Manchee v BTIG Australia Limited (No 2)
[2023] FedCFamC2G 43
Federal Circuit and Family Court of Australia
(DIVISION 2)
Manchee v BTIG Australia Limited (No 2) [2023] FedCFamC2G 43
File number(s): SYG 2318 of 2021 Judgment of: JUDGE CAMERON Date of judgment: 1 February 2023 Catchwords: INDUSTRIAL LAW – Breaches of civil remedy provisions of the Fair Work Act 2009 – imposition of pecuniary penalties – relevant considerations.
INDUSTRIAL LAW – Course of conduct – grouping of contraventions – whether avoidance of civil double jeopardy required contraventions of discrete payment obligations to be grouped together.
Legislation: Fair Work Act 2009 (Cth) ss 12, 44, 45, 90, 539, 545, 546, 556, 557, 557A
Crimes Act 1914 (Cth) s 4AA
Cases cited: Manchee v BTIG Australia Limited [2022] FedCFamC2G 813
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Dafallah v Fair Work Commission (2014) 225 FCR 559
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (2018) 264 FCR 155
Kelly v Fitzpatrick (2007) 166 IR 14
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088
Division: General Number of paragraphs: 30 Date of hearing: 23 January 2023 Place: Sydney Counsel for the Applicant: Mr R. Millar Solicitor for the Applicant: Opus Legal Counsel for the Respondent: Mr R. Seck Solicitor for the Respondent: McArdle Legal ORDERS
SYG 2318 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ANDREW MANCHEE
Applicant
AND: BTIG AUSTRALIA LIMITED
Respondent
order made by:
JUDGE CAMERON
DATE OF ORDER:
1 February 2023
THE COURT ORDERS THAT:
1.The respondent is to pay the applicant penalties totalling $15,000 within 28 days.
2.In all other respects the application be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Cameron
INTRODUCTION
The applicant, Mr Manchee, was employed as a “sales trader” by the respondent, BTIG Australia Limited (“BTIG”) from 3 December 2012 until 13 April 2021. He alleged that BTIG had breached the Banking, Finance and Insurance Award 2010 (“2010 Award”) and the Fair Work Act 2009 (Cth) (“FW Act”) by failing to provide him with paid annual leave, annual leave loading and minimum wages because, instead of paying him a wage or salary, it had paid him a commission on trades. His originating application and statement of claim filed on 16 December 2021 relevantly sought an order pursuant to s.546 of the FW Act that BTIG pay penalties to him for the alleged contraventions of the FW Act.
On 6 October 2022 judgment on those allegations was delivered: Manchee v BTIG Australia Limited [2022] FedCFamC2G 813 (“Contraventions Judgment”). It was found that BTIG’s payments to Mr Manchee pursuant to his first employment contract from 3 December 2012 to 26 August 2020 (“2012 Agreement”), based on the brokerage commission he earned for BTIG, were made in satisfaction of its contractual obligations under the 2012 Agreement only, and could not be set off against BTIG’s statutory obligation to provide paid annual leave or its Award-based obligations to make payments in respect of minimum wage and annual leave loading. However, as Mr Manchee had been renumerated in excess of his entitlements under the 2010 Award, the Court did not find that Mr Manchee had suffered any loss compensable under s.545(2)(b) of the FW Act.
Relevantly, the Court found that BTIG had contravened the following sections of the FW Act:
(a)s.45 of the FW Act by contravening cl.13 of the 2010 Award (minimum wages);
(b)s.44 of the FW Act by contravening s.90(1) of the FW Act (annual leave), a provision of the National Employment Standards (“NES”); and
(c)s.45 of the FW Act by contravening cl.24.3 of the 2010 Award (annual leave loading).
These reasons concern the penalties to be imposed on BTIG for those contraventions.
LEGISLATION
Sections 44 and 45 of the FW Act are civil remedy provisions: s.539, FW Act.
The FW Act further provides relevantly as follows:
546 Pecuniary penalty orders
(1)The Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Determining amount of pecuniary penalty
(2) The pecuniary penalty must not be more than:
(a)if the person is an individual–the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
(b)if the person is a body corporate–5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
Payment of penalty
(3)The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.
…
…
556 Civil double jeopardy
If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct.
557 Course of conduct
(1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b) the contraventions arose out of a course of conduct by the person.
