Labour Hire Licensing Authority v A L Star Express Pty Ltd
[2023] VSC 711
•30 November 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
EMPLOYMENT AND INDUSTRIAL LIST
S ECI 2023 01878
BETWEEN:
| LABOUR HIRE LICENSING AUTHORITY | Plaintiff |
| v | |
| A L STAR EXPRESS PTY LTD (ACN 636 621 835) | Defendant |
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JUDGE: | Ierodiaconou AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 31 August 2023, supplementary notes filed by the plaintiff on 31 August 2023 and 29 November 2023 |
DATE OF JUDGMENT: | 30 November 2023 |
CASE MAY BE CITED AS: | Labour Hire Licensing Authority v A L Star Express Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2023] VSC 711 |
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EMPLOYMENT AND INDUSTRIAL LAW — Labour Hire Licensing Authority — Labour hire provider supplied labour hire services without a licence — Declaratory relief — Pecuniary penalties — Contraventions of civil penalty provision — Declaratory relief granted — Pecuniary penalties imposed — Labour Hire Licensing Act 2018 (Vic) ss 7, 9, 13.
PRACTICE AND PROCEDURE — Judgment in default of appearance — Allegations contained in the statement of claim treated as admissions — Whether relief sought in the statement of claim can be granted — Foris GFS Australia Pty Ltd v Manivel [2022] VSC 482 — Macquarie Bank Ltd v Seagle (2005) 146 FCR 400 — Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 21.04.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Hartley | Slater & Gordon Limited |
| No appearance for the Defendant |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Summary.............................................................................................................................................. 1
Material relied upon.......................................................................................................................... 1
Jurisdiction.......................................................................................................................................... 1
The relief sought by the Authority................................................................................................. 2
Background......................................................................................................................................... 2
Alleged contraventions in relation to Cochrane, D’Alberto, and Santospirito.................... 2
Star’s application for a licence........................................................................................... 2
The Veggie Cutter Pty Ltd applies for a licence and subsequently withdraws......... 3
Contracts or arrangements between Star, Veggie, Cochrane, D’Alberto, and Santospirito.................................................................................................................................... 4
The workers supplied and their source............................................................................ 6
Invoicing............................................................................................................................... 6
The supplies and the business of Star and Veggie......................................................... 7
Alleged contraventions in relation to Nellie Kelly................................................................... 7
Star-Nellie Kelly Arrangement.......................................................................................... 7
Applicable Law................................................................................................................................... 8
The Authority’s statement of claim.............................................................................................. 11
Analysis.............................................................................................................................................. 12
Did Star supply individuals to Veggie to perform work in and as part of Veggie’s business or undertaking?...................................................................................................................... 12
Was the supply of individuals done in the course of Star conducting its own business? 12
Was there an arrangement in force between Star and the individuals supplied under which Star supplied, or may supply, the individuals to one or more other persons to perform work?.............................................................................................................................................. 12
Was Star obliged to pay the individuals (in whole or in part) for the performance of their work, whether directly or through one or more intermediaries?.......................................... 12
Did Star supply individuals to Nellie Kelly to perform work in and as part of Nellie Kelly’s business or undertaking?................................................................................................. 12
Was the supply of individuals done in the course of Star conducting its own business? 13
Was there an arrangement in force between Star and the individuals supplied under which Star supplied, or may supply, the individuals to Nellie Kelly to perform work?........... 13
Was Star obliged to pay the individuals (in whole or in part) for the performance of their work, whether directly or through one or more intermediaries?.......................................... 13
Should declaratory relief be granted?.......................................................................................... 14
Should pecuniary penalties be imposed?................................................................................... 15
Application of s 93(5) of the Act............................................................................................... 16
Nature and extent of the contravention......................................................................... 16
Nature and extent of any loss or damage suffered as a result of the contravention 16
Circumstances in which the contravention took place................................................ 17
Other considerations......................................................................................................... 17
Penalty Amount................................................................................................................. 18
Conclusion......................................................................................................................................... 20
HER HONOUR:
Introduction
The plaintiff, namely the Labour Hire Licensing Authority (the ‘Authority’), seeks declaratory and pecuniary relief against the defendant, A L Star Express Pty Ltd (‘Star’).
On 31 August 2023, the plaintiff obtained judgment in default of the defendant’s appearance. This determination concerns the relief consequential to the judgment in default.
