Li v Zheng Min-Seng and Ors (No.2)
[2010] FMCA 505
•13 July 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LI v ZHENG MIN-SENG & ORS (No.2) | [2010] FMCA 505 |
| INDUSTRIAL LAW – Small claims process – application for alleged underpayment – application dismissed. |
| Workplace Relations Act 1996 (Cth) Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2010 (No.2) (Cth) Fair Work Act 2009 (Cth) s.548 Federal Magistrates Act 1999 (Cth) Federal Magistrates Court Rules 2001 (Cth) |
| Li v Zheng Min-Seng & Anor [2010] FMCA 344 Hill v Lang [2010] FCA 629 |
| Applicant: | YU FANG LI |
| Respondents: | ZHENG MIN-SENG & FU RUI ZHI (T/AS CAMY SHANGHAI DUMPLING & NOODLE RESTAURANT) |
| File Number: | MLG 562 of 2010 |
| Judgment of: | O’Sullivan FM |
| Hearing date: | 13 July 2010 |
| Date of Last Submission: | 13 July 2010 |
| Delivered at: | Melbourne |
| Delivered on: | 13 July 2010 |
REPRESENTATION
| The Applicant: | Appeared in person |
| The Respondent: | Appeared in person |
ORDERS
The amended application filed 11 May 2010 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 562 of 2010
| YU FANG LI |
Applicant
And
| ZHENG MIN-SENG & FU RUI ZHI (T/AS CAMY SHANGHAI DUMPLING & NOODLE RESTAURANT) |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
Introduction
This is an application filed 20 April 2010 by Yu Fang Li (“the applicant”) which alleged during her employment with Zheng Min-Seng and Fu Rui Zhi, trading as Camy Shanghai Dumpling and Noodle Restaurant (“the respondents”) that she was underpaid.
The application invoked the small claims jurisdiction of the Court under the Fair Work Act 2009 (“the FW Act”) to deal with the allegations of breaches of the Workplace Relations Act 1996 (“the WR Act”).
By virtue of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 the Court still has jurisdiction in respect of conduct occurring under the WR Act.
On 1 July 2010 the Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations 2010 (No.2) commenced and allow for breaches of the WR Act to be dealt with by the Court under the small claims procedure.
Procedural background
The application came before the Court on 4 May 2010. The applicant appeared in person and the respondents, for reasons given ex tempore in Li v Zheng Min Seng & Ors [2010] FMCA 344 were represented by Ms Daly. On that day the Court made the following orders:
“1.The Respondents have leave to be represented by a lawyer for the purpose of today’s directions hearing only.
2.The Respondents file and serve any interlocutory application relating to jurisdiction prior to 11 May 2010.
3.The Applicant file and serve any amended application, affidavit material and any documents upon which she intends to rely at hearing on or before 4.00 pm on 18 May 2010.
4.The Respondents file and serve any response, affidavit material and any documents on which they intend to rely at hearing on or before 8 June 2010.
5.The Applicant have until 22 June 2010 to file any further affidavit material in reply.
6.The proceeding be listed for hearing in the small claims list of the Fair Work Division of the Federal Magistrates Court at Melbourne at 10:00 am on 13 July 2010.
7.There be general liberty to apply for both parties.”
On 11 May 2010 the applicant filed an amended application which sought the following orders:
“1.Breaches of the Accommodation, Cafes and Restaurants minimum wage order – Victoria 1997 Industry Sector.
2.Breaches of the Liquor and Accommodation Industry Restaurants – Victoria.
3.Award 1998 – Details described in Form 5 – Small Claims under the Fair Work Act 2009.”
The respondents filed an application in a case on 7 June 2010 that sought the following orders:
“1.The proceedings be struck out with no right of reinstatement.
2.Alternatively, that the maximum claim available to the Applicant in this proceeding, should she be successful, is $10,000.00 pursuant to section 752 of the Workplace Relations Act 1996 and Regulation 2.14.2 of the Workplace Relations Regulation 2006.
3.That the Applicant file and serve any further material on which she seeks to rely on or before the 15 June 2010.
4.That the Applicant pay the Respondent’s costs of and in relation to this Application.”
The matter returned to Court for hearing on 13 July 2010. Both parties appeared in person with the assistance of interpreters. Mr Zheng Min-Seng told the Court the other respondent, Fu Rui Zhi was his wife and was not in Australia. He denied that any money was owing to the applicant. Neither party sought an adjournment or asked for more time to get material before the Court.
