Independent Education Union v Trustees of Edmund Rice Education

[2017] FCCA 1811

FEDERAL CIRCUIT COURT OF AUSTRALIA

INDEPENDENT EDUCATION UNION v TRUSTEES OF EDMUND RICE EDUCATION [2017] FCCA 1811

Catchwords:
INDUSTRIAL LAW – Contravention of Fair Work Act – breach admitted –pecuniary penalty – penalty to be paid to the Commonwealth.

Legislation:

Fair Work Act 2009 (Cth), ss.50, 546

Commonwealth of Australia v Director of Fair Work Building and Industry Inspectorate [2015] HCA 46

Mason & Harrington Corporation Pty Ltd t/as Pangea Restaurant & Bar [2007] FMCA 7

Applicant: INDEPENDENT EDUCATION UNION OF AUSTRALIA(QUEENSLAND AND NORTHERN TERRITORY BRANCH)

Respondent: TRUSTEES OF EDMUND RICE EDUCATION AUSTRALIA

File Number: BRG 104 of 2017

Judgment of: Judge Vasta

Hearing date: 20 July 2017

Date of Last Submission: 20 July 2017

Delivered at: Brisbane

Delivered on: 20 July 2017

REPRESENTATION

Solicitors for the Applicant: Independent Education Union Of Australia (Queensland And Northern Territory Branch)

Counsel for the Respondent: Mr Herbert

Solicitors for the Respondent: McInnes Wilson Lawyers

ORDERS

THE COURT DECLARES THAT:

1. The First Respondent contravened the civil remedy provision contained in: s.50 of the Fair Work Act 2009 by failing to comply with clause 3.5.1 (h) of the Catholic Employing Authorities Single Enterprise Collective Agreement –Religious Institute Schools of Queensland 2012.

THE COURT ORDERS THAT:

1. Pursuant to section 546(1) of the FW Act, that the Second Respondent pay pecuniary penalties of $1,000 in respect of the contraventions set out at Declaration 1 above.

2. Pursuant to section 546(3)(a) of the FW Act that the pecuniary penalty ordered to be paid by the Respondent, be paid to the Commonwealth within 28 days these orders.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 104 of 2017

INDEPENDENT EDUCATION UNION OF AUSTRALIA(QUEENSLAND AND NORTHERN TERRITORY BRANCH)

Applicant

And

TRUSTEES OF EDMUND RICE EDUCATION AUSTRALIA

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

1. By application and statement of claim filed in this court on 6 February 2017, the Applicant, Independent Education Union of Australia (Queensland and Northern Territory Branch), seeks a declaration and pecuniary penalty against the Trustees of Edmund Rice Education Australia.

2. In short compass, the facts of this matter are that the Respondent runs a number of Catholic schools including the school known as St Patrick’s College at Shorncliffe.  That college employs a number of teachers and a number of those are members of the Applicant union.  One of those members is a person by the name of Mr Cyril Puel. 

3. It seems that Mr Puel answered an advertisement on a website from a firm called Smart Teachers who, as it were, act as intermediaries between teachers looking for work and schools looking for teachers.  The advertisement was for a 12-month contract at St Patrick’s.  Mr Puel was interviewed and was successful.

4. What Mr Puel says in his affidavit is that he was told during his interview that the advertised position became available because a teacher had resigned after the commencement of the summer holiday.  He said that he discussed his interests in finding a permanent teaching position in a school like St Patrick’s College and he had indicated he had worked in several schools before, but he was interested in a permanent position with the school that matched his professional expectations, of which St Patrick’s College was a suitable school for him.  When he was told that he was successful, he did sign the contract.

5. The principal of the school, Mr Chris Mayes, also provided an affidavit which explained that, on about 17 December 2015, he had received an email from a Mr Scott Little, who was the senior science and maths teacher in the college, resigning his position. Mr Little had been time-tabled to teach senior physics, chemistry, maths B and maths C in the college in 2016. 

6. Mr Mayes explained that the college could not reasonably commence taking steps to replace Mr Little until January 2016, which is why they approached Smart Teachers, rather than undertaking an ordinary recruitment process. Because the relevant college staff members who assist with the recruitment process were on holidays and the school year was due to commence fairly soon, the recruitment process, which usually took up to eight to ten weeks, did not have sufficient time to occur.  Mr Mayes explained that it was very difficult to recruit teaching staff in January as the majority of teachers would be either on holidays or already committed to teaching roles for the upcoming year.