(2) The civil remedy provisions are the following:
(a)subsection 44(1) (which deals with contraventions of the National Employment Standards);
(b)section 45 (which deals with contraventions of modern awards);
…
Before 15 September 2017, ss.44, 45, 539(2) and 546(2) of the FW Act provided that the maximum pecuniary penalty for each contravention of a provision of the NES or of a term of a modern award was 60 penalty units for individuals and 300 penalty units for corporations. Since 15 September 2017, s.539(2) has provided that the maximum pecuniary penalty for such a contravention, if not a serious contravention under s.557A of the FW Act, is 60 penalty units for individuals and 300 penalty units for corporations and, for a contravention that is a serious contravention, 600 penalty units for individuals and 3,000 penalty units for corporations. It was not suggested that this case involved serious contraventions.
Pursuant to s.4AA of the Crimes Act 1914 (Cth), at all times relevant to this proceeding, a penalty unit was worth:
(a)$110 before 27 December 2012;
(b)$170 in the period 28 December 2012 to 30 July 2015;
(c)$180 in the period 31 July 2015 to 30 June 2017;
(d)$210 in the period 1 July 2017 to 30 June 2020; and
(e)$222 in the period 1 July 2020 to 31 December 2022.
EVIDENCE
No evidence was filed in this stage of the proceeding.
CONSIDERATION
This is an unusual case in that no order for financial compensation has been made. Noting that unusual context, is to be recalled that the purpose of civil penalties of the sort available under the FW Act is deterrence, not compensation: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at 195 [116]; Dafallah v Fair Work Commission (2014) 225 FCR 559 at 593 [140]. In Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (2018) 264 FCR 155, the Full Court of the Federal Court said:
It is unnecessary to engage in any extended discussion of principle. Of particular significance is the recognition that deterrence (general and specific) is the principal and indeed only object of the imposition of a penalty — to put a price on contravention that is sufficiently high to deter repetition by the contravener and others who might be tempted to contravene the Act: French J in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076 at 52,152, cited by the plurality in Commonwealth v Director of the Fair Work Building Industry Inspectorate (Civil Penalties Case) [2015] HCA 46; (2015) 258 CLR 482 at [55]. ... (at 167 [19])
When determining the appropriate penalty to impose, regard should be had to all of the circumstances of the case, guided by the various discretionary considerations discussed in authorities such as Kelly v Fitzpatrick (2007) 166 IR 14, in order to arrive at a single result that is an instinctive synthesis of those various factors. In circumstances such as the present, where the contraventions occurred over a period during which the value of a penalty unit changed, it would be appropriate, when setting the penalties to be imposed, to have regard to the value of a penalty unit at the end of the period of contravention, although regard may also be had to the fact that lower amounts applied for part of the period: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 per Katzmann J at [396]–[401].
The nature and extent of the conduct which led to the breaches
Factual findings were set out in the Contraventions Judgment. Amongst them were findings that BTIG:
(a)failed to pay minimum wages in accordance with the 2010 Award;
(b)failed to provide paid annual leave in accordance with the NES; and
(c)failed to pay annual leave loading in accordance with the 2010 Award.
The conduct commenced at the time Mr Manchee was hired and continued until the 2012 Agreement was replaced in August 2020. The breaches took place over a period of 7.6 years.
The nature and extent of any loss or damage sustained as a result of the contraventions
As noted earlier, Mr Manchee suffered no loss by reason of the contraventions. I note his submission that this case concerned
… a significant failure to pay substantial sums which were due if there had been statutory compliance
but repeat the observation in the Contraventions Judgment that:
… it is clear that if … BTIG had had regard to its obligations under the Award, Mr Manchee would not have been paid more than in fact he was, whether in respect of salary or annual leave entitlements with loading.
In fact, he was paid a good deal more than the 2010 Award provided: Contraventions Judgment at [43].
Whether the Respondent has engaged in any similar conduct in the past
No evidence was adduced to indicate that BTIG had contravened industrial laws at any other time, although it can be inferred that the terms of the 2012 Agreement were used in other BTIG employees’ employment contracts. Indeed BTIG conceded as much in its written submissions.
Whether the breaches were properly distinct or arose out of the one course of conduct
Three distinct obligations which have been found to have been contravened: the obligation to pay minimum wages in accordance with the 2010 Award, the obligation to provide paid annual leave in accordance with the NES and the obligation to pay annual leave loading in accordance with the 2010 Award. Mr Manchee did not suggest that the individual contraventions of each those three distinct obligations did not constitute a course of conduct in relation to each of those obligations. I find under s.557 of the FW Act that they did and that consequently there were three contraventions, namely
(a)a failure to pay minimum wages in accordance with the 2010 Award;
(b)a failure to provide paid annual leave in accordance with the NES; and
(c)a failure to pay annual leave loading in accordance with the 2010 Award.