Both parties gave evidence and were cross examined. To the extent it was possible to do so I am satisfied that the applicant understood the respondents did not believe she was owed any money and the respondents understood the applicant believed she was.
Approach to application
The application was filed in the Fair Work Division of the Court and the applicant has elected that it be dealt with pursuant to the small claims procedure and the provisions of section 548 of the Fair Work Act 2009 (“the FW Act”).
Section 548 of the FW Act provides that:
“(1) Proceedings are to be dealt with as small claims proceedings under this section if:
(a)a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Magistrates Court; and
(b)the order relates to an amount referred to in subsection (1A); and
(c)the person indicates, in a manner prescribed by the regulations or by the rules of the court, that he or she wants the small claims procedure to apply to the proceedings.
(1A)The amounts are as follows:
(a)an amount that an employer was required to pay to, or on behalf of, an employee:
(i) under this Act or a fair work instrument; or
(ii) because of a safety net contractual entitlement; or
(iii) because of an entitlement of the employee arising under subsection 542(1);
(b)an amount that an outworker entity was required to pay to, or on behalf of, an outworker under a modern award.
Limits on award
(2)In small claims proceedings, the court may not award more than:
(a)$20,000; or
(b)if a higher amount is prescribed by the regulations--that higher amount.
Procedure
(3)In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a)in an informal manner; and
(b)without regard to legal forms and technicalities.
(4)At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.
Legal representation
(5)A party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.
(6)If the court grants leave for a party to the proceedings to be represented by a lawyer, the court may, if it considers appropriate, do so subject to conditions designed to ensure that no other party is unfairly disadvantaged.
(7)For the purposes of this section, a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.
…”
The application
The application sought orders for alleged underpayments under the WR Act and sought to use the small claims process to recover those alleged underpayments. However under the WR Act as under the FW Act the applicant can only go back 6 years (see also s.545 FW Act) in seeking to recover those underpayments.
The applicant arrived in Australia in 2002 and commenced work with the respondents in October 2003.
The applicant’s case was that she worked until she was injured at work and in early 2005 she returned to China. The applicant’s case was that she returned to work again on 14 May 2005 and her employment was terminated on 15 August 2005.
Given the above the applicant alleged in the amended application that she was underpaid by the respondents between 21 April 2004 and 1 January 2005 and between 1 January 2005 and 15 August 2005 in the amount of $17,929.43.
Attached to the amended application were inter alia:
·an unsworn statement dated 7 May 2010;
·copies of time and wage records from the respondents business;
·a statement of the applicant in a WorkCover claim;
·a letter to the applicant from Shine Lawyers dated 29 October 2008 re WorkCover claim;
·other correspondence regarding a WorkCover claim; and
·various correspondence from the Fair Work Ombudsman including a summary of an investigation dated 10 May 2010.
Consideration
I have not recited, nor do I intend to recite, all of the evidence that was presented at the hearing although all the evidence has been considered and taken into account as have the material and the submissions made by both parties so far as they were intelligible.
At the hearing both parties gave brief evidence. On the basis of my observations, and even making allowances for the fact that their evidence was given through an interpreter, I am not satisfied they were candid in their evidence before the Court. It was clear both parties had relied on others to assist them in preparing their respective documents and in dealing with these proceedings. Neither had an appreciation of what would be required to make out their respective cases.
I have considered as invited to do by the respondents whether the proceedings should be summarily dismissed on the basis of no reasonable prospects of success but in light of the observations in Hill v Lang [2010] FCA 629 and cognisant of the provisions of s.548 of the FW Act I attempted to put in place a structure where the parties cases could be identified and a decision arrived at.
As the background rehearsed earlier makes clear, the claims made by the applicant are in relation to events when the WR Act was in force.
The applicant’s case is that her employment with the respondents ended in August 2005 after which she went back to China returning again in November 2005. In 2006 she sought medical advice and was in receipt of Centrelink benefits. In 2007 she went back to China again returning in May 2007.
In July 2008 she lodged a WorkCover claim which resulted in the WorkCover insurer making weekly compensation payments from at least as far back as 2006 to 2008.
The applicant also made a complaint to the Fair Work Ombudsman.
In late 2008 the applicant’s weekly WorkCover payments were adjusted including providing backdated payments.
In June 2009 the Fair Work Ombudsman issued a breach notice against the respondents in relation to underpayments of $5,532.00 it calculated were owed to the applicant under Schedule 1A of the WR Act and the Accommodation, Cafes and Restaurants Industry Sector Minimum Wage Order Victoria 1997 during her employment.
