Kearney v Accrue Property Pty Ltd
[2023] FedCFamC2G 1078
•24 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kearney v Accrue Property Pty Ltd [2023] FedCFamC2G 1078
File number: MLG 3058 of 2018 Judgment of: JUDGE TAGLIERI Date of judgment: 24 November 2023 Catchwords: INDUSTRIAL LAW – alleged underpayment – finding that applicant was underpaid commission on sales under the Real Estate Industry Award 2009 in contravention of the Fair Work Act 2009 – finding that applicant was underpaid for public holidays and annual leave – finding that applicant was underpaid superannuation – finding that applicant was not provided with copies of the Award and National Employment Standards – penalties to be determined
INDUSTRIAL LAW – accessorial liability – whether second respondent accessorily liable for breaches of the Real Estate Industry Award 2009 and Fair Work Act 2009 by the first respondent – finding that second respondent accessorily liable for breaches in respect of underpayment – finding that second respondent not liable for failure to provide the applicant with copies of the Award and National Employment Standards – penalties to be determined
Legislation: Fair Work Act 2009 (Cth) ss 45, 90(2), 116, 323, 532, 539, 550, 550(1), 550(2), 550(2)(a)
Superannuation Guarantee (Administration) Act 1992 (Cth) ss 19, 19(2)
Estate Agents Act 1980 (Vic)
Real Estate Industry Award 2009 cls 16, 16.2, 16.2(f), 16.3, 16.5
Cases cited: Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1999) 95 FCR 302
Construction, Forestry, Mining and Energy Union v Clarke (2007) 164 IR 299
Australian Building and Construction Commissioner v Parker (2017) 266 IR 340
EZY Accounting ABC Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034
Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456
Jones v Dunkel [1959] HCA 8
Heydon v NRMA Ltd (2000) 51 NSWLR 1
LGM & CAM (Contempt) [2008] FamCAFC 1
Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 280 ALR 503
Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236
Yorke v Lucas (1985) 158 CLR 661
Division: Division 2 General Federal Law Number of paragraphs: 122 Date of last submission/s: 26 June 2023 Date of hearing: 20 to 24 February 2023 and 8 to 9 May 2023 Place: Melbourne Counsel for the Applicant: Ms Jardine Solicitor for the Applicant: Gil Boffa and Associates Counsel for the Respondents: Mr Galbraith Solicitor for the Respondents: SLF Lawyers ORDERS
MLG 3058 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JOSEPH KEARNEY
Applicant
AND: ACCRUE PROPERTY PTY LTD
First Respondent
JEFFREY JAMES GROCHOWSKI
Second Respondent
ORDER MADE BY:
JUDGE TAGLIERI
DATE OF ORDER:
24 NOVEMBER 2023
THE COURT DECLARES THAT:
A.The First Respondent contravened s 44 of the Act by not:
(i)Paying the Applicant for his absence on a public holiday as prescribed by s 116 of the Act;
(ii)Paying the Applicant for untaken and accrued annual leave on termination of employment in accordance with s 90(2) of the Act.
B.The First Respondent contravened s 45 of the Act by failing to ensure that the Applicant had access to the Award and the NES in accordance with cl 5 of the Award; and
C.The First Respondent contravened s 323 of the Act by failing to pay the Applicant his contractual entitlements to commission.
D.The Second Respondent was involved in the contraventions referred to in Declarations A(i), A(ii), and C.
THE COURT ORDERS THAT:
1.By 4:00pm on 11 December 2023, the parties are to file written submissions, including workings and calculations, in respect of compensation and penalties to be paid for all Declarations made in these Orders.
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 Taglieri
These proceedings are brought in the Fair Work jurisdiction of the Court. The Applicant Joseph Kearney (“the Applicant”), a former employee of the First Respondent Accrue Property Proprietary Limited (“the First Respondent”), seeks relief against both Respondents relating to alleged:
(a)Underpayment of commission in breach of the Real Estate Industry Award 2009 (“the Award”) in contravention of s 45 of the Fair Work Act 2009 (Cth) (“the Act”);
(b)Underpayment of commission from Accrue for Life (“AFL”) Memberships in contravention of the Award and consequently contravention of s 323 of the Act;
(c)Underpayment of commission entitlements on various sales, including a sale to John Chapman in contravention of s 323 of the Act;
(d)Failure to pay public holiday pay in contravention of s 116 of the Act;
(e)Failure to pay annual leave on termination of employment in contravention of s 90(2) of the Act;
(f)Non-payment of superannuation as payable pursuant to the contract of employment and in contravention of s 323 of the Act; and
(g)Failure to provide copies of the Award and National Employment Standards (“NES”) in contravention of the Award and s 45 of the Act.
The First Respondent admits it was the Applicant’s employer at relevant times.[1] The Second Respondent is alleged to be the managing director of the First Respondent. He did not plead to this allegation, stating that he claims privilege against self-exposure to penalty.[2] However, the First Respondent admits that the Second Respondent was the managing director of the First Respondent at relevant times.[3]
[1] First Respondent’s Consolidated Defence filed 1 February 2023 at [4].
[2] First Respondent’s Consolidated Defence filed 1 February 2023 at [3(a)].
[3] First Respondent’s Consolidated Defence filed 1 February 2023 at [3(a)].
By his Consolidated Defence filed 1 February 2023, the Second Respondent consistently does not plead to the allegations against him in the Applicant’s Consolidated Statement of Claim filed 19 January 2023, and expressly claims privilege against self-exposure to penalty.
The First Respondent has fully participated in the proceedings and defended them, essentially through evidence of Joan Grochowski (“Ms Grochowski”), who has consistently described herself in her affidavits as a “co-founder” of the First Respondent.
The Second Respondent has had limited participation in the proceedings by filing defences, making submissions about admissibility of evidence through counsel appearing for both Respondents, and making closing submissions in writing. Although the Applicant has submitted that the Second Respondent gave evidence at an earlier procedural hearing, there is no evidence before the Court to that effect.
By virtue of previous directions made by the Court, the defended hearing was conducted on the basis of a Consolidated Statement of Claim filed by the Applicant on 19 January 2023, the Consolidated Defence of the First Respondent filed on 1 February 2023, and the Consolidated Defence of the Second Respondent also filed 1 February 2023.
The parties had prepared and filed written outline of their submissions by way of opening and I have read and considered those, being the Applicant’s Outline of Submissions dated 29 September 2022 and the First Respondent’s Outline of Submissions dated 14 February 2023.
THE APPLICANT’S CASE
The Applicant relied on three affidavits he had sworn in the proceedings, being those filed on 29 April 2020, 21 June 2021, and 12 October 2022. There were multiple objections taken to the content of the affidavits, and at least one day of the hearing was consumed with submissions concerning the objections taken by the Respondents’ counsel. I delivered rulings in respect of the objections and made an order on 22 February 2023 for the parties to provide to my Chambers versions of each affidavit that demonstrated the evidence struck out and not to be read. I have regard to those affidavits received on 7 March 2023 pursuant to the order I made and which for identification are now marked as Exhibit A-7.
