Lowe v Georgiou
[2008] FMCA 1461
•10 September 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LOWE v GEORGIOU | [2008] FMCA 1461 |
| INDUSTRIAL LAW – Imposition of civil penalties and other consequential orders – failure to pay wages – failure to pay accrued annual leave entitlements – failure to make payment in lieu of notice – underpayment of wages. |
| Workplace Relations Act 1996 (Cth) Workplace Relations Amendment Act (Work Choices) 2005 (Cth) Industrial Relations Act 1999 (Qld) |
| Australian Competition and Consumer Commission v ABB Transmission v Distribution Limited [2001] FCA 383 Australian Competition and Consumer Commission v Australian Safeway Stores (1997) 75 FCR 238 Australian Ophthalmic Supplies v McAlary-Smith [2008] FCAFC 8 Cotis v McPherson [2007] FMCA 2060 Cotis(Office of Workplace Services) v Pow Juice Pty Ltd [2007] FMCA 140 CPSU v Telstra Corporation [2001] FCA 1364 Chad Johnson v R [2004] HCA 15 Kelly v Fitzpatrick [2007] FCA 1080 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 |
| Applicant: | JULIE PAULETTE LOWE |
| Respondent: | LINDA GEORGIOU |
| File Number: | BRG 180 of 2008 |
| Judgment of: | Burnett FM |
| Hearing date: | 8 September 2008 |
| Date of Last Submission: | 8 September 2008 |
| Delivered at: | Brisbane |
| Delivered on: | 10 September 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Murdoch |
| Solicitors for the Applicant: | Macrossans Lawyers |
| Counsel for the Respondent: | Mr Bland |
| Solicitors for the Respondent: | QBM Lawyers |
ORDERS
That the parties submit a minute of order giving effect to the conclusions provided in my reasons.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 180 of 2008
| JULIE PAULETTE LOWE |
Applicant
And
| LINDA GEORGIOU |
Respondent
REASONS FOR JUDGMENT
EX TEMPORE
In this application the applicant applies for the imposition of civil penalties and other consequential orders in relation to conduct that concerned a company operated by the respondent. The company Star Human Resources Management Pty Limited is now in liquidation. In its further amended application filed by leave dated 1 September 2008, the applicant details 10 complaints in paras.1 to 10. It further details consequential relief sought in paras.10A through to 10L and orders for other relief in paras.11 to 15. I will deal with each of those in due course.
Dealing with the first 10 complaints; they can broadly be identified as four categories of complaints being: two complaints in respect of a failure to pay wages in respect of individuals by the name of Mollard and Goodwill; three complaints in respect of failure to pay accrued annual leave entitlements in respect of persons identified as Mollard, Thompson and Gozner; three complaints in respect of failure to make payment in lieu of notice in respect of persons identified as Mollard, Thompson and Gozner; and two complaints of underpayment of wages in respect of persons identified as Thompson and Gozner.
For present purposes, I understand the applicant to prosecute jointly the complaint in respect of failure to pay wages with the complaints in respect of underpayment of wages. In total those complaints relate to alleged underpayments totalling $7551. Failures in respect of payment of accrued annual leave entitlements total approximately $3094 and the total alleged in respect of the failure to make payment in lieu of notice totals approximately $2739.
Paragraph 10 of the further amended application requires the Court, if appropriate, to deal with those complaints that arise out of a course of conduct pursuant to s.719(2) of the Workplace Relations Act 1996 (“the Workplace relations Act”).
By way of background, the applicant in the case, Julie Paulette Lowe is a workplace inspector employed by the Office of Workplace Ombudsman. She is a duly appointed person under s.167 of the Workplace Relations Act and has standing to apply for penalty or other remedies pursuant to Div.2 of Part XIV of the Act. The Office of Workplace Ombudsman commenced on or about 1 July 2007 and from 27 March 2006 to 30 June 2007 the Workplace Ombudsman operated as the Office of Workplace Services.
The respondent in this case was the general manager, sole director and company secretary and shareholder of Star Human Resources Management Pty Limited. That was an Australian proprietary company limited by shares. It was incorporated on 16 March 2005 and was the subject of a winding up order made by the Federal Court on 6 September 2007. It operated a business called Star Human Resources Management and I am informed that the respondent herself had been in business for approximately eight years prior to these events.
In the period from 16 March 2005, which is the date of incorporation of the company, until 14 November 2006 Star Human Resource Management carried on the business of providing recruitment services for a variety of industries from various premises, including the respondent's home and from offices at 50 Marine Parade, Southport and on level 3/17 Short Street, Southport.
The company itself was a constitutional corporation within the meaning of s.6 of the Workplace Relations Act and an employer within the meaning of the s.718 of that Act. Insofar as events occurred after amendments effected by the Workplace Relations Amendment Act (Work Choices) 2005, it was also subject to that Act. At various times its registered office was at 6010 Calardo Avenue, The Lakes, Hope Island.
At time the subject of the application there were four employees, they being Chantal Selena Thompson; Rosanna Therese Gozner and David John Goodwill and Elizabeth Margaret Mollard. So far as the employees are concerned, there were various agreed facts. Broadly they are these: So far as Chantal Selena Thompson is concerned, she commenced employment with the company on 16 August 2006 and ceased employment with the company on 14 November 2006. She was employed on an adult starting salary of $42,500 and was employed as an office administrator and worked for the business at its premises at level 3/17 Short Street, Southport.
She was employed on a full time basis at 40 hours per week with ordinary hours between 8.30 am and 5.30 pm Monday to Friday with a one hour meal break per day. The respondent terminated her employment on 14 November 2006 but, at that time, the respondent and the company failed to pay Ms Thompson the following entitlements, being first, wages for the period 11 October 2006 to 14 November 2006 in accordance with s.182 of the Act and calculated on the basis of the Australian Pay Classification scale as derived from the Clerical Employees Award State (2002) Southern Division Eastern District (“the Clerical Award”), and failed to pay accrued annual leave and annual leave loading in accordance with cls.7.1.5(c)(i) and 7.1.5(c)(iii) of the NAPSA and; (3) failed to make payment in lieu of notice in accordance with cl.4.7.2 of the NAPSA. The total of the outstanding entitlements payable to Ms Thompson was $4834.23 due to the alleged contraventions. The parties, in their Notice of Admission, agree that the underpayment calculations for Ms Thompson appear in the further amended application and in that regard are correct.
Concerning the employee, Rosanne Therese Gozner, Ms Gozner commenced employment with the company on 4 September 2006 and ceased employment on 14 November 2006. She was employed on an adult starting salary of $45,000. She was employed as an office manager and worked for the business at its premises at level 3/17 Short Street, Southport. She was employed on a full time basis at 40 hours per week with ordinary hours between 8.30 am to 5.30 pm Monday to Friday with one hour per day for meal breaks.
It is agreed that the respondent terminated Ms Gozner's employment on 14 November 2006 but at that time the respondent and the company failed to pay Ms Gozner the following entitlements, they being first, wages for the period 11 October 2006 to 14 November 2006 in accordance with s.182 of the Workplace Relations Act and calculated on the basis of the Australian Pay and Classification Scale as derived from the Clerical Award. Second, accrued annual leave and annual leave loading in accordance with cls.7.1.5(c)(i) and 7.1.5(c)(iii) of the NAPSA and, finally, payment in lieu of notice in accordance with cl.4.7.2 of the NAPSA. It is agreed that the total outstanding entitlements payable in respect of those contraventions was $3318.66. The parties also agreed that the underpayment calculations for Ms Gozner are correct as they appear in the further amended application.