7. Employment under the Catholic school system is somewhat regulated by an agreement from a collective bargaining instrument.  Such an agreement was made in 2012 and then was renewed in 2016. 

8. A fixed-term contract under that agreement is covered under cl.3.5.  In cl.3.5.1 there are a number of definitions there which really regulate such use of such fixed-term contracts.  They are that:

   “1. Use of Fixed-term contracts – Teachers

   (a) are those identified as meeting an identifiable short-term need as in (e).

   (b)Employees whose positions are identified as continuing positions will be appointed to continuing status.

   (c)It is recognised that in in some exceptional situations a teacher may accept appointment to a series of fixed-term appointments for a series of identifiable short term needs. 

   (d)An employer will employ an employee on a fixed-term contract of employment only where the employee is appointed to cover an identifiable short term need. 

   (e) An identifiable short-term needs could include:

   i. Special projects;

   ii. Proposed closure of a school;

   iii. Short term funding;

   iv. Filling in the position of a specified employee who is on nominated leave from the school;

   v. Filling the position of an employee arising from a resignation, where such position is declared vacant and no suitable permanent employee is available.....”

9. There are a number of other matters, eight in all, which are not exclusive, but one would easily be able to tell whether such a need was an identifiable short-term need by reference to the eight examples there given.

10. The clause further states this at 3.5.1(h):

    “(h) Where an employer employs an employee on a fixed-term contract, the employer will indicate in the employee’s letter of appointment the identifiable short term need which the employee is appointed to fill.  The letter of appointment will also contain the terms, conditions and specific duration, (commencement and cessation dates) of the appointment.”

11. Now, Mr Puel was offered the fixed-term contract, as I have previously said, and he was given a letter of appointment.  Relevantly, that employment letter states this: 

    Further to your recent interview I wish to confirm our offer of a contract teaching position at St Patrick’s College effective from 19 January 2016 till Friday, 2 December 2016.  Remuneration and general conditions of employment are determined by the teachers’ award for non-governmental school and your classification will be confirmed upon receipt of your statement of service.  In addition, superannuation of 10 per cent of your process earnings will be paid on your behalf.

12. Such a letter did only state the term of the contract.  What is clear from my reading is that the letter did not state the identifiable short-term need which Mr Puel was appointed to fill.  Therefore, prima facie there has been a breach of the enterprise agreement clause 3.5.1(h). 

13. Therefore, because there was a contravention of that clause, which means that there has been a contravention of s.50 of the FW Act, which is a civil penalty provision. This means that the Respondent is liable to a penalty of 60 penalty units, which equates to a maximum penalty of $54,000.

14. On 26 May 2016 at 11 am, a staff member, who was also a staff representative of the Applicant Union, met with Mr Mayes, the principal of the college, and raised a number of workplace issues.  One of the issues raised was the absence of the identification of “short-term need” in the letters of appointment.  Before the discussion, the representative sent Mr Mayes a number of documents, which included an extract from the agreement, which had all of cl. 3.5 attached. 

15. After the talk he had with Mr Mayes, the representative sent Mr Mayes, in effect, a summary of the meeting that he had compiled.  Relevantly, that summary has the following at issue number 2:

    “Use of fixed-term contracts 

    The EBA states where an employer employs an employee on a fixed-term contract the employer will indicate in the employee’s letter of appointment the identifiable short-term need which the employee is appointed to fill.” 

16. And also includes this notation:

    “I have spoken to members on contracts and they are not aware of what identifiable short-term need they are filling.”

17. Mr Mayes, in his affidavit, says that during that discussion with the representative that he explained to the representative that at the interview stage all short-term contract applicants are advised of:-

    a)the reason the relevant role has become available, with examples being given of an employee going on maternity leave; and

    b)the short-term need the college requires the applicant to fill, which is the need to have a teacher appointed to teach certain classes during the proposed fixed-term period. 

18. Nothing more seems to have been mentioned on this matter.  Mr Mayes was of the view that that was sorted to everyone’s satisfaction.  The representative says in his affidavit that that may not have been so, but, because of his junior status and his only recent appointment as a staff representative, he felt somewhat apprehensive of saying anything more. 

