Matus v Australia Wide Computer Resources Pty Ltd and Anor (No.2)
[2015] FCCA 2055
•31 July 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MATUS v AUSTRALIA WIDE COMPUTER RESOURCES PTY LTD & ANOR (No.2) | [2015] FCCA 2055 |
| Catchwords: INDUSTRIAL LAW – Application under s.548 of the Fair Work Act 2009 (Cth) – alleged failure to pay unpaid accrued annual leave entitlements under the Fair Work Act 2009 (Cth) – contraventions found – compensation awarded. |
| Legislation: Fair Work Act 2009. ss.87, 90, 454, 548, 550, Part 2, Part 4 Federal Circuit Court Rules 2001 (Cth) Civil Procedure Act 2005 (NSW) |
| Matus v Australia Wide Computer Resources Pty Limited & Anor [2014] FCCA 2716 Jones v Groovy Freighters Pty Ltd [2010] FMCA 673 McShane v Image Bollards Pty Ltd [2011] FMCA 215 Lebot v Energetic IT Pty Ltd [2011] FMCA 755 Glynn v Napoleon Hair & Beauty Pty Ltd [2011] FMCA 1050 Brennan v Plumbing Services Australia Pty Ltd & Ors [2012] FMCA 3 Australian Building & Construction Commissioner v Abbott (No 4) [2011] FCA 950 Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 Predl v DMC Plastering Pty Ltd & Anor [ 2014] FCCA 1066 and Foster v Faulkhead and Faulkhead Nominees Pty Ltd [2005] SAIRC 86 |
| Applicant: | MARIAN MATUS |
| First Respondent: | AUSTRALIA WIDE COMPUTER RESOURCES PTY LTD, ABN 53 055 526 308 |
| Second Respondent: | RONALD BROWNE |
| File Number: | SYG 2141 of 2013 |
| Judgment of: | Judge Nicholls |
| Hearing date: | 16 September 2014 |
| Date of Last Submission: | 27 March 2015 |
| Delivered at: | Sydney |
| Delivered on: | 31 July 2015 |
REPRESENTATION
| Applicant: | In Person |
| First Respondent: | Mr R Brown as Director |
| Second Respondent: | In Person |
THE COURT DECLARES THAT:
The first respondent contravened the Fair Work Act 2009 (Cth).
THE COURT ORDERS THAT:
The application against the second respondent is dismissed.
The first respondent pay the applicant the sum of $20,000 within 28 days of the date of this order.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2141 of 2013
| MARIAN MATUS |
Applicant
And
| AUSTRALIA WIDE COMPUTER RESOURCES PTY LTD, ABN 53 055 526 308 |
First Respondent
| RONALD BROWNE |
Second Respondent
REASONS FOR JUDGMENT
On 12 September 2013 Mr Marian Matus (“the applicant”) commenced proceedings in this Court pursuant to the Fair Work Act 2009 (Cth) (the “FW Act”). The applicant elected to make the application under the small claims procedure provided for in s.548 of the FW Act.
The applicant claims that his former employer, Australian Wide Computer Resources Pty Ltd (“the respondent”) and Mr. Ronald Browne as director of Australian Wide Computer Resources (“the second respondent”) breached s.90(2) of the FW Act by failing to pay him unpaid accrued annual leave entitlements on the termination of his contract to the sum of $20,000.
Application to the Court
The applicant’s claims were set out in Form 5 which was filed with the application to this Court on 12 September 2013. Under Part G of Form 5 the applicant claims that on termination of his employment the respondents failed to pay a portion of accrued untaken paid annual leave to him.
The applicant claims (Part H and I of Form 5):
“As per Fair Work Ombudsman investigation and calculations, Reference number: MAT-0005-9944, report attached.
The annual leave payable calculated by Fair Work Ombudsman equals to gross amount of $21,632.72, however the amount claimed inclusive of interest owed is capped at $20,000 as per small claims proceedings.”
The application is silent as to the orders sought by the applicant. The applicant’s written submissions state (applicant’s written submissions of 1 September 2014):
“44. I am seeking to have the outstanding amount of accrued annual leave entitlements as calculated by Fair Work Ombudsman, but capped at $20,000 (exclusive of Superannuation) as per small claims proceedings rules, confirmed by this court.
45. I am also seeking, in accordance with Civil Procedure Act 2005, that the interest on the outstanding payment of my statutory entitlements is awarded by this court, calculated from the initial due date of the payment.”
Before the Court
The matter first came before the Court on 2 October 2013. At that time both parties appeared in person. Mr Ronald Neil Brown appeared as director of the first respondent. Orders were made by consent on 2 October 2013 referring the matter for mediation and listing the matter for directions. The matter was unresolved at mediation.
The parties attended directions before the Court on 11 December 2013. On that occasion, orders were made providing the parties with the opportunity to file and serve any evidence by way of affidavit and the opportunity to file and serve written submissions.
The matter was heard at a final hearing on 16 September 2014. Mr Matus appeared in person. Mr R Browne appeared on his own behalf and on behalf of the first respondent. Ms K Matus (Mr Matus’ wife) and Mr S Brown (Mr Brown’s son) were granted leave to assist, respectively, the applicant and the respondents.
At the final hearing of this matter, the parties sought to press s.548(3) of the FW Act. That section, relevantly, is in the following terms:
“(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.”
Each party agreed to proceed, at this stage, in an informal manner and some affidavits were read into evidence without objection. The parties agreed that any weight to be accorded to various parts of the affidavit evidence would be addressed in written submissions.
Despite the matter having reached, and commenced, a final hearing, and contrary to their earlier positions, both parties sought leave to file and serve further evidence by way of affidavits on which they sought to rely, in regards to an issue that had emerged during the hearing. The parties were granted leave by Orders made on 16 September 2014 to file and serve any further evidence by way of affidavit and written submissions in relation to that evidence. Both parties filed a number of affidavits.
The matter came before the Court again on 24 October 2014 as each party had various objections to the evidence filed pursuant to the Orders of 16 September 2014. The parties made submissions as to what parts of the affidavit evidence should not be read into evidence, as those parts went beyond the scope of the leave granted on 16 September 2014. This issue was the subject of an interlocutory judgment, Matus v Australia Wide Computer Resources Pty Limited & Anor [2014] FCCA 2716 (“Matus (No.1)”), which set out in a “Table” what parts of the affidavit evidence, filed pursuant to the 16 September 2014 Orders, were to be read into evidence.
At the same directions listing, the respondents were granted leave to file further evidence by way of affidavit in response to the applicant’s affidavit of 30 September 2014 relating to “job sheets, pay slips and timesheets”. The respondents filed such an affidavit on 2 January 2015 with two annexures, some 8000 pages (as reduced in size) (see further below).
Small Claims
Section 548 of the FW Act is in the following terms:
“548 Plaintiffs may choose small claims procedure
(1) Proceedings are to be dealt with as small claims proceedings under this section if:
(a) a person applies for an order (other than a pecuniary penalty order) under Division 2 from a magistrates court or the Federal Circuit Court; and
(b) the order relates to an amount referred to in subsection (1A); and
(c) the person indicates, in a manner prescribed by the regulations or by the rules of the court, that he or she wants the small claims procedure to apply to the proceedings.
(1A) The amounts are as follows:
(a) an amount that an employer was required to pay to, or on behalf of, an employee:
(i) under this Act or a fair work instrument; or
(ii) because of a safety net contractual entitlement; or
(iii) because of an entitlement of the employee arising under subsection 542(1);
(b) an amount that an outworker entity was required to pay to, or on behalf of, an outworker under a modern award.
Limits on award
(2) In small claims proceedings, the court may not award more than:
(a) $20,000; or
(b) if a higher amount is prescribed by the regulations—that higher amount.
Procedure
(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
(4) At any stage of the small claims proceedings, the court may amend the papers commencing the proceedings if sufficient notice is given to any party adversely affected by the amendment.
Legal representation
(5) A party to small claims proceedings may be represented in the proceedings by a lawyer only with the leave of the court.
(6) If the court grants leave for a party to the proceedings to be represented by a lawyer, the court may, if it considers appropriate, do so subject to conditions designed to ensure that no other party is unfairly disadvantaged.
(7) For the purposes of this section, a person is taken not to be represented by a lawyer if the lawyer is an employee or officer of the person.
Representation by an industrial association
(8) The regulations may provide for a party to small claims proceedings to be represented in the proceedings, in specified circumstances, by an official of an industrial association.
(9) However, if small claims proceedings are heard in a court of a State, the regulations may so provide only if the law of the State allows a party to be represented in that court in those circumstances by officials of bodies representing interests related to the matters in dispute.”
In Jones v Groovy Freighters Pty Ltd [2010] FMCA 673, Judge Burnett (at [9]) noted that:
“... in relation to small claims I make the observation that consideration ought be given for these proceeding to be conducted on a delegated basis by a registrar because ... the conduct of these proceedings is extremely resource intense. Even with the best will in the world, these matters cannot be disposed of expeditiously when one has regard to the need to conduct proceedings in accordance with judicial standards ...”
Further, Judge Burnett noted that (at [10]):
“... Commonly small claims applications are conducted in the States by their Tribunals rather than courts. They are called upon to determine these disputes in a manner which can be described as somewhat “quick and dirty” to provide flexibility to dispose of such proceedings both informally and cost effectively.”
In McShane v Image Bollards Pty Ltd [2011] FMCA 215, Judge Lucev (at [7]) also commented on the nature of small claims proceedings and the exercise of the Court’s judicial power within the proceeding’s informal structure:
“Although the Court is not bound by the rules of evidence, and may act informally, and without regard to legal forms and technicalities in small claim proceedings in the Fair Work Division, this does not relive an applicant from the necessity to prove their claim. The Court can only act on evidence having a rational probative force.”
The observations made by Judge Burnett and Judge Lucev are, in my respectful view, important in the current circumstances (see further below). While the small claims process allows for the Court to act in an informal manner, without regard to legal forms and technicalities and to not be bound by rules of evidence and procedure (s.548(3) of the FW Act), those allowances must be balanced against the Court’s proper exercise of its judicial power. That is, the Court can only make a decision where a claim is supported by some probative basis in fact derived from the evidence presented. Further, that decision must be supported by a reasoned judgment that addresses the issues in the case.
