KIYAMA v MTN Top Pty Ltd and Ors
[2020] FCCA 1205
•10 June 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KIYAMA v MTN TOP PTY LTD & ORS | [2020] FCCA 1205 |
| Catchwords: INDUSTRIAL LAW – Application for summary judgment – accessorial liability – whether contravention of Fair Work Act 2009 (Cth) – failure to pay entitlements – absence of clear pleading – directions for filing of documents – provision for hearing. |
| Legislation: Fair Work Act 2009 (Cth), ss.44, 45, 87(1)(a), 125(1), 325(1), 345, 550(1) Federal Circuit Court of Australia Act 1999 (Cth), s.17A |
| Cases cited: EZY Accounting 123 Pty Ltd v Fair Work Ombudsman (2018) 360 ALR 261 | ||
| Applicant: | HITONARI KIYAMA | |
| First Respondent: | MTN TOP PTY LTD (ABN 41 926 761 100) |
| Second Respondent: | MING GAO |
| Third Respondent: | QING LAI TRADING AS Q & T ACCOUNTANTS (ABN 37 007 151 891) |
| File Number: | BRG 514 of 2019 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 18 February 2020 |
| Date of Last Submission: | 18 February 2020 |
| Delivered at: | Brisbane |
| Delivered on: | 10 June 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Moxon |
| Solicitors for the Applicant: | Behlau Murakami Grant ILP Pty Ltd |
| No appearance on behalf of the First Respondent: |
| Counsel for the Second Respondent: | Mr Fronis |
| Solicitors for the Second Respondent: | Sun & Co Lawyers |
| Solicitors for the Third Respondent: | Ace Law |
ORDERS
THE COURT DECLARES THAT:
Pursuant to s.550 of the Fair Work Act 2009 (Cth) (the Act) the second respondent was involved in the first respondent’s contraventions of:
(a)s.44 of the Act, by:
(i)failing to provide the applicant with a fair work information statement;
(ii)failing to provide the applicant with payslips;
(iii)failing to pay the applicant his unused annual leave entitlement when his employment ended; and
(b)s.45 of the Act, by failing to pay the applicant laundry allowance in accordance with his entitlement pursuant to the Restaurant Award 2010;
THE COURT ORDERS THAT:
By 4:00pm on 26 June, 2020 the applicant file and serve any amended statement of claim upon which he intends to rely in these proceedings;
by 4:00pm on 10 July, 2020 the second respondent file and serve any amended defence upon which he intends to rely;
by 4:00pm on 24 July, 2020 the applicant file and serve any further affidavits of evidence in chief upon which he intends to rely at the trial of these proceedings;
by 4:00pm on 7 August, 2020 the second respondent file and serve any further affidavits of evidence in chief upon which he intends to rely at the trial of these proceedings;
The application is adjourned to 21 August 2020 at 9:30am for directions.
| IN THE FEDERAL CIRCUIT COURT OF AUSTRALIA |
BRG 514 of 2019
| HITONARI KIYAMA |
Applicant
And
| MTN TOP PTY LTD (ABN 41 926 761 100) |
First Respondent
| MING GAO |
Second Respondent
| QING LAI TRADING AS Q & T ACCOUNTANTS (ABN 37 007 151 891) |
Third Respondent
REASONS FOR JUDGMENT
The applicant applies for summary judgment against the second respondent pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 (Cth) and r.13.07 of the Federal Circuit Court Rules 2001 (Cth). The applicant seeks judgment “principally” on the basis of admissions and deemed admissions in the second respondent’s defence.
The claim against the first respondent arises from alleged contraventions of the Fair Work Act 2009 (Cth). The claim against the second respondent is that he is liable as an accessory because, for the purposes of s.550(1) of the Fair Work Act, he was involved in the first respondent’s contraventions.
The first respondent has not participated in these proceedings. It was deregistered in August, 2019. The second respondent has appeared in the proceedings and filed a defence. So too, the third respondent. The second and third respondents are separately represented. This application proceeds against the second respondent only.
Having regard to the parties’ written and oral submissions, there is no dispute between them about the principles to be applied in on a summary judgment application such as this. Nor is there dispute about the principles to be applied in determining the second respondent’s accessorial liability.
As to the former matter the principles urged upon me by the parties are found in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 and repeated in Vassallo Constructions Pty Ltd v Andergrove Lakes Pty Ltd [2014] FCA 862 at [11]-[12]. The second respondent also referred to a number of other authorities from which the summaries that appear in Jefferson Ford and Vassallo Constructions were collected.
