Miljevic v Ital One Holdings Pty Ltd

[2015] FCCA 1317

FEDERAL CIRCUIT COURT OF AUSTRALIA

MILJEVIC v ITAL ONE HOLDINGS PTY LTD [2015] FCCA 1317

Catchwords:
INDUSTRIAL LAW – Small claims application – allegations of under payment of wages – failure to pay loadings and penalty rates under Restaurant Industry Award 2010 – respondent aware of hearing date – respondent failed to file any material or attend the hearing – respondent in default – undefended hearing.

Legislation:  

Fair Work Act 2009 (Cth) s.548
Federal Circuit Court Rules 2001 (Cth) rr.13.03A, 13.03B, 13.03C

McShane v Image Bollard Pty Ltd [2011] FMCA 215
Black v Young Republic & Anor [2012] FMCA 729
Jones v Groovy Freighters Pty Ltd [2010] FMCA 673
Lebot v Energetic IT Pty Ltd [2011] FMCA 755

Applicant: STANKO MILJEVIC

Respondent: ITAL ONE HOLDINGS PTY LTD

File Number: MLG 1744 of 2014

Judgment of: Judge O’Sullivan

Hearing date: 6 May 2015

Date of Last Submission: 6 May 2015

Delivered at: Melbourne

Delivered on: 6 May 2015

REPRESENTATION

The Applicant: Appeared in person by telephone link

The Respondent: No appearance

ORDERS

THE COURT ORDERS THAT:

1. The applicant have leave to proceed undefended pursuant to Rules 13.03A(2)(a), (b) (ii), (iii), (iv), (vi), (vii) and 13.03B(2)(d) and/or Rule 13.03C(1)(e) of the Federal Circuit Court Rules2001 (“the Rules”).

THE COURT DECLARES THAT:

1. The respondent contravened the Restaurant Industry Award 2010 and the Fair Work Act 2009 (Cth) (“FW Act”).

THE COURT ORDERS THAT:

1. Pursuant to section 545(2) of the FW Act the respondent pay to the applicant the sum of $17, 312.78 (gross) within 21 days of service of these orders.

2. The applicant shall serve the respondent with a sealed copy of these orders within 21 days.

AND THE COURT NOTES:

1. Rules 16.05.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

MLG 1744 of 2014

STANKO MILJEVIC

Applicant

And

ITAL ONE HOLDINGS PTY LTD

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. Before the Court is an application filed on 26 August 2014 by Stanko Miljevic (“the applicant”). The application was filed in the Small Claims List of the Fair Work Division of the Court. The application was supported by a form 5 and an affidavit, which the applicant swore on 17 April 2014 and filed on 26 August 2014. The respondent to the application is Ital One Holdings Pty Ltd (“the respondent”).

   
   

   The application was given a hearing date of 18 February 2015.

2. However, prior to the hearing both the applicant (who was by that time no longer in Australia) and the respondent sought to adjourn that hearing (although for different reasons). Neither party made a proper application to do so. Nevertheless, with the agreement of both parties, the respondent (represented by its director) and the applicant appeared before the Court, both via telephone link on 13 February 2015. The following orders were made:

“THE COURT ORDERS THAT:

1.The hearing listed on 18 February 2015 be vacated.

2.The Application filed on 26 August 2014 be adjourned for hearing on 6 May 2015 at the Federal Circuit Court of Australia at Melbourne commencing at 10.00 am.

3.On the adjourned date the Applicant has leave to appear by telephone link and the Respondent shall appear represented in Court by its Director.

4.The Respondent shall file and serve any material on which it seeks to rely upon, on the adjourned date within 21 days from the date of these Orders.

5.The Applicant shall file and serve any further material in reply on which he seeks to rely upon, on the adjourned date within 7 days thereafter compliance with Order (4) herein.

6.The Applicant shall file and serve a Notice of Address for Service by not later than 17 February 2015.”

1. Today, 6 May 2015 the applicant appeared in person by telephone link. There was no appearance by or on behalf of the respondent. Notwithstanding the orders made on 13 February 2015, there has been no material filed by the respondent. There has been no contact made with the Court by or on behalf of the respondent to explain its failure to do so.
   The respondent failed to answer the call today when the matter was called. There has been no request for an adjournment of today’s hearing.