The following documents were tendered in the Applicant’s case:
·Exhibit A-1: Tax returns of the Applicant for the year ending 30 June 2012;
·Exhibit A-2: List of property sales appearing with highlighting;
·Exhibit A-3: Unsworn affidavit of Darren Taylor;
·Exhibit A-4: Unsworn affidavit of Laurence Kennedy;
·Exhibit A-5: Payroll advice for the period 9 December 2016 to 22 December 2016; and
·Exhibit A-6: National Australia Bank statement of GY Pty Ltd for the period 20 August 2016 to 20 September 2016.
The Applicant also relied on two witnesses, Darren Taylor and Lawrence Kennedy, whose unsworn affidavits had been filed on 7 February 2023 and served on the Respondents. After the witnesses identified and adopted their affidavits to be true and correct, their evidence was taken as read and marked as Exhibits A-3 and A-4. Both witnesses were cross-examined by counsel for the Respondents.
The Applicant was cross-examined in detail about his evidence and claims.
At the close of the Applicant’s case, the Second Respondent conveyed through counsel for both Respondents that he would maintain his claim of privilege against self-exposure to penalty. The Second Respondent did not adduce evidence in support of his defence. The First Respondent conducted its defence through the evidence of Ms Grochowski.
THE FIRST RESPONDENT’S CASE
Evidence was adduced by the First Respondent in support of its Consolidated Defence, and it is pleaded that the Applicant is not entitled to any of the relief sought. The First Respondent read into evidence three affidavits of Ms Grochowski filed on 25 February 2021, 16 May 2022, and 25 January 2023. Ms Grochowski was cross-examined at length.
Various documents were also tendered in evidence by the First Respondent during cross-examination of the Applicant and his witnesses or during the evidence of Ms Grochowski:
·Exhibit R-1: List of the First Respondent’s objections to affidavit evidence of the Applicant;
·Exhibit R-2: Affidavit of documents filed by the Applicant on 3 January 2023, tendered through the Applicant;
·Exhibit R-3: Company search for the ABN for the Trustee of Accrue Property Trust, tendered through the Applicant;
·Exhibit R-4: Orders made 15 December 2022, tendered through the Applicant;
·Exhibit R-5: Letter from SLF Lawyers to the Applicant’s solicitor dated 9 January 2023, tendered through the Applicant;
·Exhibit R-6: Email from Craig Bulman to the First Respondent dated 31 May 2019 with invoices attached, tendered through Darren Taylor;
·Exhibit R-7: Company extract for Accrue Real Estate Vic Pty Ltd dated 21 February 2023;
·Exhibit R-8: Tax invoices from the First Respondent to vendors, tendered through Ms Grochowski;
·Exhibit R-9: Copies of Accrue business account deposit records, tendered in two parts through Ms Grochowski;
·Exhibit R-10: Exclusive Sale Authority relating to Lot 13 Champion Parade in Craigieburn, tendered through Ms Grochowski;
·Exhibit R-11: Contract Information Sheet and Sales Administration Form for Lot 6/60 View Street in Pascoe Vale, tendered through Ms Grochowski;
·Exhibit R-12: Sales Administration Form for Lot 13 Champion Parade in Craigieburn, tendered through Ms Grochowski;
·Exhibit R-13: Sales Administration Form for 54 Exhibition Street in Point Cook, tendered through Ms Grochowski;
·Exhibit R-14: Sales Administration Form, tax invoices, and exclusive sales Agreement for Lot 6 Grand Boulevard in Craigieburn, tendered through Ms Grochowski;
·Exhibit R-15: Spreadsheet concerning property sales which corresponds with Annexure JG8 of the affidavit of Ms Grochowski filed 25 January 2021, tendered through Ms Grochowski;
·Exhibit R-16: Contract Information Sheet for Lot 14/335 Grand Boulevard in Craigieburn, tendered through Ms Grochowski;
·Exhibit R-17: Contract Information Sheet for 5/60 View Street in Pascoe Vale, tendered through Ms Grochowski;
·Exhibit R-18: Contract Information Sheet for 1/21 Coronet Avenue in Roxburgh Park, tendered through Ms Grochowski;
·Exhibit R-19: Screenshots of cancelled purchases, tendered through Ms Grochowski; and
·Exhibit R-20: Business Licensing Authority Estate Agent’s Licence for Accrue Real Estate Pty Ltd, tendered through Ms Grochowski.
The parties also jointly tendered two documents pursuant to an order I made on 3 May 2023, being:
·Exhibit J-1: Agreed “Table A” listing property sale transactions which it is agreed proceeded to settlement and where the Applicant was involved in that sale; and
·Exhibit J-2: Agreed “Table B” listing each property in respect of which there is a dispute as to whether it proceeded to settlement, was cancelled, or otherwise.
After the close of each parties’ cases, because of the length of time the trial had taken, the parties sought by consent that closing submissions be made in writing. Timetabling orders were made for filing and service of written submissions and the following submissions have been received, read, and considered:
·Applicant’s written submissions filed 16 June 2023;
·First Respondent’s written submissions filed 16 June 2023;
·Second Respondent’s written submissions filed 16 June 2023;
·Applicant’s submissions in reply filed 23 June 2023;
·First Respondent’s submissions in reply filed 26 June 2023; and
·Second Respondent’s submissions in reply filed 23 June 2023;
KEY AGREED OR DISPUTED FACTS
The evidence which unfolded at the hearing revealed that the following facts were not in dispute:
·The Award applied to the Applicant’s employment by the First Respondent at relevant times, but the Respondents disputed that he was a “commission only employee” within the meaning of the Award;[4]
·The Applicant and First Respondent had entered into a written employment contract on 3 July 2012, which was amended in January 2013;[5]
·The First Respondent conducted business as a real estate agency;[6] and
·At relevant times, the Second Respondent was the managing director of the First Respondent.[7]
[4] Consolidated Statement of Claim filed by the Applicant on 19 January 2023 at [6(g)]; First Respondent’s Consolidated Defence filed 1 February 2023 at [9(a)].
[5] Affidavit of the Applicant filed 29 April 2020 at Annexure JK-04.
[6] First Respondent’s Consolidated Defence filed 1 February 2023 at [2(d)].
[7] First Respondent’s Consolidated Defence filed 1 February 2023 at [3(a)].
Further, in respect of what entitlements the Applicant had pursuant to his employment contract, the evidence revealed dispute as to:
·Whether the amount referred to in the employment contract between the Applicant and the First Respondent as AFL commission was a commission;
·What sum was payable to the Applicant for the period after 1 January 2013 for the AFL memberships he secured;
·What was meant by the term “involved in the sale” pursuant to the employment contract;
·Whether there was an agreement that the Applicant would still receive commission as specified in the employment contract if a sale in which he was involved was cancelled or did not proceed, but where he referred the purchaser to another property which was purchased;
·Whether the Applicant was entitled to receive double commission in respect of a property sale where an existing client of the First Respondent had referred another person who then purchased a property; and
·Whether the Applicant was to be paid superannuation in addition to commission remuneration.