As to the question of accessorial liability, the parties agree that the relevant principles are summarised in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176] and approved in EZY Accounting 123 Pty Ltd v Fair Work Ombudsman (2018) 360 ALR 261 at [11].
These are the orders that the applicant seeks on this application:
1. The Court declare pursuant to s 550 of the Fair Work Act 2009 (Cth) (the Act) that the second respondent was involved in the first respondent’s contraventions of:
a. s 44 of the Act, by:
i. failing to provide the applicant with a fair work information statement;
ii. failing to provide the applicant with payslips;
iii. failing to pay the applicant his unused annual leave entitlement in the amount of $20,756.40 when his employment ended;
b. s 45 of the Act, by:
i. failing to pay the applicant laundry allowance in the amount of $876;
ii. failing to pay the applicant overtime in the amount of $57,168.29;
c. s 325(1) of the Act, by;
i. requiring the applicant to pay $440 per week to the second respondent between 14 January 2014 and 14 March 2016, in an amount of $49,720;
ii. requiring the applicant to pay $340 per week to the second respondent between 14 March 2016 and 31 October 2016, in the amount of $10,880;
iii. requiring the applicant to pay $11,545 for visa processing fees;
iv. requiring the applicant to pay $56,512.15 in taxation and superannuation contributions
d. s 325(1A) of the Act, by requiring the applicant to pay $9,000 for visa processing fees; and
e. s 345 of the Act, by making statements that payment of the amounts in paragraphs (c) and (d) above were required as an incident of the applicant’s employment.
2. Pursuant to s 17 A of the Federal Circuit Court Act 2001 (Cth) or alternatively r 13.07 of the Federal Circuit Court Rules 2001 (Cth), and s 545(1) of the Act, there be judgment for the applicant against the second respondent in the sum of $216,157.84.
3. Pursuant to s 546(1) of the Act, the second respondent pay pecuniary penalties to the applicant in an amount to be fixed.
4. The proceeding be listed on a date to be fixed for the determination of any pecuniary penalty payable by the second respondent.
5. In the alternative, paragraph six of the defence of the second respondent filed 3 December 2019 be struck out.
The second respondent consents to orders in terms of paragraph 1a above, save that the agreed declaration does not go so far as to specify the amount of the unused annual leave entitlement the applicant was not paid.
The pleadings
It is common ground between the applicant and the second respondent that the applicant was employed by the first respondent between 14 January, 2014 and 31 October, 2016 in the first respondent’s restaurant business. The applicant held, from time to time, an employer sponsored visa which entitled him to stay and work in Australia. There is a dispute on the pleadings as to whether the applicant was covered by the Hospitality Industry (General) Award 2010 or the Restaurant Award 2010 in his employment. However, the applicant accepts now that the appropriate award is the latter. There is no dispute that he was employed in the classification of Cook Grade 2 (Level 3 Employee).
The second respondent was the sole director of the first respondent. He was responsible for the first respondent’s compliance with immigration and visa obligations insofar as it concerned the applicant’s employer-sponsored visa. He was responsible for remuneration arrangements for the first respondent’s employees, including the applicant, which included the withholding of income tax, the payment of superannuation and the issuing of payslips. He was involved in the management of the first respondent’s employees and specifically the applicant. All these matters are admitted by the second respondent (see paragraph 1 of the defence).
It is uncontentious that in about December, 2013 and prior to the applicant commencing his employment with the first respondent, the first and second respondents directed the applicant to pay to the first respondent $9,000 in consideration for the applicant’s employer-sponsored visa application which was to be processed by the first respondent (see paragraph 12 of the statement of claim and paragraph 1 of the second respondent’s defence).
It is common ground between the applicant and the second respondent that over the period of the applicant’s employment, there were three written employment contracts entered into between him and the first respondent. They required the applicant to work for at least 38 hours per week (see paragraph 6 of the statement of claim and paragraph 1 of the second respondent’s defence).
The applicant alleges that:
a)from 14 January, 2014 to 14 March, 2016 he was directed by the second respondent to work from Tuesday to Sunday (inclusive) with the stand down period between 2:30pm and 4:30pm each day for a total of 57 hours of work per week;
b)from 15 March, 2016 to 31 October, 2016 he was directed by the second respondent to work from Tuesdays to Sundays (inclusive) without any stand down during those days, from 9:00am until 8:30pm for a total of 69 hours of work per week.
The second respondent does not admit these allegations. His non-admission of those allegations does not meet the requirements of r.16.07(3) of the Federal Court Rules 2011 (Cth) for pleading a non-admission (which rules apply to these proceedings by reason of r.1.06 of the Federal Circuit Court Rules 2001 (Cth)). Absent an amendment to his pleading, he will be deemed to have admitted these allegations (see 6(c) of his defence). But, for reasons which I shall shortly explain, the deemed admissions are of no particular benefit to the applicant on this application.
