Munckton v Laser Bean Pty Ltd T/A Muzz Buzz

[2016] FCCA 410

FEDERAL CIRCUIT COURT OF AUSTRALIA

MUNCKTON v LASER BEAN PTY LTD T/A MUZZ BUZZ [2016] FCCA 410

Catchwords:
INDUSTRIAL LAW – Application for declarations and orders as a result of non-compliance with an order of the Fair Work Commission – breach of a civil remedy provision – orders for compensation.

Legislation:

Fair Work Act 2009 (Cth), ss.394, 405, 539, 545

Heather Munckton v Laser Bean Proprietary Limited (2015) FWC 2874
Heather Munckton v Laser Bean Proprietary Limited trading as Muzz Buzz (2015) FWC 4105
Laser Bean Proprietary Limited trading as Muzz Buzz v Heather Munckton (2015) FWCFB 8396
Mayberry v Kijani Investments Pty Ltd. as Trustee for the Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238
Meadley v Sort Worx Pty Ltd [2013] FCA 1012
Fair Work Ombudsman v Wedderburn Petroleum Proprietary Limited (2015) FCA 2011
Kennewell v MG & CG Atkins trading as Cardinia Waste & Recyclers [2015] FCA 716

Applicant: HEATHER MUNCKTON

Respondent: LASER BEAN PTY LTD T/A MUZZ BUZZ

File Number: MLG 1913 of 2015

Judgment of: Judge O'Sullivan

Hearing date: 18 February 2016

Date of Last Submission: 18 February 2016

Delivered at: Melbourne

Delivered on: 18 February 2016

REPRESENTATION

Applicant: In person

Respondent: Mr Stinean, Director

ORDERS

THE COURT DECLARES THAT:

1. The respondent Laser Bean Pty Ltd contravened s.405 of the Fair Work Act 2009 (“FW Act”) by failing to comply with an Order of the Fair Work Commission dated 22 June 2015.

THE COURT ORDERS THAT:

1. Pursuant to s.545(2)(b) of the FW Act the respondent pay the applicant Heather Munckton an amount of $15,456.96 plus 9.5% superannuation as required by law within 21 days of this Order.

2. The matter be fixed for a penalty hearing on 15 April 2016.

3. The applicant file and serve any further material and an outline of submissions 21 days prior to the adjourned date.

4. The respondent file and serve any further material and an outline of submissions 14 days prior to the adjourned date.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG1913 of 2015

HEATHER MUNCKTON

Applicant

And

LASER BEAN PTY LTD T/A MUZZ BUZZ

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

Introduction

1. Before the Court today, 18 February 2016 are proceedings commenced by Heather Munckton (“the applicant”) under the Fair Work Act 2009 (“FW Act”). The respondent is Laser Bean Pty Ltd trading as Muzz Buzz (“the respondent”). The proceedings were commenced by application, Form 5 and an affidavit all filed on 19 August 2015.

2. The application was given a first court date of 28 October 2015 in the Court’s small claims list.  On 19 October 2015, a response was filed on behalf of the then-named respondent joining issue with the allegations made in the applicant’s application, Form 5 and affidavit.  The response was filed by a director of the respondent, Mr Ciprian Stefan Stinean.

3. On the first court date of 28 October 2015 the following orders were made:

   “1.    The name of the respondent to the application filed 19 August 2015 be changed to Laser Bean Pty Ltd T/A Muzz Buzz.

   2.  The proceedings be transferred from the small claims list to the Fair Work Division of the Federal Circuit Court of Australia.

   3.  The respondent’s application for an adjournment be granted and the proceeding for enforcement of an order of the Fair Work Commission and any penalty for breach be adjourned to 18 February 2016 with an estimated hearing time of 1 day at the Federal Circuit Court of Australia at Melbourne at 10:00 am.

   4.  The applicant file and serve any further material to be relied on 14 days prior to the hearing.

   5.  The respondent file and serve any further material to be relied on 7 days prior to the hearing.”

4. The matter returned to Court today pursuant to the above-mentioned orders.  The applicant appeared in person and Mr Stinean appeared for the respondent.  Since the first Court date, both the applicant and the respondent have filed further affidavit material.  The applicant filed a further affidavit on 1 February, 2016 and Mr Stinean, for the respondent, a further affidavit filed on 8 February 2016.

Background

1. The applicant is aged 22 years, lives in Clyde North, and worked as a Store Manager at the respondent’s outlet (a coffee drive-through shop) in Rowville.