Concerning the claims by the Applicant made pursuant to the Award, the Act, and the NES, there was factual dispute about:
·Whether the Applicant was a “commission only” employee within the meaning of that term in the Award;
·Whether the Applicant was entitled to be paid for public holidays and untaken accrued annual leave; and
·Whether the Applicant was provided with information as required by the Award and NES about employment entitlements.
ANALYSIS OF THE EVIDENCE AND FINDINGS ABOUT DISPUTED FACTS AND ISSUES
Was the Applicant a commission only employee?
The Applicant has not taken issue with the First Respondent’s closing submissions relating to the meaning of a “commission only” employee pursuant to the Award, or to the principles applying to interpretation of the relevant clauses in the Award.[8] However, he submits that he satisfied the meaning of commission only employment in cl 16 of the Award at relevant times he was employed.
[8] Applicant’s Written Submissions filed 16 June 2023 at [16] to [18].
The contest between the parties is limited to whether the evidence satisfies the Court that the Applicant has established that he met the requirements of cl 16 of the Award. In particular, if it shows that at the time the Applicant commenced employment with the First Respondent he had earned the “minimum income threshold” with a past employer.[9]
[9] Applicant’s Written Submissions filed 16 June 2023 at [23(f)]; First Respondent’s Written Submissions filed 16 June 2023 at [20] to [23].
In the Applicant’s affidavit filed 12 October 2022, he states that between 4 March 2008 and 15 August 2011 he earned income as a real estate representative working for Toni and Eric Planinsek, through a company of which he was a director and shareholder, known as Australian Investment Institute Proprietary Limited (“AI P/L”).[10]
[10] Affidavit of the Applicant filed 12 October 2023 at [4] and [5].
Annexure JK102 to the same affidavit purports to be a record of payments received by the Applicant through AI P/L. The Applicant states that the bank statements in Annexure JK103 evidence deposits of the sums referred to in Annexure JK102 to his bank account, and an explanation is given for the name of the account with the National Australia Bank being what it is.[11]
[11] Affidavit of the Applicant filed 12 October 2023 at [6].
By reference to the annexures JK102 and JK103, the Applicant also states he has made a summary of the payments to him via AI P/L, distinguishing commission payments and director’s fees.[12] He says that between 1 July 2009 and 30 June 2010, he earned an income in excess of the minimum threshold prescribed by cl 16.3 of the Award.
[12] Affidavit of the Applicant filed 12 October 2023 at Annexure JK104.
The Applicant was cross-examined at considerable length in relation to the reliability of his evidence which was subject to his affidavit of 12 October 2022. First, it was put to the Applicant that he had not produced five years’ worth of tax returns in accordance with the order made by the Court on 15 December 2022. The Applicant agreed, stating that he had thought he only needed to produce a tax return showing that in a twelve-month period he had received commissions in total which exceeded the minimum income threshold.
He was then challenged about the only tax return which he had produced for the year ending 30 June 2012.[13] Although the evidence was at times confusing, when shown an ABN search record,[14] the Applicant conceded that the personal tax return he had produced recorded the First Respondent’s ABN and not that of the Planinseks or Planinsek Property Group Pty Ltd, for whom he said he had been employed prior to commencing with the First Respondent.
[13] Exhibit A-1.
[14] Exhibit R-3.
The Applicant rejected the suggestion that the summary in his affidavit filed 12 October 2022 at Annexure JK104 was not accurate because he would have been unable to recall, without the benefit of pay slips or other records, what deposits to his bank account were for commission. The Applicant stated that he had marked up the bank statements with his hand-written notes to identify what the entries were at about the time the statements were received, and that he had given the originals to his accountant, but he always made and retained copies.[15]
[15] Transcript dated 22 February 2023 on page 174 at lines 13 to 15.
Although the Applicant has not discovered and produced bank statements according to the Court’s order, his explanation for the failure related to being told by his lawyer that he only had to produce one year where income exceeded the minimum threshold. In explanation for the tax return for year ending 30 June 2012 referring to the First Respondent’s ABN, he stated he could only assume it was an error by his accountant.
The Applicant reasonably ought to have known about his obligations to obtain and discover the tax returns for the years ending 30 June 2008 to 30 June 2011. Ordinarily, I would infer that to be so,[16] but noting the way his case has been conducted by his lawyers, which I consider was disorganised and without required focus, his explanation given at [28] of these reasons seem plausible and I accept it.
[16] LGM & CAM (Contempt) [2008] FamCAFC 1.
However, as the Applicant’s contract of employment states his commencement date with the First Respondent was 13 June 2012 and his evidence is that he commenced on that date,[17] the income in the financial year ending 30 June 2012 would likely have come from at least two sources:
·The First Respondent for the period 13 June to 30 June 2012, which was likely minimal because of the unchallenged evidence that commissions were paid on signing of a contract by the purchaser; and
·From another employer or other mode of remuneration for the period 1 July 2011 to 30 June 2012, and comprising the much larger proportion of the total taxable income in the year ending 30 June 2012.
[17] Affidavit of the Applicant filed 19 April 2020 at [2].
On review of the handwritten notes on the bank statements marked as Annexure JK103, the notations made relate to credits and debits of various kinds, not only “commission”. The notations reflect a labelling or identifying of entries typical of that which may be made by a careful person and for provision to an accountant. They do not solely note “commission” and I accept the Applicant’s evidence referred to at [27] of these reasons. However, this merely establishes that in the 12 months relied on between 1 July 2009 and 30 June 2010, the AI P/L made payments to the Applicant which he described/noted as “commission” and in other cases which he described/noted as director’s fees.
Significantly, in my view, the bank statements produced and relied upon by the Applicant do not correspond to the financial year ending 30 June 2012, being the only period for which he produced a tax return. Conversely, there is no tax return supporting the claimed commission income noted on the bank statement,[18] and summarised in Annexure JK104.
[18] Annexure JK103.
Clause 16.2(f) of the Award provides, amongst other things, that:
…the employee can demonstrate (with the present or any past employer) that they had achieved the minimum income threshold in clause 16.3. Provided that the minimum income threshold will not need to have been achieved if the employee has operated their own real estate business within the last five years.
The terms of cl 16.2(f) of the Award distinguish that the minimum income threshold must be established by an “employee” but not “a person who operated their own real estate business”. The distinction contemplates two alternate ways a person may satisfy the meaning of “commission-only employment”, a person who was a self-employed real estate agent does not need to satisfy the minimum income threshold referred to in cl 16.3 of the Award to be a commission-only employee with a present employer.