In this light, I also have regard to what was said by Judge Lucev in Lebot v Energetic IT Pty Ltd [2011] FMCA 755 (at [7] – [9]):
“ Small claims jurisdiction – practice and procedure
[7] Section 548(3) of the FW Act provides as follows:
Procedure
(3) In small claims proceedings, the court is not bound by any rules of evidence and procedure and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
[8] Rule 45.11(2) of the FMCA Rules provides as follows:
(2) The Court is not bound by any rules of evidence and procedure when dealing with a small claims application and may act:
(a) in an informal manner; and
(b) without regard to legal forms and technicalities.
[9] Although the Court is not bound by the rules of evidence, and may act informally and without regard to legal forms and technicalities in small claims proceedings in the Fair Work Division, this does not relieve an applicant from the necessity to prove the claim. The Court can only act on evidence having a rational probative force. For that reason the Court had Mr Lebot give evidence which confirmed the detail of his claim as it appeared in the Form 5 claim form, plus other details which the Court considered it necessary to enquire about.”
I also have regard to what was said by Judge O’Sullivan in Glynn v Napoleon Hair & Beauty Pty Ltd [2011] FMCA 1050 (at [15]):
“I have had the benefit of evidence this morning from Ms Glynn who has adopted as true and correct in every particular the details of both her employment and the breaches of the Award referred to in the Form 5 accompanying her application save that she only sought $866.60 as she only sought pay for public holidays and payment in lieu of notice. She was employed as a hairdresser by the respondent for only a short period in late 2010. The Award governing her employment was the Hair and Beauty Industry Award 2010. Ms Glynn’s Form 5 particularised the contraventions as well as the amounts owing.”
Is the Application Within the Small Claims Procedure?
In the current case, the applicant has elected to proceed under the small claims procedure of the Court’s Fair Work jurisdiction. This immediately invokes Division 3 of Part 4-1 of the FW Act. That is, s.548 of the FW Act. In order for that application to be valid, the claim must be related to an amount that the respondents were required to pay as set out in s.548(1A) of the FWA. Further, the Court may not award, unless prescribed by the Regulations, more than $20,000 (s.548(2) of the FWA).
The applicant’s claim for payment of unpaid accrued annual leave entitlements concerns an amount that the respondents would be required to pay pursuant to s.90(2) of the FW Act.
It is appropriate, in the circumstances, that these proceedings be dealt with under this section. The applicant has sought an order which is not a pecuniary penalty order under Division 2 of Part 4 of the Act. The order relates to an amount of $20,000 (with reference to s.548(1A) of the FW Act) and is an amount that does not exceed the amount set out at s.548(2)(a) of the Act. Further, the applicant has indicated, consistent with the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”), that he wants the matter to proceed as a small claims procedure.
The applicant has also sought an order that interest be paid on the outstanding payment of the amount ($20,000) to which he claims he is statutorily entitled, to be calculated from the initial due date of the payment. In the circumstances, I understood this to be 16 July 2012 (the relevant date of termination).
For the reasons set out below, I have found that the applicant should succeed as against the first respondent. However, the applicant did not explain his entitlement to interest in circumstances where the amount sought would then exceed $20,000.
The applicant also made reference in his submissions to the Civil Procedure Act 2005 (NSW). The applicant did not explain its application to the proceedings he initiated in this Court.
While both the applicant and the second respondent appeared, initially, to understand that the small claims jurisdictions provides an opportunity for parties to proceed in a “low cost”, informal manner, the conduct of their respective cases “escalated” to a level far beyond what is usually encountered in matters of this type. The amount of material sought to be put before the Court, alone, stands in support of that proposition.
As set out above, leave was granted for Ms K Matus and Mr S Browne to assist the applicant and respondents respectively. It is clear that this, in part, contributed to lengthening these proceedings, and contributed, in a significant way, to the “escalation” referred to above.
Ms K Matus’ “oral submissions” before the Court were lengthy and largely irrelevant to the relevant issues, rather than helpful in explaining the applicant’s case.
Ms S Brown pressed at some length a number of matters that, with the benefit of hindsight, can be seen to be of little ultimate assistance to the first respondent.
As will be seen below, the respondents pressed the opportunity to file a document which, it was said, would explain and provide evidentiary detail to answer the applicant’s complaint. What was subsequently filed was of approximately 8000 pages in length. It purported to be a detailed and comprehensive history of the relevant entirety of the applicant’s work activity. Further, the second respondent made a late application to be removed as a party to the proceedings.
Evidence before the Court
The following evidence is before the Court:
1)The applicant did not seek to read his affidavit of 12 September 2013, as the entirety of the affidavit and annexures was reproduced in the affidavit of Mr Marian Matus of 27 March 2014.
2)At the hearing it became apparent that the respondents had not served the affidavit of Mr Ronald Neil Browne of 1 October 2013 on the applicant. The affidavit was provisionally “read” on the basis that the relevant affidavit of service would be put before the Court showing that the respondent’s affidavit of 1 October 2013 had been served on the applicant. Ultimately, this affidavit was not read into evidence.
3)The affidavit of Mr Marian Matus of 27 March 2014 was read into evidence with no objections.
4)The affidavit of Mr Ronald Neil Browne of 14 May 2014 was read into evidence, with the applicant noting with the Court that it was filed late.
5)The affidavit of Mr Marian Matus of 21 May 2014 was read into evidence with no objections.
6)The applicant objected to the affidavit of Mr Ronald Neil Browne of 9 September 2014 being read into evidence as it was not in the proper form, as it was not properly “affirmed”. The respondents submitted that it was a mistake as to form. Further, as the document annexed to the affidavit was the same document as put before the Court by the applicant, the affidavit was ultimately read into evidence.
7)The affidavit of Mr Marian Matus of 11 September 2014 was read into evidence with no objections.
8)The affidavit of Mr Marian Matus of 30 September 2014 Paragraphs 1 ‑ 78, 87 – 100, 106 ‑ 110 and Annexures V, X, and Y is in evidence before the Court (see [36] of Matus (No.1)).
9)The affidavit of Mr Ronald Neil Browne of 14 October 2014 is in evidence before the Court (see [30] of Matus (No.1)).
10) The affidavit of Ms Maryam Ayoubi, Operations Manager of the respondent, of 14 October 2014 is in evidence before the Court (see [30] of Matus (No.1)).
11)The applicant claimed that he was served with the affidavit of Mr Ronald Neil Browne of 2 January 2014 some 11 days late. Further, that that he was unable to read the document as four pages had been reduced to one A4 sheet throughout the document. The applicant objected to this evidence been read as it went beyond the scope of the leave granted by orders made 24 October 2014 (see [36] of Matus (No.1)). The applicant claimed that the respondents “recreated” his timesheets. The respondents claim that there were significant issues with the effective electronic filing and service of this document with the Court’s registry due to the size of the document (some 8000 pages). The respondents claim that they were granted leave to provide a comprehensive report as to the applicant’s employment based on documents already in existence (see [36] of Matus (No.1)). The report is said to be based on “job cards” that were already in existence. Ultimately, this affidavit was read into evidence (however see further below).
The following written submissions were before the Court:
1)The applicant’s written submissions filed on 1 September 2014.
2)The respondents’ written submissions filed on 9 September 2014.
3)The applicant’s written submissions filed on 13 February 2015.
4)The respondents’ written submissions filed on 27 March 2015.
The Applicant’s Claims and Evidence
The following is derived from the applicant’s affidavits of 27 March 2014, 21 May 2015, 11 September 2014 and 30 September 2014.
The applicant commenced employment with the respondent on 28 April 2003 as an “IT Technician”. During the course of his employment the respondent offered to sponsor the applicant’s application for a “Sponsored Visa Sub Class 457” visa. The applicant was granted the sponsorship visa ([2] - [4] and “Annexure B” of the applicant’s affidavit of 27 March 2014).
September 2004 Employment Contract
The applicant entered into an employment contract with the respondent on 24 September 2004 (“the September 2004 contract”). The applicant claims that the conditions of the 24 September 2004 contract were changed “at least twice” ([1] of the applicant’s affidavit of 21 May 2014). The applicant’s wages, and leave details, were set out in the 24 September 2004 contract in the following terms ([6] and “Annexure C” at (6), (7)(e), (9) and (10) of the applicant’s affidavit of 27 March 2014):
“6. WAGES
a. The employee’s ordinary Base Salary shall be $46,720.00 per annum
b. The employee’s Total Yearly Remuneration Package shall be $ 50,815.00
…
7.PAYMENT OF WAGES
…
e. No deductions shall be made from wages except for time lost through sickness, accident and default or through absence at the request of the employee with the employer’s consent.”
9. PUBLIC HOLIDAYS
a) The recognised holidays shall be…
…
b) Time worked on any of the above holidays shall be paid for at the employee’s ordinary rate of pay. In addition the employees shall be entitled to an additional day’s leave (on ordinary pay) to be taken at a later date as agreed with the employer
…
10. ANNUAL HOLIDAYS
a. Annual Holidays shall be allowed in accordance with provisions of Holidays Act 1981.
b. Employee should apply for Annual Holiday in written to the employer fourteen (14) days in Advance.
c. Employer reserves the right to approve or not to approve the Annual Holiday.”
The applicant claims that he “cannot comment” on who prepared the employment contract ([8] of the applicant’s affidavit of 21 May 2014). The applicant claims that he was not given a copy of the employment contract and that the respondent indicated to him that the contract was for “visa purposes only, [the applicant’s] current remuneration is unchanged” and that he “would not be paid as fixed weekly/ annual salary” but would “be paid per fieldwork/job hours” ([6] and “Annexure C” of the applicant’s affidavit of 27 March 2014 and
[71] – [78] of the applicant’s affidavit of 30 September 2014).
The applicant claims that the second respondent verbally “offered me/advised me” of the change to this contract to the effect that, instead of receiving remuneration in the form of a salary, he would be paid wages at “pieceworker’s rate” (of $40/hour). The applicant agreed with this offer and change of payment conditions as different to that set out in the written, and signed, September 2004 contract ([1](a) of the applicant’s affidavit of 21 May 2014).