The third employee was David John Goodwill. Mr Goodwill commenced employment with the company on 18 September 2006 and ceased employment on 3 October 2006. Mr Goodwill was employed on a contract of employment with an adult starting salary of $50,000 together with access to a bonus scheme and a $6000 per annum car allowance. He was employed as a senior recruitment executive and worked at the business premises at level 3/17 Short Street, Southport. He was employed on a full time basis, 40 hours per week with ordinary hours between 8.30 to 5.30 pm Monday to Friday with a one hour meal break per day.
His employment was terminated on 3 October 2006 by agreement with the respondent, however, the respondent and the company had failed to pay Mr Goodwill the following entitlements, they being 12 days' wages for the period immediately preceding and including 3 October 2006 in accordance with s.182 of the Australian Fair Pay and Condition Standard under the Act and calculated using the Federal minimum wage of $12.75 per hour under s.195(1) of the Act. It is agreed that the total outstanding entitlements payable to Mr Goodwill were $1224 in respect of the contravention. Likewise, with the earlier two employees, it is agreed that the underpayment calculations for Mr Goodwill are accurately recorded in the further amended application, in this case at para.10D.
That leaves, finally, the employee, Elizabeth Margaret Mollard. It is agreed that she was employed as a senior consultant from the week commencing 8 May 2008. There is argument about the actual date of commencement of employment. It is agreed that she worked at the business premises at Pivotal Point Serviced Offices, 50 Marine Parade, Southport and then from premises at level 3/17 Short Street, Southport. It is also agreed that she was employed on a full time basis, 40 hours per week with ordinary hours between 8.30 am to 5.30 pm Monday to Friday with a one hour per day meal break but other aspects of her employment are in dispute.
The matters that fall into dispute concerning Ms Mollard are four in total. They concern first, salary. Second, her date of commencement of employment. Third, her leave entitlements and fourth, concern her circumstances of termination and entitlements flowing there from. The issues concerning those complaints which are not admitted are, first concerning salary.
Ms Mollard found Ms Brooks' company Star by medium of the internet. A position was advertised and she applied for that position. She said she was subsequently interviewed. She said an interview took place at the Hope Island Golf Club and at that time in the course of the interview she was asked by the respondent what salary she was expecting, to which Ms Mollard says she was asking for a salary of $55,000 per annum. She says this figure was agreed to.
The respondent challenges that assertion. She says that she only ever offered Ms Mollard a salary of $50,000 per annum which she said was agreed to by Ms Mollard. In support of her position the respondent relies upon a letter of offer, which she says was emailed. I note Ms Mollard says the email was never received by her. By that I mean she says she received an email with an attachment but the attachment was whilst able to be opened, unable to be printed off. Secondly, the respondent says that, in any event, the letter of offer was also provided to her in physical form, at a meeting on 9 May. Ms Mollard says that never occurred.
The second issue concerns the start date. In respect of that issue Ms Mollard says that at the meeting at the Hope Island Golf Club there was discussion concerning the commencement date. The date discussed she says was 2 May. She says that she was told by the respondent at that time to go home and do her research and that she would be required to attend at that day at the respondent's house to commence preparation. She says that that is in fact what occurred. Ms Mollard says she attended the respondent's house and further, following that time, attended various meetings with the respondent. She says that she regarded herself as being employed by the respondent from that time.
The respondent denies those matters. The respondent says that while she accepts Ms Mollard attended at her house, she says she did so voluntarily and that the time spent was of her own volition and not spent with her as an employee. Ms Mollard says, concerning this matter, that at the outset there was considerable goodwill between the parties. There appeared to be a good relationship and a strong trust between them. She says that against that background the early relationship between the parties was strong. It seems to me that in those circumstances it is not surprising that there was a request to commence on 2 May and that it would be seen as a start date.
Next is the question of leave entitlements. The respondent maintains or maintained a record of absenteeism and holidays. That record was one maintained solely by the input of the respondent. A record was individually maintained in respect of each employee. Before the Court was the record so far as it related to Ms Mollard. Each employee, therefore, had a separate register of both holiday and sick leave. The respondent says that Ms Mollard took leave and/or sick leave as recorded in her register. Ms Mollard says she accepts that she took some leave and, in particular, in respect of two occasions acknowledges the leave, the first being leave to travel to New Zealand for a funeral of her stepfather and the second being leave to attend to a personal matter related to a commercial property conveyance.
Additionally, in respect of those matters, it is further alleged by the respondent that there was an additional day of sick leave which Ms Mollard denies was ever taken. Ultimately these matters will have to be resolved by reference to questions of credit. Ms Mollard says that the respondent told her in respect of both the leave to travel to New Zealand and the leave to attend to personal matters, that they were in effect to be taken without penalty to her. If Ms Mollard is accepted then her pay requires adjustment for the otherwise improper deduction. However, if the respondent is accepted then the deductions would appear to be appropriate subject to any adjustment necessary on account of the other claims made by Ms Mollard, in particular, I refer to the one day which Ms Mollard denies having taken.
The fourth issue concerns termination and broadly, in respect of that matter, Ms Mollard says that she was summarily dismissed. The respondent says that she resigned. The circumstances relating to the events leading up to the dismissal and/or resignation arise out of a meeting which occurred on 18 September 2006. Ms Mollard says that at the time of the meeting, words being spoken were intended to convey to the respondent her displeasure with the meeting itself rather than with her employment. In particular, a record made by the respondent following a meeting, states broadly what was said by Ms Mollard in the course of the meeting after there had been some heated discussion. Words to the effect of:
“Fucking hell, it was for a funeral. I'm not doing this any more, I am leaving.”
were spoken followed by an observation that Ms Mollard proceeded to walk over to her desk. The respondent says that she took that to mean that Ms Mollard was resigning. Ms Mollard says that all she was doing was calling the meeting to a close. The question for resolution is how should the exchange reasonably have been construed and what flows from that.
Those four issues are largely to be resolved by reference to issues of credit. In the course of the trial, aside from the affidavit material filed and relied upon by each of the parties, I have the opportunity to view each of Ms Lowe, Ms Mollard and Mr Mead for the applicants and Ms Brookes for the respondent. Each of those witnesses were cross-examined.
Although Ms Lowe is noted as the applicant in the proceedings, she was a party to the proceeding by reason of her position within the office of the Workplace Ombudsman. The real protagonists in this dispute are Ms Mollard and Ms Brookes.
I had no difficulty accepting any of the evidence provided by Ms Lowe or Mr Mead. In respect of Mr Mead first, I make the simple observation that of all the parties to this proceeding he was clearly independent in all respects. He is a process server. There could be no possible motive for him to mislead or embellish anything that he informed the Court of. I was satisfied that his memory of events was accurate and reliable and I accept his evidence unequivocally.
So far as Ms Lowe was concerned she, in my view, conducted herself professionally. She was challenged in respect of various matters such as her recall of some details of a telephone conversation made by her to Ms Brookes on or about 21 November 2006, a conversation that was denied by Ms Brookes. However, in dealing with that matter and in cross-examination in relation to that matter, her concessions in relation to that matter appeared to be appropriate, particularly having regard to the fact that she had no record of the conversation and was prepared to make concessions consistent with that position.
As an aside the fact that a conversation occurred on that date, can be affirmed by reference to a diary note maintained by Ms Lowe as referred to in a later diary note, although that note itself is not necessarily a note of the conversation. I note that Ms Brookes herself has only her memory to rely upon and, for reasons that I will deal with in a moment, I do not regard her recollection of matters as being entirely reliable.
