Ginzberg v Caip Services Pty Ltd (No 2)
[2022] FedCFamC2G 407
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Ginzberg v CAIP Services Pty Ltd (No 2) [2022] FedCFamC2G 407
File number: SYG 1788 of 2021 Judgment of: JUDGE CAMERON Date of judgment: 17 May 2022 Catchwords: INDUSTRIAL LAW – Breaches of civil remedy provisions of the Fair Work Act 2009 (Cth) – imposition of pecuniary penalties – relevant considerations. Legislation: Fair Work Act 2009 (Cth) ss 44, 90, 539, 546, 570
Crimes Act 1914 (Cth) s 4AA
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) sch. 2 its. 1, 5, 9
Cases cited: Ginzberg v CAIP Services Pty Ltd [2022] FedCFamC2G 84
Kelly v Fitzpatrick (2007) 166 IR 14
Division: Fair Work Division Number of paragraphs: 32 Date of hearing: 17 May 2022 Place: Sydney Solicitor for the Applicant: Mr S. Howe (Turner Freeman) Counsel for the Respondent: No appearance by or on behalf of the respondents ORDERS
SYG 1788 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CINDY GINZBERG
Applicant
AND: CAIP SERVICES PTY LTD
Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
17 MAY 2022
THE COURT ORDERS THAT:
1.The respondent pay a penalty of $10,000 for its contravention of s.44 of the Fair Work Act 2009 (Cth).
2.The penalty be paid to the applicant, or as she directs, within 28 days.
3.The respondent pay the applicant’s costs fixed in the amount of $12,613.15.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
INTRODUCTION
From 5 July 2010 to 5 February 2021 the respondent, CAIP Services Pty Ltd (“CAIP Services”), employed the applicant, Ms Ginzberg, as Office Director, Human Resources, Compliance and Claims Lodgement Manager. In her statement of claim, Ms Ginzberg alleged that CAIP Services contravened the Fair Work Act 2009 (Cth) (“FW Act”) and the Long Service Leave Act 1955 (NSW) by not paying out her accrued entitlements under those Acts as at 5 February 2021.
On 3 December 2021, Ms Ginzberg filed an application in a proceeding seeking default judgment. On 25 January 2022, the Court ordered that:
1.Pursuant to r.13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) there be judgment for the applicant against the respondent for $19,440.27 inclusive of interest.
2.The respondent pay the applicant’s costs of the application in a proceeding filed on 3 December 2021 fixed in the amount of $3,142.
The reasons for those orders are found in Ginzberg v CAIP Services Pty Ltd [2022] FedCFamC2G 84 (“Default Judgment”). The Default Judgment recorded that affidavits of service of the initiating process and of the application in a proceeding for default judgment had been filed, proving service, and that the respondent did not appear or file any documents.
The proceeding had earlier been discontinued as against another respondent.
Prayer 28(d) of Ms Ginzberg’s statement of claim relevantly seeks an order pursuant to s.546 of the FW Act that CAIP Services pay penalties for contravening s.44 of the FW Act. Prayer 28(f) seeks costs.
LEGISLATION
Section 90 of the FW Act is concerned with payment for annual leave and is part of the National Employment Standards (“NES”). It provides:
90 Payment for annual leave
(1)If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.
(2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
A contravention of the NES is a breach of s.44 of the FW Act, which is a civil penalty provision.
In combination, ss.539 and 546(2)(b) of the FW Act provide that each contravention of s.44 by a body corporate attracts a maximum penalty of 300 penalty units unless a contravention is a serious contravention, which was not suggested in the case here.
At the time of the contravention, a penalty unit was worth $222: s.4AA of the Crimes Act 1914 (Cth). Consequently, as at 5 February 2021, the maximum penalty for a single contravention by a body corporate of s.44 of the FW Act was $66,600.
FACTUAL BACKGROUND
Ms Ginzberg has filed an affidavit of service of the Court’s orders of 25 February 2022 which listed this matter for penalty hearing today, and a further affidavit of service of her written submissions on penalty. In the circumstances I am satisfied that, as previously, the respondent has been notified of the relevant court date. In those circumstances, and notwithstanding the failure of the respondent to file a notice of appearance, any other documents or to appear today, the matter can proceed.