There are disputes on the pleadings between the applicant and the second respondent about whether the second respondent directed the applicant to purchase tools of trade so that he could perform his work and whether he was directed to work in excess of eight hours each day. However, there is no dispute that the applicant was required and directed by the second respondent to launder his uniforms that he wore exclusively for the purposes of performing his work for the first respondent (see paragraphs 10(d) and 10(e) of the statement of claim and paragraph 7(c) of the second respondent’s defence).
Significantly, there is no dispute between the applicant and the second respondent on the pleadings that during the applicant’s employment, the second respondent directed the applicant to perform his work tasks; directed the applicant to pay $440 per week to the second respondent (during the period 14 January, 2014 to 14 March, 2016) and $340 per week to the second respondent (during the period 15 March, 2014 to 31 October, 2016) and directed the applicant to pay ten amounts by way of quarterly taxation and superannuation contributions to the first respondent (see paragraphs 13(d), 13(e) and 13(f) of the statement of claim and paragraph 8(c) of the second respondent’s defence).
The parties agree that during the applicant’s employment the first respondent did not provide to the applicant:
a)payslips for his wages;
b)penalty rates for working after 7:00pm;
c)a fair work information statement;
d)a laundry allowance;
e)overtime payments; and
f)allowances for use of personal equipment.
Thus, there is no dispute between the applicant and the second respondent that the first respondent contravened the Fair Work Act in the following ways:
a)by failing to provide him with a fair work information statement pursuant to s.125(1) of the Fair Work Act thereby contravening s.44 of the Fair Work Act;
b)by failing to provide to him payslips pursuant to s.536(1) of the Fair Work Act thereby contravening s.44 of the Fair Work Act; and
c)by failing to provide to him a period of four weeks annual leave per year pursuant to s.87(1)(a) and failing to pay to him an amount in respect of his untaken but accrued annual leave at the conclusion of his employment as required by s.90(2) of the Fair Work Act contravening s.44 of the Fair Work Act.
Relevantly, the applicant pleads against the second respondent:
Contraventions by the Second Respondent
37. Section 550(1) of the Act provides a person who is involved in a contravention of a provision of the Act is taken to have contravened that provision.
38. The Second Respondent either:
a. aided, abetted, counselled or procured the contraventions of sections 44, 45, 325(1), 325(1A) and 345(1) of the Act of the Act pleaded herein;
b. has directly or indirectly, been knowingly concerned or a party to the contraventions of sections 44, 45, 325(1 ), 325(1A) and 345(1) of the Act pleaded herein; and
c. has conspired with others to effect the contraventions of sections 44, 45, 325(1), 325(1A) and 345(1) of the Act pleaded herein;
contravening section 550( 1) of the Act.
Particulars
a. During the Employment Period, the Second Respondent was at all times a Director of the First Respondent company.
b. During the Employment Period, the Second Respondent was concerned with the direct management and control of the Applicant.
c. During the Employment Period, the Second Respondent provided the Applicant with directions in relation to places of work, times of work, and the tasks to be undertaken.
d. During the Employment Period, the Second Respondent advised the Applicant on rates of pay, changes to pay arrangements, and interpretation of employment contracts.
e. During the Employment Period, the Second Respondent was the officer responsible for enquiries about pay, visa and immigration arrangements, point of contact for employment condition enquiries for the Applicant.
f. During the Employment Period, the Second Respondent was aware of, and made decisions about, the payment of the Applicant’s wages, including but not limited to, making representations about the why monies needed to be returned to the First Respondent.
g. During the Employment Period, the Second Respondent made representations about the rights, obligations and entitlements of the Applicant.
The second respondent does not plead to these matters other than to say that they are not material facts but are conclusions of law. However, earlier in the pleading the applicant pleads:
4. The Second Respondent, at all material times:
a. was a Director of the First Respondent;
b. controlled, or influenced, the management of the Respondent’s Business;
c. was responsible for managing payment of wages to employees;
d. managed the First Respondent’s compliance with immigration and visa obligations as the employer of employer-sponsored visa holders;
e. was responsible for withholding income tax, superannuation and the issuing of pay-slips to the First Respondent’s employees; and
f. was involved in the management of the Applicant as an employee of the First Respondent.
The second respondent expressly admits that paragraph (see paragraph 1 of the defence).
