Hall v Active Towing Sydney Pty Ltd (No 2)
[2022] FedCFamC2G 299
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hall v Active Towing Sydney Pty Ltd (No 2) [2022] FedCFamC2G 299
File number: SYG 1506 of 2020 Judgment of: JUDGE CAMERON Date of judgment: 29 April 2022 Catchwords: INDUSTRIAL LAW – Breaches of civil remedy provisions of the Fair Work Act 2009 (Cth) – imposition of pecuniary penalties – relevant considerations. Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 44, 90, 324, 325, 539, 550, 557
Cases cited: Kelly v Fitpatrick (2007) 166 IR 14
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Division: Fair Work Division Number of paragraphs: 27 Date of hearing: 19 April 2022 Place: Sydney Solicitor for the Applicant: Mr T. Gardner (Clayton Utz) Counsel for the Respondents: No Appearance by or on behalf of the Respondents ORDERS
SYG 1506 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ALAN HALL
Applicant
AND: ACTIVE TOWING SYDNEY PTY LTD ACN 003705539
First Respondent
WAYNE THOMAS WILLIAMSON
Second Respondent
RICHARD TUNCHON
Third Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
29 APRIL 2022
THE COURT ORDERS THAT:
1.The second respondent pay a penalty of $6,000 for his contravention of s.325(1) of the Fair Work Act 2009 (Cth).
2.The second respondent pay a penalty of $4,000 for his contravention of s.44 of the Fair Work Act 2009 (Cth).
3.The penalties be paid to the applicant within 28 days.
4.The applicant have liberty to apply on 7 days’ notice in the event that any of the preceding orders is not complied with.
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 January 2014 until around 8 October 2018 the first respondent, Active Towing Sydney Pty Ltd (“Active Towing”), employed the applicant, Mr Hall, as a tow truck driver. In his amended application filed 29 March 2021, Mr Hall sought declarations that Active Towing, as well as Wayne Williamson, the second respondent, and Richard Tunchon, the third respondent, had contravened the Fair Work Act 2009 (Cth) (“FW Act”). He sought penalties for such contraventions as well as orders for the payment of compensation.
Active Towing was placed in liquidation in 2021. On 15 October 2021, the Court noted advice from the parties that the proceeding as between Mr Hall and Mr Tunchon had settled. A related notice of discontinuance was subsequently filed and the proceeding now concerns only Mr Williamson.
On 2 December 2021 the Court declared that:
1.The first respondent contravened ss.324 and 325 of the Fair Work Act 2009 (Cth) (“FW Act”) by deducting various amounts from the applicant’s wages during the employment period April 2015 to January 2018.
2.The first respondent contravened s.90 of the FW Act by failing to pay the applicant his accrued annual leave when his employment terminated.
3.The second respondent was involved in the first respondent’s contraventions of ss.90, 324 and 325 of the FW Act
and ordered Mr Williamson to pay Mr Hall compensation of $26,955.52 plus interest of $5,819.16. By virtue of s.550(1) of the FW Act, the effect of the third declaration made on 2 December 2021 is that Mr Williamson is taken to have contravened the provisions cited.
Prayer 2(c) of the amended application relevantly seeks an order pursuant to s.539 of the FW Act that Mr Williamson pay penalties for contravening ss.90, 324 and 325 of the FW Act. These reasons concern that issue.
Mr Williamson did not appear at the penalty hearing on 19 April 2022 but the affidavit of Thomas Gardner affirmed on 8 February 2022 satisfies me that he was served in accordance with a substituted service order made on 17 December 2021.
LEGISLATION
Section 90 of the FW Act is concerned with payment for annual leave and is part of the National Employment Standards (“NES”). A contravention of the NES is a breach of s.44 of the FW Act, which is a civil penalty provision. Section 325 is relevantly concerned with an employer requiring an employee to pay it any part of an amount payable to the employee in relation to the performance of work and is also a civil penalty provision. Section 324 is not a civil penalty provision.
Section 539 of the FW Act provides that each contravention by an individual of ss.44 or 325 attracts a maximum penalty of 60 penalty units, unless the contravention is a serious contravention which was not suggested to be the case here. Section 557 of the FW Act provides that 2 or more contraventions of s.325(1), which is the relevant breach in Mr Williamson’s case, committed by the same person and arising out of a single course of conduct, are to be taken to constitute a single contravention.
Pursuant to s.4AA of the Crimes Act 1914 (Cth), a penalty unit was worth:
(a)$170 in the period from 28 December 2012 to 30 July 2015;
(b)$180 in the period from 31 July 2015 to 30 June 2017; and
(c)$210 in the period from 1 July 2017 to 30 June 2020.
As at 8 October 2018, the maximum penalty for a single contravention of ss.44 or 325(1) of the FW Act was $12,600.
FACTUAL BACKGROUND
In his affidavit signed on 12 August 2021 but dated 23 July 2021, Mr Hall deposed to being employed by Active Towing from January 2014 to around 8 October 2018. He described Mr Williamson as the owner and director of Active Towing and the person he understood to be responsible for the company’s overall management and operations. Mr Hall deposed that on 7 October 2017 he was injured at work, following which he performed light duties until January 2018 and received workers compensation payments from 8 October 2017 until 8 October 2018. Mr Hall deposed that in July 2018 he attended Active Towing’s office where Mr Williamson said to him words to the effect of “You’re not welcome here. If you want to speak to us contact us through your solicitor”. Mr Hall deposed that Mr Williamson then threatened to throw him down the stairs and he understood that he no longer had a job at Active Towing.