Summary
I will declare that Star has contravened the Labour Hire Licensing Act 2018 (Vic) (the ‘Act’). I will make orders that Star pay civil penalties according to the Act. The total amount of civil penalties imposed on Star is $617,916.00.
Material relied upon
The Authority relies upon the affidavits of service of Geoffrey Borenstein, solicitor, affirmed on 25 July 2023 and 17 August 2023 (the ‘first Borenstein affidavit’ and the ‘second Borenstein affidavit’ respectively), the affidavits of service of Emma Harper, solicitor, affirmed on 25 July 2023 and 17 August 2023 (the ‘first Harper affidavit’ and the ‘second Harper affidavit’ respectively), and the affidavit of Barry Joseph Terzic, in house solicitor for the Authority, affirmed on 28 November 2023.
The Authority filed written submissions on 30 August 2023 and, at the Court’s request, filed two supplementary notes on 31 August 2023 and 29 November 2023.
The defendant did not file any affidavit material or written submissions.
Jurisdiction
The Supreme Court of Victoria has jurisdiction to make orders concerning pecuniary penalties or any other order it considers appropriate pursuant to s 93(2) of the Act.[1]
[1]For further discussion of the jurisdiction of the Supreme Court of Victoria in relation to s 93(2) of the Labour Hire Licensing Act 2018 (Vic), see Labour Hire Licensing Authority v UNG Services Pty Ltd & Anor [2022] VSC 740, [7]-[8] (‘UNG’).
As an Associate Justice of this Court, I have power to make the orders sought by the Authority as it has obtained a default judgment. I refer to s 17(1A) of the Supreme Court Act 1986 (Vic) and Order 77 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the ‘Rules’).
The relief sought by the Authority
The Authority seeks the following relief against Star:
(a) declarations that Star contravened s 13 of the Act; and
(b) orders, pursuant to s 93(2) of the Act, that Star pay pecuniary penalties because it contravened s 13 of the Act.
Section 93(7) of the Act provides that an application under s 93 must be made within six years of the contravention. The proceeding is within time. The alleged contraventions occurred approximately two years ago.
Background
The following sections summarise the facts alleged in the Authority’s statement of claim (the ‘statement of claim’). Due to the defendant’s default, the allegations are treated as admissions.[2]
[2]Foris GFS Australia Pty Ltd v Manivel [2022] VSC 482 (per Elliot J), [30] (‘Foris’).
Alleged contraventions in relation to Cochrane, D’Alberto, and Santospirito
Star’s application for a licence
On or about 10 October 2019, Star lodged with the Authority an application for a licence authorising Star to provide labour hire services (the ‘Star application’).[3] The Star application stated that:
[3]Plaintiff’s Statement of Claim filed on 5 May 2023, [3] (‘SoC’).
(a) Star intended to conduct a labour hire services business in Victoria which was not yet in operation;[4]
[4]Ibid, [4(a)].
(b) Star intended to provide labour hire services in the horticultural industry;[5]
(c) Star would supply eight workers to hosts in the next twelve months, all of whom would be employees;[6] and
(d) those employees would be covered by the Horticulture Award 2020 (Cth).[7]
[5]Ibid, [4(b)].
[6]Ibid, [4(c)].
[7]Ibid, [4(d)].
On 28 June 2021, the Authority decided to refuse to grant Star a labour hire licence.[8] The Authority subsequently issued to Srey Touch Chhean, in her capacity as director of Star, a ‘Notification of refusal to grant a licence under the [Act]’ (the ‘refusal notice’).[9] The refusal notice stated, under the heading ‘Providing labour hire services without a licence’, the following:[10]
Providing labour hire services without a current licence is a breach of s 13 of the Act and can attract significant financial penalties. Accordingly, if you are currently operating a labour hire business, you must cease doing so immediately.
[8]Ibid, [5(a)].
[9]Ibid, [5(b)].
[10]Ibid, [6].
The Veggie Cutter Pty Ltd applies for a licence and subsequently withdraws
On or about 29 October 2019, The Veggie Cutter Pty Ltd (ACN 163 548 490) (‘Veggie’) lodged with the Authority an application for a licence authorising Veggie to provide labour hire services (the ‘Veggie application’).[11]
[11]Ibid, [7].
The Veggie application stated that:
(a) Veggie was, then, currently conducting a labour hire services business in Victoria;[12]
[12]Ibid, [8(a)].
