Le v Ital One Holdings Pty Ltd
[2018] FCCA 3590
•6 December 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LE & ORS v ITAL ONE HOLDINGS PTY LTD | [2018] FCCA 3590 |
| Catchwords: INDUSTRIAL LAW – Allegations of underpayment of wages and breaches of the Restaurant Industry Award 2010 – five different small claims proceedings against the same respondent – consolidated and transferred to the Fair Work Division – whether the Fair Work Ombudsman can be joined to the proceedings. |
| Legislation: Fair Work Act 2009 (Cth), ss.548, 682 Restaurant Industry Award 2010 Federal Circuit Court Rules 2001 (Cth), rr.11.01, 11.03 |
| Cases cited: Godwin & Godwin [2018] FCCA 385 |
| First Applicant: | KHOA DUY ANH LE |
| Second Applicant | SHU LING TEH |
| Third Applicant | PABLO ANDRES GONZALES JARAMILLO |
| Fourth Applicant | FABIOLA SAIU |
| Fifth Applicant | MARY SEEWALD |
| Respondent: | ITAL ONE HOLDINGS PTY LTD |
| File Number: | MLG 2294 of 2017 |
| Judgment of: | Judge O'Sullivan |
| Hearing date: | 16 November 2018 |
| Date of Last Submission: | 16 November 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 6 December 2018 |
REPRESENTATION
| Counsel for the Applicants: | Ms Foong (pro-bono) |
| Solicitors for the Applicants: | Unrepresented |
| Counsel for the Respondent: | Self-Represented |
| Solicitors for the Respondent: | Self-Represented |
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2294 of 2017
| KHOA DUY ANH LE & ORS |
Applicant
And
| ITAL ONE HOLDINGS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons concern whether, in the context of complaints, made by five former employees of the respondent of underpayment of wages, the Court can make an order joining the Fair Work Ombudsman (“FWO”) as a party to the proceedings given her role under the Fair Work Act 2009 (Cth) (“the FW Act”).
Background
There are five applicants in the substantive proceedings, all of whom filed a small claims application under s.548 of the FW Act in late 2017 and are seeking orders against Ital One Holdings Proprietary Limited trading as Café Baci (the respondent).
All the applicants were employed as casuals between 2011 and 2013 by the respondent and their employment was governed by the Restaurant Industry Award 2010. At the time of their employment, the five employees were on temporary working visas and they have all since left Australia.
The first applicant, Mr Le is 27 years of age and was employed with the respondent between 2011 and 2014. He alleges that he is owed $20,000.00 in wages and other entitlements.[1] The second applicant, Ms Teh was employed by the respondent between September 2012 and February 2013 and alleges that she is owed $9,906.51.[2] Mr Gonzales-Jaramillo, the third applicant, was employed by the respondent between February 2011 and April 2013 and alleges he is owed $20,000.00.[3] The fourth applicant, Ms Seewald was employed by the respondent from September 2012 to February 2013 and is claiming she is owed $5,858.00.[4] Ms Saiu, the fifth applicant, was employed by the respondent between January 2012 and November 2014 and claims she is owed $10,000.00.[5]
[1] Khoa Duy Anh Le v Ital One Holdings Pty Ltd (MLG2294/2017).
[2] Shu Ling Teh v Ital One Holdings Pty Ltd (MLG2292/2017).
[3] Pablo Andres Gonzales Jaramillo v Ital One Holdings Pty Ltd (MLG2529/2017).
[4] Mary Seewald v Ital One Holdings Pty Ltd (MLG2293/2017).
[5] Fabiola Saiu v Ital One Holdings Pty Ltd (MLG2291/2017).
The small claims lodged by the applicants in these proceedings were filed after they had all sought advice and assistance from the FWO. The applicants filed their respective applications in this Court on 23 October 2017 with the exception of the third applicant, Mr Gonzales-Jaramillo who filed his application on 22 November 2017.
Each of those applications were served on the respondent and given a first court date on 22 February 2018 in the small claims list with the exception of the third Applicant, Mr Gonzales-Jaramillo which was returnable on a later date.
At the first Court date for each application on 22 February 2018, it became apparent that there were other proceedings against the respondent on foot. Accordingly, notice was given to each of the applicants and the respondent (who was represented) that consideration would be given to an order consolidating all of the ‘small claims proceedings’ against the respondent, transferring the ‘consolidated’ proceeding to the Fair Work Division of the Court and requesting that the FWO (who had appeared amicus curie ) intervene in those proceedings.