The applicant claims that he was paid $40 per “job” (in context, per individual computer/printer repair he was tasked with by the respondent), which was inclusive of superannuation and all costs for total labour, travelling and preparation time. He was paid on a weekly basis ([7] – [10] of the applicant’s affidavit of 27 March 2014). The applicant has provided evidence of his payslips during this period to show that he was paid “agreed pieceworker’s rates” ([1](a) and “Annexure 1” of the applicant’s affidavit of 21 May 2014).
The applicant claims that there was no discussion or agreement between the parties “that his job hour payments [were] capped annually” or that there would be a restriction on the hours he could undertake, or that any payment would be considered payment of his “annual leave entitlements or any other statutory entitlements” ([75] – [78] of the applicant’s affidavit of 30 September 2014).
Further, the applicant claims that he understood clause 7(e) of the 24 September 2004 contract (see above at [36]) to mean that he “had no-entitlement to such payments” and that this clause was in line with the verbal advice he had received from the respondents. The applicant also claims that clause 10 of the September 2004 contract, outlining his “Annual Holidays”, was said to be governed by New Zealand legislation (which he was unaware of) and did not outline his leave entitlements “in detail”. The applicant claims that the contract does not stipulate that he is entitled to paid annual leave, rather that he was allowed to take holidays subject to the respondent’s approval
([87] – [93] of the applicant’s affidavit of 30 September 2014).
The applicant claims that he did not expect his employer to provide him with “incorrect/ misleading advice” with respect to his leave entitlements ([1](b) of the applicant’s affidavit of 21 May 2014). The applicant claims that there was no discussion or agreement between the parties “that his job hour payments are capped annually” or that there would be a restriction on the hours he could undertake, or that any payment would be considered payment of his “annual leave entitlements or any other statutory entitlements” ([75] – [78] of the applicant’s affidavit of 30 September 2014).
After receiving his visa, the applicant inquired with the pay roll officer of the respondent about his “employment status” and access to “paid entitlements”, such as leave. The applicant claims he was told by the payroll officer that he was employed as a contractor and was not entitled to paid leave and public holidays. The applicant did not question his leave entitlements any further ([7] – [10] of the applicant’s affidavit of 27 March 2014).
The applicant agreed to, and received, a pay rise on 21 March 2005 and was paid $50 per “job”, which was inclusive of superannuation. The conditions of his pay rise were in the following terms ([11] and “Annexure D” of the applicant’s affidavit of 27 March 2014):
“…Your hourly rate will now be raised by $10 starting from Monday, 21st March 2005.
If you accept this offer please sign …as confirmation of your understanding and acceptance of this offer. All other existing employment conditions remain unchanged…”
The applicant claims that he was provided with a company car in April 2005 ([1](a) and “Annexure 2” of the applicant’s affidavit of 21 May 2014).
The applicant took 42 days of unpaid leave from 25 May 2005 to 8 July 2005, and from 7 August 2006 to 18 August 2006, and submitted to the Court copies of his bank records during these periods seeking to support his claim, that he was not paid by the respondent during these periods. The applicant also submitted to the Court a copy of his payslips received from the first respondent during the period of his August 2006 holiday again to support his claim that he was not paid during this period ([12] – [13] and Annexures “E”, “F’ and “G” of the applicant’s affidavit of 27 March 2014 and [4] of the applicant’s affidavit of 21 May 2014).
The applicant claims that he took 42 days of unpaid leave during these two holidays periods in 2005 and 2006, as he was told by the respondent that he “was not entitled to paid leave” and that he had no “accrued entitlements” ([11] of the applicant’s affidavit of 21 May 2014). Further, that as he took this period of leave as “unpaid”, and, it was approved as such, he no longer questioned whether it should have been taken as a period of paid leave ([94] – [95] of the applicant’s affidavit of 30 September 2014).
The applicant was granted a permanent residence visa (Skilled 856) on 14 February 2007 through the Employment Nomination Scheme under the Migration Act 1958 (Cth) ([14] – [15] and Annexures “H” and “I” of the applicant’s affidavit of 27 March 2014).
The applicant took a day of unpaid leave on 5 February 2008 due to his twin daughters’ birth. One of his daughters had to remain in hospital and the applicant did not take any further leave during this period. The applicant claims that he told a colleague that he was not able to take paid leave during this period. This conversation was repeated to the second respondent by the colleague ([17] – [20] of the applicant’s affidavit of 27 March 2014).
July 2008 Change of Payment Conditions
The applicant received another pay rise and new remuneration conditions in July 2008, where his payment package was restructured to include a “base annual salary” of $40,000 and “reduced job rate” of $35 dollars per hour ([21] and “Annexure K” of the applicant’s affidavit of 27 March 2014).
The applicant’s conditions of employment, to which he agreed on 22 July 2008, are in the following terms (“Annexure K” of the applicant’s affidavit of 27 March 2014):
“The terms and conditions of our offer are as follows
Base Salary - $27,523
Super 9% - 2,477
Motor Vehicle/inclusive of running costs - $10,000
Total Base - $40,000
…
Additional
Hourly rate for Completed jobs @ - $32.12
Super @ 9% - 2.88
Total Hourly Rate - $35.00
…
Conditions of Employment
Annual leave: 20 days pa, based on average annual income
Sick leave: 10 days pa. 2 Days or more leave requires a medical certificate.
Public Holidays: Payment based on average annual income
Termination: 30 days by either party”
The applicant claims that his “records were amended in the system” by the respondents’ payroll staff at this time, such that the system would be able to reflect his accrued annual leave entitlements ([97] – [100] of the applicant’s affidavit of 30 September 2014).
The applicant claims that there was no implied agreement between himself and the respondent that any changes or increases in his pay, or working conditions, constituted payment of his leave entitlements ([6] of the applicant’s affidavit of 21 May 2014 and [77] of the applicant’s affidavit of 30 September 2014).
The applicant claims to have not been paid for the October Labour Day public holiday in 2008. He made enquiries of the respondent’s payroll staff who amended his records in the system. The applicant claims to have been paid for public holidays since that time ([22] of the applicant’s affidavit of 27 March 2014 and [97] of the applicant’s affidavit of 30 September 2014).
The applicant has put in evidence before the Court his payslips and bank records for the period of 11 May 2009 to 26 June 2009 to show that during his holiday to Slovakia, in which he took annual leave, he was only paid 18 days of annual leave (and a public holiday) by the respondent out of a period of 34 days. This was said to be due to the fact that he had not accrued sufficient leave entitlements to be able to take a full paid holiday, as he had only recently been entered properly into the system ([23] and Annexures “L” and “M” of the applicant’s affidavit of 27 March 2014 and [4] of the applicant’s affidavit of 21 May 2014 and [100] of the applicant’s affidavit of 30 September 2014).
Termination of Employment
The applicant’s employment was terminated on 16 July 2012. The applicant claims that he was paid two weeks’ pay, a sum of $1760.00, on termination, but that this did not include “payments for annual leave accruals, full notice period and pro-rata long service leave” that were allegedly due to him at the time of the termination of his employment ([24] and “Annexure N” of the applicant’s affidavit of 27 March 2014).
The applicant requested the respondent, on 17 July 2012, to pay his full entitlements he alleged were due on termination. The respondent replied and told the applicant he would be paid his “accrued annual leave” as shown in MYOB (in context, an internal office accounting system) and would not be paid the “payment in lieu of 30 days’ notice” as the respondent disputed the length of the relevant notice period. The respondent also refused to pay the applicant his pro-rata long service leave as he considered the applicant had engaged in “serious and wilful misconduct” ([25] – [26] and annexures “O” and P” of the applicant’s affidavit of 27 March 2014).
After receiving the respondent’s refusal to his request to pay out his leave entitlements, the applicant contacted the Fair Work Ombudsman (“FWO”). The applicant lodged a general protections claim with Fair Work Australia (“FWA”). The applicant started legal proceedings in the then Federal Magistrates Court, against the respondents, for alleged contraventions of a general protection under the FW Act. The respondents filed a “defence” in this matter on 5 December 2012, which stated that the applicant accrued 123 days of annual leave.
The matter was settled at mediation and the applicant discontinued the claim on 8 January 2013. The matter was subject to a Deed of Release signed on 21 December 2012 in which both parties agreed to unconditionally release the other from “all claims in relation to or arising from the applicant’s employment and/or termination of my employment” and “not to make any further claims” against the respondents, except for “any statutory entitlements held to be due and payable at the conclusion of the FWO’s investigation” ([27] – [31] and annexures “O”, “P”, “Q”, “R” and “S” of the applicant’s affidavit of 27 March 2014).
FWO Investigation
On 29 August 2012, the applicant lodged a complaint with the FWO with respect to the “underpayments of termination entitlements and other underpayments” ([27] – [31] and annexures “O”, “P” and “Q” of the applicant’s affidavit of 27 March 2014).
On 19 November 2012, the applicant received a payment from the first respondent “in settlement of notice period payment and pro-rata long service leave”. The applicant’s “outstanding leave entitlements remained unpaid” and the FWO investigation continued ([33] of the applicant’s affidavit of 27 March 2014).
The applicant’s affidavit of 27 March 2014 annexed a copy of the investigation report of the Fair Work Inspector (“FWI”) (“Annexure T”) who, on 23 May 2013, made a number of findings.
The FWI found that the applicant was employed on a “casual employment basis” from 23 April 2003 to 27 September 2004 and on a “full time basis” from 28 September 2004 to 16 July 2012 ([4] of “Annexure T” of the applicant’s affidavit of 27 March 2014).
The applicant complained to the FWO that the respondent had contravened Chapter 2, Part 2-2, Division 2 of the National Employment Standards of the FW Act. Specifically, that during the period of full time employment the respondent had paid a “portion of accrued annual leave on termination but the balance of annual leave owing was not paid” to the applicant.
The FWI found that the respondents had contravened their obligations pursuant to s.90(2) of the FW Act by non-payment of accrued annual leave entitlements. The FWI calculated that the respondents owed the applicant, pursuant to s.87(1)(a) and (2) of the FW Act, $21,632.72 in unpaid leave entitlements during the period of full-time employment (28 September 2004 to 16 July 2012) ([6] of “Annexure T” of the applicant’s affidavit of 27 March 2014 and the applicant’s Group Certificate at “Annexure 3” and [14] of the applicant’s affidavit of 21 May 2014).