(b) Veggie was, then, providing labour hire services in the horticultural industry;[13]
[13]Ibid, [8(b)].
(c) Veggie either had supplied nine workers to hosts in the previous twelve months, or would supply nine workers to hosts in the next twelve months;[14]
(d) of those workers, three were employees and one was an independent contractor;[15] and
(e) those workers were or would be covered by the Horticulture Award 2020 (Cth).[16]
[14]Ibid, [8(c)].
[15]Ibid, [8(d)].
[16]Ibid, [8(e)].
Section 117(2) of the Act had the effect that, so far as Veggie supplied labour hire services without a licence, it nevertheless did not contravene s 13 of the Act for as long as the Veggie application was pending.
The outcome of Veggie’s application is not determinative of this application and was not pleaded. It is included below as part of the background facts.
On 6 July 2023, the Authority communicated to Veggie that it intended to grant Veggie a licence with conditions.[17]
[17]Affidavit of Barry Joseph Terzic affirmed on 28 November 2023, [12(1)] (‘Terzic affidavit’).
On 16 August 2023, the solicitors acting for Veggie communicated to the Authority that Veggie intended to withdraw its application for a licence.[18]
[18]Ibid, [12(2)].
On 16 August 2023, the Authority communicated to Veggie that it had processed Veggie’s request to withdraw its application for a licence.[19]
[19]Ibid, [12(3)].
Contracts or arrangements between Star, Veggie, Cochrane, D’Alberto, and Santospirito
On or about 10 October 2019, Star and Veggie entered into a contract or arrangement (the ‘Star-Veggie Contract’) whereby:
(a) Star agreed to supply workers to Veggie to perform horticultural work, being or including the picking and packing of fruit, vegetables, and/or flowers (‘Horticultural work’);[20] and
(b) Star was entitled to charge to Veggie an hourly fee of $25.50 per worker per hour of work.[21]
[20]SoC, [10(a)].
[21]Ibid, [10(b)].
On or about 1 August 2021, Veggie and Thirty Second Natbarb Pty Ltd (ACN 006 059 687), being the trustee for the James Brian Cochrane Family Trust, trading as ‘Jim Cochrane Farms‘ (ABN 93 885 762 065) (‘Cochrane’), entered into a contract or agreement (‘Veggie-Cochrane contract’) whereby:
(a) Veggie agreed to supply workers to Cochrane to perform Horticultural work;[22] and
(b) Cochrane agreed to pay to Veggie $32.85 per worker per hour of work.[23]
[22]Ibid, [11(a)].
[23]Ibid, [11(b)].
On or about 1 July 2020, Veggie and D’Alberto Farms Pty Ltd (ACN 088 998 136) trading as ‘D’Alberto Egg Farm’ (‘D’Alberto’) entered into a contract or arrangement (‘Veggie-D’Alberto Contract’) whereby:
(a) Veggie agreed to supply workers to D’Alberto to perform Horticultural work;[24] and
(b) D’Alberto agreed to pay to Veggie $17.00 per worker per hour of work.[25]
[24]Ibid, [12(a)].
[25]Ibid, [12(b)].
On or before 27 October 2021, Veggie and I, C & J Santospirito Pty Ltd (ACN 052 485 533) (‘Santospirito’) entered into a contract or arrangement (‘Veggie-Santospirito arrangement’) whereby:
(a) Veggie agreed to supply workers to Santospirito to perform Horticultural work;[26] and
(b) Santospirito agreed to pay to Veggie $25.50 per worker per hour of work.[27]
[26]Ibid, [13(a)].
[27]Ibid, [13(b)].
The workers supplied and their source
Between about 27 September 2021 and 31 December 2021, Veggie had one employee, or possibly two employees.[28] Star was the only entity that supplied workers to Veggie for the purpose of on-supply.[29]
[28]Ibid, [14(a)].
[29]Ibid, [14(b)].
Between about 27 September 2021 and 31 December 2021, Veggie supplied workers to Cochrane (the ‘Cochrane workers’), D’Alberto (the D’Alberto workers’) and Santospirito (the ‘Santospirito workers’) to perform Horticultural work.[30]
[30]Ibid, [14(c)]-[14(e)].
None, alternatively not all, of the Cochrane workers, D’Alberto workers, and Santospirito workers, were employees of Veggie. All, alternatively some, of the Cochrane workers, D’Alberto workers, and Santospirito workers, were supplied to Veggie by Star.[31]
[31]Ibid, [14(f)]-[14(k)].