Deductions
Mr Hall deposed that deductions described in his payslips as “Staff Loans” were taken from his wages between April 2015 and January 2018 and were said to be for:
… Active Towing's costs for fines and damages incurred by me during the Employment, including:
(a) a red light camera fine;
(b) parking fines; and
(c) damage to towed vehicles.
He deposed that Mr Williamson was aware of these deductions which, according to the amended application, totalled $18,881.95. In relation to the fines, Mr Hall deposed:
32.I was prepared to pay the red light camera fine, but remember that Wayne refused to nominate me as the driver and Active Towing was fined directly instead for a much larger amount. ….
33.When I first started with Active Towing, Wayne told me words to the effect “if you are parked outside a panel shop or are dropping off a car for Active Towing and a parking ranger books you, Active Towing will pay the fine.” It was fairly common for tow truck drivers to be fined for double parking, in particular, in James Street in Hornsby and various streets in Artarmon. …
The deductions from Mr Hall’s pays were declared by the Court on 2 December 2021 to be contraventions of s.325 of the FW Act.
Annual Leave
In his affidavit Mr Hall deposed to a conversation he had with Mr Williamson regarding his accrued annual leave during which Mr Williamson said words to the effect of “all these claims you owe us, if you leave, I’ve got your holiday pay anyway”. According to the amended application, this unpaid annual leave entitlement was valued at $8,073.57.
Relevantly, the failure to pay Mr Hall his accrued annual leave when his employment ended was declared by the Court on 2 December 2021 to be a contravention of s.90(2) of the FW Act.
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 circumstances such as the present, where the breach of s.325(1) occurred over a period during which the value of a penalty unit changed, it would be appropriate, when setting the penalties to be imposed, to have regard to the value of a penalty unit at the end of the period of contravention, although regard may also be had to the fact that lower amounts applied for part of the period: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 per Katzmann J at [396]–[401].
The nature and extent of the conduct which led to the breaches
The picture painted by Mr Hall in his affidavit is that certain expenses incurred by the business were charged back to him by way of deductions from his pay and, also it would seem, by retention of his accrued annual leave entitlements. There is evidence in Mr Hall’s affidavit of him having signed an authority for the making of the deductions but he contests the voluntariness of his consent and, as Mr Williamson has not appeared to contest Mr Hall’s version of events, I accept it.
The nature and extent of any loss or damage sustained as a result of the breaches
Mr Hall was underpaid $26,955.52, before interest, which is a not inconsiderable sum, being more than a quarter of what he earned in 2015/2016 and nearly a quarter of what he earned in 2016/2017, according to pay slips annexed to his affidavit.
Whether the breaches were properly distinct or arose out of the one course of conduct
The various breaches of s.325(1) of the FW Act are properly to be seen as part of the one course of conduct such that s.557 applies to them and requires that they be treated as one contravention. However, that breach and the breach of s.90, and so of s.44, involve different conduct and are separate contraventions. They will attract individual penalties as a result.
The size of the business enterprise involved
The impression given by Mr Hall is that the business was not a large one but it was nevertheless big enough to employ Mr Tunchon as manager as well as an unspecified number of tow truck drivers in addition to Mr Hall. It is not apparent that the size of the business had significance for the contravening conduct.
Whether or not the breaches were deliberate
Mr Hall’s evidence, such as that quoted earlier at [13], supports a conclusion that the contraventions were deliberate.
Whether senior management was involved in the breaches
Mr Hall submitted that senior management had been involved in the contraventions but that submission is not conventionally relevant in the immediate circumstances where it is the manager himself who is the contravener under scrutiny, not the company. The point is relevant nevertheless because the size of Active Towing’s business would appear to be such that Mr Williamson was its directing mind and consequently closely involved in its contravening conduct.
Whether the party committing the breach has exhibited contrition
Mr Williamson has not engaged with this proceeding since he was joined by the amended application. However, at the commencement of the case and before Active Towing went into liquidation, Mr Tunchon told that Court that he had raised the litigation with Mr Williamson and later a solicitor appeared for the company and so I am satisfied that he was aware of it. Despite that awareness, no evidence was led by or for Mr Williamson to demonstrate that he took corrective action, was contrite or had co-operated with Mr Hall in this proceeding.
The need for specific and general deterrence
Active Towing was placed in administration by way of a creditors’ voluntary liquidation on 11 February 2021. Mr Hall led evidence that, according to a search on 4 May 2021, Mr Williamson had since 14 April 2021 been director and half owner of a different company. The fact that Mr Williamson appears to be trading still in one form or another, coupled with his lack of demonstrated corrective action and contrition, indicates that the penalties to be imposed need to include an element for specific deterrence. Similarly, in order to demonstrate the Court’s disapproval of Mr Williamson’s conduct and in order to dissuade others from repeating it, the penalties will include an element for general deterrence.
PENALTIES
Mr Hall submitted that the appropriate penalties were:
(a)$6,000 for the contravention of s.325(1) of the FW Act; and
(b)$4,000 for the contravention of s.44 of the FW Act.
I accept that submission. Having considered all the matters canvassed earlier in these reasons, and having had particular regard to the lack of any attempt by Mr Williamson to explain or address his conduct, I conclude that those individual amounts are appropriate. Further, the total penalty figure of $10,000 is, in my view, just and appropriate.
CONCLUSION
Mr Williamson is to pay the following penalties:
(a)$6,000 for his contravention of s.325(1) of the FW Act; and
(b)$4,000 for his contravention of s.44 of the FW Act.
The penalties are to be paid to Mr Hall within 28 days.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 29 April 2022
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