So far as Ms Brookes is concerned, she had largely only her memory to assist her, save for isolated notes such as the note I referred to a moment ago, dated 18 September 2006. I found her evidence in many respects to be vague and uncertain. Many questions were responded to by her with answers such as she couldn't recall. That seemed, indeed, to become a standard answer when pressed for details in respect of any matter that might have been adverse to her case. For instance, in answers to a proposition that she did not disclose her holiday and/or sick leave register to Ms Lowe, and it was put to her that she did not, she gave that sort of response. She says that she could not recall if she received letters directed to the company dated 13 November 2006, those being letters detailing complaints. Likewise there were difficulties in respect of recollection concerning letters sent and dated 21 November, and a telephone conversation which I am satisfied occurred on that date. I note the letter dated 21 November was entitled "Initial Request for Documents." The letter which subsequently followed was one which was entitled "A Breach Notice." That was a letter which was dated in May 2007. This bears significance in this context for reasons that follow shortly.
She said in her evidence, for instance, that whilst she recalled receiving notices in May, she had no recall of receiving the earlier notices, stating she had earlier vacated her premises at Southport. I regarded that to be a feeble excuse. However, later in her evidence she added that after about two weeks following her vacating those premises she had forwarded to the post office a redirection instruction. As I have noted earlier the letter in November was entitled "Initial Request for Records" and was dated the same day as the telephone conversation which Ms Brookes denied ever having participated in, subsequently in May a letter was forwarded entitled "A Breach Notice."
When she gave her evidence in relation to the receipt of those documents she essentially said that she recalls receiving the May correspondence which, from her recollection, made similar requests for documents. However when one looks at the two sets of documents it can be seen that they are indeed separate documents identifying different issues. The initial request for records is indeed a document requesting the production of records. The breach of notice document itself makes no such requests for records. It seems to me in those circumstances, clearly Ms Brookes is mistaken in her recollection of these matters because it cannot be that in May she received a request to produce documents.
Yet as I have noted, in her evidence she stated that she did not know that notices she received in May were in response to those earlier notices because:
“They asked for the same information.”
That was not the case.
To my mind her recollection on these matters was limited and was wanting. She was cross-examined about documents requested to be disclosed and produced. A request was made formally on 29 August 2007. It was put to her that she informed Ms Lowe she would send documents that day. The documents were not sent and, by way of explanation for the delay, she allegedly stated to Ms Lowe that she had just changed banks and delay was occasioned by that fact. Ms Brookes did not recall that conversation although it seems a short time later some documents were forwarded; conduct which was incongruous having regard to alleged conversations.
Generally I formed the view that Ms Brookes was not an impressive witness. I formed the view that she sought to be deliberately vague when it suited her. Her recollection was unreliable on many points and that in respect of some points it was plainly inconsistent with the documented facts. At the time of these events she was under financial distress. Her business was proving unsuccessful. Her bank has had appointed receivers and/or was exercising a power of sale in respect of some of her property. She had a strong motive to seek to brush off or deflect the workplace ombudsman and to stall his investigation. Having set upon that course in 2006 it seems hardly likely that she would change tack for trial.
Her responses at trial in my view reflected a continuation of that policy which was set in train by her in 2006. I reject any evidence that she gave which was contrary to either of Ms Mollard, Mr Mead and Ms Lowe, and when her evidence stands alone I treat it with suspicion unless it is supported by objective material.
Dealing then with the four claims of issue; first salary. I accept the version of events contended for by Ms Mollard.
I note that there was an offer of employment forwarded by the respondent to Ms Mollard. It was contained in an email, and in broad terms, in her affidavit material Ms Mollard simply states initially, in her first affidavit, she was offered the position of senior recruitment consultant by the respondent on a starting salary of $55,000 per annum for 40 hours per week together with access to a bonus scheme and $215 per month car allowance. She attached a copy of the letter of offer. In her affidavit she stated:
“While the letter of offer provides for a salary of $50,000 my understanding was that I was engaged on the basis that I would be paid 55,000, 50,000 was never discussed. I only received the document from the workplace ombudsman after my employment ended as I was unable to print the copy that Linda emailed to me and therefore I do not agree that I was ever employed for $50,000 per annum.”
In a subsequent affidavit responding to Ms Brookes' affidavit she says at para.3 that she notes:
“The respondent alleges I was offered and accepted a salary of 50,000 per annum. I deny this and repeat that the offer was made to me which she says she accepted for 55,000 per annum. I recall the offer was made at the Hope Island Golf Club and I was interviewed for the position and when the respondent asked me what salary I wished to be paid, I responded 55,000 – ”
to which she says the respondent immediately agreed. She continued in para.4 to say:
“The respondent alleges that she forwarded to me a hard copy and an electronic copy of the letter of offer setting out the salary of $50,000. I never received a hard copy and the electronic copy was unable to be retrieved from her computer. I made the respondent aware that I did not receive the electronic copy she had emailed to me.”
The respondent further alleges that on 9 May 2006 she provided Ms Mollard with a further copy of the letter of offer. Ms Mollard denies that occurred. In the course of cross-examination Ms Mollard admitted concerning the electronic copy she was able to open the attachment and was able to open the letter of offer and noted that it said a starting salary of $50,000 per annum. She says in response to seeing that letter that the only figure mentioned at the meeting was $55,000. She was asked, "What did she do when you received the letter of offer of $50,000?" She says words to the effect of:
“I reverted to the respondent she said that she'd pay me what I asked.”
This was said to have occurred by telephone of which she was then asked:
“Well, what did you do concerning the letter of offer? Did you accept it?”
And Ms Mollard said, referring to the respondent:
“She verbally accepted it at $55,000.”
Mr Bland, for the respondent, cross-examined her about the particulars of the telephone conversation and it is fair to say that Ms Mollard was unable to accurately recall the details of that conversation, although she said that she did remember doing it but:
“I can't recall the date or hour.”
She was challenged about why it was not in the affidavit and to that end she simply noted that the matter was "not brought up" by which I understood her to mean it was an issue that was not raised by her solicitors in the course of drafting the affidavits.
Despite it being put to her that she had in fact agreed and accepted $50,000 as the salary, she was quite adamant in her denials stating that she agreed on $55,000 saying that $50,000 was never discussed. She was adamant $55,000 was discussed and was accepted. It was what she wanted and it was what Ms Brookes had accepted.
In submissions made on behalf of the respondent, it was said that Ms Mollard's evidence should be rejected where it is in contest with that of Ms Brookes on this point. First, it was said that the affidavits were inconsistent in that the first affidavit acknowledges the email stating she had received it, however, that it couldn't be printed. Yet it was apparent from her evidence that in fact Ms Mollard had in fact seen the letter when it was forwarded to her in electronic form. Further she stated that she had only seen the document from the Workplace Ombudman's Office once her employment had been terminated. In response to that I am not necessarily persuaded that the evidence is inconsistent. When one looks particularly at para.4 of her second affidavit her statement it was not that she had never seen the written offer contained in the letter, but rather that she had never received a hard copy of it and that the electronic copy was unable to be retrieved from her computer. The retrieving of the letter from her computer is, in my view, not inconsistent with her saying that she read it despite the fact that she was unable to print a copy.
The second point made in respect of that matter was that the affidavit was deficient in relation to what was obviously an important piece of evidence. However, I think her explanation is adequate. As with all these cases the parties rely very much upon their legal advisers to assist in the drafting of material. In this case the applicant is the Workplace Ombudsman. Ms Mollard had made a complaint to the Workplace Ombudsman. She placed her trust in them to identify and tease out from her those facts which were necessary in support of her claim. It is, I agree, a matter that perhaps ought to have been included in the affidavit but in the circumstances I am not inclined to draw any adverse inference by reason of its omission.