2. Given that the applicant sought leave pursuant to Rules 13.03A(2)(a), 13.03B(2), (iii), (iv), (v) and (vii) and pursuant to rule 13.03(2)(d) and/or 13.03C(1)(e) of the Federal Circuit Court Rules 2001 (“the Rules”) to proceed with his small claims application. For that purpose the applicant has given evidence. His application and form 5 was marked as exhibit A1 and A2 respectively. The affidavit that the applicant filed on 26 August 2014 was marked as exhibit A3.

3. The applicant, who is in his thirties, worked for the respondent between 19 December 2011 and 27 January 2013 as a casual employee at Café Baci located at Crown Casino. The applicant’s employment with the respondent was governed by the Restaurant Industry Award 2010 (“the Award”). The applicant’s evidence is during the course of his employment he received a flat hourly rate of $18 per hour. In the form 5 accompanying his application, the applicant detailed the alleged contraventions of both the Fair Work Act2009 (“the FW Act”) and the Restaurant Industry Award 2010 at part G of that Form 5.

4. At part H of that form 5 the applicant particularised the remedy that he sought, claiming in total $17,312.78 by reason of the contraventions referred to in part G. At part I of the form 5 the applicant particularised the details of his claim and how the calculations referred to in part H were arrived at, by reference to the relevant provisions of the aforementioned award.

5. Attached to the affidavit filed by the applicant on 26 August 2004 as exhibit A3 were details of the applicant’s pay slips from his employment with the respondent. There was also a letter dated

   
   

   10 February 2014 from the Fair Work Ombudsman addressed to the applicant in relation to a complaint made by him to the Fair Work Ombudsman arising from his employment with the respondent.

   
   

   The letter dated 10 February 2014 from the Fair Work Ombudsman to the applicant records the findings of the Fair Work Ombudsman as a result of its investigation into that complaint. The letter states:

   “I refer to the complaint lodged against Ital One Holdings Pty Ltd, trading as Baci (the Company), with the Fair Work Ombudsman (FWO) on 3 December 2013 concerning underpayment of hourly rate, non-payment of late night penalties, non-payment of weekend penalties, non-payment of public holiday penalties and not being provided with adequate meal breaks in-line with the Award.

   …

   Resolution outcome notification

   This resolution outcome notification has been prepared in order to assist the parties to voluntarily resolve their workplace dispute. It presents the FWO’s views about whether a contravention of Commonwealth workplace laws is likely to have occurred and provides recommendations about how the workplace dispute should be resolved.

   The assessment has been prepared based on information supplied to the FWO by the parties. The assessment and recommendations contained in this report may be later amended by a court subject to the provision of additional information and evidence.

   The complaint

   Details of the complaint can be briefly summarised as follows:

   ·You were paid a flat rate of $18.00 per hour.

   ·You were not paid late night penalties.

   ·You were not paid weekend penalties.

   ·You were not paid public holiday loadings.

   ·You were not provided with adequate paid/unpaid meal breaks.

   Information supplied by the parties

   The following information was supplied to the FWO by the parties in relation to the complaint:

   1.Pay slips provided by you

   Matters Assessed by Fair Work Inspector

   1.The Company is an employer within the jurisdiction of the Fair Work Ombudsman.

   2.You were employed by the Company between January 2012 and January 2013 on a casual basis in the role of barista/waiter. The Company confirmed your employment status as casual.

   3.The terms and conditions of your employment were governed by the Restaurant Industry Award 2010 (the Award) and the Fair Work Act 2009 (the Act).

   The FWO has assessed the information provided by the parties and is of the view that the Company has likely contravened provisions of the Award and the Act.

   Minimum Hourly Rate

   The applicable classification for a barista/waiter in the Award is a Food and Beverage Level 2. For the following periods, the hourly rates are as follows:

   1 July 2011 to 1 July 2012 $20.71 per hour

   1 July 2012 to 1 July 2013 $21.32 per hour

   The pay slips provided confirm you were paid $18.00 per hour. Therefore, there is an underpayment of $2.71 per hour up to 1 July 2012 and $3.32 per hour from 1 July 2012 to termination of your employment.