The FWO found that the applicant had taken 78.5 days of paid annual leave and that the balance of annual leave owed was said to be approximately 77.4 days. The FWO found that the annual leave payable was to be calculated on the weekly wage of $1,397.66 per week ([6] of “Annexure T” of the applicant’s affidavit of 27 March 2014).
The respondents indicated to the FWO that they were “contesting the allegations” ((14) at [7] of “Annexure T” of the applicant’s affidavit of 27 March 2014). The FWO did not receive any evidence confirming payment made to the applicant by the respondents resolving the matter (“Annexure T” of the applicant’s affidavit of 27 March 2014).
The Respondents’ Claims and Evidence
The respondents filed a Response on 1 October 2013 opposing the following orders sought in the application:
“1. Payment of $20,000 relating to Annual Leave payment…”
The respondents sought the following further order in the response:
“1. Only applicable if the matter proceeds – repayment of overpaid salary and wages…”
The grounds of opposition appear to refer to the various appendices in the affidavit of Ronald Neil Browne of 1 October 2013, filed with the Response. The affidavit attaches a copy of the applicant’s employment contract and FWO investigation report (Appendix C and Appendix A respectively). In addition, the affidavit attaches a copy of an email from Mr Brown to the FWO summarising objections to findings (Appendix B) and a summary of leave taken and payments made (Appendix D). This affidavit was not read into evidence (see above at [35](2)).
Inclusion of the Second Respondent
The respondents claim that the second respondent should be removed as a party to these proceedings as “the director of a company” should not be held “personally liable for any alleged unpaid statutory entitlements on termination”. The respondents submit that the applicant has not pointed to any authority or statute to support the inclusion of the second respondent and that, additionally, there has been no “allegations of fraud or other unconscionable conduct necessary to lift the corporate veil” ([1] – [3] of the respondents’ written submissions of 9 September 2014).
The September 2004 Contract
The respondents claim that the September 2004 employment contract (see above) was prepared by the applicant’s migration agent on his behalf and “approved” by the Department of Immigration as the terms of the applicant’s employment with the respondent ([13] and Annexure “B” of the second respondent’s affidavit of 14 May 2014).
The respondents claim that the applicant has been, at all relevant times, an employee of the respondent (full time), and, prior to this a “casual employee”. The respondent claims that the applicant was never a “contractor”, was “provided weekly payslips” and, as far as the second respondent was aware, was not providing services in his own right to other companies ([15] and “Annexure B” of the second respondent’s affidavit of 14 May 2014).
The respondents claim that the September 2004 contract contained specific reference to all legal leave entitlements, inclusive of annual holidays at [10] of that contract ([16] of the second respondent’s affidavit of 14 May 2014).
The respondents claim that the accrued unpaid annual leave payment, allegedly owed to the applicant, should not be paid as the September 2004 contract included payment of all leave entitlements at cl.6(b) “Wages: - The Employee’s Total Yearly Remuneration Package shall be $50,815.00” (“Annexure C” at (6) of the applicant’s affidavit of 27 March 2014 and the second respondent’s affidavit of 14 May 2014 at [1]).
The respondents claim that the applicant’s salary was increased in March 2005 to $50 per hour. This was said to be in addition to his “initial contract amount” and his annual salary package was still above “contractual requirements”. The respondents rely on a spreadsheet which outlines “his actual payment versus his entitlements to pay” under the September 2004 contract ([14] and “Annexure C” of the second respondent’s affidavit of 14 October 2014).
Further, the respondents claim that there was an “implied agreement” between the parties that the “higher pay and extended benefits, above and beyond” the September 2004 contract, constituted “payment for his leave entitlements” as they were provided for in the September 2004 contract ([6] and “Annexure B” of the second respondent’s affidavit of 14 May 2014).
The respondents claim that the payment conditions of the September 2004 contract were fulfilled and exceeded. Further, that the applicant was paid “approximately $135,000 in excess of the Contractual obligations” during his employment (respondents’ written submissions of 9 September 2014 at [19]). The respondents rely on email correspondence of April 2014 between the second respondent and the applicant, which appear to agree on amounts paid to the applicant between 1 July 2004 and 30 June 2009 ([2] and “Annexure A” of the second respondent’s affidavit of 14 May 2014
The applicant approached the respondents twice during his period of employment in regards to his entitlements. It is claimed that the first time was in 2006 when he “complained about his car” and that a new car was supplied the next week. He was also provided with a home internet connection ([19] – [20] and “Annexure E” of the second respondent’s affidavit of 14 October 2014).
The respondents further rely on the email correspondence of April 2014 between the second respondent and the applicant to show that the applicant took “76 days of annual leave between 1 October 2004 and 30 June 2009” ([4] and Annexure “B” of the second respondent’s affidavit of 14 May 2014).
The respondents claim that the applicant was aware of his annual leave entitlements as he had signed the September 2004 contract and that the issue of unpaid leave entitlements was only raised at the time of the termination of the applicant’s employment on 16 July 2012. Due to this, the applicant “should be estopped by way of acquiescence” (respondents’ written submissions of 9 September 2014 at [9] – [10]).
The respondents deny stating to the applicant that the September 2004 contract was “for visa purposes only, your current remuneration remains unchanged”. The respondents claim that the applicant signed the contract and the “additional declaration” stating that he understood the terms and conditions of the contract ([14] of the second respondent’s affidavit of 14 May 2014 and “Annexure C” of the applicant’s affidavit of 27 March 2014).
July 2008 Change of Payment Conditions
The second respondent gives evidence that he spoke to a “colleague” in June 2008 who told him that the applicant “was having difficulty meeting his financial obligations” due to his family circumstances and was “unsatisfied with his working conditions”. The respondents claim, that at this stage, the applicant was been paid “as per the 2004 Employment Contract” and did not refer to any other changes that allegedly occurred during this period. The applicant’s contract was changed to a “standard AWCR Employment Contract” in July 2008 ([18] – [19] of the second respondent’s affidavit of 14 May 2014 and “Annexure K” of the applicant’s affidavit of 27 March 2014 and [20] of the second respondent’s affidavit of 14 October 2014).
The respondents claim that the minimum hourly rate received by the applicant, post 2008, was “$52.06” per hour ([16] and “Annexure D” of the second respondent’s affidavit of 14 October 2014).
Termination of Employment
The respondents claim that on termination of the applicant’s employment, all long service leave payments were “temporarily withheld”, while the respondent “looked into the possibility of [the applicant] having engaged in serious and wilful misconduct”. The respondents claim that they received advice that allegations of misconduct are very difficult to prove and that payments for “pro-rata long service leave” should be made ([20] – [21] of the second respondent’s affidavit of 14 May 2014).
The respondents claim that the Deed of Release that the parties entered into on 21 December 2012 stipulates that the release would not apply to statutory entitlements held to be due and payable by the FWO investigation. However, that the FWO investigation had concluded the annual leave was “not paid” but, was “not due and payable due to the statute of limitations” ([22] of the second respondent’s affidavit of 14 May 2014).
FWO Investigation
The FWO sent the respondents a copy of the “Finalisation of Investigation” on 9 May 2013 and noted that the “underpayment arising from the contravention was calculated to be $21,632.72 gross”. The respondents claim that the FWO recommended that it would be “inappropriate to recommend further enforcement action” by the applicant against the respondent (“Annexure C” of the second respondent’s affidavit of 14 May 2014).
“1. The annual leave that was accrued and not paid, related to a period of employment outside the statute of limitations imposed by the Fair Work Act 2009.
2. The employee was paid a salary rate above the Visa Subclass 457 obligations at the time.
3. Records relating to non-attendance and alleged unauthorised absences relating to the period of dispute are outside the statute of limitations and are not legally required to be kept beyond seven years.”
The respondents submit, in regards to [1] above, that s.545(5) of the FW Act prevents the Court from making an order under this section, in relation to an underpayment, if it is more than 6 years before the proceedings commenced (respondents’ written submissions of 9 September 2014 at [22]).
The respondents claim that the applicant was paid a salary rate above that owed under the Visa Subclass 457 obligations. In addition, to the superannuation and salary, the applicant had private use of a company car valued at “$10,000 a year” and a paid “Home Internet service” ($719.88 per year) and the availability of purchasing computer equipment for personal use ($2,020.87).
The respondents claim that time sheets that were before the FWO detail dates when the applicant took authorised leave between April 2005 and June 2012, which totalled 174 days. This was said to amount to $48,637.35.
The respondents submit, in the alternative, that if the Court finds that the leave entitlements were not paid out, that this leave should be considered as annual leave that was taken and paid, but that it “was not paid correctly at the time”. Further, that this contravention would relate to an underpayment for the period of leave (as taken leave), not an underpayment of “accrued statutory entitlements on termination”. In this circumstance, the respondents submit that s.545(5) of the FW Act applies, and prohibits this Court from making orders relating to contraventions of a civil remedy provision, for a period that is more than 6 years before the proceedings concerned commenced. The respondents claim that the applicant should not be able to recover his claim as it relates to a period prior to 2007, which is said to be 6 years before the commencement of these proceedings (respondents’ written submissions of 9 September 2014).
Unauthorised leave absences
The respondents dispute the calculations of unpaid annual leave entitlements owing and payment allegedly due. The respondents submit that it was “mutually agreed” that the applicant took 58 days of leave.
The respondents submit that during the period of 11 July 2007 and 22 June 2012 the applicant was absent from “service”, without authorisation, for a period of 174 days and was paid $37.27 per hour for this authorised leave (176 days in the respondents’ written submissions). The respondent provides evidence to the Court, a “report from the AWCR job tracking system”, to show the days on which the applicant was allegedly absent during his employment. This report lists jobs completed by the applicant throughout his employment, including days on which “zero jobs were completed”. The report is extensive and lists jobs completed within a period close to 5 years ([32] of the respondents’ written submissions of 9 September 2014 and [1] and “Annexure A” of the second respondent’s affidavit of 9 September 2014).
The respondent claims that during this period there were jobs which were always available for the applicant to complete. Further, that any “administrative duties” that the applicant undertook at home would not be “onerous enough to consume a full day” and are “insufficient to explain any unauthorised absence by the applicant” ([2] – [3] of the second respondent’s affidavit of 9 September 2014).
