Goswami v BPL Adelaide Pty Ltd (No 2)
[2021] FCCA 2165
•17 AUGUST 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Goswami v BPL Adelaide Pty Ltd (No 2) [2021] FCCA 2165
File number: ADG 288 of 2019 Judgment of: JUDGE YOUNG Date of judgment: 17 August 2021 Catchwords: INDUSTRIAL LAW – pecuniary penalties – where Court found respondent contravened the Fair Work Act 2009 (Cth) – where the respondent company took disciplinary action against the applicant employee beyond the permissible scope of the enterprise agreement – where the respondent company failed to consult the applicant employee prior to significantly changing the applicant’s work arrangements – where the respondent company failed to remunerate the applicant employee in accordance with the enterprise agreement – consideration of factors relevant to penalty – pecuniary penalties imposed. Legislation: Fair Work Act 2009 (Cth), ss 50, 323, 557 Cases cited: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Kelly v Fitzpatrick [2007] FCA 1080Number of paragraphs: 24 Date of hearing: 17 August 2021 Place: Darwin Counsel for the Applicant: Ms Stewart of Counsel Solicitor for the Applicant: Holding Redlich Counsel for the Respondent: Ms Fredericks of Counsel Solicitor for the Respondent: AFEI Legal Pty Ltd ORDERS
ADG 288 of 2019 BETWEEN: DILIPGIRI GOSWAMI
Applicant
AND: BPL ADELAIDE PTY LTD
Respondent
ORDER MADE BY:
JUDGE YOUNG
DATE OF ORDER:
17 AUGUST 2021
THE COURT ORDERS THAT:
1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) the Respondent pay a pecuniary penalty in respect of the contraventions as follows:
(a)Contravention 1: $5,000
(b)Contravention 2: $5,000
(c)Contravention 3: $3,000
(d)Contravention 4: $3,000
(e)Contravention 5: $3,000
(f)Contravention 6: $3,000
(g)Contravention 7: $3,000
Total amount: $25,000.
2.Pursuant to section 546(3)(b) of the Fair Work Act 2009 (Cth) the Respondent pay the pecuniary penalty of $25,000 to the United Workers’ Union.
REASONS FOR JUDGMENT
Ex TemporeJUDGE YOUNG:
This is a penalty hearing under the Fair Work Act 2009 (Cth) (the Act). On 1 March 2021 another Judge of this Court, Judge Heffernan, delivered judgment in favour of the applicant employee against the respondent employer in respect of breaches under the Act. The hearing had proceeded before Judge Heffernan on the basis of agreed facts and affidavits and the deponents of those affidavits were not subject to cross-examination.
The particular breaches found proven by his Honour were not set out in a table or other similar manner. His Honour's declarations at the end of the hearing were as follows:
(1) The respondent committed breaches of ss 50 and 323 of the Fair Work Act 2009 (Cth) by:
(a) Taking disciplinary action which was beyond the permissible scope contained within the provisions of Clause 11 of the BPL Adelaide Pty Ltd (Production of Distribution of Employees) Enterprise Agreement (2016-2020) (‘The Enterprise Agreement’); and
(b)Failing to pay the applicant as a Level 3 Distribution employee in accordance with Clause 15.1 of the Enterprise Agreement; and
(c) Failing to consult the applicant before implementing the change to his work locations by transferring him from the Hakkinen Road site to the Moss Road site.
(2) At all material times the applicant was a Distribution Employee Level 3.
Subsequently there were orders by consent that the applicant be awarded compensation of $5,000 in respect of non-economic damage, compensation in the amount of $5,104.40 less tax in respect of underpayments for ordinary time, shift loading, personal leave, annual leave, annual leave loading, and interest, and an amount included in that of $3,734 in respect of lost opportunity to obtain overtime as a result of the transfer to the Moss Road site.
I do not propose to summarise the factual background in any great detail. The applicant was originally employed in 2011 but these events arose in 2019 between 29 April 2019 and 22 December 2019. There were some concerns about the applicant's performance at work involving his management of a forklift and as a result the applicant was subjected to what purported to be a disciplinary procedure under the enterprise agreement. The applicant was then demoted from a Level 3 to a Level 2 Distribution employee which caused the applicant to suffer a consequent reduction in wages. The applicant was transferred to another work site which was some distance away from the site where he had been previously employed.