The Applicant’s own evidence is extremely confusing about his status with Planinsek. He variously states in his affidavits that he was “employed” by Planinsek or provided services as a consultant through AI P/L to Planinsek.[19] Further, that he was not operating his own real estate business, but operated under the business Planinsek Real Estate Agents who held the real estate license.[20]
[19] Applicant’s affidavit filed 12 October 2023 at [5].
[20] Applicant’s affidavit filed 12 October 2023 at [4].
The arrangement as evidenced by the Applicant’s testimony does not satisfy on the balance of probabilities either alternate situation contemplated by cl 16.2(f) of the Award and as such the meaning of “commission-only employment”. Consequently, the Applicant has not established the requirements of “commission-only employment” pursuant to the Award, regardless of what income the Applicant received as commissions in either period prior to commencing employment with the First Respondent he may be relying upon.
The Applicant submitted in his written closing submissions filed 16 June 2023 at [26] that he could be “engaged” for the purpose of qualifying the minimum income threshold. However, given the construction of cl 16.2(f) of the Award and the state of the evidence described above, I reject the submission. It seems plain that the Award does not contemplate the type of contractual arrangement which the Applicant had with AI P/L and it in turn had with Planinsek.
Consequent of the above reasoning, I accept the tenor of the First Respondent’s closing submissions filed 16 June 2023 at [22].
The Applicant’s contentions in the written submissions filed 16 June 2023 at [30] to [35] are rejected in respect of the claim that he was entitled to 35 per cent of the vendor’s commission with respect to each relevant sale.
The Applicant has failed to persuade the Court that he was in “commission-only” employment within the meaning of that term under the Award, because the requirements of cls 16.2 and 16.3 of the Award have not been satisfied.
A further reason for this conclusion is that the terms of the Award which provide for commission-only employment clearly contemplate that the employee is in a property sales classification and is to receive 35 per cent of the “employer’s net commission”.[21] The employer’s net commission is also defined under the Award, and when read together with cl 16 is a sum arrived at by deducting no more than 10 per cent from the commission the employer receives from the vendor on the sale of a property.
[21] Clause 16.5 of the Award.
Commission-only employment thus does not include employment where the employee is remunerated by reference to sale of something other than property, within the ordinary meaning of that term. As the Applicant was remunerated by fixed amounts for sale of the AFL membership as well as fixed sums for each sale of property, the employment arrangement was not as contemplated or covered by commission-only employment as defined under the Award.
Notwithstanding the conclusion to which I have come, this does not mean that the Applicant’s claims all fail, as is explained in the reasons below.
Entitlements pursuant to the employment contract?
Comparison of the evidence about employment terms for the Applicant and those relating to “in-homers” demonstrates that their agreed terms of employment were different.
The Applicant’s terms of employment specifically state he would be remunerated by two “commission” components:[22]
·A fixed “commission” for each sale of an AFL membership; and
·A fixed “commission” for each sale of property in which he was involved.
[22] Affidavit of Ms Grochowski affirmed 25 February 2021 at Annexure JG-2.
By contrast the in-homers were remunerated by salary plus commission as is apparent from the express terms of their employment contracts.[23] It is telling that the statement by Ms Grochowski at [39] of her affidavit of 25 February 2021 is incomplete as it merely refers to in-homers receiving commission.
[23] Affidavit of Ms Grochowski affirmed 25 February 2021 at Annexure JG-4.
Despite rejecting the claim that the Applicant was in “commission-only” employment pursuant to the Award, there remains for determination the claim for underpayment based on what the Applicant says was due to him pursuant to the employment contract. That is, whether the fixed commission payable to the Applicant concerning sales in which he was involved was divisible, meaning payable to him and other employees who were allegedly involved in sales based on proportionate involvement. [24] Alternatively, whether the fixed commission was solely payable to the Applicant if he was involved in a sale of property.
[24] First Respondent’s written closing submissions dated 16 June 2023 at [27] to [31].
Having heard the witnesses give evidence during the hearing, I prefer the evidence of the Applicant to that of Ms Grochowski. The evidence of Ms Grochowski did not sit consistently with the records in evidence that documented what was payable to other employees of the First Respondent.[25] Further, and generally, I found Ms Grochowski’s evidence to be constructed and formulated after the event rather than based on her direct involvement and knowledge of the terms of various persons’ employment.
[25] See [44] of these reasons.
Generally, I consider Ms Grochowski to be an unreliable witness, who often stated she was not involved in or did not know of facts and systems within the First Respondent’s business, which she reasonably would be expected to know as a claimed “co-founder” and manager of the business. For example, she was not involved in employment interviews, required authorisation from the Second Respondent before making payments out of the vendor’s commissions to employees, did not readily and clearly know what bank accounts the company operated, and was not involved in the regular sales meetings.
Further, Ms Grochowski regularly prevaricated, sought to avoid giving answers, or was vague or imprecise in her answers about the systems and arrangements for the employees when she should not have been if she genuinely had the position and authority which she claimed. Despite Counsel for the Applicant cross-examining in a challenging manner and interrupting Ms Grochowski, requiring me to intervene at times, this did not explain shortcomings in her evidence. I prefer the evidence of the Applicant where Ms Grochowski’s conflicts with his.
On the balance of probabilities, the First Respondent remunerated in-homers and the Applicant differently. The in-homers were paid on a salary and what I would characterise as a bonus-like payment if a potential purchaser to whom they showed a property, subsequently went on to purchase a property due to the work undertaken by the Applicant as the salesperson. The Applicant as the salesperson, was only remunerated by payment of a fixed sum on sale of an AFL membership and then a fixed commission in respect of a purchase contract; he did not receive salary although he may have been paid at regular intervals which is unclear on the evidence.
The preponderance of the evidence shows a clear delineation between the persons responsible for physically showing a property and relevantly the Applicant whose sales skills secured the sale of a property. I accept the totality of the Applicant’s evidence about his involvement in sales and that when he secured the signing of a contract and then completion of it, no other salesperson was involved except after he ceased employment.[26] In respect of the evidence about the Second Respondent’s interactions in sales conducted by the Applicant, I find that he was involved as a manager, intent on being informed about what contracts were being signed, not as a salesperson.[27]
[26] Affidavit of the Applicant filed 29 April 2020 at [47]; affidavit of the Applicant filed 21 June 2023 at [18]; Transcript of proceedings (“Transcript”) dated 22 February 2023 on page 185 at lines 14 to 26.
[27] Transcript dated 22 February 2023 on page 160 at lines 20 to 32.
The meaning of “involved in a sale” argued by the First Respondent in the alternative may not need to be addressed, because the contention was an alternate argument if the Court concluded that the Applicant was in commission-only employment.[28] However, for completeness I will address it.
[28] First Respondent’s written closing submissions dated 16 June 2023 at [27] to [33].