The respondents claim that the applicant would not have spent two or more hours on any particular job and relies on a survey undertaken by field technicians in his company to indicate the average number of hours required per job, which was said to be 1.06 hours. Further, that the applicant’s average call time was “0.96 hours” ([1] and Annexure “A” of the second respondent’s affidavit of 14 October 2014).
The respondents claim that the calculation of annual leave accrued should be reduced as follows so as to accurately reflect the figures represented in the report from the AWCR job tracking system ([34] of the respondents’ written submissions of 9 September 2014):
“a. 58 + 176 = 234 days in which no leave was accrued
b. 234/250 = 0.94 of a year work of annual leave
c. 0.94 x 20 = 18.8 days of leave to be deducted
d. 77.3890486 (from Annexure T of the Matus Affidavit dated 27/03/2014) - 18.8 = 58.5890486 days of annual leave alleged to be owed
e. 58.5890486/5 = 11.71780972 weeks of annual leave alleged to be owed
f. 11.71780972 x $1,397.66 (weekly wage) = $16,377.51”
The second respondent conceded that there were a number of inconsistencies in Annexure A of his affidavit of 9 September 2014. At the final hearing, the respondents sought leave to file further evidence before the Court, an “update” of the report set out in annexure “A”, so as to remedy any inconsistences and discrepancies that existed in the first report from the “AWCR job-tracking system”. The respondents claim that the first report is “inaccurate and potentially unreliable”. The updated business record was put before the Court ([1] and annexure “A” of the second respondent’s affidavit of 2 January 2015).
The respondents sought to explain the “majority” of the discrepancies between the two reports as due to the “inaccurate entering of timesheet information” into the job-tracking system and timesheet system used by the respondent. The respondents claim that “[r]egardless of when jobs are updated, the dates are entered as per the real attendance date”. This is said to be done through two ways, through the “engineer’s Web-Update system and through direct entry into “the System Manager” (“TSM”). It is claimed that the applicant had access to both points of access and could update a job at any time and “would only take a few minutes” (in context, the internal recording system) ([2] – [5] and “Annexure A” of the second respondent’s affidavit of 2 January 2015 and [5] – [10] and “Annexure A” and “Annexure B” of the affidavit of Maryam Ayoubi of 14 October 2014).
The respondents claim that the customer billing system and job-timesheet recording system are one united system and that “all engineers get paid as per the timesheet produced” by this system, one week after all non-engineer employees are paid ([1] – [3] of the affidavit of Maryam Ayoubi of 14 October 2014).
The second respondent claims to have “examined in precise detail each job that appears on [the applicant’s] time sheet report” and that the “Service Required” comments on each individual job entry are the only accurate representation of the actual hours the applicant worked on a particular job ([2] – [5] and “Annexure A” and annexure “B” of the second respondent’s affidavit of 2 January 2015).
The respondents claim “[i]n examining each job, a separate ‘version’” of the job tracking and timesheet system “was amended so that the timesheet entries accurately reflected the times actually worked by [the applicant], as stated in the ‘comments’ of each job card”. The respondents have provided the relevant job cards, in their entirety, to the Court. The numbers on the job cards correspond with the job numbers in the timesheet report. The respondents then created a timesheet report based on the information provided in the timesheet entries. ([6] – [7] and “Annexure A” and “Annexure B” of the second respondent’s affidavit of 2 January 2015).
The respondents claim that days of “authorised leave” (personal leave), which were originally calculated as “unauthorised leave” have now been marked as “authorised personal leave” based on reports from MYOB, which allegedly show a balance of the applicant’s personal leave entitlements ([10] – [13] and “Annexure A” and “Annexure C” of the “of the second respondent’s affidavit of 2 January 2015).
The respondents have sought to explain the following discrepancies in the reports:
1)That job records for the period on or about 27 February 2012 were lost in a “catastrophic fire” which resulted in the destruction of onsite backups. This date has been removed from the balance of “unauthorised leave” ([14] of the second respondent’s affidavit of 2 January 2015).
2)That various jobs which were completed by the applicant, where no timesheet entry was showing, were completed on days on which other work was completed and recorded in the system and on which no unauthorised leave has been alleged ([15] of the second respondent’s affidavit of 2 January 2015).
3)Referring to job number 158462, the respondents claim that the comments of the job card indicate that the applicant went against company policy and made an unauthorised visit to a customer’s site, which was unattended ([16] of the second respondent’s affidavit of 2 January 2015).
Applicant’s Response to Unauthorised Leave Absences
The applicant claims that he did not have any days of unauthorised absences from 11 July 2005 and 22 June 2012. The applicant claims that the spreadsheet from the billing system (“Annexure A” of the second respondent’s affidavit of 9 September 2014) does not reflect the dates that he attended the customer’s sites and the “real time” spent there. Further, that the claim that the applicant took a number of days of unauthorised leave is in breach of Clause 5 and Clause 9 of the Deed of Release on 21 September 2012 (“Annexure S” of the applicant’s affidavit of 27 March 2014).
The applicant claims that the respondent’s “job tracking system” is a “billing system” and not an employee time-sheet recording system. The applicant claims that the date of entries of particular jobs were from when the “data was entered, modified or billed to the customer” and not the dates where the applicant attended on site. The applicant claims that the dates on which he actually completed the jobs were entered into the “job-sheet comments” but that these “comments” were lost once his timesheets were approved. Further, his comments were deleted as these “job sheets” were part of the “invoice” that was sent to customers ([2] of the applicant’s affidavit of 11 September 2014).
The applicant claims that he was not always able to update his job sheets immediately due to “system unavailability” and his own hours of work. The applicant claims that there were “two ways” to enter a job into the job tracking system, one which allowed the job to be entered in real time (the date on which “you are actually entering the job”) and the other way, which allowed the job hour to be entered separately. The applicant claims that it is not now possible to ascertain which work related “job” entries show the “correct”, or actual, days of when the work was completed, due to the various methods used to enter the relevant data ([3] - [4] of the applicant’s affidavit of 30 September 2014).
The applicant further claims that the billing system “cannot be relied upon with respect to days and hours worked” as it did not account for travel time, the additional time spent at the customer’s site when problems re-occurred, or for occasions when he had to visit twice in one day, and those occasions were within a warranty period that was not billed to the customers ([2] of the applicant’s affidavit of 11 September 2014).
The applicant claims that in the period from 11 July 2005 to 22 June 2012 he completed 7,819.22 job hours that were billed to customers. The applicant claims, as set out above, that despite the fact that each job equates to an average of “2-3 real hours”, he has exceeded his required amount of hours per week (40 and 37.5 hours as at the relevant time) ([3] of the applicant’s affidavit of 11 September 2014). The applicant claims that any “average” amount of hours said to be usual for a field technician in the past is not an accurate reflection of his “real working time” ([58] – [68] of the applicant’s affidavit of 30 September 2014).
The applicant provided to the Court an annotated copy of the first report from the AWCR job tracking system (“Annexure A” of the second respondent’s affidavit of 9 September 2014 and “Annexure A” of the applicant’s affidavit of 11 September 2014). The applicant provided a number of reasons for disparities in the first report. These include the reasons set out above, and that during quiet periods in the year he attended to “other duties” such as administrative work, that he was not allocated jobs at various times due to holiday periods, and in 2008 and 2009 due to the global financial crisis and a “medical injury”. The applicant claims that the jobs that are recorded in the report as occurring on weekends were, in the majority, “done during working days” and “entered/modified/billed” on the weekends ([4] of the applicant’s affidavit of 11 September 2014).
The applicant claims that he attended “duties in the workshop”, such as the maintenance and repair of printers, replying to emails, attendance at training and various meetings, maintenance of his company car and the rating of resource staff on days on which jobs were not allocated to him ([45] – [57] of the applicant’s affidavit of 30 September 2014).
The applicant also submits that his job-sheets were checked on a weekly basis by Human Resource, and also checked by the second respondent “regularly”, and that excessive periods of authorised leave would not have gone unnoticed ([5] of the applicant’s affidavit of 11 September 2014).
The applicant analyses, in some depth, various discrepancies in the respondent’s first report from the AWCR job tracking system. The applicant claims that on various days that he is said to have been on “unauthorised leave” he was, variously, on paid annual leave, on a job which was incorrectly listed on another day, weekend or month, that he was in the workshop attending to repairs and other duties, at training, or that he was absent due to Worker’s Compensation leave. The applicant attaches copies of his payslips during relevant periods to show that he was in fact attending sites and was paid for his “field work hours” during these periods of alleged unauthorised leave (“Annexure A” of the second respondent’s affidavit of 9 September 2014 and [1] – [23], [27] – [49] and annexures “A”, “B”, “C”, “D”, “E’, “I”, “K”, “L”, “P” of the applicant’s affidavit of 30 September 2014).
The applicant claims that his “personal leave” has been listed in the report as “unauthorised leave” and that, in fact, no “personal leave” has been listed at all ([23] – [26] and “Annexure G” of the applicant’s affidavit of 30 September 2014). Further, the applicant claims that some jobs, of which he has presented to the Court relevant job cards, are absent from the report altogether ([37] – [41] and annexure “L” of the applicant’s affidavit of 30 September 2014).
The applicant claims that the various inconsistences in this report (set out above) show that the report cannot be considered a relevant indicator of the hours and days actually worked by the applicant and cannot be considered his “timesheet” ([11], [21] - [22] and [41] – [42] of the applicant’s affidavit of 30 September 2014).
Consideration
Issue: Unpaid Leave Entitlements
The relevant issue arising is whether there are unpaid leave entitlements owed to the applicant to the value of $20,000 and whether they are due and payable by the respondents (s.90(2) of the FW Act). This includes the following:
1)How many days of unpaid leave entitlements are owed to the applicant and whether the applicant owes the respondent for alleged payment on days which he took “unauthorised leave”.
2)What sum of money is owed to the applicant, if any?
As set out above the applicant commenced employment with the respondent in April 2003. On the evidence, both parties entered into a contract of employment on 24 September 2004.
It is not clear why, in the context of the proceedings, the applicant raised the issue of who prepared the contract. He claims he “cannot comment” on who prepared it. The respondents’ evidence is that it was prepared by the applicant’s then migration agent, in connection with the applicant’s application for a visa. Ultimately, for current purposes, it does not matter who, or for what purpose, the contract was drafted.
