the Second AWA.
(x)The Employee was under the impression that if she did not sign the Second AWA, she would lose her employment with the First Respondent.”
In Canturi v Sita Coaches Pty Ltd (ACN 004 444 900) [2002] FCA 349 Ryan J considered the question of duress and referred to Schanka v Employment National (Administration) Pty Ltd [1999] 166 ALR 663 where his Honour said at [681]:
“The conduct of the contravening party must involve illegitimate pressure, … whether pressure is illegitimate will ultimately depend on the factual context in which the allegation of duress arises. But it must be pressure that is likely to have the effect of denying the exercise of free will if an AWA was made. It also must be intended to have that effect.”
Ryan J approved of the views of R D Nicholson J in Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899:
“Where his Honour at 125 accepted the rationale for s.170WG as being “to ensure that processes that might lead to the making of an AWA occur in a way that ensures that free choice is exercised.” Nicholson J continued at [367]:
“Duress, “like undue influence, focuses upon the effect of pressure, upon the quality of the consent or assent of the pressured party, rather than the quality of the conduct of the party against which relief is sought”: Westpac v Cokerill (1998) 152 ALR 267 at 289 per Keifel J. While generally speaking the types of pressure considered to be illegitimate will involve unlawful threats or pressure that amounts to unconscionable conduct, the categories of conduct are “not closed” and “otherwise lawful conduct may in certain circumstances amount to illegitimate pressure”: Crescendo Management Pty Ltd v Westpac Banking Corp [(1998) 19 NSWLR 40] at 46. …
It can be duress in relation to an AWA in contravention of section 170WG to refuse to deal with someone if they do not enter into an AWA with an employee or to not employ someone except on an AWA, or to threaten an existing employee with loss of employment if he or she does not enter into an AWA: Schanka. An enquiry into an allegation or duress for the purposes of section 170WG must involve a consideration of the “possible or probably impact of the conduct” of the party applying duress to the other party” Schanka at 12.”
The Full Federal Court in Schanka [2000] FCA 202 said at [16]:
“[16] Nor are we persuaded that there is any ambiguity between the ordinary English meaning of "duress" and its meaning as a legal term with the signification acquired from the authorities in which it has been applied. All that the authorities reveal is that the need to apply the concept has only arisen when the application of duress has resulted in the party, the subject of the illegitimate pressure, changing his or her position, for example, by the making of a contract or payment from which the victim seeks to be relieved. However, the making of such a contract is not an intrinsic part of the "duress" which is alleged to have procured it. The Oxford English Dictionary defines "duress" in the relevant sense as "Constraint compulsion; spec in Law, Constraint illegally exercised to force a person to perform some act."
At [23] the Court found that it was the intention of the Act that an employer should not apply illegitimate pressure on an employee in an endeavour to induce her to enter into an AWA saying at [24]:
“[24] AWAs should be negotiated and concluded openly and freely at arm’s length without outside interference and without either party being deceived or misled.”
I would not necessarily agree that many of the particulars of the claimed duress are accurate. I am not prepared to accept that Ms McCarthy was a naïf as suggested by particular (i) nor have I heard any evidence that she was tired, hungry and anxious to go home when she signed the document. I cannot see the relevance of there being another employee present who was waiting to witness Ms McCarthy’s signature on the second AWA. The evidence seems to bear out the fact that the two employees went in there together, the two employees were given certain information and appear to have agreed to sign quite willingly albeit under the misunderstanding that they may be getting a pay rise. Neither of them looked in any detail at the document, certainly not in sufficient detail to realise that they were not getting a pay rise because the benefit had already been given to them. To this extent, they were misled but I do not accept Ms McCarthy’s evidence that if she had truly known what the three changes were she would not have signed the agreement. Where was the harm in her signing the agreement? It changed nothing. She had already signed an AWA. Although she could have refused to sign this AWA that would not have changed her conditions of employment until the old AWA was terminated pursuant to its provisions and the provisions of the Act. I accept that Ms McCarthy was asked to sign the document immediately and I think that the offer to take the document home to look at it was not an offer to take it home and look at it before signing but to take it home and look at it after signing. I accept that before signing the document there were a number of things that Ms McCarthy was not informed of as set out in particular (viii) and that she had no access to any explanatory memoranda or any assistance from Mr Suleman. I accept that she was asked to sign a blank signature page but I also accept that although she was not given a copy of the full document there was one available for her to look at both in the staffroom and on Mr Suleman’s desk. The most important matter is the last particular, namely that Ms McCarthy was under the impression that if she did not sign she would lose her employment with the first respondent. If that impression was gained from the actions of Mr Suleman then it may well constitute illegitimate pressure. Ms McCarthy says in her affidavit at [74]:
“[74] I believed that if I did not sign the second AWA I would not be employed by Chilis Restaurant any longer. I felt under pressure to sign the second AWA because Imran Suleman was sitting there in the manager’s office. We were both looking at each other. I said words to the effect, “Well I’ll just sign it.” It was the end of the shift so I just wanted to sign it quickly and get out.”