It follows that while it is clear on the evidence that Ms Mollard saw the letter, she did not accept its terms at 50,000 and indeed took action to reaffirm the earlier oral conversation she had at the Hope Island Golf Club that the annual salary would be $55,000. Ultimately, the issue comes to be determined by resolution of issues of credit. I have formed the view that I would not accept anything stated by Ms Brookes in the absence of supporting objective material. In this case the only objective material which supports Ms Brookes' position, of course, is the letter of offer itself. However apart from noting its receipt is acknowledged its physical receipt was denied. I note that the letter of offer was not countersigned by Ms Mollard, I treat any acceptance of that letter with suspicion. I say that particularly when one has regard to the fact that on 9 May 2006 Ms Mollard was required to sign a computer usage policy. It seems to me incongruent that she may have been required to sign a computer usage policy but was not required to sign or countersign a letter of offer of employment, particularly one which was by then known to Ms Brookes to be adverse to Ms Mollard’s position if, as she says, that the offer was only ever at $50,000.
I make no specific findings concerning the production of the letter but to say that in all the circumstances it does not persuade me that I should reject the oral testimony of Ms Mollard. On that basis, so far as that term is concerned, I am satisfied that the term of the contract between the parties did not provide for employment at an annual rate fixed at $50,000 per annum but rather the salary was agreed at $55,000 per annum.
To some extent so much can be independently regarded from other material. For instance, an examination of the PAYE declaration for the financial year ending 30 June 2006. The arithmetic exercise there undertaken by Ms Lowe supports the payments made by the company, Star Recruitment to Ms Mollard were for a salary well in excess of $50,000 per annum.
So far as these matters were concerned various submissions were made by both parties concerning the documents. The documentary evidence can be construed to support both positions. For Ms Brookes Mr Bland submitted that figures can be seen to be consistent with an income of $50,000 per annum. He contends the difference arises because of the treatment of a sum of $215 per month which was a car allowance. The explanation provided by Ms Lowe at para.16 of her affidavit filed on 24 July 2008 was explained by the supplementary submissions made by Mr Bland. The matter, to some extent, is quite unclear because the value of the benefits and the calculation of wages and their workings are difficult to distil having regard to a number of different variables including taxation, allowances that were paid and the base salary. On that basis it seems difficult to figure how the payments made were indeed reached and, in particular, how the tax effect should be brought to bear in determining those matters.
It is clear, however, that the payslips directed to Ms Mollard cannot be accepted as reliable. They do not reflect, for instance, the change in taxation that occurred from financial year to financial year. It is common ground between the parties that between the financial year '05/'06 and '06/'07 the tax scales were subject to statutory adjustment, however, the payslips do not reflect any variation acknowledging the change in tax scales. Likewise, the payslips themselves, do not appear to separate out the pre and post 30 June payments. That is of significance because the employee is reported as having received approximately $8000 for the eight weeks of employment or a little under eight weeks employment governed by the group certificate, yet the matter is not supported by a comparative payslip issued by the company in the company's accounts.
Although it was urged upon me that I should make findings concerning the fraudulent nature of the payslips, I am not prepared to make any findings about whether or not the payslips, in this instance, had been fraudulently generated or otherwise. I acknowledge that there are serious discrepancies and that the discrepancies may give occasion for suspicion particularly when one compares the format of the payslip in respect of the employee, Mollard, with other employees. However, in my view it is simply satisfactory for present purposes to make the observation that I was not entirely satisfied that the payslips necessarily accurately reported the salary relationship between the company and Ms Mollard.
As I said, perhaps the most accurate record which can be referred to in this context is the PAYG form which was the declaration completed by the employer dealing with the period of employment from 8 May 2006 to 30 June 2006. When annualised out that suggested a rate of pay at $52,130, certainly more than the $50,000 per annum which is contended for by the respondent although less than the $55,000 contended for by Ms Mollard. On balance, I am of the view, having regard to both particular documents in addition to the oral testimony that it is more likely than not that the agreement between the parties was that Ms Mollard was to be paid $55,000 per annum. It follows that her salary and entitlements are set out in accordance with para.6 of the affidavit of Ms Lowe filed on 25 July 2008 and are estimated at $2749.76 by way of present underpayment. Finally, on this issue, I note that there is a claim by the respondent concerning overpayment of about $220.30 per month. Given my finding in relation to salary, that simply cannot be the case and, accordingly, I need not to go further on that issue.
Next is the issue of the start date. In her evidence, the respondent's case is premised principally upon the letter of offer. It contends for a start date of 9 May. I have already addressed in part the matters contained in the letter above. Despite that matter, not only is it inconsistent with the oral testimony of Ms Mollard, but also with the conduct of the parties. As I have earlier indicated I prefer the evidence of other witnesses to those of Ms Brookes where her evidence is at variance with the versions of other witnesses who I regard as more reliable. In this instance, that is the evidence of Ms Mollard. I accept that her start date was 2 May and consistent with the agreement between the parties that she started on that date. From that date she undertook duties in accordance with directions issued to her by Ms Brookes. In my view, it is of little moment where those duties were undertaken because, as is agreed by the parties in the statement of agreed facts, the place of employment varied over the course of the period of employment.
Third concerns the issue of leave entitlements. This also comes down to a contest of facts between the competing witnesses, principally the respondent and Ms Mollard. I accept Ms Mollard's evidence that, in broad terms, when the two particular occasions that I have earlier identified arose, in respect of each occasion she was permitted leave essentially on a basis that she would not be prejudiced by the taking of that leave. So far as the third occasion is concerned Ms Mollard denies that she took leave on that occasion.
The respondent, in support of her case, contends that the leave is accurately recorded in a document which was prepared by her. I do not accept that document. It was never acknowledged by Ms Mollard and, in fact, only came to light late in the course of the investigation. I do regard the document as somewhat suspicious. I find, on that basis, that the respondent has wrongly sought to make deductions account of leave entitlements and accept Ms Lowe's calculations contained at para.11 of her affidavit filed on 25 July 2008. On that basis there is underpayment in respect of leave to a value of $1627.12.
Finally the issue of termination. I accept again the version of Ms Mollard in preference to that of Ms Brookes. Ms Brookes maintained a diary of these events. It is recorded in her notes dated 18 September 2006. I make the observation that the note was never one which was acknowledged by Ms Mollard and, to some extent, in any event, is equivocal so far as the resolution of this issue is concerned. As I earlier observed the note records that at the material time there was a meeting late on the date of termination. The lead up to that discussion at the meeting is significant. A meeting was called by Ms Mollard to discuss her outstanding commissions. On any version of the agreement between the parties, there is no doubt that it was agreed that Ms Mollard would be paid a commission if her sales were in excess of agreed benchmarks. Paragraph 4 of the offer of employment identified that:
“There would be a personal bonus scheme of 33 per cent of personal billings above your base salary threshold.”
The letter provided an illustration in relation to how it would work. It seems to me unlikely, having regard to such an elementary formula, that there could be much room for mistake on the part of Ms Mollard as to whether or not she was entitled to commissions. Accordingly it seems unlikely that she would call a meeting in respect of commissions if she did not consider she had any entitlement particularly when, as the diary note would suggest, the purpose of the meeting appeared to be the discussion or the calculation of her “non commission” and “under performance”.