In any event, the evidence is that both parties signed and entered into the contract of employment. The parties disagree as to the meaning of some of the terms of this contract, how they were applied at the time, whether the respondent felt bound by the contract, and whether certain payments were made. What can relevantly be said, is that for the period of 28 September 2004 to 16 August 2012, the applicant was employed by the respondent. For the period September 2004 to July 2008, the employment was governed by the terms of that contract, as varied as to some terms and conditions over time.
The dispute further centres around what were said to be the nature of various payments made to the applicant during the course of the employment (that is, “over” payments or payments for annual leave).
The references in the applicant’s evidence, that he was told he was a “contractor”, may arise out of his evidence that sometime during this period he was told that he would be paid on agreed “pieceworker’s rates”. This is contrary to the terms of the 2004 employment contract.
Before the Court, as part of the argument against the applicant’s claim, the respondents made a number of assertions.
First, that in March 2005 the applicant’s hourly rate of pay was increased beyond the salary amount set out in the contract. Even if the respondents’ evidence in this regard was accepted, it says nothing about whether the applicant was paid leave entitlements to which he was entitled under the contract.
Second, that there was an “implied agreement” between the parties that the “higher pay and benefits” given to the applicant in this period “constituted” payment of his annual leave entitlements.
The respondents have not satisfactorily explained the basis for such an “implied agreement”. The applicant denies that any implied agreement existed. While it is the case that contractual agreements are, in certain circumstances, susceptible to inferences, these require a sound basis from which they can be said to arise.
An implication may be generally understood as invoking the existence of something not expressly asserted. That is, something that is insinuated or can be said to arise indirectly. However, it requires a basis from which a process of reasoning or logic may lead to an implication being said to reasonably arise.
The evidence before the Court does not support any such inference or implied agreement. At its highest, the respondents appear to assert this implied agreement simply because payments in excess of the contract amount were paid. Even if such “higher” payments were made, there would need to be something more than just mere assertion by the respondents now. The payments, if made, could have been made for a large number of other reasons.
What remains, however, is an acknowledgement that, at least, for the period September 2004 to July 2008 the applicant was generally entitled to annual leave payments under the contract of employment.
Third, the respondents also submitted, and the second respondent gave evidence that, the applicant had approached the respondents twice during this period in relation to his entitlements. This involved the provision of a company car and home internet connection. It may well be that the applicant did make such approaches. However, the relationship of this to the issue for disposition now was not satisfactorily explained by the respondents.
It is also of note that the respondents’ evidence and submissions in relation to the changes to the applicant’s “payment conditions”, said to have occurred in July 2008, claim that as at that time, the applicant was being paid “as per the 2004 Employment Contract”. There is no reference to the terms and conditions of that contract.
The evidence before the Court, from both parties, is that in July 2008 the applicant agreed to changes to the terms and conditions of his contract. The parties agree that from that time, until the termination of employment, the applicant was employed under the terms and conditions of what was described by the respondents as a “standard AWCR Employment Contract”. The respondent relied on what was said to be the relevant hourly rate of pay as being applicable to the consideration of the applicant’s leave entitlements (see further below).
The applicant’s employment was terminated on 16 July 2012. As set out above, the applicant claims that as at termination of his employment, while he was paid certain sums of money by the respondent, this did not include the amount he now claims as leave entitlements. This matter is addressed below.
The 8000 Page Business Record
As set out above the applicant provided various evidence that he said revealed that he was entitled to payment in relation to certain unpaid accrued annual leave entitlements.
Ultimately, the respondents rely on the second respondent’s affidavit of 2 January 2015 and, in particular, the annexures to that affidavit, to respond to the applicant’s claims (see [2] of the second respondent’s affidavit of 2 January 2015).
The respondents conceded that evidence provided by them earlier in these proceedings contained “discrepancies” as to the basis of the applicant’s leave entitlements, their calculation and presentation.
In this light, the respondents sought the opportunity to file further evidence to address these discrepancies. An order was made in the following terms (Order 1 of the orders of 24 October 2014):
“Leave is granted to the respondents to file and serve evidence by way of affidavit, in response to the evidence in the affidavit of the applicant of 30 September 2014, relating to job sheets, pay slips and timesheets, on or before 2 January 2015.”
In his affidavit of 2 January 2015, the second respondent explains the process by which the annexures to his affidavit were created. It appears from the evidence that the respondent used a particular “job tracking and timesheet system”. The evidence of Ms M Ayoubi (affidavit of 14 October 2014) seeks to explain how information was entered into this system.
The second respondent seeks to explain the various “discrepancies” on the basis that there was “inaccurate entering of timesheet information” into the TSM. This was said to have been done by the applicant and “some AWCR Resource Centre Operators” ([3] – [4] of the second respondent’s affidavit of 2 January 2015).
His evidence is that ([6] of the second respondents affidavit of 2 January 2015):
“In examining each job, a separate 'version' of TSM was amended so that the timesheet entries accurately reflected the times actually worked by Mr Matus, as stated in the 'comments' of each job card. A timesheet report was then created using this accurate representation of Matus' days actually worked. This report was created in line with the court orders delivered on 24 November 2014 which state, at paragraph 36, that leave is granted to ‘provide a comprehensive document encapsulating the entirety of the applicant's relevant employment record as to leave taken during the relevant period’, which will take the form of a ‘composite record of existing materials, or, materials arising from, documents already in existence.’ This report is based entirely off documents already in existence--that is, the job cards which both parties agree are the true representation of work performed by Mr Matus. Please find attached Annexure A, which details the times truly and accurately worked by Mr Matus, based off the job card 'comments', and taking into account further concerns raised in Mr Matus' affidavit dated 30 September 2014.”
The reference to “[36]” is a reference to [36] of the interlocutory judgment handed down in this matter, Matus (No.1):
“Notwithstanding this, I granted the leave the respondents sought on the basis that it would provide a comprehensive document encapsulating the entirety of the applicant’s relevant employment record as to leave taken during the relevant period. That is, a composite record of existing materials, or, materials arising from, documents already in existence.”
I do not accept the second respondent’s evidence that the document at Annexure “A” falls within both Order 1 of 24 October 2014, and the explanation of it at [36] of Matus (No.1).
While the evidence is “the report is based entirely off documents already in existence…”, his evidence is also that to prepare the document “… a separate ‘version’ of TSM was amended” ([6] of the second respondents affidavit of 2 January 2015). That amendment, in the evidence, was said to be necessary because “incorrect entering of times” had occurred in the existing documentation. The “correct” version was said to have been created by being “based” on comments on “job cards”. While it may be that case that the 7861 pages set out in annexure “B” of the affidavit may well be within the scope of the orders contemplated in Matus (No.1), such that it could be said they were in existence at the relevant time, their relevance was not explained before the Court in any specific, adequate or meaningful way. Further, “amendments” were made to the report to “change” the description of certain references of “unauthorised leave” to “personal leave” said to have been based on yet another “report” used by the first respondent (the MYOB report) (see further below).
I do not accept that a “composite record of existing materials, or materials arising from, documents already in existence” ([36] of Matus No 1) includes the creation of an “amended” document to address deficiencies in the respondent’s record keeping. The second respondent gave evidence that he and “the management” of the respondent were unaware of the extent of the errors in data entry into the TSM.
In essence, annexure “A” (of the second respondent’s affidavit of 2 January 2015) is a new document created not for the purpose of addressing admitted “discrepancies” as they appeared in the existing various records of the respondent, but a newly created, and constructed, account of what could, or should, have been the business records of the respondent at the relevant times. The scope outlined in the orders was limited to the coherent and comprehensive presentation of existing business records. The document at annexure “A” presented has an interpretive character and includes elements of a reconstruction of what could have been the case rather than what was. I cannot be satisfied that it is an accurate record, or even an accurate subsequent understanding of the respondent’s business record, in existence at the relevant times. This concern was highlighted to the respondent at [35] of Matus (No.1):
“It must be said that the applicant's concerns and objections have weight. Both for the 'lateness' of the respondent's request and what appeared to be the possibility that the respondents were attempting to create a new business record not in existence at the relevant time.”
I give no weight to these documents.
The respondents say the report directly addresses some of the applicant’s concerns as raised in his affidavit of 30 September 2014 (and his submissions). A number of other difficulties emerge.
First, the applicant disputed the respondents’ earlier evidence and submissions as to the question of unauthorised leave (see [23] of the second respondents’ written submissions of 13 February 2015). The second respondent’s initial position was that the days claimed by the applicant as having taken personal leave were noted in the first respondent’s “job tracking sheets” as being marked as “unauthorised leave”.
The applicant’s evidence (and with reference to correspondence between the second respondent and an employee of the respondent – at annexure “G” of the applicant’s affidavit of 30 September 2014) was that he had accrued a certain amount of “personal” leave entitlements, and that he variously took such leave while employed by the respondent.
The applicant pointed to inconsistencies between records that showed that he had taken personal leave, and that these had been “deducted” from his “accrued entitlements”, such that, with what is presented in the respondents’ “job tracking sheet”, which did not note such leave, and therefore, the deductions which the respondent’s otherwise say were made.
In support of his claim, the applicant provided copies of medical certificates in relation to some days when he was absent from work, which he said he submitted to the respondent (at annexure “H” of the applicant’s affidavit of 30 September 2014), and “payslips” prepared by the first respondent which show that relevant deductions were made from his accrued and various leave balances.
It is to be remembered that the applicant commenced employment in September 2004. The second respondent’s evidence in his affidavit of 2 January 2015 appears to concede that what had initially been given in evidence was not correct (see [13] of the second respondent’s affidavit of 2 January 2015). The evidence is that the document at Annexure “A” to the affidavit was “amended”. In context, that can only be reasonably understood as an assertion that having now consulted other records said to have been held by the first respondent (the “MYOB” records), Annexure “A” reflected a change from the earlier reported references to “unauthorised leave” to “personal leave”.
It must be said that this can only reasonably be seen as a concession that the applicant was initially correct in his relevant claims on this issue of accrued leave.