The declaration made by Judge Heffernan in 1(c) related to a requirement in the enterprise agreement that before there was to be any significant change in the employee’s arrangements there should be consultation with him. There was no consultation.
Ms Stewart, counsel for the applicant, said that it can be inferred from the agreed facts and his Honour's reasons that his Honour found a total of seven contraventions proved. In respect of an eighth contravention of section 323 of the Act, Ms Stewart did not seek the imposition of a penalty because she acknowledged that the factual elements of that contravention were entirely in common with the other seven contraventions and it would be inappropriate to apply a separate penalty in respect of that contravention.
To summarise her argument, she said that:
(1)contravention 1 was a contravention of section 50 of the Act by taking disciplinary action against the applicant which was beyond the permissible scope of, and contrary to, clause 11 of the enterprise agreement;
(2)contravention 2 was a breach of section 50 of the Act by failing to consult the applicant before implementing a change to his work locations by transferring him from Hakkinen Road to the Moss Road site contrary to clause 9.1.2 of the enterprise agreement;
(3)contravention 3 was a breach of section 50 of the Act by failing to pay the applicant the minimum rates of ordinary weekly pay required by clause 15.1 of the enterprise agreement;
(4)contravention 4 was a breach of section 50 of the Act by failing to pay the applicant the appropriate rate of shift loading weekly as required by clause 21.3 of the enterprise agreement;
(5)contravention 5 was a breach of section 50 of the Act by failing to pay the applicant the appropriate amount of personal leave weekly as required by clause 26.2 of the enterprise agreement;
(6)contravention 6 was a breach of section 50 of the Act by failing to pay the applicant the appropriate amount of annual leave weekly as required by clause 24.2 of the enterprise agreement; and
(7)contravention 7 was a breach of section 50 of the Act by failing to pay the applicant the appropriate rate of annual leave loading weekly as required by clause 21.3 of the enterprise agreement.
As noted, the eighth contravention was said to be a breach of subsection 323(1) of the Act by failing to pay the applicant in full at least monthly. As can be seen from the recitation of those counts above, the eight contravention is entirely encompassed by the preceding seven and is duplicitous. Ms Stewart conceded that the eighth contravention should not be pursued separately.
For example, in regards to contravention 3, Ms Stewart said that there had been 32 occasions, 32 weeks, 32 pay periods when the applicant had not been properly paid over the relevant period, being 29 April 2019 to 22 December 2019. She conceded that in respect of those 32 occasions, subsection 557(1) of the Act should be applied to treat each of the breaches as a course of conduct for the purpose of section 557 of the Act. I accept Ms Stewart's analysis of those matters.
Mr Fredericks, counsel for the respondent, initially submitted that I should simply treat each of his Honour’s declarations in 1(a), (b) and (c) as the contraventions that were found proven by his Honour. However, Mr Fredericks later appeared to concede that there was substance in what was proposed by Ms Stewart. As I say, I accept her analysis. Accordingly, I am satisfied that the contraventions found proved by his Honour were the seven I have mentioned.
It was agreed the maximum penalty for each contravention is $63,000 which, if there are seven contraventions, produces a maximum penalty of $441,000. Ms Stewart submitted that it was appropriate to impose a penalty of 50 per cent of the maximum in each case, bearing in mind that the respondent is a corporate entity. Mr Fredericks took a different view and said that this would produce a penalty that was quite disproportionate to the respondent's culpability.
In approaching a penalty hearing of this kind it is necessary to follow three, or perhaps four, steps. The first is to identify the separate contraventions involved. I have done that. Secondly, attention needs to be paid to the question of concurrency or course of conduct which I have addressed. There is also the related principle of grouping the contraventions or taking into account shared elements between the various contraventions which would ordinarily result in a reduction of penalty. The third factor to be considered is the need to take into account all of the circumstances in assessing the penalty for each particular contravention to the extent that that involves something more than the second step I have mentioned. Finally, having considered the appropriate penalty for each contravention, or group of contraventions, the Court should consider the aggregate penalty to decide whether the aggregate or the totality is an appropriate response to the contravening conduct. In this regard, I refer to Full Court of the Federal Court of Australia decision Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560.