In any event the diary note clearly notes that there was considerable discussion across a broad cross range of issues which were, no doubt, becoming a source of contention between the parties. It should not be forgotten that at this time the respondent company was suffering from a downturn in business and it appears by reason of other evidence that the company was in some sense suffering some financial distress. The extent of that distress, of course, is not apparent but it was certainly conceded by Ms Brookes that matters were tight for from August that year she had ceased paying herself a salary. Towards the end of the meeting it seems the matters became somewhat heated. In the minute Ms Brookes reports it in these terms:
“At this point she (Ms Mollard) got up and screamed "fucking hell, it was for a funeral, I'm not doing this any more, I'm leaving" and proceeded to walk over to the desk.”
Ms Brookes continues:
“I followed her and asked her to please give me her keys and card and phone –“
She noted, that Ms Mollard:
“then looked at me and said, "What, are you sacking me?"”
To which she says she responded to Ms Mollard:
“No, I am not. You've just told us you have had enough and are leaving.”
She then says that Ms Mollard said:
“Well, I'm not leaving without a fight.”
Matters progressed from there.
Having regard to the circumstances in which this conversation took place, the manner in which the situation evolved, the question is whether or not the statement made to the effect that Ms Mollard “was not doing this any more” and she was “leaving” was intended to mean that she was leaving the meeting as she contended in her evidence or whether she was resigning as contended for by Ms Brookes. In my view of matters I do not accept that the circumstances could reasonably have given rise to an understanding that Ms Mollard was intending to resign. It is, to my mind, more likely than not that at the time she used those words, having regard to the background and circumstances, she was expressing in clear terms her disgust with the manner in which the meeting had progressed and the manner in which matters were unravelling.
It should not be forgotten that the meeting was initially called for the purpose of discussing commissions. It is odd, to my mind, that someone could call a meeting for that purpose if she did not believe she had an entitlement to commissions and, of course, further in my view it is curious that in that context one would simply resign and walk out on a claim for commission in that environment.
At the time of the meeting the company was suffering financially and the respondent was not drawing a salary. No doubt when facing an attack such as a claim for a commission, as was then maintained by Ms Mollard, the best form of defence was attack. That, in my view, is what appears to have occurred here. The respondent being, no doubt an experienced operator in the human resources area, was able, she thought, to take advantage of a situation in which had opened to her in order to justify a termination. However, notwithstanding that attempt on her part, I do not accept that the circumstances would reasonably have lent themselves to be interpreted as a resignation. In fact the later words immediately following the words relied upon by the respondent where Ms Mollard questioned her asking:
“What, are you sacking me?”
clearly indicate to me that there was never an intention on the part of Ms Mollard to resign and nor would that have been apparent to a reasonable observer, including in this case Ms Brookes. In my view, the defendant's conduct constituted a summary dismissal. It was unlawful in that it was given without affording Ms Mollard notice and, accordingly, she was in those circumstances entitled to payment in lieu.
It follows then, coming back to the facts of this case, in addition to the three earlier employees that I have discussed in respect to which there are admissions, I make further findings in relation to the employment of Ms Mollard that indeed she was employed at a salary of $55,000 per annum; she did in fact start her employment on 2 May; her leave entitlements are as detailed in the affidavit of Ms Lowe and that the deduction of leave contended for by Ms Brookes is without foundation; and, finally, that she was terminated without notice and not paid in lieu of that notice.
Dealing then with the investigation. During the investigation the Workplace Ombudsman had numerous dealings, or at least attempted communications with the respondent regarding the underpayments. The matters are detailed in the statement of agreed facts that include correspondence on 13 November 2006, correspondence on 20 February 2007, and those particular items of correspondence dealt with the claims of Ms Mollard and Ms Thompson encouraging voluntary compliance. There was correspondence on 30 March 2007 requesting notice to produce documents in respect of the employment relating to Ms Mollard, Ms Thompson and Mr Goodwill. In relation to that matter, a process server had to be engaged to serve the Notice to Produce Documents. On 1 May 2007 attempts were made to have a process server serve a failure to comply with a notice to produce documents. That was done at a residence at 2141 Beaufort Way, Hope Island, which is a residence then owned by the respondent.
The access to the estate was refused by security. The process server was advised that if he returned to the estate the respondent would complain to the police and he would be arrested. On 10 May 2007 the respondent telephoned the Office of Workplace and left a message for a Workplace Inspector. That was followed up with a return call during which the respondent advised that she had been away and that she had only received the Notice to Produce Documents the previous day. She asked if the documents could be forwarded to the Office of Workplace by mail and, as events have transpired, that did not occur, until some significant later time. Even then it was not necessarily provided in a fulsome manner.
In the course of that conversation the respondent was also informed that the breach notices would be issued at the end of the following week based upon available evidence. The respondent confirmed that she would get some of the information to the office by the end of the then current week. On 18 May 2007 a breach notice was issued to the respondent company advising of the outcome of the investigation with respect to the claim made by Ms Mollard itemising the underpayments and requesting payment in full and advising of consequences if that did not occur. Likewise, a similar notice was issued in respect of Mr Goodwill and Ms Thompson.
On 23 August 2007 the Workplace Ombudsman received an email from the respondent as a result of which the Workplace Inspector telephoned the respondent. During that communication the respondent was advised that the investigation was finalised on 18 May 2007 and the matter was proceeding to litigation and the respondent needed to produce any documentation urgently. She advised she would meet with the Workplace Inspector on 28 August 2007 to produce additional documents. A meeting was scheduled for 29 August but on that day the respondent advised she wished just to email the documents to the Workplace Ombudsman in relation to breach notices from Mollard, Goodwill, Thompson and Gozner.
On 29 August the respondent sent a partial email to the Workplace Ombudsman which contained only a fax header page and half the first page of a letter of offer to Mollard. She was informed by the Workplace Ombudsman that that needed to be sent again. On 20 September 2007 the Workplace Ombudsman ultimately received a bundle of documents from the respondent relating to Mollard's employment but no other documents were received and the documents did not include payslips or leave records. It is probably worthy of note in relation to these matters that, as I have already stated, because of difficulties in effecting service, a process server was engaged to assist in this matter.
Mr Mead was the process server. He was engaged to serve the initiating application and supporting affidavit. Prior to that he had served various other documents on the respondent. He stated that his first attempted service of documents on the respondent was on about 6 January 1997. In his report in respect of service on that date he said that he attended on that occasion a property at 6010 Calardo Avenue at The Lakes, Hope Island. He spoke to a male who told him that the respondent had not lived at that address for some time. That then led him to discover the property at 2141 Beaufort Way, Hope Island. There was a further attempt then to effect service on that property. Prior to service on 10 April 2007 Mr Mead reported that although he attended the estate, the only way in was via a security gate and a boom gate which was only accessible by residents. He had been unsuccessful in trying to get into the property although, ultimately, at about 7.50 on the 10th he succeeded in getting into the estate noting that that was his eighth attempt.
He says that at about 7.50 he buzzed the door for 2141 and looked at a screen and within about 30 seconds access to part of the estate was granted by someone from within 2141 Beaufort Way. He says he drove to that address through the gates and attended at the premises 2141 Beaufort Way. He knocked on the door, however no-one came to the door. He described the building and made a notation that there was a for sale sign on the front lawn advertising an auction on 18 April. He says that he looked through the blinds because they were open and he noticed a female walking within the premises. That person matched the description of the respondent based on a photograph which had been forwarded to him and which is consistent with an identification he effected in Court of the respondent. He noted that this person was ignoring him. He said within a matter of three minutes of him arriving security from the estate arrived and asked him to leave the estate immediately. Although he told the security that he had been granted access by someone within 2141, the security personnel advised that his right of access had now been revoked and he was to leave immediately. Before he left he proceeded to slide documents under the front door noting that the female was then in what appeared to be an office which was at the left hand front of the house next to the front door.