Invoicing
Cochrane prepared, for Veggie, invoices dated October 2021–December 2021, and covering the weeks ending 1 October 2021–31 December 2021, for the supply of workers by Veggie to Cochrane to perform Horticultural work.[32]
[32]Ibid, [15].
Veggie issued to D’Alberto invoices dated 1 October 2021–31 December 2021, and covering the weeks ending 1 October 2021–31 December 2021, for the supply of workers by Veggie to D’Alberto to perform Horticultural work.[33]
[33]Ibid, [16].
Veggie issued to Santospirito invoices dated 1 October 2021–31 December 2021, and covering the weeks ending 1 October 2021–31 December 2021, for the supply of workers by Veggie to Santospirito to perform Horticultural work.[34]
[34]Ibid, [17].
Star issued invoices to Veggie around each week between around 8 October 2021 and 21 December 2021 in respect of the supply of workers by Star to Veggie, being or including the Cochrane workers, the D’Alberto workers, and/or the Santospirito workers (the ‘Star invoices’).[35]
[35]Ibid, [18].
The Star invoices were paid by Veggie.[36]
[36]Ibid, [19].
The supplies and the business of Star and Veggie
Between around 27 September 2021 and 31 December 2021, Veggie’s business or undertaking was, or included, supplying workers to other entities to perform Horticultural work.[37]
[37]Ibid, [20(a)].
Star supplied the Cochrane workers, the D’Alberto workers and/or the Santospirito workers to Veggie to perform work as part of Veggie’s business or undertaking.[38]
[38]Ibid, [20(b)]-[20(d)].
Alleged contraventions in relation to Nellie Kelly
Star-Nellie Kelly Arrangement
Between around 29 June 2021 and 2 August 2021, there was a contract or arrangement between Star and Nellie Kelly Passionfruit Nurseries Pty Ltd (ACN 006 223 070) (‘Nellie Kely’) (‘Star-Nellie Kelly arrangement’) whereby:
(a) Star agreed to supply workers to Nellie Kelly to perform Horticultural work;[39] and
(b) Nellie Kelly agreed to pay Star $31 per worker per hour of work.[40]
[39]Ibid, [37(a)].
[40]Ibid, [37(b)].
Between 29 June 2021 and around 1 August 2021, certain workers whose identities are not known to the Authority performed Horticultural work at Nellie Kelly’s premises (‘Nellie Kelly workers’).[41]
[41]Ibid, [38].
Star issued to Nellie Kelly invoices dated between 30 June 2021 and 2 August 2021, which invoices were issued in respect of ‘labor hire’ provided by Star to Nellie Kelly and paid by Nellie Kelly.[42]
[42]Ibid, [39].
Between around 29 June 2021 and 2 August 2021, an arrangement was in place between Star and each of the Nellie Kelly workers under which Star supplied, or may supply, each Nellie Kelly worker’s services to one or more other persons to perform work.[43] Star was obliged to pay each of the Nellie Kelly workers for the performance of work by each of them.[44]
[43]Ibid, [40(a)].
[44]Ibid, [40(b)].
Between around 29 June 2021 and 1 August 2021, Nellie Kelly’s business or undertaking was, or included, the growing and wholesaling of fruit and vegetable plants.[45] Star supplied the Nellie Kelly Workers to perform work as part of Nellie Kelly’s business or undertaking.[46] The supply of the Nellie Kelly workers to Nellie Kelly were made in the course of Star conducting a business.[47]
[45]Ibid, [42(a)].
[46]Ibid, [42(b)].
[47]Ibid, [43].
Applicable Law
Rule 21.04 of the Supreme Court (General Civil Procedure) Rules 2015 (the ‘Rules’) is applicable. It applies to a claim other than for recovery of a debt, damages or any property. If the plaintiff is entitled to a default judgment, r 21.04 of the Rules provides that “the Court may give judgment for the plaintiff upon the statement of claim.”