[75] The job market in Wollongong at the time I signed the second AWA had not changed since I applied for a job working with Chilis Restaurant a few weeks earlier. It was still hard to get a job in Wollongong. I wanted to stay in my job working for Chilis Restaurant and this was on my mind when I signed the second AWA. However it was more than that, it was made out to me by Imran Suleman that it was not a big deal, it was just a minor change to the AWA I had already signed.”
Under cross examination Ms McCarthy agreed that Mr Suleman had never said “If you don’t sign this you are no longer employed.” I am prepared to accept that notwithstanding this there was a concern in Ms McCarthy’s mind that if she did not sign she would not get any more shifts. She was being asked to sign the document and was told that doing so was “no big deal”. It was “no big deal” because the only change to the document was the period during which it operated. This view that I have taken focuses upon the effect of the pressure. I think that the pressure was illegitimate in that a reasonable person in the position of Ms McCarthy, having been told in the morning the AWA should be signed before people go off their shift and being asked at the time she was “to sign the document” she was being asked to do something that was not required of her. It was not required of her because she was not being given the explanatory statement and was not told that she was entitled to have the document in her possession for seven days before signing it. If the subjective feelings about the effect of not signing the document are induced by illegitimate pressure to sign then I believe that the instigator of the pressure applies duress to the employee. I say this, even though I recognise that Mr Suleman in all probability had no thoughts whatsoever as to what he would do if Ms McCarthy had declined to sign at that time.
Mr Suleman has admitted the breach of the Regulations referred to in paragraph 47 of the Statement of Claim:
“[47] By reason of the Second Respondent, as a signatory to the Second AWA on behalf of the First Respondent, failing to include his full name and address in the Second AWA either
(a) the First Respondent and/or
(b) the Second Respondent,
has contravened regulation 8.11(1)(c) of the WR Regulations in relation to the Second AWA.”
Mr Suleman signed the second AWA but did not put his address on the document. He did include his full name. Similarly he included his full name as witness to Ms McCarthy’s signature but not his address. He did sign as witness to Ms McCarthy and was a person involved in the day to day management of the corporation insofar as he was the general manager of the place of business at which he worked. The AWAs were sent to Mr Suleman by Ms Griffin. He appears to have had no instructions as to how to sign. There was no place on the document [McCarthy Affidavit at page 80] for addresses of the signor for the company or the witness of the employee.
The claim against Mr Noor is articulated in paragraph 55 of the Statement of Claim:
“As the sole director and shareholder of the First Respondent, and by virtue of the matters pleaded in paragraphs 8 to 19 and 20 to 32 above, the Third Respondent was involved in contraventions of sections 337(8) and 337(9) in relation to the First and Second AWAs within the meaning of section 728 of the WR Act (and therefore contravened those provisions) either because the Third Respondent:
(a) aided, abetted, counselled or procured the contraventions; or
(b) has been, by act or omission, directly or indirectly, knowingly concerned in or party to the contraventions.”
The relevant sub-sections of s.337 are 337(2), 337(3), 337(8) and 337(9). Section 728 of the Act is in the following form:
“Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.
(2) For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.”
The applicant submits that Mr Noor was involved in the contravention of s.337 by his omission. In other words by not taking any interest whatsoever in the day to day management of the company of which he was the sole director and shareholder he allowed, by that omission, Ms Griffin to proceed with obtaining the entry of Ms McCarthy into the second AWA without complying with the provisions of s.337(2) and (3). The applicant claims that Mr Noor was obliged to ensure that people who were to undertake work on behalf of RSG did so according to the law. The evidence is that Mr Noor gave permission to Ms Griffin to use his name on the declaration that the Act had been complied with. I am satisfied from the evidence of Mr Noor and Ms Griffin that Mr Noor is in contravention of ss.337(8) and 337(9) in relation to the first and second AWAs within the meaning of s.728. Abrogating one’s authority to others does not relieve one of responsibility. Mr Noor was well aware that the company would be responsible for the staff in the Chili’s Restaurants. He told the court how important he considered it to be that staff were properly paid and properly treated. If he did not understand that that included responsibilities under the Workplace Relations Act as well as other Acts such as the Workers Compensation Act1987 then he is at fault.