On the hearing of this application, the second respondent relied upon an affidavit deposed by him and filed on 17 February, 2020. He does not suggest in his evidence that there was any other person who was responsible for the management of the first respondent or who took any of the relevant decisions about which the applicant complains in his pleading in which the second respondent admits. It is beyond argument, I think, that to the extent that the first respondent might be found to have contravened the Fair Work Act as the applicant alleges, the second respondent was involved in any such contravention for the purposes of s.550 of the Fair Work Act. Indeed, the orders to which the second respondent now consents underscores that proposition.
I will now deal with each of the orders sought by the applicant in turn.
As I have indicated above, the applicant consents to orders in terms of paragraph 1.a. set out above.
By order 1.b.i. the applicant seeks a declaration in respect of the first respondent contraventions of s.45 of the Act by failing to pay the applicant laundry allowance in the amount of $876 and failing to pay him overtime in the amount of $57,168.29. I decline to make either of those declarations. As I have set out above, the applicant pleads that the second respondent required him to work certain hours. Nowhere does he plead that he in fact worked those hours. It may be the case that the implication is that he worked all of the hours that he was directed to work by the second respondent and never departed from them, but he does not plead that in his statement of claim. Nor does he say that he worked those hours in the affidavit that he filed in support of this application (affidavit of the applicant filed on 31 January, 2020). The closest the applicant’s evidence comes is in paragraph 18 of his affidavit where he deposes that he had to be at the restaurant before it opened to prepare food for the day and make sure the kitchen was ready. At the end of the day, he says he had to make sure the kitchen was clean and ready for the next day. It says nothing about the hours that he in fact worked.
I am prepared to make a declaration that the second respondent was involved in the first respondent’s contravention of s.45 of the Fair Work Act by failing to pay the applicant laundry allowance. I am not satisfied on the applicant’s pleading nor on his evidence of the amount to which he might be entitled by way of laundry allowance.
I am not satisfied on either the pleading or the evidence that I can make an order relating to the overtime claimed by the applicant, for the same reasons as outlined above. There is no pleading by the applicant of how much overtime he in fact performed and no evidence by him to support that pleading. Even if I take the view that the allegations about the applicant being directed to work for certain hours is deemed to be admitted, the applicant’s pleading and evidence do not demonstrate that he actually worked the claimed hours thereby generating the entitlement to the overtime claimed by him.
The applicant seeks declarations in respect of the first respondent’s contraventions of s.325(1) of the Fair Work Act. That section is in the following terms:
Unreasonable requirements to spend or pay amount
(1) An employer must not directly or indirectly require an employee to spend, or pay to the employer or another person, an amount of the employee’s money or the whole or any part of an amount payable to the employee in relation to the performance of work, if:
(a) the requirement is unreasonable in the circumstances; and
(b) for a payment--the payment is directly or indirectly for the benefit of the employer or a party related to the employer.
Note: This subsection is a civil remedy provision (see Part 4-1).
The pleadings establish that the second respondent admits that the first respondent (and the second respondent) required the applicant to pay amounts of his own money to others, including the first and second respondents both before and during his employment. Before his employment commenced he was required by the first and second respondents to pay $9,000 for the “Employer-sponsored Visa application to be processed by the First Respondent” (paragraph 12 of the statement of claim). During his employment he was required to make payments to the second respondent on a weekly basis as pleaded in paragraphs 13(d) and 13(e) of the statement of claim as well as payments to the first respondent for quarterly taxation and superannuation contributions as pleaded in paragraph 13(f) of the statement of claim. He alleges in paragraph 13(g) of the statement of claim that he was required to pay to the first respondent $5,000 in February, 2015 and further $6,545 for the “First Respondent’s visa processing fees”.
The pleadings establish the requirement to pay made of the applicant by the first and second respondents in respect of the visa processing fees (paragraphs 12, 13 d., 13e. and 13g. of the statement of claim). However, the applicant does not plead any material facts to establish that the requirement to pay those amounts was unreasonable in the circumstances and that the required payments were directly or indirectly for the benefit of the employer or a party related to the employer. There is no pleading of a benefit, either direct or indirect, to the employer or a related party. One is left to infer it.
In paragraph 33 of his statement of claim the applicant pleads in a compendious way that on the basis of the matters pleaded in paragraphs 13(d), 13(e), 13(f) and 13(g) the first respondent unreasonably required the applicant to pay a particular total sum of money to the benefit of the first respondent. That pleading and the particulars to paragraph 33 are inconsistent with what is in fact pleaded in the relevant subparagraphs of paragraph 13 of the statement of claim. For example particular a. of paragraph 33 suggests that the requirement was to pay $440 per week of the applicant’s wages to the first respondent whereas the pleading in paragraph 13d. was that a payment of $440 per week was to be made to the second respondent. Moreover, the particulars are inconsistent with the pleading in paragraph 33 because they refer to matters beyond the primary allegation.
