McPARLAND v Origin Oz Holdings T/A Nuline Glass and Ors (No.2)
[2019] FCCA 1674
•14 June 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| McPARLAND v ORIGIN OZ HOLDINGS T/A NULINE GLASS & ORS (No.2) | [2019] FCCA 1674 |
| Catchwords: INDUSTRIAL LAW – Contraventions of provisions of FWA by First Respondent and Third Respondent – accessorial liability of Fourth Respondent – lack of contrition or apology – adverse action with malice – pecuniary penalty orders made. |
| Legislation: Fair Work Act 2009 (Cth) ss.44(1), 117, 323, 340, 546, 550. |
| Cases cited: Australian Competition and Consumer Commission v Coles Supermarkets Pty Ltd [2015] FCA 330. Kelly v Fitzpatrick (2007) 166 IR 14. Mason v Harrington Corporation Pty Ltd [2007] FMCA 7. ACCC v Global One Mobile Entertainment Ltd [2011] FCA 393. Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No.2) [2018] FCA 1968. Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191. |
| Applicant: | DEAN MCPARLAND |
| First Respondent: | ORIGIN OZ HOLDINGS T/A NULINE GLASS (ABN 152 700 420) |
| Third Respondent: | SYDNEY SUNNY GLASS PTY LTD |
| Fourth Respondent: | SHENGIANG CHI |
| File Number: | SYG 2912 of 2017 |
| Judgment of: | Judge Egan |
| Hearing date: | 13 June 2019 |
| Date of Last Submission: | 13 June 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 14 June 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr T. Glover |
| Solicitors for the Applicant: | Harmers Workplace Lawyers |
| Counsel for the Respondents: | Mr W. Chan |
| Solicitors for the Respondents: | Cathay Lawyers |
THE COURT DECLARES THAT:
The First Respondent has contravened the provisions of s. 323(1) of the Fair Work Act 2009 (Cth) (‘FWA’), by failing to pay all of the Applicant’s base salary, car allowance, share allotment/transfer and superannuation entitlements in relation to the period between 21 March 2015 and 14 March 2017 in the amount of $315,912.98.
The Third Respondent has contravened the provisions of:
(a)s. 117(1) of the FWA, and thereby s. 44(1) of the FWA, by failing to give the Applicant written notice of termination;
(b)s. 117(2) of the FWA, and thereby s. 44(1) of the FWA, by failing to pay the Applicant the minimum period of one-week’s notice;
(c)s. 323(1) of the FWA, by failing to pay all of the applicant’s base salary, car allowance, share allotment/transfer and superannuation entitlements in relation to the period between 15 March 2017 and 6 June 2017 in the amount of $251,898.21; and
(d)s. 340(1)(c) of the FWA, by terminating the Applicant’s employment because the Applicant exercised his workplace right to make a complaint to WorkSafe NSW.
The Fourth Respondent was involved in, and is taken to have contravened, each of the Third Respondent’s contraventions set out in paragraph 2 above pursuant to s. 550(1) of the FWA.
THE COURT ORDERS THAT:
The First Respondent pay directly to the Applicant pecuniary penalties pursuant to the provisions of s. 546(1) of the FWA in the amount of $32,400.
The Third Respondent pay directly to the Applicant pecuniary penalties pursuant to the provisions of s. 546(1) of the FWA in the amount of $81,000.
The Fourth Respondent pay directly to the Applicant pecuniary penalties pursuant to the provisions of s. 546(1) of the FWA in the amount of $7,560.
Costs be reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
SYG 2912 of 2017
| DEAN MCPARLAND |
Applicant
And
| ORIGIN OZ HOLDINGS T/A NULINE GLASS (ABN 152 700 420) |
First Respondent
| SYDNEY SUNNY GLASS PTY LTD |
Third Respondent
| SHENGIANG CHI |
Fourth Respondent
REASONS FOR JUDGMENT
These reasons are to be read in conjunction with the reasons of the Court published on 5 June 2019.
The trial of this matter proceeded over four days commencing on 30 April 2019 and concluding on 20 May 2019. The orders sought by the Applicant against the First Respondent were for compensation and the imposition of pecuniary penalties.