Penalty
Mr Suleman
Mr Suleman has been found in breach of sub-s.400(5) of the Act and the three Regulations. I accept that Mr Suleman was, in the scheme of things, a low level employee. I accept that he did no more than what he was asked by Ms Griffin and the managers of the business. I accept that Mr Suleman was ignorant of the requirements of the Act so far as providing the employees with an explanatory statement and giving them time to consider the AWA. I am prepared to say from my perception of Mr Suleman as a witness that if he had been told to give out Explanatory Statements and to advise employees that they had seven days to consider the AWA he would have done so. I accept that in regard to the finding of duress against him this was inadvertent in that whilst he wanted to have the document signed, and signed quickly, he was in ignorance of the employee’s rights not to sign. Finally, I accept that Mr Suleman has personally lost considerably by the failure of RSG. It is perhaps unfortunate that the knowledge about the manner in which this company was run was not before the applicant at the time he commenced these proceedings. Had it been so he may have been prepared to lay the blame for Mr Suleman’s actions squarely on the company, rather than on Mr Suleman himself. I accept that there was some confusion about exactly when the changes to the pay rates for probationary employees found their way into agreements. It was certainly not very long before Ms McCarthy signed the first AWA. Mr Suleman may well have thought that her first AWA was a Brinker AWA with the old pay rates in it. In considering the appropriate penalty to apply I have had regard to the following matters:
a)the circumstances of the conduct (including deliberate defiance or disregard of the WR Act);
b)relevant record of civil penalty contraventions;
c)whether the contraventions are distinct or arise from a single course of conduct;
d)the consequences of the contravening conduct;
e)deterrence, both general and specific;
f)the objects of the WR Act;
g)the size and financial resources of the contravener;
h)co-operation with regulatory authorities;
i)the contravener’s contrition;
j)the size of the prescribed penalty, and any recent increases to that prescription; and
k)the totality principal.
I accept that a breach of s.400(5) is a serious matter. If the corporation had been before me in regard to this breach I would have imposed a substantial penalty. It is clear that the corporation acted high handedly with little regard to the requirements of the Act. But I cannot say the same about Mr Suleman who acted as he was instructed, checked on his instructions and had no reason to believe that they were incorrect or that he was acting in any way unlawfully. There is a case for imposing a penalty on the ground of general deterrence, although I would not think that there is a case on specific deterrence as I am sure that Mr Suleman has well and truly learnt his lesson. I have taken all of these matters into account in coming to the view that the appropriate penalty to impose upon Mr Suleman for breach of s.400(5) is the sum of $250.00 which penalty I would order pursuant to s.841 of the Act to be paid to Ms McCarthy.
In regard to the breaches of the Regulations I have likewise taken into account the matters previously referred to. I am of the view that the breaches should be considered at the lower end of the scale, the maximum of which is $1,100.00. I would order that Mr Suleman pay a penalty of $50.00 in respect of each of the three breaches and pay that sum to Ms McCarthy pursuant to s.841 of the Act.
Mr Noor
I regard Mr Noor’s conduct in relation to this whole affair as serious. His cavalier attitude to the responsibilities of a corporation employing a large number of young people cannot be condoned. The breaches of the Act with which he has been charged go to the very heart of the AWA system. That system is intended to provide an equal playing field for negotiations between employer and employee. By giving the employee an Explanation Statement and allowing her to have time to consider the draft document that is put before her it is hoped that she will be in a position to decide whether it is in her own best interests to enter into this contract of employment. Ms McCarthy was prevented from doing this. A responsible director of an employing company would inform himself of the requirements of the Workplace Relations Act and ensure that his staff complied. Mr Noor did not do so, he did nothing. He seeks to use his doing nothing in mitigation. It does not mitigate his actions, it magnifies them. There is a very real requirement for this type of conduct to be deterred. Mr Noor has not shown any contrition, has not assisted the authorities, in fact, quite to the contrary, he has made it very difficult indeed to be served with this process. There are no contraventions recorded against him and this is taken into account. The maximum penalty for each offence, (there are four), is $6,600.00. Applying the totality principle I would impose a penalty a penalty upon Mr Noor in the sum of $10,000.00 and order that pursuant to s.841 of the Act Mr Noor shall pay the sum of $10,000.00 to the Commonwealth.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 11 April 2008
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