In his affidavit read for the purposes of this application the applicant swears that the second respondent told him that he had to pay the various amounts particularised in paragraph 13 of his statement of claim. His evidence is that he had to make the weekly payments to the second respondent. His evidence is that he paid the money but that he never received anything in return for the payments. His evidence is that the second respondent told him that he had to pay the money because the first respondent was sponsoring his visa and it was a cost of sponsoring him.
The second respondent does not deny the conversations in his evidence in reply. At best, he says that he never received any payments. The submissions made on behalf of the second respondent focused on the factual dispute that the second respondent says exists with respect to the question of payment. But that dispute is not to the point. Section 325 of the Act circumscribes the making of a requirement to pay an unreasonable amount which is for the benefit of the employer or a party related to the employer - actual payment is not required. Thus, the dispute about whether the payment was made is not relevant for present purposes.
But the absence of a clear pleading that the requirement to make the payments was unreasonable in the circumstances and was for the benefit of the employer or a related party robs the statement of claim of any efficacy on this point. I am not satisfied that that requirement was either unreasonable or to the benefit of the first respondent or a party related to the first respondent on the basis of the pleadings or the evidence that the requirement was unreasonable. Without a visa the applicant could neither remain in the country nor work. It was his visa not that of the first respondent. Prima facie, I would expect that he would meet the costs of his own visa. But that highlights the problem with the pleading. There is no plea that requiring the applicant to meet the visa costs was unreasonable in the circumstances (and there is no identification of the relevant circumstances) nor is there any plea of benefit to the first respondent or any party related to the first respondent.
The applicant suggests that the requirement to pay the first respondent’s visa processing fees is prima facie in contravention of ss 245AR and 245AS of the Migration Act 1958 (Cth), but again, the pleading fails to plead the material facts necessary to engage with of those sections.
Although in his evidence the second respondent denies having told the applicant that he had to make taxation and superannuation contributions as the applicant alleges, he has admitted the requirement to make those payments in his defence. No application was made for leave to withdraw that admission. But the admission only goes so far. It does not establish that the payments that the applicant was required to make were for his employer’s benefit. If he was paid a gross amount then it might be the case that requiring him to pay the tax and superannuation back to the employer so that it could be forwarded to the tax office was reasonable. But none of that is pleaded. There is simply no allegation of material fact that wold support the making of an order on a summary basis as the applicant seeks.
I am not prepared to make the declaration sought in orders 1.c. of the statement of claim on a summary basis.
For the same reasons, I am not prepared to make a declaration as sought in paragraph 1.d. of the applicant’s application in a case.
The last declaration sought by the applicant deals with s.345 of the Act. That section is in the following terms:
Misrepresentations
(1) A person must not knowingly or recklessly make a false or misleading representation about:
(a) the workplace rights of another person; or
(b) the exercise, or the effect of the exercise, of a workplace right by another person.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.
The applicant relies upon “the premises of paragraphs 12, 13(d), 13(e), 13(f), 13(g) and 13(h)” to allege that “by making the statements regarding pay and conditions which were either false or misleading” the first and second respondents contravened s.345(1) of the Act. The allegations is denied by the second respondent and so is in issue.
The applicant does not plead in his statement of claim that:
a)the representations were false or misleading and if so, in what way;
b)the representations were made knowing that they were false or recklessly not caring whether they were false; or
c)the representations were in respect of the workplace rights of the applicant, and if so which workplace rights.
There are no material facts pleaded which would engage s.345 of the Act. Moreover, if the making of the requirement to make the relevant payments did not engage s.325 of the Act, the pleaded allegations about the applicant being required to make such payments would not engage s.345(1) of the Act. I decline to make the declaration sought.
Conclusion
The applicant has pursued this case on the basis that the pleadings establish his claims. But his own pleading is seriously deficient, although not irretrievably so.
It follows from what I have said above that I am not prepared to give judgment in the applicant’s favour for an identified sum. It is not clear on either his pleadings or his evidence just what it is that is owed to him. It is clear that by reason of the declarations that I am prepared to make to make the second respondent will be liable for some pecuniary penalties but the fixing of those penalties must await the resolution of the balance of the case.
In my view, the appropriate course is to make the declarations that I have I have foreshadowed in which I have set out at the commencement of these reasons and to invite the parties to tender to bring into court a directions order for the filing and serving of any amended pleadings and further affidavits of evidence in chief by the applicant or second respondent the respondents and for the listing of a matter for a trial of the outstanding factual issues.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 10 July 2020
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