Ms Brooks denies that she was present on that day. She said that only her 11 year old daughter was at the house on that occasion. I accept Mr Mead in his evidence that although he had limited vision, something a little better than a silhouette, he was well able to make out the character and features of the person inside the house and that they accorded with the features of Ms Brookes and were not consistent with the features of an 11 year old girl.
Dealing then with the legislative framework; I do not propose to detail these matters, but to state that the legislative framework is comprehensively detailed in the very helpful submissions which have been filed on behalf of the applicant and which I will mark exhibit 2 in the application. There does not appear to be any contest in relation to the relevant legislation save in so far as I will deal with matters in a moment. In broad terms the claim premised upon the legislation is that, in part, the Federal minimum wage applies. In so far as there are State awards they now become NAPSA's and the relevant provision of the Act dealing with contraventions is s.718. I make those observations particularly in so far as concerns the employee, Mr Goodwill. He was engaged as a senior recruitment consultant. His employment was not governed by any pre-reform agreement or award, State or Federal. It is admitted that Star had failed to pay Mr Goodwill any wages for the period, 18 September 2006 to 3 October 2006. He was, in effect, not paid anything during his employment. On 15 July 2008 that matter was rectified with the underpayment to Mr Goodwill being made in the amount sought in the further amended application for unpaid wages and, on that basis, Mr Goodwill was paid according to the Federal minimum wage which is less than the contracted rate.
So far as Ms Thompson is concerned, Ms Thompson's duties for staff fell within the application provisions of the Clerical Award. Again, the respondent admitted that Star had failed to pay Ms Thompson wages, accrued annual leave and payment in lieu of notice of termination. Again, on 15 July this year the respondent rectified the underpayment to Ms Thompson in making a payment of the amount sought in the further amended application for unpaid wages, annual leave and notice.
In so far as Ms Gozner is concerned, her duties for Star were detailed in the application. She was employed under the provisions of the clerical award and the respondent has admitted that Star failed to pay those wages and accrued annual leave and payment in lieu of notice on termination and that on 15 July 2008 the respondent rectified the underpayment to Ms Gozner by making a payment of the amounts sought.
I have already now determined the factual issues in relation to Ms Mollard. She was engaged as senior recruitment consultant. Likewise her award was not governed by any pre-reform agreement, State or Federal and she falls into the same class and is entitled to compensation in respect of underpayment as were the other unpaid employees. So far as her claim is concerned, the applicant seeks an order under s.719(6) of the Act that the respondent pay to Ms Mollard an amount for unpaid wages in accordance with the Federal minimum wage unpaid accrued annual leave in accordance with the AFPCS and unpaid payment in lieu of notice in accordance with the NAPSA, that being in this case the Industrial Relations Act 1999.
It is further submitted that the respondent can be made personally liable for making payments sought under s.719(6) in that it is available for the Court to order the respondent be liable for such payments because first s.727 of the Act provides that s.719 of the Act is a civil remedy provision and, secondly, because s.728 of the Act provides that a person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision. Further consequential orders are also sought in respect of Ms Mollard, pursuant to s.722 of the Act for the payment of interest at the rate of 6.5 per cent from 18 September 2006 and then so far as concerns the remaining unpaid wages, pursuant to s.722 for the payment of interest at a rate of 6.5 per cent from 14 November 2006 to 15 July 2008.
So far as her personal liability is concerned, the respondent is the sole director, company secretary and shareholder of Star Human Resource Management. She was its directing mind and will. A review of the company's ASIC return reveals that she was the sole shareholder. She was clearly in a position of management and was responsible for carrying out the business of Star, including engaging employees. She had knowledge of all the material circumstances constituting Star's breaches and of the applicable provisions and in fact was directly responsible for the conduct constituting the breaches. In my view it is clear that she was knowingly concerned, a party to and procured the contraventions. In addition, it should be noted that she was the general manager of a human resources business, which was in the business of providing recruitment services for her clients and that the provision of such services would ordinarily entail an obligation to have an awareness of the minimum statutory entitlements. She told the Court that she had been in the business herself for about eight years and, further, she was responsible for engaging the employees and payment of their wages and she also supervised their work in the business.
Dealing then with penalty, the first point to note is that the Court has the power to impose a penalty on the respondent by virtue of s.727 and 728 pursuant to 719(1) of the Act in respect of each breach of the applicable provision. Each breach attracts a maximum penalty of 60 penalty units that equates to $6600, that being the maximum which can be applied which, in respect of nine offences, gives a total value of $59,400. However, s.719(2) of the Act requires the Court to consider two or more breaches of an applicable provision that arises out of a course of conduct to be taken to constitute one single breach of the applicable provision. So far as this is concerned I have been referred to the decisions of Cotis (Office of Workplace Services) v Pow Juice Pty Ltd [2007] FMCA 140 and also to Mason v Harrington Corporation Pty Ltd (“Mason”) [2007] FMCA 7. In broad terms those cases are authority for the proposition that where particular breaches of a particular term arise out of the same course of conduct, even if they involve different employees they must be treated as a single breach, and that where there are breaches of two distinct terms of an industrial instrument they are not to be treated as a single breach even if they arise out of the one course of conduct. I accept that authority and adopt that approach.
It is on that premise that there are, in effect, three breaches in this case. There is the breach of the applicable provision relating to wages, which I earlier noted, as having a value of approximately $7550. Second, a breach of the applicable provision regarding annual leave which has a value of approximately $3090 and, third, a breach of an applicable provision relating to the payment in lieu of notice which has a value of approximately $2740.
In determining the actual penalty itself, in the decision of Mason His Honour, Mowbray FM identified a non exhaustive range of considerations which might be considered in determining the particular penalty to be called for. The parties have each addressed me in respect of those matters and I will touch upon them briefly. First, is the nature and extent of the conduct which led to the breaches. For the respondent, in particular, it is contended that the conduct consisted of a failure to pay the employee entitlements from 21 September 2006 to 3 October 2006, 11 October 2006 to 14 November 2006 in respect of two of the employees, and finally in respect of Ms Mollard for a period of approximately 2 May 2006 to 18 September 2006.
Second, the circumstances in which the conduct took place. It is contended that the conduct took place during a period of reduced business activity, in other words, during a time of financial distress in respect of which the company and the respondent were placed under significant financial pressure. Whilst that may in fact be the case, that is in my view simply not an adequate explanation. Indeed, as was noted by his Honour Driver FM in Cotis v McPherson [2007] FMCA 2060 at para.12 where a like submission was made:
“An employer should not and cannot regard insolvency either personal or corporate as a refuge from their responsibilities under the Workplace Relations Act. The mere fact that a business fails and its premises close is not an excuse for a failure to pay entitlements due to employees, including entitlements in respect of termination of their employment which is a necessary consequence of the closure of the business.”
Obviously, in that case the business had gone into liquidation at the time that the breaches arose. In this case this was immediately preceding liquidation which subsequently occurred but, no doubt, the financial stressors were the same. Ultimately it was for the respondent, in this instance, to make appropriate financial arrangements which she failed to do.
Next is the nature and extent of any loss or damage sustained as a result of the breaches. In this case the respondent says that she has paid each of Mr Goodwill, Ms Thompson and Ms Gozner and so much is the fact. Those payments were made approximately two months ago.
Interest was paid, however the matter concerning Ms Mollard is yet to be resolved.