19. On 21 July 2016, about eight weeks later, an organiser from the Applicant, Ms Nicole Carlill, sent an email to Mr Mayes identifying concerns that the college’s letters of appointment didn’t comply with the enterprise agreement. 

20. In effect, the email reiterated most of what had already been discussed between Mr Mayes and the representative two months before.  The email has these two paragraphs:

    “Issue 2: Fixed-term contracts

    At the June meeting the chapter rep confirmed with the employer that the EBA clause states where an employer employs an employee on a fixed-term contract the employer will indicate in the employee’s letter of appointment the identifiable short-term need which the employee is appointed to fill. 

    Members affected by this have confirmed that their letters of employment/contract do not specify which short-term need they are filling.  As such the executive representative requests that the college update the letters of employment for those on contract to ensure these comply with the EBA.”

21. That email was sent on 21 July at 3.06 pm. At 4.31 pm on the same day, Mr Mayes sent an email back to Ms Carlill which relevantly states on this point: 

    “I am unsure of what you are trying to say in your third issue.....

    At the time of interview, applicants are very clearly explained that the position is a contract position and why that is the case.  The letter of employment also sets out that it is a contract position.  Thank you for the chapter’s thoughts and advice.  However, I believe our letters to be sufficient and they will remain as they are currently written.”

22. Nothing more was said about the matter and there was no reply by Ms Carlill to Mr Mayes. No one from the Union enlightened Mr Mayes at that stage, of what it was that the Union was actually saying to him.

23. It was on 26 October 2016 that Mr Spriggs, who appears before me today on behalf of the Applicant Union, wrote to Mr Mayes and, in what I consider to be a fairly well drafted letter, explained that the Union have been provided with a copy of the letter of appointment, which the college gave to an employee at the beginning of 2016. 

24. Mr Spriggs explained that the letter purported to offer a contract teaching position from 19 January to Friday 2 December 2016.  However, the letter did not identify the reason for the fixed-term contract.  Mr Spriggs went on to explain:

    “Hence the absence of the identifiable short-term need in the letter constitutes a breach of the enterprise agreement.  The union reserves its rights fully in this regard.”

25. And the letter further states that:

    “The union understands that certain employees who are currently subject to fixed-term contracts have been invited to apply for continuing positions for 2017.  We note clause 3.5.1 also contains the following at (g): a fixed-term contract of employment will not be used as a probationary period. 

    It is the opinion of the union that certain employees were inappropriately employed on fixed-term contracts from the beginning of 2016.  Hence it is inappropriate to require such employees to apply for continuing positions which will exist in 2017.

    Consequently, we request that the subject employees where they so desire be offered the continuing contracts which exist for 2017.  Please contact we me if you wish to discuss the content of the letter.”

26. Mr Mayes said that this was the first time anyone had challenged his interpretation of the “employer will indicate in the employee’s letter of appointment the identifiable short-term need which the employee is appointed to fill” clause.  What Mr Spriggs has done very eloquently is tell Mr Mayes that the letter needs to identify the reason for the fixed-term contract.  The word “reason” for the fixed-term contract is not in cl.3.5.1(h), but one would think there could be no other interpretation.  But, obviously, that was not Mr Mayes’s interpretation. 

27. It seems to me that the term “identifiable short-term need” means that the words “identifiable” and “short-term” were adjectives describing the need and, therefore, that “identifiable short-term” needed to be contained in the letter to fulfil the requirements of the enterprise bargaining agreement.  It seems that Mr Mayes identified the words “identifiable” and “need” to be adjectives to the term “short-term” and so his interpretation was, as long as he told the employee why they were getting the contract, what the reason was and so on, all he needed to do in the letter was to identify the short term. 

28. Whilst this seems a strange interpretation, one could see why someone without legal training may come to such a conclusion, especially when the word reason was not put in.  Mr Mayes deposed that he always believed that he was acting in accordance with the enterprise bargaining agreement and says that neither the representative nor Ms Carlill, in their communications with him, explained this. Mr Mayes said that it was not until Mr Spriggs wrote to him that he then realised that his interpretation may be wrong. 

29. He got in touch with the manager of workplace relations at Queensland Catholic Education Commission, a Mr Phillip Whitehouse.  Mr Whitehouse informed Mr Mayes that his interpretation was indeed incorrect and the two of them worked upon a new template which now would read this, as far as paragraph 1 is concerned: 

    “Welcome to St Patrick’s College Shorncliffe community.  On behalf of Edmund Rice Education Australia trading as St Patrick’s College Shorncliffe, I confirm the offer of a full-time teaching position commencing on such and such and initiating on such and such. 