In her affidavit affirmed 17 March 2022, Ms Ginzberg deposed to having been employed by CAIP Services from 5 July 2010 to 5 February 2021. She reported to Nadia Valentini, a director of the respondent, and deposed that on 31 December 2020 Ms Valentini telephoned her to say that:
The company is not doing great … I can’t afford to keep you on,
and gave her five weeks’ notice.
Ms Ginzberg’s last day of employment was 5 February 2021 at which time she received no redundancy pay or accrued annual leave or long service leave entitlements. She deposed that on 4 February 2021 she had sent an email to Ms Valentini requesting she be paid her entitlements. Carlo Valentini, Ms Valentini’s brother, responded on 10 February 2021 saying that:
As you know payments are processed between the 15th and 20th of every month … Payslips will be sent to you.
She inferred that CAIP Services would pay her outstanding annual leave and long service leave entitlements sometime between 15 and 20 February 2021.
It was Ms Ginzberg’s evidence that she sent an email to Mr and Ms Valentini on 18 February 2021 saying that if she was not paid by 22 February 2021, she intended to report the matter to the Australian Taxation Office and the Fair Work Ombudsman. Ms Valentini replied on 19 February 2021 saying:
For the past two years Carlo has kept the busines going in order ton ensure you had an Income. I have not drawn an income since June 2018, the financial strain has been intense for me. We are doing everything we can with the limited financial resources we have. The company has limited to no income.
We have no financial resources. When the Company did well you were the first to receive the spoils.
It is me who is disappointed from all your threats, we are doing everything we can. (errors in original)
Ms Ginzberg deposed that in mid-February 2021, a deposit of $1,182 was made into her account which she understood to be payment for her last few days of work in February 2021. On 20 February 2021, she received an email from Mr Valentini which suggested that the delay in providing her entitlements was caused by mistakes she had made entering details of her attendance and leave. Ms Ginzberg deposed that she sought further advice from Mr and Ms Valentini on 24 and 25 February 2021 and 4 March 2021 and that on 4 March she received an email from Mr Valentini which suggested that her record-keeping was a problem. Ms Ginzberg deposed that she did not know how Mr Valentini could have formed this view as she had recorded her leave and attendance in the way she always had, and had also sent an email specifying the days and hours she was taking leave. She said that if there had been “a problem on the back end”, the bookkeeper could and should have fixed it.
Ms Ginzberg deposed that she received an email from Mr Valentini on 15 March 2021 asking her how to generate a leave report. On 19 March 2021, she sent Mr and Ms Valentini an email requesting an update on her outstanding entitlements and that she be paid by 22 March 2021.
Ms Ginzberg deposed that on 10 April 2021 Mr Valentini wrote to her as follows:
Please may I add from a personal perspective and opinion. Most businesses are run according to strict business principles, profit, loss and cost. In any other business, your employment would have ended more than a year earlier than what it did as any other business owner would have ruthlessly ended your employment in an act of self-preservation, which would have placed the business in a far better position today than what it currently is in. Instead, your employment was extended for a year longer than any other business owner would have in the hope things would improve. Unfortunately, your employment ended when the situation unfortunately did not improve and became impossible.
Ms Ginzberg deposed that as at the time of affirming her affidavit, she had not been paid her annual leave or long service leave entitlements or received payslips which she had requested. She also deposed that at the time she was dismissed she had recently been divorced and was a single mother with two children and significant financial commitments, including a mortgage and private school fees.
Annexed to Ms Ginzberg’s affidavit was correspondence passing between her and the Valentinis, and letters from her solicitors to CAIP Services dated 21 June 2021 and 20 July 2021 pressing for payment of her outstanding entitlements.
DISCUSSION
When determining the appropriate penalty to impose, regard should be had to all of the circumstances of the case, guided by the various discretionary considerations discussed in authorities such as Kelly v Fitzpatrick (2007) 166 IR 14, in order to arrive at a single result that is an instinctive synthesis of those various factors.