Next is whether there has been similar previous conduct by the respondent. It is conceded that there is no previous history in relation to this party. Next, whether the breaches were properly distinct or arose out of the one course of conduct. That matter has earlier been addressed and there are in fact in effect three distinct breaches having regard to the course of conduct involved in those instances. Next is the size of the business enterprise involved. In this instance it is clear that the business was a small business. The company had six employees and a consultant general manager. That was by September 2006. It was, however, as I note the company that was perhaps employing beyond its means particularly when one takes into account the evidence of the respondent that at that time she was not herself drawing a salary because of the downturn in business.
Next is the question of whether or not the breaches were deliberate. The respondent submits that the breaches should not be treated as deliberate in the sense that they were committed maliciously, it was submitted they were involuntary in the sense that they resulted from the company's financial difficulties. Whilst it may be the fact that the breaches arose by reason of the company's difficulties, I don't accept that they were involuntary. The financial difficulties of the company may have precipitated the need for the respondent to make a decision about these matters but ultimately she determined the conduct of the company and her determination was not to pay wages and/or other lawful benefits. Once set upon that course it could not be said that the conduct was otherwise than deliberate, although I do take into account the submission that it was not done maliciously.
Next, is whether senior management were involved in the breaches. Again, in this instance, having regard to the size of the company it is apparent that the company was directed essentially by the respondent and, to that end, it is not a particularly significant consideration in this context. Next is whether the party committing the breach had exhibited contrition. For the respondent it is submitted that contrition has been demonstrated, in particular, because of the payment of the amounts owing to Mr Goodwill, Thompson and Gozner including interest which was paid at 7 per cent on the outstanding entitlements.
I take that matter into consideration but I also make the observation that contrition is not limited to what happens a short time before trial but I think can reasonably be considered from the overall context. In this case, particularly when one has regard to the cavalier manner in which it appears the respondent has engaged with the applicant in order to try and resolve the matter on a voluntary basis and then, indeed, the difficulty the respondent has put the applicant to in terms of the process, it cannot be said, in my view, that she has demonstrated considerable contrition. By that I take into account particularly my observations from the Court record that there was a need for an order for substituted service; I take into account the observations made on the basis of Mr Mead's evidence that on the occasion when he attended the residence he was certainly made not welcome in relation to his purpose for attending, which was a lawful purpose to serve process.
Furthermore I take into account the behaviour of the respondent. In my view, it did not accord with that of somebody who sought to be cooperative. In particular, I take into account her non response to correspondence, her shortcomings in the production of documents in response to directions to make disclosure and, as I say, ultimately a late payment, albeit that the payment is made, including the payment for interest. However, having said all those matters I still consider she has an entitlement to some allowance for that matter, despite the fact that I do not necessarily accept there has been a great demonstration of contrition by her in relation to these matters.
Next, whether the party committing the breach has taken corrective action. Obviously in this case, except in relation to Ms Mollard, there has been corrective action although perhaps not entirely satisfactory for reasons which I have just expanded upon. Next is whether the party committing the breach has cooperated with the enforcement authorities. Again, I have earlier addressed that matter. It is submitted that the explanation for non cooperation has been explained by Ms Brookes in paras.48 to 72. While they do provide some basis for explanation, in particular her observations she was overseas for a considerable period of time, the fact remains she acknowledged in relation to the closure of the premises, she did provide the post office with a redirection authority. Accordingly, in the ordinary course, there should be an explanation for why correspondence was not received back via the office of the Workplace Ombudsman when as stated by Ms Brookes, she did not receive the correspondence. I simply have difficultly accepting that statement by Ms Brookes that she never received the correspondence.
Then there is the need to consider the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. In respect of that matter it was submitted by the respondent that matters should be subsumed into the question of general deterrence which I will address next as the final consideration. In that regard the respondent submits that there is no evidence that there is any increase in the occurrence of this kind of conduct in question such as to warrant a greater penalty on the ground of general deterrence. Accordingly on the basis that the respondent has only engaged in this conduct on one occasion there is no need to impose a greater penalty on the ground of specific deterrence.
In relation to matters of deterrence I note the observations of Tracey J in Kelly v Fitzpatrick(“Kelly”) [2007] FCA 1080 where his Honour noted in circumstances where there may be no need in dealing with the issue of general deterrence, it does not follow that the need for general deterrence should not be disregarded. Adopting the observations of Finklestein J in CPSU v Telstra Corporation (“CPSU”) [2001] FCA 1364. Tracey J stated at [28]:
“Even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority and, in that case, a penalty should be imposed to mark the law's disapproval of the conduct in question and to act as a warning to others not to engage in similar conduct. No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation this will occur. When it does not it will normally be necessary to mark failure by imposing an appropriate monetary sanction. Such a sanction must be imposed at a meaningful level.”
His Honour there referred to the Australian Competition and Consumer Commission v ABB Transmission v Distribution Limited [2001] FCA 383 at [13]. I accept the submissions made by Mr Bland on behalf of the respondent that there is no need for a general deterrence, and there is no basis for an enlarged penalty on the basis of specific deterrence. However there is at least the need to impose a penalty by way of general deterrence that will inform the business community that there is a need to meet minimum employment standards and that employees do have an expectation this should occur and when it does not there will be an appropriate monetary sanction. This is particularly so having regard to his Honour's observations in relation to small business.
I should add that in considering that list, that list should not be regarded as exhaustive, see generally the comments made by the Full Court in the decision of Australian Ophthalmic Supplies v Clarry Smith (2008) FCA FC 8. But I think that they do cover in this situation all the matters that require consideration but one. Because I am considering the context of multiple penalties, the observations made in Kelly by his Honour Tracey J, introduce another factor which must be taken into account when fixing pecuniary penalties for multiple breaches and statutory stipulations that being the totality principle. This principle is designed to ensure that the aggregate of the penalties imposed is not such as to be oppressive or crushing. Different views have been expressed as to the manner in which the principle ought properly be applied. On one view the starting point should be the determination of an appropriate total penalty. That figure would then be divided by the number of breaches to produce a penalty for each breach. See CPSU.
However the orthodox position which I consider should be adopted, is that the starting point is the determination of appropriate penalties for each contravention or the statutory norm. The aggregate figure is then considered with a view to ensuring that it is an appropriate response to the conduct which led to the breaches. See Australian Competition and Consumer Commission v Australian Safeway Stores (1997) 75 FCR 238. His Honour noted this approach was recently described in the criminal context from which the totality principle is derived as:
“The orthodox, but not necessarily immutable, practice –“
adopted by a sentencing in Court. See Chad Johnson v R [2004] HCA 15 at [24]-[28] per Gummow, Callinan and Haydon JJ. That, to my mind, seems to be the appropriate approach to be adopted in this instance.
In submissions made on behalf of the applicant, it was submitted that in this case it was appropriate to impose a significant penalty on the respondent toward the higher end of the scale for each breach. The basis for that submission was that the principle objects of the Act emphasise the importance of minimum standards and for the enforcement of those standards and that Australian workers rely upon these minimum standards. In this case he submitted there were multiple contraventions involving four employees and involving a total underpayment of about $12,500 occurring over a period of about seven months. He submitted the contraventions revealed a deliberate disregard for the respondent's statutory obligations and, in particular, the respondent in contravention of the Act failed to keep and provide proper records relating to leave, pay and periods to which payment is related. There were no proper records as to days worked and this was a failure that should be emphasised in the context of the respondent's own business which was of course that of human resources.