The First Respondent was not represented at trial. It had been ordered by His Honour Judge Smith on 15 October 2018 that judgment be entered in favour of the Applicant against the First Respondent in respect of the claims as alleged in paragraph 29 of the 2nd Further Amended Statement of Claim (‘2nd FASC’). By paragraph 29, the Applicant made the following claims:
“29. In breach of the Origin Employment Contract, in the period 23 March 2015 to 14 March 2017, Origin has failed, neglected or refused to:
a) pay all of the Applicant’s base salary for the period of his employment by Origin; and
b) failed to make all contributions to a complying superannuation fund on behalf of the Applicant.”
The Applicant otherwise sought orders for compensation and the imposition of pecuniary penalties against the Third and Fourth Respondents as set out in the prayer for relief.
The orders made by the Court on 13 June 2019, after the hearing of further submissions, were as follows:
“1. The First Respondent and the Third Respondent are jointly and severally liable to pay to the Applicant the sum of $240,000 as damages for breach of contract, together with the sum of $868 for interest calculated pursuant to the provisions of s. 76 of the Federal Circuit Court of Australia Act 1999 (Cth).
2. The Third Respondent pay to the Applicant:
a. $11,898.21 as compensation for underpayment of salary, car allowance and superannuation contributions in relation to the period between 15 March 2017 and 6 June 2017 in contravention of section 323(1) of the Act;
b. $3,342.79 as compensation for loss of salary, car allowance and superannuation contributions suffered as a result of the contravention of section 117(2) of the Act;
pursuant to section 545(1) of the Act.
3. The Third Respondent and Fourth Respondent are jointly and severally liable to pay to the Applicant the sum of $6,685.58 as compensation for loss of salary, car allowance and superannuation contributions suffered as a result of the contravention of s. 340(1) of the Act pursuant to s. 545(1) of the Act.
4. The First Respondent pay to the Applicant $75,912.98 as compensation for underpayment of salary and superannuation contributions in relation to the period between 21 March 2015 and 14 March 2017 in contravention of s. 323(1) of the Act.
5. The Third Respondent pay to the Applicant interest on the sum of the amounts in Order 2(a) and 2(b) in the amount of $1,660.43 pursuant to the provisions of s. 76 of the Federal Circuit Court of Australia Act 1999 (Cth).
6. The Third Respondent and Fourth Respondent are jointly and severally liable to pay to the Applicant interest on the amount in order 3 in the amount of $728.36 pursuant to the provisions of s. 76 of the Federal Circuit Court of Australia Act 1999 (Cth).
7. The First Respondent pay to the Applicant interest on the amount in order 4 in the amount of $9,231.23 pursuant to s. 76 of the Federal Circuit Court of Australia Act 1999 (Cth).”
It was found that the Fourth Respondent was accessorily liable in respect of the conduct of the Third Respondent taken against the Applicant. In light of the above orders, it is appropriate that declarations be made:
a)As against the First Respondent, for its contravention of the provisions of s. 323(1) of the Fair Work Act 2009 (Cth)(‘FWA’).
b)As against the Third Respondent, for its contraventions of the provisions of s. 44(1), s. 117(1), s. 117(2), s. 323(1) and s. 340(1)(c) of the FWA.
c)As against the Fourth Respondent, for his contravention of the provisions of s. 340(1)(c) of the FWA.
For the purpose of considering what pecuniary penalties ought to be ordered in this matter, the respective conduct of each of the First Respondent, the Third Respondent and the Fourth Respondent needs to be examined.
When considering the imposition of a pecuniary penalty the court has had regard to the judgment of Allsop CJ in Australian Competition and Consumer Commission v Coles Supermarkets Pty Ltd [2015] FCA 330 at [6] where the Chief Justice relevantly set out the general principles to be applied.