   Penalty Rates for Weekend Work and Public Holidays

   Clause 34.1 of the Award provides in part:

   An employee working ordinary time hours on the following days will be paid the following percentage of the minimum wages in clause 20- Minimum wages for the relevant classification:

Type of employment	Monday to Friday      %	Saturday      %	Sunday % %	Public Holidays %
Full time and Part-Time	100	125	150	250
Casual (inclusive of 25% casual loading)	125	150	175	250

Examination of pay slips provided and the allegation made of payment of a flat hourly rate suggest it is likely that the Company has not paid the required penalties for hours worked on a Saturday, Sunday and for public holidays.

Penalties for late night work

Clause 34.2 of the Award states in part:

(a)An employee, including a casual, who is required to work any of their ordinary hours between the hours of 10.00 pm and midnight Monday to Friday inclusive, or between midnight and 7.00 am Monday to Friday inclusive, must be paid an additional amount per hour calculated according to the following:

(i)Between 10.00 pm and midnight

·       For each hour or part of an hour worked during such times – 10% of the standard hourly rate per hour extra.

(ii)    Between midnight and 7.00 am

·       For each hour or part of an hour worked during such times – 15% of the standard hourly rate per hour extra.

(b)For the purposes of this clause midnight will include midnight Sunday.

Examination of pay slips provided confirmation that you were not paid additional wages for hours worked between 10.00 pm and 7.00 am on Monday to Friday.

Breaks

Clause 32.4 of the Award states in part:

If clause 32.3 does not apply and an employee is not given a meal break in accordance with clause 32.1 the employer must pay the employee 150% of the employee’s ordinary base rate of pay from the end of six hours until either the meal break is given or the shift ends.

You have alleged that you were not given a scheduled unpaid break. The clause above confirms that if a break is not provided after the sixth hour, the Company must pay 150% of the ordinary rate until a break is given or the shift ends.

The Company has confirmed that time sheets were required to be completed by all employees, but once payment of wages was processed from those time sheets, these records were discarded. The Company has been advised by this agency of the legal requirement to keep and maintain proper employment records in line with the Act.

Next steps

The FWO recommends that the parties take the following steps in order to resolve their workplace dispute:

1.The Company to audit your records to determine if an underpayment of wages can be identified.

2.The Company to rectify any identified underpayment by making payment to you within 28 days from the date of this letter.

If payment is not made in accordance with the above recommendations, you may commence your own civil court action using the small claims process at the Federal Circuit Court of Australia. This letter may be used in any civil court proceedings as evidence of the FWO’s reviews in relation to this matter.

…” (emphasis added)

1. In the form 5 filed on 26 August 2014 the applicant said at part I:

   “Wages:

   Clause 20.1 of the Restaurant Industry Award 2010

   The minimum wages for a food and beverage attendant grade 2 from November 2011 is $16.57 and from July 2012 is $17.05 plus a casual loading of 25% equal to $20.71 and $21.31 respectively. A total of 1832.25 ordinary hours were worked.

   From Dec 19/2011 to June 30/2012

   681.75 Hours x $20.71 =$14121.64

   From July 1/2012 to January 27/2013

   1150.5 Hours x $21.31 = $24523.82

   - The calculated amount that the employer should have paid is:

   $14121.64 + $24523.82 = $38645.46

   - The amount paid by the employer at a flat rate of $18 is:

   1832.25 Hours x $18 = $32980.5

   -The differences comes to:

   $38645.46 - $32980.5 = $5664.96

   Penalty rate:

   Clause 34.1 of the Restaurant Industry Award 2010

   The penalty rate for a food and beverage attendant grade 2 from November/2011 is $24.85 for Saturdays; $28.99 for Sundays and from July 1/2012 is $25.57 for Saturdays and $29.84 for Sundays inclusive of a casual loading of 25%. A total of 912 hours between Saturdays and Sundays were worked.