    The identifiable short-term need for this contract position is due to a current staff member on (with insert reason for leave ..... long service).”

30. Such a letter, if properly filled out, would fulfil all the requirements of the clause.  That letter was sent then to Mr Spriggs in November 2016, about four weeks after Mr Spriggs first wrote to Mr Mayes. The letter was sent by Mr Whitehouse, who seemed to have taken over the communications then with the union.

31. So those are the facts of the matter. 

32. There has been a breach and it is incumbent upon this Court now to impose a penalty.  The High Court explained the purpose of the imposition of civil penalties in Commonwealth of Australia v Director of Fair Work Building and Industry Inspectorate [2015] HCA 46 at paragraph 55 when it said:

    “No less importantly, whereas criminal penalties import notions of retribution[74] and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance[75]:

    ‘Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.’”

33. The matters upon which a Court looks in imposing a penalty have been iterated in many cases.  They are famously summarised in the case, which is Mason & Harrington Corporation Pty Ltd t/as Pangea Restaurant & Bar [2007] FMCA 7 (“the Pangea case”). There in that case the Court talked about a number of factors that the Court should look at, as far as guidance is concerned, that would lead to the imposition of proper penalties.

34. To my mind, there are a few of those factors that are apposite in this case.  When one looks at the nature and extent of the conduct which led to the breaches, it was, quite frankly, a very technical breach.  As has been pointed out here, what Mr Puel was told in his interview was that the reason he was being interviewed was because Mr Little had resigned quite suddenly and a replacement needed to be found.  Such a reason complies with cl.3.5.1(e)(v).

35. The problem here is that whilst such information was given to Mr Puel, it was not contained in the letter.  If such information had also been written in the letter, then there would have been no breach.  So one has to look at then how has this affected Mr Puel. 

36. Notwithstanding some of the things that were written in his affidavit, I can ascertain absolutely no prejudice to Mr Puel because the information that he was told was not actually contained in the letter. Therefore, it seems to me that when one looks at where this matter fits in the scale, it does fit at the very lowest level of breaches of the FW Act.

37. There was no loss or damage sustained as a result of this breach.  There has never been any similar previous conduct by the Respondent.  It was a one-off matter in some ways, but I will come back to that aspect.  It was not truly a deliberate breach because the information was conveyed to Mr Puel in any event. 

38. Once Mr Spriggs notified the principal that he had breached the agreement and that he was wrong in his interpretation, the principal looked for help and was given help. The college and, one would think, all of the Edmund Rice schools changed the template of their appointment letter so as to ensure that there was compliance with cl.3.5.1(h).

39. There has been cooperation in this matter from the beginning.  Once the matter was brought to this Court on the first mention date, it was set straightaway for a penalty hearing and there has been no contest to this breach at all.

40. What the real problem is for the Respondent is that an agreement has been made between employees and employer as to what the employer will do for the employees.  When it comes to fixed-term contracts, it is, in my view, fairly clear what should be contained in the letter.  Notwithstanding the interpretation that Mr Mayes honestly held and I find that he held that it was a wrong interpretation, which meant that any letter that was sent to any person on a fixed-term contract was in breach of the agreement. 

41. The fact that no one else has come forward really goes to the fact that no one else cared enough about this to actually make a complaint about it because it didn’t affect them one little bit.  But notwithstanding that, there has still been a breach and when there is a breach, there does need to be a sanction that ensures that these sorts of matters will not occur again.  In my view, a penalty that ensures that both specific and general deterrence is needed.

1. Mr Herbert talked about a nominal penalty.  A nominal penalty in this case would be anything up to $180.00 (the value of one penalty unit).  Any other penalty, in my view, is a penalty that does show that there needs to be some deterrence and that is the real reason for the penalty that I will impose. 

2. In all the circumstances, I find and I declare that the Respondent has breached s.50 of the FW Act. For the breach of s.50 of the FW Act, I impose a pecuniary penalty in the sum of $1,000.00. I order that such sum be paid to the Commonwealth of Australia within 28 days of today’s date.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Vasta

Date: 8 August 2017