The Court has adopted the principles laid down in Kelly v Fitzpatrick (2007) 166 IR 14 at [14] where Tracey J adopted the approach of Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [26] – [59] on the question of the imposition of pecuniary penalties. The relevant factors to be taken into account by a court when approaching the issue of the imposition of a pecuniary penalty were there held to include the following:
a)The nature and extent of the conduct which led to the breaches.
b)The circumstances in which that conduct took place.
c)The nature and extent of any loss or damage sustained as a result of the breaches.
d)Whether there had been similar previous conduct by the respondent.
e)Whether the breaches were properly distinct or arose out of the one course of conduct.
f)The size of the business enterprise involved.
g)Whether or not the breaches were deliberate.
h)Whether senior management was involved in the breaches.
i)Whether the party committing the breach had exhibited contrition.
j)Whether the party committing the breach had taken corrective action.
k)Whether the party committing the breach had cooperated with the enforcement authorities.
l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
m)The need for specific and general deterrence.
First Respondent
The First Respondent failed to honour its contractual and statutory duty to pay to the Applicant his due entitlements for a substantial period of time – namely from 21 March 2015 until 14 March 2017. Its breach of the mandatory provisions of s. 323(1) of the FWA requiring it to pay the Applicant in full during such period has neither been explained, nor has it otherwise been the subject of submissions. Further, the First Respondent failed to cause promised shares to be transferred to the Applicant, lulling the Applicant into the belief that they would be so transferred right up until the time that the Applicant’s employment was to be transferred from the First Respondent to the Third Respondent. The First Respondent has not demonstrated any contrition, and no apology has been forthcoming. The Applicant continues to be owed substantial sums of money by the First Respondent and no indication has been given by or on behalf of the First Respondent that it has any intention to remedy that situation.
It has been submitted on behalf of the Applicant that the conduct of the First Respondent warrants the imposition of a greater penalty than as against the Third Respondent because of the longer period of unexplained contravention by the First Respondent and its total failure of engagement in the court process. The Court agrees that overall the conduct of the First Respondent warrants the imposition of a greater penalty than that to be imposed upon the Third Respondent.
Third Respondent
Adverse findings were made against the Third Respondent in circumstances where it had made no concession, in any respect, that its conduct constituted either a statutory breach or a breach of relevant terms of the Applicant’s contract of employment with it.
There has been no apology proffered since the handing down of judgment, nor has there been any contrition shown. The Third Respondent steadfastly maintained its position of non-contravention and non-breach throughout the course of the trial. It was non-conciliatory throughout.
The Third Respondent submits that its debit trading situation ought to be taken into account in respect of the imposition of any pecuniary penalty. Reliance was placed by it upon an affidavit of Shengiang Chi filed on 12 June 2019 which relevantly annexed a copy of the Third Respondent’s Financial Report and Income Tax Return for the year ended 30 June 2018. That report showed that the Third Respondent had experienced a trade downturn relative to the 2017 financial year.
In ACCC v Global One Mobile Entertainment Ltd [2011] FCA 393, Bennett J at [139] – [140] said as follows:
“[139] Although Mr Jeronimo provided several affidavits in the proceedings, there is no evidence that either Global One or 6G would be unable to pay any penalty imposed, other than the contention that 6G cannot directly make any payment from its own resources.
[140] The Commission submits that it is not relevant that 6G has effectively no assets and that an appropriate penalty should be imposed whether or not it would “ruin” the company. In Australian Competition and Consumer Commission v High Adventure Pty Ltd (2006) ATPR 42-091, the evidence did not indicate that the company would be forced into liquidation provided it was given time to pay but the Full Court said that, in any event, an appropriate penalty should be imposed by reference to the need to deter future contraventions rather than by focussing on the detriment to the respondent. The possibility of liquidation ‘must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined’ (at 44,564).”
The Court has taken into account the Third Respondent’s downturn in trading when making orders for the imposition of pecuniary penalties against it.
The Third Respondent’s conduct is not as egregious as that of the First Respondent but is close thereto.
Fourth Respondent
The Fourth Respondent was in reality the controller of the Third Respondent. In his capacity as a director and officer of the Third Respondent he directed the affairs of that company. It has been found that he was not a witness of credit and that he dismissed the Applicant from employment with malice after concluding that the Applicant had been responsible for the making of complaints about unsafe work practices at the Third Respondent’s premises to Worksafe NSW. In doing so, his conduct ought to be condemned, and the imposition of pecuniary penalties upon him ought to reflect the need for the imposition of penalties which would deter any such future conduct.