A further difficulty with the respondent’s relevant records is also revealed with the second respondent’s evidence that the relevant computer system (MYOB) “was not set up correctly for the applicant to accrue personal/sick leave prior to July 2008” and that the company had no “correspondence” as to his sick leave relating to the period prior to that ([12] of the second respondent’s affidavit of 2 January 2015).
What follows at [13] of the second respondent’s affidavit of 2 January 2015 is ambiguous and unclear:
“To address this authorised personal leave, the report in Annexure A was amended to change any ‘unauthorised leave’ within a week to a day of ‘personal leave’, corresponding with the hours of leave taken from the MYOB report.”
It is not clear whether the “amendment” related to the period of employment prior to July 2008 or for the entire period. If it is meant to relate only to the period prior to July 2008, then it appears inconsistent with evidence given at [10] of the same affidavit, where the examination of the MYOB system was said to relate to “all dates from 2008 onwards”.
If it is meant to refer to the period past July 2008 then there is no satisfactory explanation why the respondents needed to now examine the MYOB system to address what they concede are “disparities” in their own records, which were provided to the applicant at the relevant times.
In his affidavit of 30 September 2014, the applicant provided examples of what he said were “false statements” in the affidavit of the second respondent of 9 September 2014, as to the description of his being on “unauthorised leave”. Other business records of the respondent, contemporaneous with the relevant events, showed that he worked on certain days, and on some other occasions worked longer hours than otherwise indicated in the second respondent’s evidence (see
[34] – [35] of the applicant’s affidavit of 30 September 2014).
In his affidavit of 2 January 2015, the second respondent states that the example at [35] of the applicant’s affidavit of 30 September 2014 related to a period ([14] of the second respondent’s affidavit of 2 January 2015):
“immediately after the total destruction of the AWCR office and warehouse premises by a catastrophic fire…in which a week of business records were lost due to destruction of onsite backups.”
It is not clear what is meant at the conclusion of that paragraph ([14] of the second respondent’s affidavit of 2 January 2015):
“…I have included 6 days that are exempt from unauthorised leave in Annexure A over this period business records may be inaccurate and to allow business to resume as usual.”
What, in my view, this emphasises is that the evidence of the applicant, based on records contemporaneous with relevant events, is to be preferred to a reconstruction now of what the respondents say the relevant records should have shown, but on the second respondent’s earlier evidence to the Court did not do so. It is also to be preferred to evidence relating to how that reconstruction was created, which is unclear and ambiguous.
At [37] – [41] of his affidavit of 30 September 2014, the applicant provides, albeit from what he said were his “limited” records, examples of “jobs” on which he said he worked (during 2011 to 2012) which contradicted the evidence of the second respondent’s affidavit of 9 September 2014 (see annexure “L” to that affidavit) which makes no reference to these “jobs”.
The second respondent’s “response” in his subsequent affidavit (of 2 January 2015) was that these examples did not relate to “unauthorised leave”. I agree that that is the case. However, I understood the examples provided by the applicant, at [37] – [40] of his affidavit of 30 September 2014, to have been put in support of his central proposition that the respondent’s records, as initially provided and referred to in these proceedings, generally, could not be relied upon because they contained “errors” and were in conflict with other records of the respondent contemporaneous with the relevant times.
It must be said that the respondents’ insistence in providing annexure “A” to the affidavit of 2 January 2015, amongst other things, serves to support the applicant’s contention that Annexure “A” and “B” were only “necessary” from the respondents’ perspective because the other business records as presented to the Court by both parties were unsatisfactory.
In all, therefore, as between the documentary evidence presented by the applicant and the recent reconstruction of what the respondents say the records should have shown, the applicant’s evidence is to be preferred.
The FWO Report
It must be said that for the remainder, the applicant only provided documentary “examples” of evidence as to pay, and leave records rather than any “comprehensive” set of records. These “examples” were put in evidence for the purpose of revealing “errors” in the evidence provided by the respondent. In some instances, they achieved that purpose.
However, in the large volume of material provided in this matter, there is only one piece of documentary evidence that can be said to be comprehensive of the entire relevant period of employment, and comprehensive in addressing the central question in these proceedings involving whether there were any periods of untaken accrued annual leave in respect of which the respondent had not paid the applicant. That is the FWO report put in evidence by the applicant (see annexure “T” of the applicant’s affidavit of 27 March 2014) and by the respondent (see annexure “C” of the second respondent’s affidavit of 14 May 2014).
That report makes certain relevant findings, and explains the basis for them. Those findings are said to be based on a number of documents submitted to the FWO and which led to the report by the FWI. Although, I note that it is not apparent that all of that documentation is in evidence before the Court.
In that latter circumstance, some care must be taken by the Court. It is not appropriate to simply apply the findings of the FWI to the disposition of this case. The FWI’s report however is a document, which is probative of relevant material submitted to the FWO by the parties. In this light, some weight may be given, and the report may be weighed in light of other evidence before the Court. Noting again that the FWI report is comprehensive of the relevant period, whereas the documentary evidence produced by both the applicant and respondent s (noting the situation as to annexure “A” of the affidavit of the second respondent of 2 January 2015) related to only a part of that period.
As set out above, s.90(2) of the Act compels an employer to pay an employee an amount for untaken paid annual leave that would have been payable to the employee had the employee taken that leave.
That sub-section uses the past indicative tense (“would have been”). The respondents take the view that regard therefore should be had to the period prior to the termination of employment and to calculate any payment for untaken leave with reference to the past. This is said to be supported by s.90(1) of the FW Act, which creates an obligation for an employer to make the payment with reference to the past.
However, in my view, s.90(1) and s.90(2) of the FW Act are directed to two different circumstances, and two different points, in time. Section 90(1) of the FW Act is directed to the time an employee takes a period of paid annual leave. The employer’s obligation, in this circumstance, is to pay the employee for ordinary hours of work at the employee’s “base rate of pay” while that employee is on annual leave.
Section 90(2) of the FW Act, however, is directed to that point of time when the employment ends. That is, on termination or cessation of employment. In that circumstance, the employer’s obligation is to pay to the employee, in circumstances where a period of untaken accrued paid annual leave remains, an amount that would have been payable, had the leave been taken.
The amount payable, in context of s.90(1) of the FW Act, is to be calculated with reference to the employee’s “base rate of pay”. In my view, the words “would have been payable” must be read in light of s.90(1), and to mean that the calculation for the relevant period of unpaid leave remaining is with reference to the base rate of pay. The approach taken by the FWI, outlined in the report, is consistent with this understanding.
“Base rate of pay” is defined in s.16 of the FW Act:
“16 Meaning of base rate of pay
General meaning
(1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:
(a) incentive‑based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.
Meaning for pieceworkers in relation to entitlements under National Employment Standards
(2) Despite subsection (1), if one of the following paragraphs applies to a national system employee who is a pieceworker, the employee’s base rate of pay, in relation to entitlements under the National Employment Standards, is the base rate of pay referred to in that paragraph:
(a) a modern award applies to the employee and specifies the employee’s base rate of pay for the purposes of the National Employment Standards;
(b) an enterprise agreement applies to the employee and specifies the employee’s base rate of pay for the purposes of the National Employment Standards;
(c) the employee is an award/agreement free employee, and the regulations prescribe, or provide for the determination of, the employee’s base rate of pay for the purposes of the National Employment Standards.
Meaning for pieceworkers for the purpose of section 206
(3) The regulations may prescribe, or provide for the determination of, the base rate of pay, for the purpose of section 206, of an employee who is a pieceworker. If the regulations do so, the employee’s base rate of pay, for the purpose of that section, is as prescribed by, or determined in accordance with, the regulations.
Note: Section 206 deals with an employee’s base rate of pay under an enterprise agreement.”
There is evidence before the Court that the applicant’s base rate of pay as at the time of termination of employment was $72,679.00 (see the applicant’s relevant taxation “group certificate” for the period 1 July 2011 to 30 June 2012 – see annexure “3” of the applicant’s affidavit of 21 May 2014).
The subsequent calculations by the FWI were based on an examination of the documentary material and records before the FWO. On these records, the FWI calculated that the applicant had taken 78.5 days of leave and been paid for this. This meant that the applicant, for the relevant period, was entitled to 155.99 days leave. The FWI found that the difference between the two sets of days, 77.4 days, had not been taken as paid leave and the applicant was therefore entitled to an amount of $21,632.72 (the applicant has sought only $20,000 to come within the small claims jurisdiction of this Court).
As can be seen, with reference to the evidence and submissions made to the Court, the respondents dispute the FWI calculation. Essentially, this dispute centres around what the respondents assert were days taken by the applicant as leave and for which he was paid, that was in excess of the total found by the FWI.
Up until the provision of the “updated business record”, the respondents’ approach was to respond to applicant’s case in general terms, albeit with some specific, but limited examples in relation to the applicant’s claims as to the days of unpaid leave. This was supported only by piecemeal and limited episodic documentary evidence. The respondents’ position was also undermined by inconsistent evidence given over the course of these proceedings. Ultimately, in these proceedings, the respondent has not provided a comprehensive and accurate relevant employment record for the applicant, as it can be said to have existed at the relevant period.
On balance, I prefer the applicant’s evidence centred around the FWI report. That report is not an interpretive analysis of what could, or should, or what has, been the situation. Rather, as is evident in the report, it is based on data extracted from contemporaneous material. The respondents complain that not all the relevant documents were before the FWO at the time the FWI made her report, or that some of the documents (those of the applicant) that were, contained errors. Even if that were the case the respondents have not provided a satisfactory and contemporaneous business record to make out that claim.
As stated above, the updated business record (annexure “A” to the affidavit of the second respondent of 2 January 2015) is not a comprehensive relevant business record as it existed at the relevant times. Rather, the document was created by taking some of what was recorded at the relevant time (for example comments made by the applicant as to his completed hours) and extrapolated from that a document which purports to be an accurate business record.
In my view, as stated above, it is not an accurate business record. At best, it is what the respondents now say is the proper understanding of the applicant’s work and leave situation. In my view, it is not. It is what the respondent now says may have been the situation, not what was. It reflects the lack of adequate business record keeping at the relevant period. Attempts now to address those deficiencies must be seen in light of the applicant’s, albeit limited, evidence that supports his claim.