For that purpose the matter was adjourned to May 2018 after an order had been made under rule 12.02 requesting the applicants be represented by pro bono Counsel.
However, that still left another application on foot involving the respondent (albeit one that had been commenced by the FWO). The remaining application had been filed in May 2017 by the FWO also over alleged contraventions of the FW Act and the Restaurant Industry Award 2010[6]. In those proceedings, there were allegations concerning a total underpayment of $73,347.42 with respect to many other employees of the respondent. These proceedings were the subject of a penalty hearing and a decision on the appropriate penalty is currently reserved before Judge Riley.
[6] Fair Work Ombudsman v Ital One Holdings Pty Ltd t/a Baci Café & Len Di Pietro (MLG1122/2017).
The issue of consolidation of the five small claims, and the FWO’s decision whether to intervene was then adjourned to a directions hearing on 11 May 2018 and the FWO was requested to attend on the adjourned date.
On 11 May 2018, the FWO appeared represented by Ms Kelly, of Counsel who informed the Court the FWO did not intend to apply for leave to intervene in these proceedings and that the FWO opposed being joined as a party to, or substituted as the applicant in these proceedings.
The Court ordered that each of the small claims proceedings be consolidated and subject of a Court ordered mediation and that they be listed for a further directions hearing on 16 November 2018 at which time the FWO would make submissions “on the issue of joinder under r 11.01(2) of the Rules…”.[7] On 14 November 2018, the FWO filed written submissions on those issues making clear it opposed being joined.
[7] Order dated 11 May 2018 in Khoa Duy Anh Le v Ital One Holdings Pty Ltd (MLG2294/2017).
Following an unsuccessful mediation, on 16 November 2018, Ms Foong of Counsel appeared[8] on behalf of the applicants pro bono, Mr De Peitro, Company Director, appeared for the respondent (after the respondent’s solicitor was given leave to withdraw) and Ms Kelly of Counsel appeared on behalf of the FWO.
[8] As a result of the order on 11 May 2018 made under Rule 12.02 of the Federal Circuit Court Rules 2001 referring the applicants for legal assistance.
FWO submissions
The FWO’s written submissions opposing an order being joined were inter alia that:
“8.Rule 11.01 of the Federal Circuit Court Rules 2001 (“the Rules”) relevantly provides as follows:
“11.01 Necessary Parties
…
(2)The Court may require a person to be included as a party.”
9.Pursuant to r.11.01(2) of the Rules, the Court has power to join a party to a proceeding before it: Godwin & Godwin [2018] FCCA 385 at [41].
10.By contrast, there is no express provision in the Rules allowing for the Court to substitute one party for another.
11.Whilst a person may apply to the Court under r. 11.03 to be included as a party to a proceeding and a party may apply to the Court under r.11.04 to be removed from that proceeding, there is no express provision for the Court, on its own motion, to order substitution.[9]
[9] This is to be contrasted, for example, with the Family Law Rules 2004, specifically r.6.15(3): The Court may order that the legal personal representative of the deceased person be substituted for the deceased person as a party [which may be necessary for the purposes of s 79(8) of the Family Law Act 1975 (Cth)].
12.It might be said that the power of the Court to order substitution is instead to be implied in circumstances where it is necessary for the proper conduct of proceedings before it.
13.Putting the basis of the Court’s power to order joinder or substitution aside, the FWO respectfully submits that it is not in any event appropriate in the circumstances of this matter for the Court to order either joinder or substitution.
14.As set out below, the Court would be acting ultra vires if it were to join or substitute the FWO as Applicant in the Consolidated Proceeding.
Fair Work Ombudsman
15.Section 681 of the FW Act establishes the FWO and s 682(1) sets out its various functions, including:
“…
(c)to inquire into, and investigate, any act or practice that may be contrary to this Act, a fair work instrument or a safety net contractual entitlement;
(d)to commence proceedings in a court, or to make applications to the FWC, to enforce this Act, fair work instruments and safety net contractual entitlements;…
(f)to represent employees or outworkers who are, or may become, a party to proceedings in a court, or a party to a matter before the FWC, under this Act or a fair work instrument, if the Fair Work Ombudsman considers that representing the employees or outworkers will promote compliance with this Act or fair work instrument.”
16.Further, by s 539 of the FW Act, a Fair Work Inspector has standing to apply to the Court for penalties in relation to civil remedy provisions. The FWO is a Fair Work Inspector by force of s 701 of the FW Act and may, pursuant to s 700, appoint other Fair Work Inspectors.