In Macquarie Bank Ltd v Seagle, Conti J of the Federal Court considered whether an applicant could obtain declarations and other relief against the respondent.[48] The applicant was entitled to judgment in default. The applicable Federal Court rule gave the Court power to “give judgment against the respondent for relief that: the applicant appears entitled to on the statement of claim; and the Court is satisfied it has power to grant”.[49] The applicant sought declaratory and other relief. The applicant submitted that the Court could grant the relief “so long as each element of the relevant civil wrong involved is properly and discretely pleaded in the statement of claim”.[50] Conti J accepted this submission in light of the objective of the applicable rule for default judgment “in providing for a ready and expedient means to dispose of uncontested litigation”.[51] The principle was recently applied in this jurisdiction by Elliot J in Foris v Manivel.[52]
[48](2005) 146 FCR 400.
[49]Ibid, 405 at [21] (emphasis in original).
[50]Ibid, 406 at [24].
[51]Ibid.
[52]Foris, [30(4)].
Section 13 of the Act is applicable and it provides as follows:
13 Licence required to provide labour hire services
A person must not provide labour hire services unless the person is the holder of a licence that is in force.
Note
Section 94 provides that this section is a civil penalty provision. Part 6 deals with civil penalty provisions.
Section 7 of the Act defines ‘provides labour hire services’ and it provides as follows:
7 Meaning of provides labour hire services—general definition
(1)A person (a provider) provides labour hire services if—
(a)in the course of conducting a business, the provider supplies one or more individuals to another person (a host) to perform work in and as part of a business or undertaking of the host; and
(b)the individuals are workers for the provider, within the meaning of section 9(1).
(2)For the purposes of subsection (1), a provider may provide labour hire services to a host regardless of the following—
(a)whether a contract has been entered into between the provider and the host;
(b)whether the individuals supplied by the provider are supplied—
(i)directly; or
(ii)indirectly through one or more intermediaries;
(c)whether the work performed is under the control of the provider or the host.
There is a question as to whether or not s 7 covers the situation alleged here with respect to the Cochrane workers, D’Alberto workers and Santospirito workers. That is, where the provider supplies the worker to a host who then on-supplies the workers to other entities. In other words, where the host themselves becomes a provider. Section 7 of the Act plainly covers this situation. Section 7(2) contemplates that the provider may supply the workers directly or through one or more intermediaries. It contains no exclusion. To read a limitation into s 7, thereby limiting the definition of ‘labour hire services’, would be contrary to the protective purpose of the legislation contained in s 1, and the objects of the Act contained in s 4. This is because a contrary interpretation may enable the avoidance of statutory obligations by the use of intermediaries.
I will refer briefly to the statutory context of s 7. It is contained in Part 1 of Division 2 of the Act. The plain construction described above is consistent with s 9. In particular, ss 9(1) and (2) envisages that a provider may supply workers to more than one host, and contemplates that the work may be performed ‘directly or indirectly through one or more intermediaries’. Division 2 contains exceptions in ss 10 and 11. They are not applicable.
Section 9(1) and (3) of the Act provides a definition of a ‘worker’ as follows:
9 Meaning of worker
(1) An individual is a worker, for a provider, if—
(a)an arrangement is in force between the individual and the provider under which the provider supplies, or may supply, the individual to one or more other persons to perform work; and
(b)the provider is obliged to pay the individual (in whole or part) for the performance of the work by the individual, whether directly or indirectly through one or more intermediaries.
…
(3)For the purposes of this section, an individual may be a worker for a provider regardless of the following—
(a)whether the individual is an employee of the provider;
(b)whether a contract has been entered into between the individual and the provider;
(c)whether the individual is an apprentice, or is under a training contract, within the meaning of the Education and Training Reform Act 2006.
The Authority’s statement of claim
In summary, the Authority alleges the following in its statement of claim:
(a) Star contravened s 13 of the Act, in that between around 27 September 2021 and 31 December 2021, it provided labour hire services to Veggie, for on supply to Cochrane, despite that Star was not a holder of a licence that was in force authorising it to provide labour hire services.
(b) Star contravened s 13 of the Act, in that between around 27 September 2021 and 31 December 2021, it provided labour hire services to Veggie, for on supply to D’Alberto, despite that Star was not a holder of a licence that was in force authorising it to provide labour hire services.
(c) Star contravened s 13 of the Act, in that between around 27 September 2021 and 31 December 2021, it provided labour hire services to Veggie, for on supply to Santospirito, despite that Star was not a holder of a licence that was in force authorising it to provide labour hire services.
(d) Star contravened s 13 of the Act, in that between around 29 June 2021 and 1 August 2021, it provided labour hire services to Nellie Kelly, despite that Star was not a holder of a licence that was in force authorising it to provide labour hire services.
