FWO v Lufra Investments Pty Ltd - [2011] FMCA 263

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FWO v LUFRA INVESTMENTS PTY LTD & ANOR

[2011] FMCA 263

INDUSTRIAL LAW – Judgment in respect of quantum of penalties to be imposed on respondents for contraventions.

Workplace Relations Act 1996, ss.189(1), 235, 719, 719(2), 728

Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998

Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216
Pearce v R (1998) 194 CLR 610
Kelly v Fitzpatrick [2007] FCA 1080
Ikin v Crown Trading Group Pty Ltd [2009] FMCA 1187

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

LUFRA INVESTMENTS PTY LIMITED (A.C.N. 107 791 104)

Second Respondent:

JOHN SHEPLEY

File Number:

LNG 44 of 2009

Judgment of:

Burchardt FM

Hearing date:

25 February 2011

Date of Last Submission:

7 March 2011

Delivered at:

Melbourne

Delivered on:

21 April 2011

REPRESENTATION

Counsel for the Applicant:

Mr B. Vallence

Solicitors for the Applicant:

Zeeman & Zeeman

Counsel for the Respondents:

Mr M. O’Farrell S.C.

Solicitors for the Respondents:

De Korte Lawyers

THE COURT DECLARES THAT:

The First Respondent Contravened:

Subsection 182(1) of the Workplace Relations Act 1996 (Cth) (“WR Act”) by failing to pay Mr and Mrs Adness for the work they had performed in the month of December 2007, the guaranteed basic periodic rate of pay as required under the preserved Australian Pay and Classification Scale (“APCS”) derived from the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998.
Subsection 189(1) of the WR Act by failing to pay Mr and Mrs Adness in accordance with the frequency of payment provisions contained in the preserved APCS derived from the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998.
Subsection 235(2) of the WR Act by failing to pay Mr and Mrs Adness their untaken accrued annual leave on the termination of their employment.
Clause 21 of the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 by failing to pay Mr and Mrs Adness in accordance with the frequency of payment provisions for the period 27 March 2006 to 29 December 2007.
Clause 22.3 of the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 by failing to keep a daily record of the hours worked by Mr and Mrs Adness for the period 1 December 2004 to 29 December 2007.
Clause 25.5 of the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 by failing to make superannuation contributions on behalf of Mr and Mrs Adness in respect to their periods of employment from 1 to 29 December 2007.
The Second Respondent was involved in the contraventions specified in declarations 1, 3 and 6 within the meaning of s.728(1) of the WR Act.

THE COURT ORDERS THAT:

A penalty of $40,000 be imposed on the First Respondent pursuant to subsection 178(1) of the WR Act as in force prior to 27 March 2006 and subsection 719(1) of the WR Act for contraventions of the Australian Fair Pay and Conditions Standard and…

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: [2011] FMCA 263
Decision Date: 21 April 2011

CaseChat Overview and Summary

The Federal Circuit Court heard a case brought by the Fair Work Ombudsman (FWO) against Lufra Investments Pty Ltd and two individuals, alleging breaches of the Workplace Relations Act 1996. The primary dispute centred around the failure to pay minimum wage entitlements to employees under the Australian Fair Pay and Conditions Standard and the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998. The FWO sought penalties and restitution for the affected employees, Mr Stanley Adness and Mrs Marie Adness.

The legal issues before the court were whether Lufra Investments Pty Ltd and the individuals had contravened the specified awards by failing to pay minimum wage entitlements and, if so, what penalties should be imposed under the Workplace Relations Act 1996. The court also needed to determine the amount of unpaid entitlements owed to the employees and whether interest should be applied to these amounts from the commencement of the proceedings.

The court found that Lufra Investments Pty Ltd and the individuals had indeed contravened the specified awards by not paying the required minimum wage entitlements. It imposed a penalty of $40,000 on the first respondent and $7,920 on the second respondent. The court ordered the first respondent to pay the employees their outstanding entitlements, totalling $299.99 for Mr Adness and $301.15 for Mrs Adness, and to pay interest on these amounts from the commencement of the proceedings. The penalties were to be paid into the Consolidated Revenue Fund of the Commonwealth.

The court’s final orders included the imposition of financial penalties on the respondents, restitution to the employees for unpaid entitlements, and the payment of interest on these amounts from the initiation of the legal proceedings. The penalties were directed to be paid into the Consolidated Revenue Fund of the Commonwealth.

Orders

Orders of the court

A penalty of $40,000 be imposed on the First Respondent pursuant to subsection 178(1) of the WR Act as in force prior to 27 March 2006 and subsection 719(1) of the WR Act for contraventions of the Australian Fair Pay and Conditions Standard and the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 as declared above.

A penalty of $7,920 be imposed on the Second Respondent pursuant to subsection 719(1) of the WR Act for contraventions of the Australian Fair Pay and Conditions Standard and the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 as declared above.

10.

Pursuant to subsection 719(6) of the WR Act the First Respondent pay:

(a) Mr Stanley Adness the sum of $299.99 representing outstanding entitlements required to be paid under subsection 182(1) and 235(2) of the WR Act; and

(b) Mrs Marie Adness the sum of $301.15 representing outstanding entitlements required to be paid under subsection 182(1) and 235(2) of the WR Act.

11.

Pursuant to s.722 of the WR Act the First Respondent pay interest on moneys owed by the First Respondent to Mr and Mrs Adness from the date these proceedings were commenced.

12.

The above ordered penalties be paid into the Consolidated Revenue Fund of the Commonwealth pursuant to subsection 841(a) of the WR Act.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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