Although the contraventions are likely to have been the product of a single decision, the details of which are not known to the Court, the contraventions nevertheless remain breaches of separate obligations and so, subject to the following discussion, attract separate penalties.
BTIG submitted that the contraventions ought to be collapsed under s.556 of the FW Act to one contravention on the basis that they all arose out of the same remuneration structure such that:
… the contraventions comprise ‘one transaction’ and therefore comprise a single course of conduct.
In Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088, White J said at [55]:
The effect of s 556 is to preclude the imposition of pecuniary penalties for contraventions of two or more civil remedy provisions in respect of the same “particular conduct”. Its application extends to contraventions of multiple provisions in the FW Act itself: Esso Australia Pty Ltd v Australian Workers’ Union [2016] FCAFC 72; (2016) 245 FCR 39 at [210] (Buchanan J with whom Siopis J agreed).
The purpose of s.556, just as with the common law course of conduct principle, is that a person should not be penalised twice for the same conduct, which is defined by s.12 of the FW Act to include omission. In a case which involves the breach of an obligation to make a wages-related payment or to pay a specific wages-related amount, the “particular conduct” amounting to a contravention is the failure to observe a particular, quantifiable payment obligation, not any generally deficient manner in which pays were made, were that to have been the factual background. In the present context, where BTIG had various particular and discrete obligations under the 2010 Award and the NES, characterisation of the payment contraventions as involving “the same criminality” is inapposite. BTIG’s contraventions of the minimum wage, annual leave and leave loading obligations it owed to Mr Manchee involved “particular conduct” that was different in each case because the obligations’ payment requirements were not identical.
The size of the business enterprise involved
Evidence of the size of BTIG was scant but it is sufficiently apparent that it was an operation of some size. It conceded in its written submissions on penalty that it is part of a group of international businesses in the banking and finance industry and, I infer, could easily have afforded to obtain advice on its employment arrangements. Given the egregiousness of the contraventions in the Australian context, I can only imagine that no suitable advice was sought or obtained before the 2012 Agreement which governed Mr Manchee’s employment from 2012 to 2020 was drawn up.
Whether or not the breaches were deliberate
The decision to pay Mr Manchee by reference to an inappropriate measure, and thus not by reference to the 2010 Award’s minimum requirements, was not an accident, even if the breach of the 2010 Award was inadvertent. It was positive conduct and, it can only be presumed, was designed, and crudely at that, to drive revenue. Any ignorant inadvertence to the requirements of the 2010 Award carries little weight in circumstances where there appears to have been no reason why BTIG operated unaware of its relevant statutory obligations, particularly as it was likely to have been acutely aware of the need to do so in the context of its commercial operations.
Whether senior management was involved in the breaches
The arrangement in question cannot have been the product of a junior employee and, in any event, its existence was known at the highest levels.
Whether the party committing the breach has exhibited contrition
The litigation was fought with some tenacity but it should be kept in mind that the contravening conduct ceased over a year before this proceeding commenced and that the matters with which it was concerned were truly historical. Given the commission amounts already paid to Mr Manchee, it is not surprising that BTIG would defend his claim to further, award-based, payments. Even so, no evidence explicatory of BTIG’s conduct was adduced although its written submissions on penalty did include a simple, perhaps perfunctory, expression of contrition:
[BTIG] expresses contrition for the contraventions.
The need for specific and general deterrence
I accept that it is unlikely that BTIG needs to be deterred from repeating the offending conduct but there is nevertheless a need to deter others from emulating it. On this occasion no compensable loss was suffered by Mr Manchee but that situation might not be repeated in other cases, particularly ones involving vulnerable workers. The penalties to be imposed will each include a component for general deterrence to demonstrate the Court’s disapproval of the conduct in question.
PENALTIES
I find that BTIG should pay the following penalties:
(a)$5,000 for its breach of s.45 of the FW Act by contravening cl.13 of the 2010 Award;
(b)$5,000 for its breach of s.44 of the FW Act by contravening s.90(1) of the FW Act; and
(c)$5,000 for its breach of s.45 of the FW Act by contravening cl.24.3 of the 2010 Award.
Those penalties total $15,000 which I believe to be just and appropriate.
CONCLUSION
BTIG is to pay the applicant penalties totalling $15,000 within 28 days.
As Mr Manchee did not make out his claim to compensation, the remainder of the proceeding will be dismissed.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 1 February 2023
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