Analysis
The effect of the default judgment is that the allegations are taken to be admitted. I am satisfied that the necessary elements to establish contravention of s 13 have been pleaded. The following drills down on each element.
Did Star supply individuals to Veggie to perform work in and as part of Veggie’s business or undertaking?
By paragraph 14 of the statement of claim: Star supplied individuals to Veggie. Veggie supplied the workers to Cochrane, D’Alberto and Santospirito.
Was the supply of individuals done in the course of Star conducting its own business?
By paragraph 21 of the statement of claim: Star supplied the Cochrane workers, D’Alberto workers and Santospirito workers to Veggie in the course of Star conducting its own business.
Was there an arrangement in force between Star and the individuals supplied under which Star supplied, or may supply, the individuals to one or more other persons to perform work?
By paragraphs 22, 24 and 26 of the statement of claim: there was an arrangement in place between Star and each of the Cochrane workers, D’Alberto workers and Santospirito workers it supplied.
Was Star obliged to pay the individuals (in whole or in part) for the performance of their work, whether directly or through one or more intermediaries?
By paragraphs 22, 24 and 26 of the statement of claim: Star was obliged to pay the Cochrane workers, D’Alberto workers and Santospirito workers for the performance of the work.
Turning now to Star and the Nellie Kelly workers.
Did Star supply individuals to Nellie Kelly to perform work in and as part of Nellie Kelly’s business or undertaking?
By paragraph 38 of the statement of claim: Star supplied individuals to Nellie Kelly.
Was the supply of individuals done in the course of Star conducting its own business?
By paragraph 43 of the statement of claim: Star supplied workers to Nellie Kelly in the course of Star conducting its own business.
Was there an arrangement in force between Star and the individuals supplied under which Star supplied, or may supply, the individuals to Nellie Kelly to perform work?
By paragraph 40 of the statement of claim: there was an arrangement in place between Star and each of the Nellie Kelly workers.
Was Star obliged to pay the individuals (in whole or in part) for the performance of their work, whether directly or through one or more intermediaries?
By paragraph 40 of the statement of claim: Star was obliged to pay the Nellie Kelly workers for the performance of their work.
There is another matter to be considered in respect of the alleged s 13 contraventions. That concerns s 117 of the Act and the exclusion of certain periods. Star applied for its licence within the ‘transition period’ as defined in s 116. The ‘transition period’ runs for six months following commencement. Section 13 came into effect on 29 April 2019. Star applied for its licence on 10 October 2019 and hence falls within the transition period. Section 117(3)(c) is applicable. There is no contravention if a review or appeal period has not ended. Section 102(1)(b) provides that an applicant may apply to the Victorian Civil & Administrative Tribunal for review within 28 days of being notified of the decision. Star was notified of the decision to refuse a licence on 28 June 2021. Accordingly, it could not contravene s 13 in the period up to and including 26 July 2021. The Authority concedes that the contravening period should not be 29 June 2021 but from 27 July 2021.[53] This does not affect the alleged contraventions regarding the Cochrane workers, D’Alberto workers and Santospirito workers. It does affect the alleged contraventions in respect of the Nellie Kelly workers. The Authority submits that there was contravention of s 13 for the period 27 July 2021-1 August 2021 (and concedes the alleged supply before 27 July 2021 is not a contravention of s 13). Accordingly, the alleged supply of the Nelly Kellie workers relates to a period of six days.
[53]Supplementary note filed by the plaintiff on 31 August 2023, [7].
The evidence given on behalf of the Authority is that Star made no review application in respect of the refusal of its licence.[54]
[54]Terzic affidavit, [7]-[9].
Should declaratory relief be granted?
I have found that Star has contravened s 13 of the Act, providing a basis for declaratory relief. The question is whether declarations ought be made.
I outlined the relevant principles to be applied in relation to whether declarations ought be made in Labour Hire Licensing Authority v UNG Services Pty Ltd & Anor (‘UNG’).[55] I apply those principles.
[55]UNG, [58]-[59], [62].
I will make the declarations below.
(a) upon admissions which Star is taken to have made consequent to its non-compliance with the requirements of the Rules of the Court: Star contravened s 13 of the Act in that, between about 27 September 2021 and 31 December 2021, it provided labour hire services to Veggie, for on supply to Cochrane, despite Star not holding a licence that was in force authorising it to provide labour hire services.