Whilst I do not think any surcharge ought be imposed upon the respondent because she is in the human resources business, the conduct in relation to her own affairs certainly does not leave her cloaked in glory. The matter is however relevant to her level of awareness. It was further submitted on behalf of the applicant that the respondent had until the applicant obtained an order for substituted service engaged in various acts amounting to non compliance or uncooperative behaviour all designed to evade responsibility. They include the failure to respond to the informal attempts by Ms Mollard to have the underpayments rectified; actively avoiding cooperating with the applicant's investigation by not providing a correct address for service; actively avoiding being served with documents; failing to comply with some of the notices to produce issued by the applicant; responding belatedly and partially in writing and by telephone to notices to produce by the applicant and then, of course, only recently producing some of the records purporting to relate to the employment of the employees, such records not otherwise having been previously provided; and failing to meet at agreed times and failing to produce documents as requested.
I have to say that I formed the view that there was indeed obfuscation on the part of Ms Brookes and that those facts contended for by the applicant do tend to support the view that I reached in relation to that matter. It is further submitted that despite there being sufficient opportunity, there was a failure by Ms Brookes to comply voluntarily with her obligations before proceedings commenced. I note that voluntary compliance would not have necessarily obviated the risk of proceedings having been commenced, but no doubt even if proceedings had been commenced, any voluntary compliance would have seen a very favourable approach taken to her circumstances by the Court. I note, and it is further submitted that there was a denial in respect of liability to Ms Mollard for reasons which have earlier been explained. I do not accept her denials and I find on the basis of that approach that there cannot be seen to be any conciliatory approach taken, at least, in respect of that employee.
It is further submitted that only after a significant time following the commencement of proceedings were underpayments rectified. I have already made observations in relation to those matters. The applicant also presses for the need to make an order that will deter other employers from similar conduct. I think that point is well made and is consistent with the observations by Tracey J in Kelly.
It is further urged upon the Court that consideration need be taken in particular of some of the relevant employees given the nature of the work. Particularly, it should be inferred that they were vulnerable in an employment situation. Having regard to the pay levels involved for these particular employees, and the nature of the duties as accepted by the parties, it is quite apparent to me that they were not senior employees. Their pay levels barely reached, in fact did not reach the average weekly pay or average weekly earnings for the average Australian employee as they now stand. As I understand it, the average weekly earnings now approximates $50,000 per annum. Even if they approach that sum, it could be seen that these people were not better than average employees. They were not persons who, by reason of their position, would have had any capacity to build up sufficient reserves such that in an event of underpayment of wages they would have reserves to call upon to tide them over until they were paid or found alternative employment. For instance, at least one of the employees went for a period of one month without pay. In the ordinary course these are ordinary working people. The underpayment, in their circumstances, I think can be seen to be exacerbated by the harm that would have occasioned them. Of course there is no evidence before me expressly dealing with those matters, but I do not think one requires a great body of evidence to have any real appreciation or a basis for empathy for persons in those positions when one knows that given their level of pay in this instance. Underpayment of people in those positions constitutes not only an imposition upon them, but can be described as predatory in an economic sense and that conduct, I think, is unacceptable to the broader community.
Next it is submitted that despite partial payments finally being made there is still nothing to indicate remorse on the part of the respondent given her attitude to Ms Mollard. I think there is some merit in the submissions made by the applicant on that point. I have earlier dealt with the respondent's attitude to these proceedings and her dealings with the Office of the Workplace Ombudsman. I am not entirely content with the submission most ably pressed by Mr Bland that she is indeed remorseful. No doubt she is sorry these proceedings commenced but I doubt that that sorrow has any genuine or heartfelt basis.
Next it is submitted by the respondent that she alleges she has cooperated with the applicant's investigation. For reasons I have earlier dealt with I am not necessarily satisfied that that is the case. I am not inclined to allow her a great deal of latitude on account of that consideration, although I will make some allowance having regard to the fact there was a payment made, albeit a payment made, relatively speaking, at the 11th hour.
Next it is submitted that the respondent claims to have been unaware that the matter was proceeding to litigation. Again, I have difficulty accepting that, particularly when one has regard to the course of these proceedings and the extensive correspondence directed to her which was not redirected back to the Workplace Ombudsman's Office, giving rise to my mind a reasonable basis to believe that she has received that correspondence. There are just simply too many items of correspondence to have been sent and not received by her to lend credibility to a suggestion that the correspondence has been lost in the post.
Finally for the respondent it was submitted that these events have given rise to some embarrassment. This matter was discussed at trial. It is not a matter that really bears any weight in my determination. Further, it is submitted on behalf of the applicant that the respondent has had a series of senior positions and has been acknowledged for business practices and that in that context it would be seen that she should be subject to a higher penalty because the public may expect, by reason of the recognition that she has received, both by those important positions and public recognition some additional surcharge might be imposed. I do not necessarily accept that to be the case and state that matter has not borne upon my determination of penalty in this instance.
Finally it is submitted that consideration should be taken of her financial situation and, in particular, that during the course of these events she was under financial distress. Again I have already addressed that matter in the context of observations made in other Courts that that matter should not bear finally upon that issue.
When it comes to the actual quantum of the penalty itself I have earlier touched upon the maximum provided for and that the aggregate totals $59,400.
In broad terms, when one comes to look at the conduct in respect to each of the three classes of offence, namely the failure to pay wages, the failure to pay accrued annual leave and a failure to make payment in lieu of notice, it seems, save for some differentiation which may occur in the instances involving Ms Mollard, it is difficult to distinguish or conclude that a different penalty might apply in relation to different employees. Broadly in relation to each of the employees there has been an underpayment. It has occurred over a period of time and the quantum may vary between employees but otherwise the conduct itself has the same quality and character. I think broadly that in relation to each of those three classifications it is difficult, when working out an aggregate, to say in one particular instance the level of penalty that might apply, if it was to be considered separately from another, is such that it would occasion a significant variance between the differing situations. Accordingly I am confident in forming the view that when I come to determining a penalty in relation to each of those three separate offences, the penalty I impose represents not only the penalty which represents the aggregate which might apply having regard to each individual cases but also represents an appropriate penalty in relation to those instances on the basis that there is a course of conduct involved.
To that end it seems to me that so far as each of the offences are concerned, and I note in this regard that overall I regard each of the contraventions as serious in the context in which they occurred, that in respect of the course of conduct related to the non payment of wages an appropriate penalty would be $4000; In respect of the course of conduct related to the underpayment of wages an appropriate penalty would be $2500; and, in respect of the course of conduct complained in respect to the failure to pay moneys in lieu of notice, an appropriate penalty in respect of each instance would be $2500. These sums have to be discounted to allow for the mitigating factors, perhaps the most significant of which instance is the earlier admissions in relation to three of the employees and the earlier payment of moneys. Although I have earlier addressed those issues I do think that some discount is called for. Although the range of discounts admitted on behalf of both parties appears to be in the range of 25 to 30 per cent I do not agree that that is an appropriate range in this instance. I think a discount of 12 per cent should be allowed in respect of the conduct of the respondent in the context of litigation having regard to not only that conduct but also the determination by the respondent to press in respect of the claim made by Ms Mollard, so those penalties will be discounted by 12 per cent in each instance.
Otherwise, coming back to the further amended application, I propose that there be consequential orders made in respect of Ms Mollard. There is no need for consequential orders in respect of the other employees, they having been paid. In respect of the sums that will be paid in respect of the contraventions from paras. 1 to 10 which I have already addressed there will be an order under s.841 of the Act that the penalties be paid to the Commonwealth and, so far as the moneys are payable, as I have already noted, paras.10A, 10B and 10C there will be a direction that the moneys be paid to Ms Mollard.
There should be interest for Ms Mollard as well.
I ask the parties to agree to a minute of order for my consideration.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Beverley Schmidt
Date: 17 November 2008
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