The contentions put that the specific amount of commission expressed as payable to the Applicant in the employment agreement, was to be split and paid to him and others in proportion to their involvement in a sale is rejected because:
·In-homers and other employees were not paid on commission but received wages/salary and a bonus in certain cases. The amounts paid are identified on the Sales Authority Forms as a “fee”;
·Nothing in the terms of remuneration for the in-homers or other employees referred to or tied their entitlements to the amount of fixed commission payable to the Applicant;
·There was a concession by Ms Grochowski that the Applicant was not involved in any conjunctional sales that I infer may have led to splitting of commission;[29]
·The context of the terms used in the employment agreement, together with the business systems of the First Respondent, convey that “involved in” is used according to its ordinary meaning and should not be interpreted as solely involved;
·The Sales Administration Forms and entries into the customer relations management system were corrected and/or amended after their initial creation, and so I find them unreliable.
[29] Transcript dated 8 May 2023 on page 41 at lines 30 to 44.
As I have rejected the assertion that the sum of $5,500 per sale was divisible and payable to more than one employee “involved in the sale”, this aspect of the Applicant’s claims will succeed.
As a result of the findings at [50] and [54] of these reasons, I reject the contention that the Applicant would receive less than the full commission for a sale of property in each instance.
Entitlement to payment for public holidays?
The parties agreed that on public holidays the First Respondent’s office was closed and that staff, including the Applicant, did not work.[30]
[30] Transcript dated 22 February 2023 on page 204 at lines 13 to 24.
Ms Grochowski agreed that full-time employees, including the Applicant, were not required to work and were to be paid on public holidays.[31] She also stated that a full-time employee “can have 10 days leave if you’re sick or you need to look after somebody else, and it’s paid leave”.[32]
[31] Transcript dated 24 February 2023 on page 384 at lines 29 to 30 and on page 391.
[32] Transcript dated 24 February 2023 on page 384 at lines 38 to 40.
The Applicant simply relied on his pleadings in relation to the claim for unpaid public holidays.[33]
[33] Applicant’s written closing submissions dated 16 June 2023 at [36] to [37].
The Respondents relied on the terms of s 116 of the Act to support the contention that because the First Respondent’s business was closed on public holidays, the Applicant was not required to work on those days and so no payment was required.
The Respondents’ contention is not a valid answer to the claim made by the Applicant under this heading. As it is conceded that the Award applied to the Applicant’s employment and I have found that he was not a “commission-only” employee under the Award, there is no basis for denying his entitlement to be paid on public holidays. As he did not qualify as a “pieceworker”, he was to be paid allowances as a full-time employee in accordance with the Award because if the employer had not closed its office on public holidays, the Applicant would have worked his usual full-time hours.
The Applicant’s concessions under cross-examination as referred to in the First Respondent’s written submissions are not to the point of what entitlement existed pursuant to the Award. Whether he or other employees were required to work on public holidays, an entitlement to be paid arose.
The First Respondent’s submissions were disingenuous, and in my view are inconsistent with the submissions made about the Applicant not being a commission-only employee, that is a pieceworker, pursuant to the Award.[34]
[34] Clause 16.1 of the Award.
The Applicant’s “Letter of Offer” did not state a figure for “Total Remuneration”, and it thus has no meaning or operation for the purposes of cl 3 of the Standard Conditions of Employment which formed part of the employment contract.
The Applicant is entitled to receive a sum for the total number of public holidays, which sum is to be calculated using the minimum rate of pay for the Applicant’s classification under the Award.[35]
[35] Senior Salesperson.
Entitlement to payment of annual leave on termination of employment
Adopting similar reasoning to that referred to at [59] to [63] of these reasons, this claim succeeds.
As there was uncontroversial evidence that the Applicant took annual leave each year,[36] it follows that, pursuant to the Award, he should have been paid. There is no evidence that he received any payment during these absences, and so annual leave is due to him.
[36] Transcript dated 22 February 2023 on page 198 at lines 19 to 35.
The Standard Conditions of Employment make it plain that as a full-time employee the Applicant was to receive 20 days of paid leave. The payment due is to be calculated on the basis of an entitlement of 20 days for each year of employment and pro-rata thereof, multiplied by the rate of pay due for his classification level as a senior salesperson under the Award.
Failure to provide copy of Award and NES
The Applicant’s evidence that the Respondents did not provide him with a copy of the Award or the NES by any means,[37] was not disturbed by cross examination.[38] Although the First Respondent contends that the Applicant’s evidence concerning knowledge of the existence of an Award is demonstrative of his evidence not being a reliable witness,[39] the evidence of Ms Grochowski about this topic was that she did not know if copies were made available,[40] which is something she would know if she was the person responsible for establishing employment with the First Respondent.
[37] Affidavit of the Applicant filed 29 April 2020 at [40].
[38] Transcript dated 22 February 2023 on page 185 at lines 42 to 46.
[39] Affidavit of the Applicant filed 29 April 2020 at [41]; Transcript dated 22 February 2024 on page 179 lines 5 to 33 and on page 185 at lines 1 to 15.
[40] Transcript dated 24 February 2023 on page 391 at line 41 to page 392 at line 14.
The First Respondent has submitted that by virtue of cl 5 of the Award, access to the Award and NES could be available through electronic means. While this is strictly correct, the full terms of cl 5 state that:
The employer must ensure that copies of this award and the NES are available to all employees to whom they apply either on a noticeboard which is conveniently located at or near the workplace or through electronic means, whichever makes them more accessible.
[emphasis added]
It is evident that the Applicant was not computer literate and relied on others to undertake computer-based tasks.[41] This evidence was not displaced, and I infer that in their regular working with the Applicant, Ms Grochowski and the Second Respondent would likely have been aware of his computer illiteracy.
[41] Transcript dated 24 February 2023 on page 193 at lines 42 to 43; affidavit of Ms Grochowski filed 16 May 2022 at [40].
I find based, on the evidence described above, that copies of the NES and Award were not made available to the Applicant as an employee because availability by electronic means was not more accessible in the circumstances.
Further, in the absence of evidence that the Applicant was instructed or advised he could access the award and NES from a computer, I am satisfied that there has been a contravention of s 45 of the Act. I will hear the parties further in respect of the appropriate quantum of penalties.
Was commission payable to the applicant for substitute sales?
In summary, the Applicant’s evidence about this topic was as follows:
(a)On the two occasions when a purchaser decided not to proceed with a property purchase, he and the Second Respondent offered an alternate property. Both purchasers proceeded with a contract for an alternate property;[42]
(b)The Second Respondent insisted on being involved with the presentation of the alternate properties, but told the Applicant in advance that the Applicant would still be entitled to full commission for the sales;[43]
(c)The clients for which the Applicant claims properties were substituted were:
(i)Alex and Galina Likhotevsky;[44]
(ii)Peter and Sophia Kokkolis.[45]
[42] Affidavit of the Applicant filed 29 April 2020 at [31] and [55] and [57].
[43] Affidavit of the Applicant filed 29 April 2020 at [32] and [57].
[44] Transcript dated 22 February 2023 on page 214 at line 32 to page 215 at line 8.
[45] [45] Transcript dated 22 February 2023 on page 159 at lines 6 to 12.