1-  From March 23/2012 to June 2012	Rate	Units	Calculated Amount	Amount paid by the restaurant at $18	Amount claimed (Difference)
Saturday	24.856580	216	5369.02	3888	1481.02
Sunday	28.999343	208	6031.86	3744	2287.86
Total	11400.88	7632	3768.88

2-  From July 1/2012 to November 18/2012	Rate	Units	Calculated Amount	Amount paid by the restaurant at $18	Amount claimed (Difference)
Saturday	25.578948	240	6138.95	4320	1818.95
Sunday	29.842106	248	7400.84	4464	2936.84
Total	13539.79	8784	4755.79

The underpayment comes to: $3768.88 + $4755.79 = $8534.67

Evening and late work: Clause 34.2 of the Restaurant Industry Award 2010

The additional payment for work done between the hours of 10.00 pm to 7.00 am on Monday to Friday is 10% of the standard hourly rate per hour extra between 10.00 pm and midnight and 15% between midnight and 7.00 am. The casual rate from March 23/2012 is $20.71 and from July 1/2012 is $21.31

Public holidays: Clause 34.1 of the Restaurant Industry Award 2010

The applicable rate for working on public holidays is $43.91 from Nov/2012 and $44.33 from July 1/2012. The underpayment comes to $3123.15.

Public holiday	Rate	Units	Calculated Amount	Amount paid by the restaurant at $18	Amount claimed (Difference)
From November 19/2012 to June 30/2012	43.913290	88	3864.37	1584	2280.37
From July 1/2012 to November 18/2012	44.336843	32	1418.78	576	842.78
Total:	5283.78	2160	3123.15

1. The small claims application filed on 26 August 2014 is governed by section 548 of the FW Act which states:

   “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.

   …”

2. In McShane v Image Bollards Pty Ltd,[1] Lucev FM (as His Honour then was) said of this process:

   [1] McShane v Image Bollards Pty Ltd [2011] FMCA 215

   “Section 548(3) of the FW Act provides as follows:

   5.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.

   6.Rule 45.11(2) of the FCCA Rules provides as follows:

   (2)The Court is not bound by the rules of evidence when dealing with a small claim application, but may inform itself of any matter in any manner as it thinks fit.

   7.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 their claim. The Court can only act on evidence having a rational probative force. The necessity to prove the claim was pointed out with particularity to the parties at the directions hearing on 18 March 2011. That particularity was necessary because Mr McShane had described the hearing, which the Court had just ordered be listed for 31 March 2011, as the “next get-together” (or words to that effect). The Court was at pains to point out that it was in fact a hearing at which the claim would need to be proved. Thus, Mr McShane was on notice that he would need to attend the hearing and prove his claim.”[FOOTNOTES OMITTED].

3. I also refer to the decision of Nicholls FM (as His Honour then was) in Black v Young Republic & Anor [2012] FMCA 729 where His Honour noted the provisions in section 548 set out above and the decision in Jones v Groovy Freighters Pty Ltd [2010] FMCA 673 and said:

   “6.Further, Burnett FM 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.”

   7.In McShane v Image Bollards Pty Ltd [2011] FMCA 215, Lucev FM (at [7]) also commented on the nature of small claims proceedings and the exercise of the Court’s judicial power within the proceedings 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.”

   [Footnote omitted.]

   8.The observations made by Burnett FM and Lucev FM are, in my respectful view, important. 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)), those allowances must be balanced against the Court’s 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. Further, that decision must be supported by a reasoned judgment that addresses the issues in the case.

   9.In this light, I also have regard to what was said by:

   Federal Magistrate Lucev in Lebot v Energetic IT Pty Ltd [2011] FMCA 755:

   “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.”

1. Rules 13.03A, 13.03B and 13.03C of the Federal Circuit Court Rules2001 (“the Rules”) provide:

   “Rule 13.03A:

   1.For rule 13.03B, an applicant is in default if the applicant fails to:

   (a)comply with an order of the Court in the proceeding; or

   (b)file and serve a document required under these Rules; or

   (c)produce a document as required by Part 14; or

   (d)do any act required to be done by these Rules; or

   (e)prosecute the proceeding with due diligence.