17.In performing its functions, including that of Fair Work Inspector, the FWO must exercise its discretion as an independent statutory authority to determine when, for example, it might “inquire into, and investigate”, “commence proceedings” or “represent” parties in proceedings before this Court in accordance with ss.682(1)(c), (d) and (f) of the FW Act respectively.
Sections 682(1)(c) and (d) of the FW Act
18.In determining whether to “inquire into, and investigate” or “commence proceedings” in accordance with ss.682(1)(c) and (d), the FWO’s discretion is exercised in the context of its unique statutory powers to investigate suspected contraventions of Commonwealth workplace laws and, through this process, to determine when there is a proper basis for litigation. Pursuant to s.706, an inspector may exercise their functions and powers but they have no obligation to do so. Moreover, where an inspector does exercise such functions and powers, they must necessarily be satisfied that on the basis of their investigations under the FW Act, they are justified in commencing proceedings pursuant to s.539.
Section 682(1)(f) of the FW Act
19.In the event that the FWO has not “commenced proceedings” (either because it has not “inquired into, and investigated” or because it has exercised its discretion, following such inquiry and investigation, not to litigate), s.682(1)(f) is the operative provision.
20.By s.682(1)(f), the legislature has made express provision for the scenario presently before the Court, envisaging circumstances in which the FWO might represent parties in proceedings, for example by way of joinder or substitution as the Applicant in a proceeding.
21.In determining whether to represent parties in proceedings, the FWO’s discretion is found in the text of s.682(1)(f) itself, it being necessary for the FWO to independently assess the matter and satisfy itself that representing the employees will promote compliance with the FW Act or fair work instrument in question. In other words, the condition precedent to the exercise of the FWO’s functions under s.682(1)(f) of the FW Act is express – it can only be called on “if the Fair Work Ombudsman considers that representing the employees…will promote compliance with this Act or fair work instrument.”
Jurisdictional Error
22.Were therefore the Court to join the FWO or substitute it as Applicant in the Consolidated Proceedings, it would have the effect of subverting the discretionary exercise of the FWO’s statutory functions by compelling it to represent the Employees and to prosecute their claims.
23.Not only, in these circumstances, would the Court be acting ultra vires but it would also be placing the FWO in a situation in which it was forced to act under dictation. Put another way, the Court would fall into jurisdictional error, thwarting the FWO’s power to determine whether it was itself satisfied that representing the employees in the Consolidated Proceedings would promote compliance with the FW Act and Award. (emphasis added)
Hearing on 16 November
At the directions hearing on 16 November 2018 Counsel for the FWO was content to rely on the written submissions referred to above. Understandably perhaps, recognising the FWO’s position in relation to the joinder issue, none of the parties to these proceedings sought to make any submissions on the issue, and after setting the substantive matter for hearing in February 2017, the Court reserved on the question of whether the FWO could be joined.
The Rules
Rule 11.01 of the Federal Circuit Court Rules 2001 (the Rules) provides as follows:
“(1)subject to any order of the Court, a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding.
(2) The Court may require a person to be included as a party.
(3)A person required to be included as an applicant who does not consent to be included may be included as a respondent.
(4)The Court may decide a proceeding even if a person is incorrectly included or not included as a party.”
The provisions of (inter alia) Rule 11.01 and the approach that should be taken to them was considered in Lukies v S2V Consulting Pty Ltd [2018] FCCA 1431 being a decision of Judge Lucev at paragraphs [28] to [52] which I respectfully adopt for the purposes of these reasons.
Consideration
In addition to the approach to that provision in the Rules and relevant to the determination of the issue as to whether the FWO should be joined under r.11.01 in this matter is the role of the FWO under the FW Act.
In Part 5-2 of Chapter 5 of the FW Act, the Office of the Fair Work Ombudsman is established, the functions of which are set out in s.682 as follows:
682. [Functions of the Fair Work Ombudsman]
(1) The Fair Work Ombudsman has the following functions:
(a) to promote:
(i) harmonious, productive and cooperative workplace relations; and
(ii) compliance with this Act and fair work instruments;
including by providing education, assistance and advice to employees, employers, outworkers, outworker entities and organisations and producing best practice guides to workplace relations or workplace practices;
(b)to monitor compliance with this Act and fair work instruments;
(c)to inquire into, and investigate, any act or practice that may be contrary to this Act, a fair work instrument or a safety net contractual entitlement;
(d)to commence proceedings in a court, or to make applications to FWA, to enforce this Act, fair work instruments and safety net contractual entitlements;
(e) to refer matters to relevant authorities;
(f)to represent employees or outworkers who are, or may become, a party to proceedings in a court, or a party to a matter before FWA, under this Act or a fair work instrument, if the Fair Work Ombudsman considers that representing the employees or outworkers will promote compliance with this Act or the fair work instrument;
(g)any other functions conferred on the Fair Work Ombudsman by any Act.
In Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833 at [154] Flick J discussed the role of the FWO in discharging its functions under the FW Act as follows:
“The role of the Ombudsman in discharging the statutory functions conferred by s 682(1), with respect, cannot be seen as involving any responsibility to reclaim moneys owed to a corporate employer or any responsibility to advance the payment of monies potentially owing: cf. Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28, (2015) 256 CLR 507. There in question was whether the Fair Work Ombudsman could be regarded as having acting “on behalf of” an employee (Mr Tomlinson) in commencing a proceeding under s 682(1)(d). In rejecting the argument, Nettle J concluded (at 544 to 545):
“[114]Since the proceeding was brought under s 682(1)(d) of the Fair Work Act and s 719 of the [Workplace Relations Act 1996 (Cth)], it logically cannot be that the Ombudsman’s claim in relation to the appellant was made by the Ombudsman as representative of the appellant or otherwise “on behalf of” the appellant. The Ombudsman was not representing the appellant in a claim under s 719 but acting in exercise of the Ombudsman’s own statutory right of action to enforce the Fair Work Act. The Ombudsman was not making the appellant’s claim “on behalf of” the appellant but making the Ombudsman’s own claim pursuant to s 682(1)(d) of the Fair Work Act under s 719 of the Workplace Relations Act for an order to compel the enforcement of the Fair Work Act.
[115]Nor is the claim by the Ombudsman under s 719 otherwise of such a nature that it should be regarded as made “on behalf of” the appellant. The relationship between the appellant and the Ombudsman did not fall into one of the established categories of legal and equitable relationships earlier described. The appellant did not engage the Ombudsman as his agent to litigate the question of whether Ramsey Food was his employer and as such had failed to pay his entitlements.
[116]As far as can be told, the appellant did not have any control over the conduct of the Ombudsman’s claim. The highest the evidence went in that regard was that the appellant placed the facts of his predicament before the Ombudsman and asked the Ombudsman if there was anything which the Ombudsman could do to procure for the appellant his entitlements.
[117]There is nothing about the power conferred on the Ombudsman by s 682(1)(d) of the Fair Work Act or on the court by s 719 which could be viewed as imposing anything in the nature of a fiduciary duty on the Ombudsman in favour of the appellant.
[118]The Ombudsman could not realistically be regarded as the corporate embodiment of the appellant – even for just the purposes of recovery of the appellant’s unpaid entitlements – in the sense of the appellant being the person who made decisions and gave instructions on behalf of the Ombudsman as to how the Fair Work proceeding should be conducted. On the evidence, the scope of the appellant’s involvement was limited to being a witness.
[119]Further, because of the Ombudsman’s statutory responsibilities to enforce the Act generally, it is not possible to exclude the potential for at least some conflict of interest between the Ombudsman’s objectives in and manner of conducting the Fair Work proceeding and the appellant’s interests in recovering his entitlements.”[10]
[10] see also Atkins Freight Services Pty Ltd v Fair Work Ombudsman [2017] FCA 1134 for discussion of role and function of FWO
Given that r.11.01(1) of the Rules provides that “a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding” and having regard to:
(a)the approach to that rule in the decision in Lukies v S2V Consulting Pty Ltd [2018] FCCA 1431;
(b)the submissions of the FWO on this occasion; and
(c)the reasons set out in those submissions;
I am not satisfied it is appropriate to make an order, in the face of the FWO’s refusal to participate, joining them as a party in these proceedings.
Conclusion
It would seem that on this occasion the FWO has decided that it is not appropriate to intervene to support these particular former employees in these proceedings. As otherwise provided for in the orders made 16 November 2018 the proceedings have been listed for liability hearing on 20 February 2019. Given the position of the FWO, on that occasion and happily the applicants they will be assisted by Ms Foong of Counsel acting pro bono. It is otherwise not necessary to make any further orders for the purposes of that liability hearing.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Associate:
Date: 6 December 2018
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