(b) upon admissions which Star is taken to have made consequent to its non-compliance with the requirements of the Rules of the Court: Star contravened s 13 of the Act, in that between about 27 September 2021 and 31 December 2021, it provided labour hire services to Veggie, for on supply to D’Alberto, despite Star not holding a licence that was in force authorising it to provide labour hire services.
(c) upon admissions which Star is taken to have made consequent to its non-compliance with the requirements of the Rules of the Court: Star contravened s 13 of the Act, in that between about 27 September 2021 and 31 December 2021, it provided labour hire services to Veggie, for on supply to Santospirito, despite Star not holding a licence that was in force authorising it to provide labour hire services.
(d) upon admissions which Star is taken to have made consequent to its non-compliance with the requirements of the Rules of the Court: Star contravened s 13 of the Act, in that from 27 July 2021 to 1 August 2021, it provided labour hire services to Nellie Kelly, despite Star not holding a licence that was in force authorising it to provide labour hire services.
Should pecuniary penalties be imposed?
Section 93 of the Act empowers the Court to impose a pecuniary penalty for contravention of a civil penalty provision. That section relevantly provides as follows:
93 Civil action for contraventions
(2)The court may make one or more of the following orders in relation to a person who has contravened a civil penalty provision—
(a)an order that the person pay a pecuniary penalty of not more than the amount set out in the table in section 94(2) in relation to the provision;
…
(5)For the purposes of determining the amount of a pecuniary penalty under this section the court must have regard to—
(a)the nature and extent of the contravention; and
(b)the nature and extent of any loss or damage suffered as a result of the contravention; and
(c)the circumstances in which the contravention took place.
…
I outlined the relevant principles to be applied in relation to s 93 of the Act, and the general principles on civil pecuniary penalties, in UNG.[56] I apply those principles.
[56]UNG, [66]-[69].
Application of s 93(5) of the Act
Section 13 of the Act is a civil penalty provision. Star has contravened this provision and the question is what penalty is appropriate.
Nature and extent of the contravention
The penalties to be fixed must take the following into account.
The contraventions relate to a key provision in the Act: s 13. The prohibition on providing labour hire services without a licence reflects the purpose in s 1(b) of the Act, namely to impose civil penalties upon providers and users of labour hire services who obtain those services from anyone other than licenced providers of labour hire services. It also reflects the objects in s 4 of the Act to protect workers from exploitation by providers of labour hire services and hosts, and to improve the transparency and integrity of the labour hire industry.
Star was evidently aware it needed to have a licence to provide labour hire services. After being refused a licence, it provided labour hire services. It knowingly contravened the Act by providing such services.
Star’s contraventions were repeated. They occurred over the course of a three month period in late 2021 in respect of at least sixteen Cochrane workers, D’Alberto workers and Santospirito workers. The particulars in the statement of claim name four Cochrane workers, ten D’Alberto workers and two Santospirito workers.
With respect to Nellie Kelly, as discussed, the contraventions were over a six day period. The particulars in the statement of claim say that the identities of the Nellie Kelly workers are unknown to the Authority. The Authority relies on invoices issued by Star to Nellie Kelly in respect of labour hire that are noted as having been paid. Without more, the extent of the contraventions with respect to the Nellie Kelly workers is unknown.
Nature and extent of any loss or damage suffered as a result of the contravention
This is unknown and in the absence of evidence, cannot be taken into account.
Circumstances in which the contravention took place
The contraventions by Star must be characterised as serious. I refer to the knowing and repeated nature of the contraventions, and the extent of the contraventions, namely over several months, and affecting at least sixteen workers. The contraventions relate to a key provision of the Act.
Other considerations
The Act’s protective purpose, objects and operation must be taken into account in considering the penalties.
The object of deterrence is the central consideration in determining penalties here.
Specific deterrence is required because there were knowing and repeated contraventions. A mitigating factor for Star is that, on the material before me, these contraventions are the first time they have contravened the Act.
General deterrence is an important factor here. The Act has a protective purpose and the pecuniary penalty to be fixed needs to be sufficiently high not to be the ‘price of doing business’.
As to the size of Star and its capacity to pay a penalty, I assume it is relatively small. It is a private company with a sole director, shareholder and secretary, and it has $2.00 paid-up share capital.[57] There are sixteen named workers in respect of the contravention. Its licence application was for the supply of eight workers.[58]
[57]Organisational search on A L Star Express Pty Ltd contained in Exhibit EH-1 to the affidavit of Emma Harper affirmed on 17 August 2023.
