WORKPLACE RELATIONS – Penalty hearing – Admitted contraventions of Transport Workers Award1998 – Underpayment of wages to employee – Where multiple breaches of award arose out of single course of conduct – Relevant considerations in determining level of penalty – Penalty determined
LAUREN MAREE KELLY v WILLIAM MICHAEL FITZPATRICK AND MARGARET MARIE FITZPATRICK VID 95 OF 2007
TRACEY J 27 JULY 2007 MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 95 OF 2007
BETWEEN:
LAUREN MAREE KELLY Applicant
AND:
WILLIAM MICHAEL FITZPATRICK First Respondent
MARGARET MARIE FITZPATRICK Second Respondent
JUDGE:
TRACEY J
DATE OF ORDER:
27 JULY 2007
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The first respondent pay the Commonwealth the following penalties for breaches of the Transport Workers Award 1998:
(a)$400 for breach of clause 15.1.
(b)$1600 for breach of clause 12.5.
(c)$1400 for breach of clause 37.2.
(d)$40 for breach of clause 33.2.1
(e)$200 for breach of clause 35.
(f)$20 for breach of clause 42.
2. Payment of the penalties imposed by Order 1 be made within 60 days.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 95 OF 2007
BETWEEN:
LAUREN MAREE KELLY Applicant
AND:
WILLIAM MICHAEL FITZPATRICK First Respondent
MARGARET MARIE FITZPATRICK Second Respondent
JUDGE:
TRACEY J
DATE:
27 JULY 2007
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicant, who is a workplace inspector appointed under the Workplace Relations Act 1996 (Cth) (“the Act”), has made application to the Court to have penalties imposed on the respondents for admitted contraventions of the Transport Workers Award 1998 (“the Award”). Each of the contraventions related to the underpayment of wages to a particular employee over a period of about five years. The underpayments, in total, amounted to $96,664.76.
The respondents are husband and wife. They conduct a trucking business which trades as “Fitzpatrick’s Transport Service”. The business is not incorporated. The business operates a small fleet of trucks from a base in Charlton in north-west Victoria. The first respondent is one of six drivers who work in the business. The second respondent performs clerical duties relating to the payment of wages and…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Kelly v Fitzpatrick [2007] FCA 1080
Case
[2007] FCA 1080
Decision Date
CaseChat Overview and Summary
The case of Kelly v Fitzpatrick involved a dispute between the applicant and the respondents, concerning underpayments of wages to the applicant under the Transport Workers Award 1998. The Federal Circuit Court of Australia was tasked with determining the appropriate penalties for the breaches of specific award terms and the resultant underpayments. The court considered the breaches under various clauses, including clauses 12.5.3, 12.5.4, 15.1, 33.2.1, 35, 37.2, 42.6.1, and 42.7.1, which cumulatively led to substantial underpayments over a period of five years. The court was required to evaluate the nature and extent of the breaches, the circumstances in which they occurred, the resultant loss, and other factors such as whether there were previous similar breaches, the involvement of senior management, and the degree of contrition shown by the respondent.
The legal issues before the court included determining the appropriate penalties for the breaches of the award terms and assessing whether the breaches warranted penalties under the Fair Work Act 2009. The court considered various factors including the nature and extent of the breaches, the circumstances, and the resultant loss, as well as the need for deterrence and compliance with minimum standards. The parties agreed on these considerations being relevant and applicable in determining the penalties. The court also assessed the actions taken by the respondent post-discovery of the breaches and whether these actions were sufficient to mitigate the penalties.
The court found that the breaches were significant and deliberate, leading to considerable underpayments. Despite the full payment of the underpaid wages to the applicant in April 2007, the court considered it necessary to impose penalties to ensure compliance and deterrence. The court acknowledged the underpayments amounting to approximately one-third of the wages entitlement under the award. The penalties were calculated based on the severity and nature of the breaches, and the need for both specific and general deterrence. The court imposed specific penalties for each clause breached and mandated a timeline for payment within 60 days.
The final orders included specific penalties for each of the breached clauses, totaling to be paid within 60 days, thereby ensuring the enforcement of compliance with award terms and the deterrence of similar breaches in the future.
Orders
Orders of the court
1. The first respondent pay the Commonwealth the following penalties for breaches of the Transport Workers Award 1998:
(a) $400 for breach of clause 15.1.
(b) $1600 for breach of clause 12.5.
(c) $1400 for breach of clause 37.2.
(d) $40 for breach of clause 33.2.1
(e) $200 for breach of clause 35.
(f) $20 for breach of clause 42.
2. Payment of the penalties imposed by Order 1 be made within 60 days.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
TRACEY J
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Ratio Decidendi
Legal Principle Established
Established by:
TRACEY J
The parties have agreed that the breaches of particular terms led to the following underpayments:(a)Underpayment of wages for ordinary hours:(i) Clause 12.5.3: $21,711.17(ii) Clause 15.1: $3,486.60(b)Underpayment of wages for overtime hours Monday to Friday:(i) Clauses 12.5.4 and 37.2: $38,233.64(ii) Clause 37.2: $23,468.85(c)Underpayment of wages for Saturday hours:(i) Clauses 12.5.4, 33.2.1 and 37.2: $2,223.45(ii) Clauses 33.2.1 and 37.2: $460.82(d)Underpayment of wages for Sunday hours:(i) Clauses 12.5.4 and 35: $4,838.39(ii) Clause 35: $1,941.87(e)Underpayment of wages for public holiday hours:(i) Clauses 12.5.4 and 42.7.1: $79.09(ii) Clause 42.6.1: $220.88CONSIDERATION In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Mowbray FM identified “a non-exhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of the penalty”. Those considerations were derived from a number of decisions of this Court. I gratefully adopt, as potentially relevant and applicable, the various considerations identified by him. They were:·The nature and extent of the conduct which led to the breaches.·The circumstances in which that conduct took place.·The nature and extent of any loss or damage sustained as a result of the breaches.·Whether there had been similar previous conduct by the respondent.·Whether the breaches were properly distinct or arose out of the one course of conduct.·The size of the business enterprise involved.·Whether or not the breaches were deliberate.·Whether senior management was involved in the breaches.·Whether the party committing the breach had exhibited contrition.·Whether the party committing the breach had taken corrective action.·Whether the party committing the breach had cooperated with the enforcement authorities.·The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and·The need for specific and general deterrence.The parties accepted that these considerations should guide the exercise of my discretion in the present proceeding.The nature and extent of the conduct The various breaches of Award terms which occurred in this case can all be traced to a single source. That source was the decision, made by the first respondent, to offer Mr Paynting employment at an hourly rate. Mr Paynting accepted that offer. Throughout the relevant period Mr Paynting was paid, either at the originally agreed rate, or, subsequently, at higher agreed rates. The wages paid to Mr Paynting were calculated on the basis of the agreed hourly rates. Over a period of a little more than five years this led to the underpayment of $96,664.76 in wages which would have been paid to him had the Award requirements been observed. This underpayment represented about a third of Mr Paynting’s wages entitlement under the Award. The amount is significant. Although the shortfall was paid in full to Mr Paynting in April 2007 he was deprived of the financial benefits which timely payment of the correct wages would have provided.Circumstances in which the conduct took place