The evidence of Ms Grochowski about the subject was to the following effect:
(a)She is aware of the “cooling off” period on the contracts, and that efforts would be made by the First Respondent’s employees to find an alternative property for the purchasers to buy;[46]
(b)She was not aware if alternate sales “usually” went ahead on every occasion that a purchaser cooled off;[47]
(c)If the purchasers proceeded with a contract for an alternative property, the Applicant was entitled to both deposit and settlement commission for the sale;[48] and
(d)She did not give evidence as to whether it was a full or partial commission, given the involvement of the Second Respondent in the sale.
[46] Transcript dated 24 February 2023 on page 370 at lines 1 to 10.
[47] Transcript dated 24 February 2023 on page 370 at lines 12 to 14.
[48] Transcript dated 24 February 2023 on page 373 at line 45 to page 374 at line 8.
In view of the concession by Ms Grochowski referred to at [75(c)] and [75(d)] of these reasons and because I prefer the evidence of the Applicant, I find that the terms of the Applicant’s employment entitled him to be paid commission on substitute sales but there is only evidence of one substituted sale completing by reference to exhibit R-15.[49]
[49] Alex and Galina Likhotevsky.
Was double commission payable on sale to John Chapman?
There is no real controversy about how John Chapman came to purchase lot 40/1-11 Hyde Park Avenue in Craigieburn. The Applicant’s evidence appears in his affidavit filed 29 April 2020 at [59] to [63].
The First Respondent admits that Mark Chapman was a person introduced by the Applicant.[50] There is no evidence from the Respondents disputing the Applicant’s evidence that Mark Chapman suggested that his brother John Chapman may be interested in a purchase.[51]
[50] First Respondent’s Consolidated Defence filed 1 February 2023 at [54].
[51] Affidavit of the Applicant filed 29 April 2020 at [60].
The First Respondent has not alleged that the term in the letter of offer to the Applicant dated 2 July 2012 at paragraph six does not form part of the employment agreement between the parties. The meaning of the paragraph seems plain in my view. As John Chapman is a person the Applicant contacted and persuaded to purchase a property and as he was not known to the Respondents prior, the plain meaning of the terms of the letter of offer requires a double payment of commission with respect to the sale.
Further, in the absence of evidence adduced by the Respondents that either John Chapman or Mark Chapman were previously known to them, I infer that whatever evidence they may have been able to adduce on this topic would not have assisted their denial of the claim.[52]
[52] Jones v Dunkel [1959] HCA 8.
The First Respondent’s written submissions filed 16 June 2023 at [66] to [70] relate to other persons being involved in the sale transaction to John Chapman. There is only mere assertion that the Applicant was not entitled to additional monies for “sourcing a lead”, but no reasoning for the assertion is provided reliant upon the terms of the employment agreement or evidence before the Court.
As such, the Applicant is entitled to the double commission for this sale.
Was there a failure to pay superannuation entitlements?
The provisions of the Award concerning superannuation relevantly were that:
22.2 Employer contributions
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
[emphasis added]
Regardless of the letter of offer stating that the Applicant’s remuneration “includes superannuation” as submitted by the First Respondent, the fact remains that the Standard Conditions of Employment specified that superannuation would be paid in accordance with relevant legislation. This term is hardly surprising as it is uncontroversial that the Award applied at all relevant times.
To avoid being required to pay the superannuation guarantee charge, the First Respondent was obliged to pay superannuation in accordance with s 19 of the Superannuation Guarantee (Administration) Act 1992 (Cth). By virtue of s 19(2), nine per cent of “quarterly salary or wages base” should have been paid up to 30 June 2013, and then nine and a half per cent from 1 July 2013.
The Applicant’s “Letter of Offer” did not state a figure for “Total Remuneration”, and it thus has no meaning or operation for the purposes of Clause 3 of the Standard Conditions of employment forming part of the employment contract. However, regardless, the terms of the Award and Act referred to in [84] and [85] of these reasons were to be complied with by the First Respondent as the Applicant’s employer.
As the First Respondent admits it paid superannuation inclusive of commissions, it in effect deducted the charge percentage rather than paying it in addition or on top of the commissions received by way of salary or wages. As such, it failed to pay superannuation according to the relevant law. This claim by the Applicant succeeds.
ACCESSORIAL LIABLITY?
Notwithstanding the submissions by the Second Respondent in his written submissions filed 16 June 2023 at [8] to [10], as I have found that the First Respondent did contravene the Award and employment agreement in some respects, the question of whether the Second Respondent is liable as an accessory pursuant to s 550 of the Act must also be addressed.
The Second Respondent claimed privilege against imposition of civil penalty throughout these proceedings, despite what the Applicant suggests in his written submissions dated 23 June 2023.[53]
[53] Applicant’s written submissions in reply to the First Respondent’s written submissions filed 23 June 2023 at [17].
The privilege has been claimed in every Defence filed by the Second Respondent, and he has chosen not to give evidence in the proceedings. By his counsel at the close of the Applicant’s case, he confirmed that he would maintain the privilege.
Although the Applicant asserts that the Second Respondent has waived his right to the privilege, I reject that for the following reasons:
(a)There is no evidence before me demonstrating that he gave evidence in an interlocutory hearing, despite the submission made by the Applicant; [54]
(b)He was ordered to file a Defence, and merely complied with the order or Rules of Court;[55]
(c)The mere filing of a Defence does not constitute a waiver, given the terms of each Defence filed which specifically makes no admission or denial of an alleged material fact as related to his liability as an accessory to the alleged contraventions;
(d)There is unchallenged evidence that Ms Grochowski has effective control of the First Respondent as beneficiary and appointor of the Accrue Property Trust, which is the trading entity for the business in which the Applicant was employed to work.[56] Accordingly, she did not require “permission” to make the affidavits she made on behalf the First Respondent and had authority to do so; and
(e)The documents referred to in the Applicant’s written submissions in reply filed 23 June 2023 at [3] were documents in the First Respondent’s possession and put before the Court by Ms Grochowski on its behalf. However, the evidence they provide is evidence before the Court in the case more broadly.
[54] Applicant’s written submissions in reply filed 23 June 2023 at [17(1)].
[55] Order 12 of the Orders made 15 December 2022.
[56] First Respondent’s written closing submissions dated 16 June 2023 at [9].
Although I have concluded that the Second Respondent has not waived his right to claim penalty privilege, that does not determine if the evidence before the Court establishes his accessorial liability.
Principles relating to accessorial liability
By virtue of s 550(1) of the Act, a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
The meaning of “involved in” for the purpose of s 550(1) is provided for in s 550(2) of the Act and has also been the subject of much case law. The Second Respondent’s written closing submissions dated 16 June 2023 extensively address the interpretation of the provisions and the principles which have emerged. The Applicant’s written submissions demonstrate that there is no real controversy about the legal principles.