In all, I find that the applicant was entitled to be paid at the time of cessation of his employment by the first respondent for unpaid leave accrued as at that date, and which was not paid at that time by the first respondent. The amount of the payment should, in the circumstances of the current case, have been $20,000.
Estoppel
In written submissions, the respondents argue that the “applicant should be estopped by way of acquiescence”. The respondents argue that the applicant was aware of his entitlements to paid leave as “he had signed a contract suggesting as such” and at no point did he raise any concerns with the respondents “regarding his unpaid annual leave” ([D] of the respondents’ written submissions of 9 September 2014).
If this submission is meant as some sort of “mitigation” argument that the applicant should not be paid his unpaid leave entitlements, because he failed to pursue his leave entitlements when he was allegedly aware of them, and he failed to mitigate this loss by not raising any concern sooner, then this argument was not fully developed, or explained, before the Court.
It is not clear whether the respondents were attempting to pursue an equitable estoppel argument by suggesting that the applicant’s failure to pursue his unpaid leave entitlements (which they claim he was aware of), with the respondents means that he is no longer owed such entitlements, and that the applicant should be estopped from making any claims.
The difficulty for the respondents is that the argument is left in an underdeveloped state of assertion. Further, while some attempt is made in submissions to refer to evidence (see [16] – [17] of respondents’ submissions of 9 September 2014), the proposition that the applicant “knew of his entitlements” at the relevant times of his employment, and knew he was not paid, yet did not mention this matter until five years later, when his employment was terminated, can only reasonably be seen as a disagreement, by way of submission, with the applicant’s evidence, not probative of any other evidence before the Court. That the respondent’s leave records were destroyed in a “catastrophic fire at AWCR in February 2012” ([18] of respondents submissions of 9 September 2014) does not, in my view, do anything to assist in any equitable estoppel argument. If anything, it highlights the lack of relevant corroborative evidence from the respondent.
Statute of Limitations – Section 545 of the Act
At best, as it could be understood, a part of the respondents’ response to the applicant was to refer to the letter (19 May 2013) from the FWO reporting on the finalisation of an investigation by the FWO of a dispute between the parties (see above). However, the respondents’ argument relevant to this matter were either poorly explained or left underdeveloped before the Court.
In any event, a number of possible elements of the argument may be gleaned from the evidence presented.
First, as set out above, the applicant gives evidence of a Deed of Release arising from earlier proceedings under the FW Act (the Deed is at Annexure “S” to the applicant’s affidavit of 27 March 2014). It was made on 21 December 2012.
Clause 4 of the Deed is in the following terms:
“4. RELEASE BY THE EMPLOYEE
4.1. Upon tending a copy of this Deed to AWCR, the Employee:-
a) unconditionally releases. AWCR and Browne from all Claims relating to or arising from the employment and/or the termination of his employment no matter how same arose and on every account which now exists or could exist but for this Deed;
b) agrees not to make any further Claims against AWCR and/or Browne relating to or arising from the employment and/or the termination of employment on any account whatsoever and no matter how same has arisen; and
c) will comply with clause 7 .1 of this Deed
4.2. For the avoidance of doubt, nothing in this clause operates to affect, modify or extinguish the ongoing FWO Investigation referred to at clause 1 (a) of this Deed, or any statutory benefits held to be due and payable to the Employee at the conclusion of said Investigation.”
To the extent that the respondents may seek to rely on clause 4,
sub-clause 4.2 makes clear that the Deed of Release does not extend to “any statutory benefits held to be due and payable” to the applicant. The claim now made by the applicant is made in relation to a statutory benefit (s.90(2) of the FW Act).
Second, the respondents refer to s.545(5) of the FW Act. The argument appears to be that as the application to the Court was made on 12 September 2013, the applicant should not be able to recover that part of his claim relating to a period over six years earlier. That is, prior to September 2007.
Section 545(5) of the Act is in the following terms:
“545 Orders that can be made by particular courts
…
Time limit for orders in relation to underpayments
(5) A court must not make an order under this section in relation to an underpayment that relates to a period that is more than 6 years before the proceedings concerned commenced.”
The difficulty for the respondents is that this sub-section operates in relation to “underpayments”. That is not the claim made by the applicant, nor does it relate to the breaches as set out above.
The case does not involve any “underpayment”. Rather, the contraventions found are that the respondent failed to pay the applicant accrued annual leave on termination of his employment. While on the evidence some payment of part of the applicant’s accrued annual leave was paid on termination, the applicant’s application to the Court concerns that portion of accrued annual leave not paid.
As set out above, s.90(2) of the FW Act required the respondent to pay the applicant an amount of money, on cessation of his employment, for untaken accrued annual leave payable to the applicant.
I do not understand that portion of annual leave not paid on cessation of employment, which should have been paid at that time, to be an “underpayment” in the sense set out in s.545(5) of the FW Act. However, even if it were to be so characterised, it is an “underpayment” made as at cessation of employment (16 July 2012) which is within the six year period.
Although not developed in argument before the Court, the second respondent’s affidavit of 14 May 2014 refers to the letter of “Finalisation of Investigation” of 9 May 2013 from a Fair Work Inspector with the FWO.
The argument appears to be that the FWO concluded that enforcement action to recover unpaid annual leave should not proceed because the annual leave related to a period prior to six years before the application to the Court was made.
In my view, the entitlement to annual leave payments certainly relates, in part, to a period greater than six years from the date of commencement of these proceedings. However, as stated above, the respondent’s obligation to pay that portion of the unpaid annual leave entitlements crystallised as at the date of cessation of employment, which is within the six year period, and is, therefore, not barred by a statute of limitations.
Removal of Second Respondent as a Party
As stated above, in written submissions and during the final hearing, the second respondent made an application to be removed as a party to these proceedings. In submissions, the complaint appeared to be that the applicant had not pointed to any relevant authority, statute or regulation on which he could proceed to make a claim against the second respondent. The issue is said to arise as to whether Mr Ronald Brown can be held personally liable as a company director for unpaid leave entitlements.
Both parties referred to this matter in oral submissions made at the final hearing. The difficulty for both parties is that to the extent that the submissions make assertions of fact, there is little relevant evidence before the Court to support the matters asserted. Given that both parties are not legally represented, it must again be noted that submissions are not evidence and the Court can only proceed on the evidence presented.
The second respondent, albeit “late” in the conduct of the case, directed attention to s.550 of the FW Act:
“550 Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
As set out at [180] above, I have found the contravention of a civil remedy, the issue now is whether the second respondent was “involved in” these contraventions within the meaning given exclusively to that term in s.550(2) of the FW Act.
The second respondent refers to Brennan v Plumbing Services Australia Pty Ltd & Ors [2012] FMCA 3 for the proposition that to satisfy that test he is required to have had actual knowledge of the contravention prior to the relevant conduct that was entered into, and must have done a positive act in entering into the conduct.
The reference to “contravention” in the second respondent’s submissions must be understood as including a reference to having knowledge of the facts constituting the contravention, and that he was knowingly concerned with, and was an intentional participant in, the contravention on actual knowledge of the relevant and essential facts. This does not mean that the second respondent would avoid accessorial liability, simply by showing that he did not know the relevant matters constituted a contravention for the purposes of the FW Act (Australian Building & Construction Commissioner v Abbott (No 4) [2011] FCA 950 at [189] – [191] as referred to in Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661).
However, any assertion by the applicant that the second respondent is liable for the contravention as an accessory, such a case must be clearly identified by evidence. The Court would need to reach a level of reasonable satisfaction which cannot be provided by mere assertions, reliance on indirect inferences, or indefinite testimony.
The difficulty for the applicant on this question, in the current case, is that on the state of the evidence presented such satisfaction cannot be reached. It must be remembered that accessorial liability, and the relevant level of satisfaction to be reached, is in respect of, and directly relates to, the actual contravention found to have occurred.
It is important to note that in his submissions, the applicant refers generally to all of s.550 of the FW Act, but has not identified the exact conduct of the second respondent said to have been engaged in by him, and as it relates to any of the matters set out in s.550(2) of the FW Act.
Nor is any satisfactory evidence before the Court such as to say that the second respondent was in possession of the requisite level of actual knowledge, before he can be found to be accessorily liable for the contraventions made by the first respondent.
While the applicant gives some evidence of some direct involvement by the second respondent in relation to the applicant’s “remuneration and employment” (see [21], [25] and [26] of the applicant’s affidavit of 27 March 2014), there is no evidence directed to the second respondent having knowledge of the conduct relating to the contraventions.
In his submissions, the applicant argues that there were contraventions under the FW Act and as the second respondent was, during the entire time of the applicant’s employment, a director of the respondent, he “accordingly shall be included in the first respondent’s contraventions…as its guiding mind” (applicant’s written submissions of 13 February 2015 at [271]).
There is no doubt, given the second respondent’s evidence, that he is, and was, at the relevant times, a director of the first respondent. The second respondent does not dispute this. The difficulty for the applicant however is that, at its highest, his assertion of accessorial liability is based simply on the fact that the second respondent is a director of the respondent. The applicant’s submissions refer to various authorities where he says directors were relevantly held liable (Predl v DMC Plastering Pty Ltd & Anor [2014] FCCA 1066 and Foster v Faulkhead and Faulkhead Nominees Pty Ltd [2005] SAIRC 86).
Merely being a director of a corporation found to have contravened parts of the FW Act is not, in my view, sufficient to be caught within s.550 of the Act. That section does not seek to impose accessorial liability on directors per se. As is clear, any such liability can attach to a “person”, so long as the elements set out in that section are, on the evidence, met.
While, as director, the second respondent may have been the “guiding mind” of the respondent, generally and in relation to some specific relevant matters, the evidence before the Court, as referred to above, is that in relation to the conduct constituting the contravention, it cannot be said that the second respondent had actual knowledge. I find that the second respondent is not accessorily liable.
In my view, and in the circumstances set out above, the appropriate action for the Court now is to dismiss the application as against the second respondent. I will make that order.
Conclusion
In all, I find that, on the best view of the evidence, the applicant’s claim against the respondent is made out and that the first respondent should pay the applicant an amount of $20,000. I will make an order accordingly.
I certify that the preceding two hundred and fifteen (215) paragraphs are a true copy of the reasons for judgment of Judge Nicholls
Associate:
Date: 31 July 2015
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