These underpayments were remedied on 22 July 2009. The investigation by the Fair Work Ombudsman was completed in August 2009 when the identified underpayments were recovered.
The Fair Work Ombudsman’s investigation found no evidence to support the applicant’s claim that she worked in 2005. Notwithstanding that result, the applicant commenced these proceedings.
By the time this matter proceeded to hearing the WR Act had been repealed and the Fair Work Act 2009 had commenced on 1 July 2009.
However, by virtue of the provisions of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009 the WR Act continues to apply on and after its repeal in relation to conduct that occurred before the repeal. Accordingly, the WR Act as it applied at the time continues to apply to the issues raised in these proceedings.
I note that these proceedings are seeking to enforce entitlements due under the WR Act. Notwithstanding the provisions of s.548 of the FW Act in my view the applicant still needs to lead evidence capable of making out a case for the orders sought in proceedings of this particular sort.
Attached to the amended application were documents from the Fair Work Ombudsman which was a summary of its investigation which had concluded in August 2009 and resulted in the respondents remedying the underpayments it had identified. The applicant sought a review of that investigation. That review found[1] inter alia:
[1] see page 4-7 of FWO summary
“DETERMINATIONS OF FWO
The Employer:
Mrs Li was employed by Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant (ABN: 49 379 856 759) from 30 September 2003 until 27 December 2004. This determination was made by accessing the time and wage records and undertaking an ASIC search.
The Industrial Instrument:
Mrs Li’s minimum wages, and terms and conditions of employment with Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant were contained in Part XV and Schedule 1 of the Workplace Relations Act 1996 with rates of pay provided by the Accommodation, Cafes and Restaurants Industry Sector – Minimum Wage Order – Victoria 1997 (the Sector).
Classification within Sector:
Mrs Li was classified as a Hospitality Employee Level 2 (Kitchen Attendant Grade 2) during the course of her employment. This was based on the duties undertaken by Mrs Li. Mrs Li (sic) duties at Zheng Min Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant was to prepare and make dumplings, transporting bowls of dumpling mix from cool room to work area, cleaning the work station, sweeping and mopping floors and washing and drying equipment used.
Assessment of Entitlements/Contraventions:
As there are no overtime provisions or allowances contained within the Workplace Relations Act 1996 or the Sector, any overtime work, work undertaken on weekends did not attract penalty rates. Furthermore Mrs Li was not entitled to an allowance under the Sector. This aspect of Mrs Li’s compliant could not be sustained.
An assessment of Mrs Li’s entitlements was undertaken by the FWO using time and wage records provided by Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant. Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant were issued a breach notice on 16 June 2009 for failing to provide the correct minimum hourly rate of pay under the Sector and for non payment of pro rata annual leave on termination as per the Workplace Relations Act 1996. The underpayment of wages and annual leave equated to $3967.00 gross and $1565.56 gross respectively. A total of $5532.56 gross was owed to Mrs Li.
Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant paid Mrs Li a total of $5532.56 gross to rectify the above contraventions on 22 July 2010 (sic).
Other considerations:
Mrs Li requested a file review from the FWO. A file review was undertaken on 15 September 2009. Mrs Li in her letter to the FWO raised a number of comments and reasons for warranting a further review in relation to the investigation of her employment with Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant (the business).
During Mrs Li’s period of employment the Workplace Relations Regulations 2006 (the Regulations) require that all employees provide employees with pay slips each time that they are paid. The Fair Work Ombudsman was not able to obtain any copies of pay slips issued to employees by Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant. Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant was not required by law to maintain copies of pay slips but must maintain time and wage records in accordance with the Regulations. Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant had alleged that pay slips were issued to employees. Due to lack of evidence Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant could not be contravened for non provision of pay slips.
Mrs Li had stated that Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant fabricated the timesheets. There is no evidence that indicates that records had been fabricated. Overall there is insufficient evidence to verify total hours alleged to have been worked and wages received by Mrs Li. The business has provided time and wage records which did not support Mrs Li’s version of events in relation to their periods of employment, hours worked, wages received.
It was decided that the witness statement provided by Yuan Zhi also lacked evidentiary value, as it did not support the actual hours worked by Mrs Li. The statement advised that Mrs Li left for work and returned home at a certain time.
The FWO received information from the City of Melbourne advising that Zheng Min-Seng and Fu Rui Zhi trading as Camy Shanghai Dumpling and Noodle Restaurant had its registration revoked on 27 December 2006. The business had advised that they continued to pay all their employees during the shut down period. As Mrs Li was paid in cash, there is no electronic trial that can be traced to determine if the businesses version of events is accurate or inaccurate. The timesheets provided indicate that wages were received by Mrs Li during this period. Due to the lack of evidence, the allegation that the records are falsified could not be sustained.