   2.For rule 13.03B, a respondent is in default if the respondent:

   (a)     has not satisfied the applicant's claim; and

   (b)     fails to:

   (i)     give an address for service before the time for the respondent to give an address has expired; or

   (ii)    file a response before the time for the respondent to file a response has expired; or

   (iii)   comply with an order of the Court in the proceeding; or

   (v) file and serve a document required under these Rules; or

   Rule 13.03B

   1.If an applicant is in default, the Court may order that:

   (a)the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or

   (b)a step in the proceeding be taken within the time limited in the order; or

   (c)if the applicant does not take a step in the time mentioned in paragraph (b)--the proceeding be stayed or dismissed, as to the whole or any part of the relief claimed by the applicant.

   (2)If a respondent is in default, the Court may:

   (a)order that a step in the proceeding be taken within the time limited in the order; or

   (b)if the claim against the respondent is for a debt or liquidated damages--grant leave to the applicant to enter judgment against the respondent for:

   (i)     the debt or liquidated damages; and

   (ii)    if appropriate--costs; or

   (c)if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings--give judgment against the respondent for the relief that:

   (i)     the applicant appears entitled to on the statement of claim; and

   (ii)    the Court is satisfied it has power to grant; or

   (d)give judgment or make any other order against the respondent; or

   (e)make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.

   (3)The Registrar must enter judgment for the debt or liquidated damages, costs and interest against the respondent as specified in leave granted under paragraph (2)(b), without giving notice, or further notice, to the respondent, if the applicant has filed in the Registry:

   (a)an affidavit, or affidavits, proving:

   (i)     service of the application claiming judgment for the debt or liquidated damages; and

   (ii)    that the respondent is in default; and

   (b)an affidavit for the debt or liquidated damages in accordance with the approved form.

   (4)Unless the Court otherwise orders, if a respondent to a cross-claim is in default:

   (a)a judgment or decision on any claim, question or issue in the proceeding on the originating process; or

   (b)any other cross-claim in the proceeding;

   is binding as between the cross-claimant and the respondent to the cross-claim, to the extent that the judgment or decision is relevant to any claim, question or issue in the proceeding on the cross-claim.

   (5)In subrule (4):

   decision includes a decision by consent.

   Judgment includes a judgment by default or by consent.

   (6)The Court may make an order of the kind mentioned in subrule (1), (2) or (4), or any other order, or may give any directions, and specify any consequences for non-compliance with the order, that the Court thinks just.

   Rule 13.03C

   (1)If a party to a proceeding is absent from a hearing (including a first court date), the Court may do 1 or more of the following:

   (a)     adjourn the hearing to a specific date or generally;

   (b)     order that there is not to be any hearing, unless:

   (i)     the proceeding is again set down for hearing; or

   (ii)    any other steps that the Court directs are taken;

   (c)if the absent party is an applicant--dismiss the application;

   (d)if the absent party is a party who has made an interlocutory application or a cross-claim--dismiss the interlocutory application or cross-claim;

   (e)proceed with the hearing generally or in relation to any claim for relief in the proceeding.

   2.If a party to a proceeding is absent from a hearing, the Court may also make an order of the kind mentioned in subrule 13.03B(1), (2) or (4), or any other order, or may give any directions, and specify any consequences for non-compliance with the order, that the Court thinks just.”

2. The Rules provide the Court with authority to give judgment or to make any other order against the respondent. I am satisfied the respondent has not satisfied the applicant’s claim. The respondent has not filed a notice of address for service, a response, or affidavit as required under the Rules. The respondent has not complied with an order of this Court and having regard to Rules 13.03A(2)(a), 13.03A(2)(b)(i), (ii), (iii), (iv) and (vii) the respondent is in default for the purposes of Rules 13.03B(2). A combination of Rules 13.03B(2), 13.03B(6) and /or 13.03C(1) provides the Court with ample authority to give judgment or make any other order against the respondent.

3. Given the defaults by the respondent and the material that the applicant has filed, I am satisfied pursuant to the relevant sections of the Rules and the FW Act, the details of which I have referred to, that I am able to make orders in the terms sought by the applicant for the amount particularised in the form 5, having regard to the provisions of section 548 of the FW Act. I am satisfied on the balance of probabilities, given the evidence before the Court, that the applicant has made out his case. I will make orders in terms set out at the beginning of these reasons, and I so order.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Judge O’Sullivan

Associate: 

Date:  20 May 2015