Collectively, the parties’ submissions show no controversy about the application of the following relevant but not exhaustive principles:
·In respect of being involved in a contravention by aiding, abetting, counselling or procuring a contravention as referred to in s 550(2)(a) of the Act:
(i)the ordinary meaning of those phrases attributed to them by criminal law equally apply;[57] and
[57] Yorke v Lucas (1985) 158 CLR 661 on page 669.
(ii)Aiding, abetting, counselling or procuring thus requires a person to intentionally participate in the offence. That is, knowing of the essential matters going to make up the offence, but not necessarily that they amount to a contravention of a civil remedy provision, in the context relevant to the Act;[58]
[58] Yorke v Lucas (1985) 158 CLR 661 on page 667.
·Being knowingly concerned in or party to a contravention in any way by act or omission directly or indirectly as referred to in ss 550(2)(c):
(i)requires proof that a person had knowledge of the essential facts constituting the contravention and intentionally participated in it;[59] but
(ii)does not require knowledge that the essential facts or matters constitute a contravention;[60]
(iii)Alternatively, requires evidence of some act or conduct that implicates or involves the person in the contravention so there is a practical connection between the person and the contravention.[61]
·Proof of knowledge of the essential facts or matters constituting the contravention may be established by direct evidence, but will commonly be a matter of inference from all the circumstances found to be proved;[62]
·A person may be accessorily liable in circumstances where they are aware of the entitlements due to an employee, but not necessarily that those entitlements are not being met;[63] and
·Knowledge that an Award applied to a person’s employment is not identical to knowledge there is a failure to pay according to the applicable Award, although it is undeniable that difference is a small one.[64] However, actual knowledge may be established on the basis of findings of fact or inferred findings of fact based on the evidence before the Court.
[59] Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1999) 95 FCR 302; Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236; Heydon v NRMA Ltd (2000) 51 NSWLR 1.
[60] Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176] to [178].
[61] Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 280 ALR 503 at [324] to [325]; Construction, Forestry, Mining and Energy Union v Clarke (2007) 164 IR 299 at [26].
[62] Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [231].
[63] EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 at [14]; Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034 at [1019].
[64] Potter v Fair Work Ombudsman [2014] FCA 187 at [81].
The Applicant’s allegations concerning the Second Respondent’s accessorial liability need only be addressed in respect of the claims which have been established on the evidence and which constitute a breach of a civil remedy provision within the meaning of s 539 of the Act relevant to the factual findings made elsewhere and conclusions I have reached. That is, contrary to either s 45 or s 323 of the Act, failures:
(a)to pay the Applicant for public holidays, annual leave on termination of employment and superannuation; and
(b)to provide copies of the Award and NES.
The Consolidated Statement of Claims filed 19 January 2023 at [59] to [61Z], read together with [3], sets out the material facts relied upon to establish that the Second Respondent was “involved in” the contraventions that have been found to be established against the First Respondent as the employer.
The Second Respondent submits in respect of each contravention found to be established that the Applicant has failed to prove the alleged averments in the consolidated pleadings.[65] I disagree for the reasons that follow.
[65] Second Respondent’s written submissions filed 16 Jul 2023 at [16], [20], [22], [25], [27] and [29].
The uncontroversial evidence establishes that the Second Respondent was at all relevant times involved in a hands-on way with the operations of the First Respondent.[66] He subsequently became the sole director and secretary of Accrue Real Estate Vic Pty Ltd.
[66] Affidavit of the Applicant filed 29 April 2020 at [69] to [73]; affidavit of Ms Grochowski filed 26 February 2021 at [26(a)] and [28].
Furthermore, Ms Grochowski gave extensive evidence about the Second Respondent’s involvement in running the First Respondent’s business and in particular the employment of the Applicant. Because this evidence does not conflict with substance of the Applicant’s evidence about this topic, I accept it and make findings that:
(a)He interviewed and hired the Applicant,[67] discussed the terms of employment with the Applicant,[68] and instructed her as to what was to be included the Applicant’s employment contract;[69]
(b)He usually signed the employment contracts for new employees,[70] and the letters of offer put to her under cross-examination were likely signed by him;[71]
(c)He was the managing director,[72] a director,[73] and the company secretary[74] of the First Respondent;
(d)He was involved in decision-making in relation to the First Respondent;[75] and
(e)He was informed by her each week as to what commissions were paid to which employees once the bookkeeping was finalised,[76] and his agreement to payments of commissions is noted on various documents put to her in cross-examination;[77]
(f)He listed all properties for sale;[78]
(g)He conducted sales meetings with the Applicant, however Ms Grochowski could not say how often they occurred;[79] and
(h)He made his own entries into the electronic customer relations management system.[80]
[67] Transcript dated 23 February 2023 on page 301 at lines 5 to 7 and lines 35 to 38.
[68] Transcript dated 23 February 2023 on page 356 at line 30 to page 357 at line 16.
[69] Transcript dated 24 February 2023 on page 368 at lines 27 to 34.
[70] Transcript dated 23 February 2023 on page 306 at line 26.
[71] Transcript dated 23 February 2023 on page 333 at lines 6 to 8.
[72] Transcript dated 23 February 2023 on page 332 at lines 27 to 28 and on page 350 at line 2 and lines 36 to 40.
[73] Transcript dated 23 February 2023 on page 350 at line 25.
[74] Transcript dated 23 February 2023 on page 350 at line 27.
[75] Transcript dated 23 February 2023 on page 350 at line 43.
[76] Transcript dated 24 February 2023 on page 40 at line 45 to page 41 at line 10.
[77] Transcript dated 9 May 2023 on page 82 at line 26 to page 84 at line 16.
[78] Affidavit of Ms Grochowski filed 26 February 2021 at [26(a)] and [28].
[79] Transcript dated 8 May 2023 on page 40 at lines 9 to 14.
[80] Transcript dated 9 May 2023 on page 90 at lines 11 and 12.
Ms Grochowski also referred to herself as co-founder of the First Respondent and I infer from the evidence given by her and summarised at [99] of these reasons that the Second Respondent was likely the other founder.[81] I infer from this that the model of selling property which the First Respondent created was at least a model the Second Respondent was involved in, particularly because he was the licence holder for the purposes of Estate Agents Act 1980 (Vic).[82]
[81] Affidavit of Ms Grochowski filed 26 February 2021 at [1] and [4]; affidavit of Ms Grochowski filed 16 May 2022 at [1].
[82] Transcript dated 23 February 2023 on page 355 at lines 32 to 44.
As the Second Respondent instructed Ms Grochowski about what should be included in the employment agreements, I find that he gave the instructions to include the third last paragraph in the letter of offer to the Applicant dated 2 July 2012,[83] the effect of which was to incorporate Standard Conditions of Employment (“SCE”) as part of the terms of the Applicant’s agreed employment once he accepted the offer.
[83] Affidavit of the Applicant filed 29 April 2020 at Annexure JK-04.
The third last paragraph states:
A copy of our Standard Conditions of Employment is attached for your reference. Any changes to these Standard conditions are noted in this letter and this letter therefore takes precedence of the Standard Conditions of Employment. Please ensure that you read and understand this document prior to commencing your employment with us.