Victoria Police and the Department of Immigration and Citizenship (DIAC) were contacted to determine if Mrs Li was present during the alleged raids. Victoria Police have provided a response indicating that no order person was present at the premises when the warrant was executed. Mr Rick Ergun (Mrs Li (sic) representative) advised on 12 January 2010 that Mrs Li had her bags checked by Victoria Police. The information gathered does not support this statement.
Furthermore, DIAC have advised that Mrs Li’s name was not listed down on the DIAC monitoring sheets as permanent residents were not required to be recorded on the monitoring sheets. Furthermore, the raid had occurred on 10 November 2005 which means this occurred after the said termination date as alleged by Mrs Li. The further information gathered by these two departments did not provide any further evidence to sustain Mrs Li’s compliant.
There is no documentary evidence that can sustain that Mrs Li worked in 2005 as alleged. The timesheets provided by the business indicate that Mrs Li was terminated in December 2004. The Fair Work Ombudsman has not stipulated during the investigation that Mrs Li’s termination date was the 14 (sic) May 2005. Furthermore, as Mrs Li received wages in cash, there is no electronic trail that can indicate when Mrs Li received her last week’s wages. Therefore the Fair Work Ombudsman has relied on these timesheets as best available evidence to determine Mrs Li’s termination date.
Documents were requested from Allianz Australia Workers Compensation (Victoria) Limited (the insurer) in relation to hours worked by Mrs Lim, particularly requesting information on the decisions and the evidence utilized when approving Mrs Li’s work cover compliant for an injury that was said to have occurred on 28 January 2005. The information provided by the insurer indicated that liability had been accepted. It appears the complaint was accepted on the basis of statements provided by Mrs Li, Mr Shi and Ms Tracey Owen. The information provided by the insurer also indicates that the Business refused to give Ms Owen a statement in relation to the matter.
Mrs Li advised that she received wages in a plastic money bag with paper contained within the bag. This money bag could not be traced back to the business as there were no identifying marks. In order for this plastic money bag and paper to be acknowledged as (sic) of evidentiary value, it will need to have some sort of identifying marks indicating that business as the employing entity and information of wages paid. This was not existent.
Mr Ergun provided a statutory declaration alleging the outcome of a conciliation that occurred between the business and Mrs Li. As Mr Ergun was representing Mrs Li during this investigation, his statement could not be seen as impartial. The Fair Work Ombudsman can not deny or accept that the statement is true.
A Notice to Produce Documents were served on L & LS who are the business representative by the FWO. The business representative had advised that “there is no further material documents that our clients has in its possession…the business has no surveillance recording of the business either covering the kitchen/dining room at all.” This investigation did not provide any further information to quantify the hours worked by Mrs Li.
During the investigation, it was noted that the timesheets provided by the business correspond with the yearly gross amounts recorded on the payment summaries. These payment summaries were provided on a yearly basis and not all at once.
The Fair Work Ombudsman acknowledges that superannuation was paid to Mrs Li in 2006 after she had been terminated from the business. Normally, superannuation is made during the course of employment. However, even though paying superannuation outside of service of employment is unusual, this does not support that Mrs Li worked in 2005.”
These proceedings were brought under the small claims process in s.548 of the FW Act. The informality of, and expedition in, proceedings mandated by the Federal Magistrates Act 1999 and Federal Magistrates Court Rules 2001 or indeed under s.548 of the FW Act cannot be a substitute for proof of facts where the facts are disputed as they were here. The applicant made claims in her material and in her evidence before the Court regarding whether she worked in 2005. As I understood the applicant’s case this is how she arrived at the underpayment figure claimed in the amended application. However the applicant’s own evidence was contradictory and unsatisfactory. I note in particular the handwritten amendments that were made to the letter from Shine Lawyers. In the circumstances, the best evidence is that contained in the Fair Work Ombudsmans investigation report which the applicant relied on. The evidence that was led by the applicant did not substantiate the claims that she made and there was nothing to substantiate or corroborate the applicant’s claims beyond the material that she had filed and in my view this did not make out her claim(s).
Conclusion
In the circumstances given what is before me and for all the above reasons the applicant has failed to persuade the Court that there has been an underpayment or other breach such as is necessary to make the orders she sought.
Accordingly the appropriate order is that the application should be dismissed.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of O’Sullivan FM
Date: 13 July 2010
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