Conventionally, reference is made to the criteria set out in Kelly v Fitzpatrick [2007] FCA 1080 as a decision containing a useful checklist of the matters to be considered, particularly at [14]. I propose to address those matters.
The nature and extent of the conduct which led to the breaches: I have described that that was a purported disciplinary proceeding which did not comply with the requirements of the relevant enterprise agreement. The employer's conduct was not justified by the enterprise agreement.
The nature and extent of any loss or damage sustained as a result of the breaches: as I have already outlined, the total loss his Honour found was $10,104.41 taking into account amounts for non-economic loss, embarrassment, and what was said to be an injury suffered by the applicant as a result of the changed duties on his transfer. The injury was, according to his unchallenged affidavit, back soreness which was treated by physiotherapy.
There was no evidence of any similar previous conduct by the respondent and the applicant conceded there was no prior relevant conduct by this respondent.
Whether the breaches were properly distinct or arose out of the one course of conduct: leaving aside the arguably technical phrase "course of conduct" which invoked section 557 of the Act, it is clear enough, in my view, that the separate contraventions were all closely related to a decision by the employer to discipline the employee in respect of his performance in a way that was not authorised by the enterprise agreement, the Act, or the applicant's contract of employment.
There is no evidence before me of the size of the business enterprise involved, though it is clear from the agreed facts that the employer has at least two places of business and conducts a manufacturing enterprise of some description. However, I was not given any evidence about the size of the business, its capacity to pay a penalty, or anything of that kind. Therefore that is largely neutral.
Whether or not the breaches were deliberate: it is clear that the actions which constituted the breach were deliberate. There was evidence in the agreed facts before the Court that in May 2019, soon after the employer entered into its purported disciplinary proceeding against the applicant, the applicant's trade union wrote to the employer and took issue with what the employer had done. In the union's letter, stretching over some four pages, it stated that it considered the respondent employer's conduct amounted to an unauthorised disciplinary proceeding, in other words, what the employer was doing was not authorised by the enterprise agreement or any other source of authority. The employer disagreed with the advice it was receiving from the union and continued with that course of action. There is no evidence that the breaches were deliberate and knowing breaches of the enterprise agreement or of the relevant legislation, however, they were certainly intentional. I am satisfied that the employer clearly took the odds, as it sometimes expressed. In other words, the employer was still convinced that it was correct subsequent to receiving, as it transpired, entirely accurate advice from the union.
Whether senior management were involved in the breaches: that would appear to be clearly the case as the union wrote to the employer and there was a reply from management. There cannot really be any doubt that management were aware of the issue.
Whether there has been contrition: the respondent is a corporate respondent and in the circumstances the question about contrition is inapposite, in my view. It can be observed that the respondent was certainly cooperative in the way the proceedings were run. There was agreement about the facts to be put before the Court. There was no cross-examination. There was nothing to suggest that the employer is contrite, however, nor is there anything to suggest that it has acted contumeliously or contemptuously in any proceedings.
Whether the party has taken corrective action: I am not told whether the agreed compensation has been paid, but there is nothing to suggest that the employer has acted in any way other than properly in relation to that. No enforcement authorities have been involved. Of course, there is the need to ensure compliance with minimum standards and the need for specific and general deterrence in these sorts of cases. Where there is no past history nor is there anything to indicate that the employer is likely to repeat the behaviour the criterion of general deterrence looms large.
Giving weight to all of those matters I have mentioned, including the relatively small size of the loss, I am satisfied that the following penalties ought to apply:
(1)contravention 1: $5,000
(2)contravention 2: $5,000
(3)contravention 3: $3,000
(4)contravention 4: $3,000
(5)contravention 5: $3,000
(6)contravention 6: $3,000
(7)contravention 7: $3,000.
That is a total of $25,000.
The applicant seeks an order that the penalty be paid to the United Workers Union. The respondent does not oppose that. The order will be that the penalty be paid to the United Workers Union. I will add that an affidavit was relied on and not challenged that the lay client had been advised of his rights in relation to the penalty and had asked for the penalty to be paid to the union which had arranged his legal representation.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Young. Associate:
Dated: 27 September 2021
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