The SCE are said to apply unless their terms are inconsistent with the Letter of Offer. Further, the SCE refer to the Act, and the Award, and relevant award applying as a matter of law.
I find because of the matters at [100] to [104] of these reasons and the admissions by both Respondents in their consolidated pleadings that the Real Estate Industry Award 2010 applied to the First Respondent and the Applicant in relation to the employment, that the Second Respondent had actual knowledge of the Award. Similarly, I find that he had knowledge of the Act because it was referred to in the SCE.
There are no inconsistencies between the Award and the Act on the one hand and the SCE in so far as they provide for entitlements due for public holidays, annual leave and superannuation. The entitlements are the same in each. Further, there is no inconsistency between the letter of offer and the SCE as they relate to entitlements due for public holidays, annual leave and superannuation, because the letter of offer is silent as to these.
There is no evidence at all about whether the Second Respondent knew that the Applicant was not paid annual leave and public holiday entitlements or superannuation in addition to his gross commission income.
However, I infer that he had actual knowledge that the Applicant was not paid these sums in accordance with the Award based on the evidence referred to at [99] and [100] of these reasons, and as such is accessorily liable for the contraventions.
It defies belief that a co-founder, Secretary and Director, managing director and licenced property agent who interviewed the Applicant and negotiated his terms of employment as reflected in the Letter of Offer would not have known that the Applicant was only to receive fixed sums on sale of AFL membership and completed sales. Particularly, because I have found he most likely authorised payments to employees given the evidence of Ms Grochowski.
The Second Respondent may not have known that by not paying annual leave and public holiday entitlements or superannuation in addition to the commissions referred to in the employment agreement, there was contravention of the Award, but this is not necessary for accessorial liability, given the established principles discussed in Australian Building and Construction Commissioner v Parker (2017) 266 IR 340 at [382] to [383] and approved of in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 and EZY Accounting ABC Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134 at [14].
The Applicant’s evidence was that neither the First nor Second Respondent provided him with a copy of the Award or NES, advised him of their existence, advised him how he could access them, or made a copy of them available at the office.[84] His awareness of the Award came about through training courses he had completed and documentation from the Real Estate Institute of Victoria,[85] although he conceded that the Award covered in his real estate accreditation course was an earlier Award rather than the Award under which he now brings his claims.[86]
[84] Affidavit of the Applicant filed 19 April 2020 at [40].
[85] Affidavit of the Applicant filed 19 April 2020 at [41].
[86] Transcript dated 22 February 2023 on page 179 at lines 1 to 31.
Ms Grochowski’ s evidence was that she did not know if the First or Second Respondent had:
(a)Provided the Applicant with a copy of the Award or the NES, either in hard copy or electronically;[87]
(b)Advised the Applicant of the existence of the Award or NES;[88]
(c)Provided the Applicant with information on how to access the Award or NES;[89] or
(d)Referred to or provided a copy of the Award or NES on any noticeboard at the office.[90]
[87] Transcript dated 24 February 2023 on page 391 at lines 41 to 45 and on page 392 at lines 13 and 14.
[88] Transcript dated 24 February 2023 on page 392 at lines 1 to 5.
[89] Transcript dated 24 February 2023 on page 392 at lines 7 and 8.
[90] Transcript dated 24 February 2023 on page 392 at lines 10 to 11.
Given the role of the Second Respondent as described in these reasons, he reasonably ought to have ensured that copies of the Award and NES were made available to the Applicant. However, it appears that a number of administrative tasks were delegated to Ms Grochowski and also Danielle Stephenson. In circumstances where there is no evidence upon which I can infer that he had knowledge that copies had not been made available, I am not satisfied that the Second Respondent was involved in the contravention relating to s 45 of the Act.
RELIEF TO BE GRANTED
In view of the above conclusions, there will be declarations that:
(a)The First Respondent contravened s 44 of the Act by not:
(i)Paying the Applicant for his absence on a public holiday as prescribed by s 116 of the Act;
(ii)Paying the Applicant for untaken and accrued annual leave on termination of employment in accordance with s 90(2) of the Act.
(b)The First Respondent contravened s 45 of the Act by failing to ensure that the Applicant had access to the Award and the NES in accordance with cl 5 of the Award; and
(c)The First Respondent contravened s 323 of the Act by failing to pay the Applicant his contractual entitlements to commission.
Further, in view of the conclusions reached, there will be a declaration that the Second Respondent was involved in the contraventions referred to in [114(a)] and [114(c)] of these reasons.
CONSEQUENTIAL ORDERS
The declaration to be made raise for determination what compensatory orders should be made and what pecuniary penalties ought to be imposed.
The evidence about the quantum of the claims that have succeeded is exceptionally disorganised and the parties’ submissions have not been helpful in identifying the relevant evidence upon which the Court is able to make findings and assess compensation.
Accordingly, I will invite submissions as to the precise assessment of compensation and the consequential final orders to be made in view of the claims that have succeeded.
The sums claimed for public holidays are pleaded in the Consolidated Statement of Claim filed 19 January 2023 at [30] to [32] and [64(c)]. The amounts have not been disputed in any submission made by the Respondents. Accordingly, compensation should probably be awarded for this claim in the sum of $2,843.00.
The Consolidated Statement of Claim filed 19 January 2023 at [46] and [64(e)] seeks a total of nine weeks annual leave. The quantum of this claim is also not disputed in any submission made and, accordingly, it seems that the sum of $6,115.00 should be awarded.
In addition, I will need to also receive submissions about the compensation due to the Applicant for non-payment of commissions in accordance with the employment agreement. This appears to involve:
·Double commission due for the John Chapman sale,[91] being pleaded and referred to in submissions as totalling $10,000, but of which only received $5,000, meaning $5,000 is likely owing;
·Commission for substitute sales which are identified by the Applicant’s evidence and so proved on balance of probabilities, and for which he was not paid at all. Apparently, concerning the sale to Alex and Galina Likhotevsky;[92]
·Non-payment of AFL commissions, which are presumably capable of being quantified by reference to the parties’ joint tables;[93]
·Disputed standard commissions pursuant to the employment agreement, pleaded in the Consolidated Statement of Claim filed 19 January 2023 at [48] or presumably capable of being quantified by reference to the parties’ joint tables;[94] and
·Failure to pay superannuation in addition to “commissions” received with respect of all sales in which the Applicant was involved and as pleaded in the Consolidated Statement of Claim filed 19 January 2023 at [59A] to [59G], but not quantified.
[91] Consolidated Statement of Claim filed 19 January 2023 at [52] to [59B].
[92] See [74](c)] of these reasons.
[93] Exhibit J-1 and Exhibit J-2.
[94] Exhibit J-1 and Exhibit J-2.
Upon receiving final submissions, I will pronounce final orders in the proceedings.
I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Taglieri. Associate:
Dated: 24 November 2023
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