In her written submissions, Ms Ginzberg raised a number of matters related to, but independent of, her entitlement to be paid the value of her accrued annual leave and leave loading, which I accepted in the Default Judgment to have been payable under s.90 of the FW Act. It is to be stressed that the statement of claim only sought pecuniary penalties in respect of that particular contravention, which engaged s.44 of the FW Act a civil remedy provision, and not the non-payment of long service leave, the lack of notice of termination or the failure to provide payslips, all of which were raised in the written submissions. Consequently, the following comments will be limited to the contravention that was alleged and which I have accepted occurred.
That contravention involved the failure to pay Ms Ginzberg $4,688.53 in annual leave entitlements when her employment was brought to an end. Her payslips annexed to her affidavit indicated that in 2020, she was paid slightly more than $5,000 per month gross and so the amount of accrued annual leave she was underpaid represents somewhat less than a month’s ordinary pay. Her unpaid long service leave was considerably greater, as the Default Judgment records. I note Ms Ginzberg’s evidence concerning her particular personal circumstances at the time she was made redundant and accept that the underpayment of $4,688.53 could have created difficulties for her.
Ms Ginzberg was an employee of long-standing and it appears from the emails she exchanged with Mr and Ms Valentini that CAIP Services had encountered financial difficulties, although it appears that they did not identify or explain the difficulties to her. The Valentinis suggested in their correspondence that they had looked after Ms Ginzberg by trading beyond the point when they should have, in order to keep her in employment. The truth of that claim has not been demonstrated because CAIP Services has not appeared but, even if it were true, it does not justify underpaying Ms Ginzberg entitlements that accrued to her because she had performed work for CAIP Services.
It appears that the business was a small one, but that is not relevant in the circumstances of non-payment of a well-known employee entitlement which was plainly not inadvertent and of which the person who I infer was the proprietor, Ms Valentini, would seem to have been aware. However, I do note that there is no evidence of CAIP Services having contravened the FW Act previously.
Because CAIP Services has not appeared, it has placed no evidence of contrition, co-operation or corrective action before the court. Indeed, the contents of the emails passing between Ms Ginzberg and the Valentinis which were annexed to Ms Ginzberg’s affidavit might support a conclusion that they were temporising and avoiding payment rather than seeking genuinely to arrange it. This is significant because the underpayment of a common workplace entitlement and then the failure to engage with the employee’s attempts to have non-observance of the workplace right addressed, first consensually and then litigiously, undermines the FW Act’s scheme for the maintenance of minimum standards.
I should note that in addition to what Ms Ginzberg has deposed in her affidavit, I am advised by Mr Howe who appears for her today that CAIP Services have not complied with the orders made on 25 January 2022.
In the circumstances, the penalty that will be imposed should include a component for specific and general deterrence to mark the Court’s disapproval of CAIP Services’ conduct before and during this proceeding and with a view to discouraging it and others from repeating that conduct.
PENALTY
As I said earlier, the maximum penalty is $66,000. I consider an appropriate penalty in this case to be $10,000.
The penalty is to be paid to the applicant or as she directs within 28 days.
COSTS
An application has also been made for costs. I accept Ms Ginzberg’s argument which reflects the argument made at the previous hearing that the failure by CAIP Services to engage at all in the proceeding has denied her the opportunity of reaching a consensual resolution of the litigation. Of course, there was no guarantee that any settlement could have been reached, but the failure even to file a notice of appearance indicates that CAIP Services had no intention of making any constructive contribution to the process presently before the Court. That made it unavoidable that Ms Ginzberg would pursue this litigation to this hearing as she did in respect of the Default Judgment.
In the circumstances, I consider the conduct of CAIP Services to have been unreasonable, which engages the Court’s power to order costs under s.570 of the FW Act. The costs ordered on the last occasion related only to the interlocutory application for default judgment. So costs will be calculated on a slightly different basis today.
Ms Ginzberg will have her costs of the remaining portions of the proceeding calculated in accordance with:
(a)item 1 of the table appearing in sch.2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth);
(b)item 5 of the table, preparation for final hearing; and
(c)item 9(b) of the table, daily hearing fee,
plus disbursements which I am advised are $835 for the filing fee and $377.15 for service fees. In that regard, I note that the respondent and its principals are in Western Australia.
On my calculations, the professional costs are $11,401. To that should be added the amounts for disbursements which I have identified. There will be orders accordingly.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 17 May 2022
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