[58]SoC, [4(c)].
There is no evidence of Star’s corporate culture. I assume it has little market power given its size.
Star has neither co-operated with the Authority nor expressed contrition.
Penalty Amount
The maximum penalties are set out in s 94 of the Act and are summarised as follows (with dollar figures inserted based on the amount for a penalty unit being, in the financial year ending 30 June 2022, $181.74):
Contravention Penalty Units Dollar amount Supply to Veggie (Cochrane) 3,200 $581,568.00 Supply to Veggie (D’Alberto) 3,200 $581,568.00 Supply to Veggie (Santospirito) 3,200 $581,568.00 Supply to Nellie Kelly 3,200 $581,568.00 TOTAL 12,800 $2,326,272.00
The Authority submits that penalties of 50% of the maximum should be imposed for the s 13 contraventions and that penalties in the following amounts are appropriate:
Contravention Maximum Percentage Penalty Supply to Veggie (Cochrane) $581,568.00 50% $290,784.00 Supply to Veggie (D’Alberto) $581,568.00 50% $290,784.00 Supply to Veggie (Santospirito) $581,568.00 50% $290,784.00 Supply to Nellie Kelly $581,568.00 50% $290,784.00 TOTAL $1,163,136.00
In respect of the Cochrane, D’Alberto and Santospirito contraventions, the Authority submits that on balance, a penalty of 50% of the maximum for each of the contraventions is an appropriate penalty that is neither oppressive nor higher than necessary to achieve the object of specific and general deterrence.
In respect of the Nellie Kelly contravention, which relate to a six day period from 27 July 2021 to 1 August 2021, the Authority says there should be no lessening of the 50% penalty sought above or alternatively, a relatively modest lessening to 35% of the penalty. That is, to $203,548.80. In respect of this, the Authority submits the following:
(a) given that the penalty of up to 3,200 units applies to a single unlicensed supply of labour hire services, the period over which a contravening course of conduct occurred being shorter rather than longer would not itself be a reason for imposing a lower penalty;
(b) while it is accepted that a longer contravening period of conduct is more serious than a shorter period of contravening conduct, a large part of the seriousness is inherent in making any unlicensed supply at all. Seriousness does not directly correlate with length of conduct, but rather, it is the fact of making an unlicensed supply that is serious. While length is relevant to seriousness, it is very far from determinative; and
(c) the effect of s 117(3) of the Act was that Star effectively had 28 days in which to wind down the relevant provision of labour hire service, but it did not.
I reject the Authority’s submission that the penalty in respect of the Nellie Kelly supply should not be lesser, or alternatively reduced to 35% of the maximum penalty. Here, the number of Nellie Kelly workers unlawfully supplied is unknown, and so the period of breach is particularly relevant to the assessment of the nature and extent of the contravention. The penalty fixed in respect of the Nellie Kelly should reflect the fact that the supply was over a six day period, and there is no information as to the number of workers supplied.
I accept the Authority’s submission that the supplies of the Cochrane workers, D’Alberto workers, Santospirito workers and Nellie Kelly workers should be treated as separate contraventions. I also accept the Authority’s submission that here, it is appropriate to fix penalties for each supply.
Weighing up the factors I have identified above, and importantly the need for deterrence, subject to the totality principle, I would fix the breaches of 13 of the Act at the following figures. They represent 40% of the maximum in respect of the Cochrane workers, D’Alberto workers and Santospirito workers, and 5% with respect to the Nellie Kelly workers:
Contravention Maximum Percentage Penalty Supply to Veggie (Cochrane) $581,568.00 40% $232,627.20 Supply to Veggie (D’Alberto) $581,568.00 40% $232,627.20 Supply to Veggie (Santospirito) $581,568.00 40% $232,627.20 Supply to Nellie Kelly $581,568.00 5% $29,078.40 TOTAL $726,960.00
On this calculation, the total amount of penalties imposed against Star would be $726,960.00. Applying the totality principle, this is higher than necessary to achieve the deterrence object, and may be oppressive. Accordingly, I will reduce the total penalty amount by 15%. The total penalty will be fixed at $617,916.00.
Conclusion
I will make the declarations sought by the Authority and impose civil penalties against Star.
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