It is also of note that throughout the hearing the Fourth Respondent failed to acknowledge any wrongdoing notwithstanding that he had the opportunity to do so during the course of extensive cross-examination. He has proffered no apology and has been lacking in contrition. His conduct in terminating the employment of the Applicant because the Applicant exercised a workplace right warrants appropriate censure.
Totality
In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No.2) [2018] FCA 1968, O’Callaghan J at [46] – [47] said:
“46. In my view, the question of the assessment of penalties is to be approached consistently with the joint judgment of the Full Court (comprised of the Chief Justice, White J and myself) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 (The Non-Indemnification Personal Payment Case) in particular at [22], viz:
The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions: Veen v The Queen [No 2] (1988) 164 CLR 465 at 477-478. Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.
47. To the extent that the submissions of the applicant suggested that the judgments of the majority in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126 may be read to suggest otherwise, I respectfully disagree.”
The Full Court of the Federal Court in Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191 at [176] said as follows:
“176. It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases. See the points of principle set out in the reasons of Bromwich J (dissenting in the result, but not in point of principle) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126 at [93] and [102] to [110], and see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 at [22].”
The Court adopts the approaches as set out in each of the above cases.
The principle of totality has been taken into consideration by the Court when assessing the appropriate level of pecuniary penalty to be imposed in this matter. The Court has also had regard to the requirement that pecuniary penalty orders must in all circumstances be proportionate.
The conduct which has constituted the contraventions was deliberate and involved senior management. The Court finds that the contraventions were in each case part of a separate breach, such that the contraventions ought not to be regarded as part of a single contravention.
Imposition of Penalty
In the light of the above, and in circumstances where the Applicant is substantially out of pocket by reason of the contraventions of the Respondents, the penalties to be imposed have reflected the seriousness with which the Court has viewed the offending conduct.
The penalties to be imposed are as follows:
Penalties – First Respondent
| Provision | Contravention | Maximum Penalty | Penalty (% of maximum) |
| 323(1) of the FW Act | Underpayment Failing to pay all of the applicant’s base salary, car allowance, share allotment/transfer and superannuation entitlements in relation to the period between 21 March 2015 and 14 March 2017 | 300 penalty units ($54,000) | $32,400 (60%) |
Penalties – Third Respondent
| Provision | Contravention | Maximum Penalty | Penalty (% of maximum) |
| 117(1) (and in turn section 44) of the FW Act | Written notice of termination. Failing to give the Applicant written notice of termination | 300 penalty units ($54,000) | $13,500 (25%) |
| 117(2) (and in turn section 44) of the FW Act | Failure to make payment in lieu of notice. Failing to pay the Applicant the minimum period of one-week’s notice | 300 penalty units ($54,000) | $13,500 (25%) |
| 323(1) of the FW Act | Underpayment | 300 penalty units ($54,000) | $21,600 (40%) |
| 340(1) of the FW Act | Unlawful termination Terminating the Applicant’s employment because the Applicant exercised his workplace rights | 300 penalty units ($54,000) | $32,400 (60%) |
| Total | $81,000 |
Penalties – Fourth Respondent
| Provision | Contravention | Maximum Penalty | Penalty (% of maximum) |
| 340(1) of the FW Act | Unlawful termination Terminating the Applicant’s employment because the Applicant exercised his workplace rights | 60 penalty units ($10,800) | $7,560 (70%) |
Whether Payment of Penalties Ought To Be Ordered To Be Made To Applicant
The Court acknowledges that there are good reasons why pecuniary penalty amounts ought to be ordered to be paid directly to an Applicant in circumstances where the Applicant has himself incurred considerable costs and has devoted substantial time in prosecuting the claim involving contraventions of the FWA. This was such a case.
In all of the circumstances, this is an appropriate case where the total of pecuniary penalties ought to be paid directly to the Applicant. [1]
[1] Sayed v CFMEU (2016) 239 FCR 336 at [120] – [121].
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Egan
Date: 14 June 2019
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