2. The applicant worked for the respondent from 2 September 2013 till 7 December 2014. Following the termination of her employment, the applicant brought proceedings in the Fair Work Commission (“FWC”) by way of an application for relief from unfair dismissal pursuant to s.394 of the Fair Work Act2009 (“FW Act”). It was that application that ultimately made its way to a hearing before Commissioner Bissett of the FWC on 23 April 2015.

3. On 30 April 2015, in a decision published as Heather Munckton v Laser Bean Proprietary Limited (2015) FWC 2874, Commissioner Bissett concluded at paragraph 67 and following that “the dismissal [of the applicant] was harsh, unjust and unreasonable” and, as a result, found that the applicant (Ms Munckton) was “unfairly dismissed” by the respondent.

4. Commissioner Bissett, at paragraph 70 of the above-mentioned decision, made clear that she was satisfied that reinstatement was not appropriate. Commissioner Bissett referred to s.392 of the FW Act, and the matters that the FWC had to determine or take into account in determining compensation. At paragraph 72 of the abovementioned decision, Commissioner Bissett made clear she was issuing further directions requesting written submissions going to the abovementioned matters before determining the compensation that should be awarded to the applicant as a result of the finding referred to above.

5. There then followed a further decision of the FWC constituted by Commissioner Bissett issued on 22 June 2015 and published as Heather Munckton v Laser Bean Proprietary Limited trading as Muzz Buzz (2015) FWC 4105 (“the FWC decision”). For the reasons set out therein, Commissioner Bissett, at paragraphs 1 through to 28, had regard to the material that was before the FWC and, for the reasons set out in the abovementioned paragraphs, determined the FWC would issue an order that the respondent pay the applicant the amount of $15,456.96 plus 9.5% superannuation paid into the applicant’s superannuation fund in compensation within 21 days (‘the FWC order”).

6. It appears that the respondent in those proceedings, Laser Bean Pty Ltd trading as Muzz Buzz, subsequently filed an application to appeal the FWC decision and the above mentioned order.  The respondent also filed an application for the above mentioned order to be stayed.  The application for a stay came before Senior Deputy President Hamberger of the FWC on 15 July 2015.  There is before the Court today a transcript of that hearing.  As is clear from the transcript, the Senior Deputy President refused to issue a stay of the FWC order made on 22 June 2015.

7. After the decision of Senior Deputy President, the applicant commenced these proceedings.  When the matter came before the Court for the first court date on 28 October 2015, Mr Stinean (as a director of the respondent) made an oral application for an adjournment.  As was made clear on that day, the respondent had sought to appeal the FWC order which is the subject of the application in this Court.  Accordingly, as the appeal from that order (the FWC order) had yet to be heard and determined, these proceedings were adjourned.

8. The Full Bench of the FWC has since then heard and determined the appeal against the FWC order brought by the respondent.  For reasons which have been published on 8 December 2015, referred to in the decision as Laser Bean Proprietary Limited trading as Muzz Buzz v Heather Munckton (2015) FWCFB 8396, the Full Bench refused permission to appeal from the FWC order.

Material relied on

1. Today, each of the parties have identified the material that they relied on.  In the applicant’s case that was the aforementioned application Form 5, the affidavit filed on 19 August 2015, and the most recent affidavit filed 1 February 2016.  For the respondent the Court was told it relied on the response filed on 19 October 2015 and the affidavit filed on 8 February 2016.

2. There is nothing to indicate there has been any appeal from the orders of the Full Bench of the FWC.  It is not disputed compliance with the FWC order of 22 June 2015 remains outstanding.

3. The applicant and the respondent have had an opportunity to give evidence today.  The applicant seeks to enforce the order made by the FWC (the FWC order).  The respondent continues to oppose the application.

Consideration

1. I have had regard to the material of each of the parties and the evidence upon which they rely. The order made by the FWC on 22 June 2015 (the FWC order) was made under Part 3.2 of the FW Act which deals with unfair dismissal. Section 405 of the FW Act, falling within Part 3.2 of the FW Act provides that a person to whom an order under that part applies must not contravene a term of that order.

2. Section 539 of the FW Act provides that a contravention, amongst other things, of s.405 of the FW Act is a civil remedy provision. The Court has the power to make any order it considers appropriate if it is satisfied that the respondent has contravened a civil remedy provision, and that is provided for in s.545(1) of the FW Act.

3. The approach to what is effectively an application seeking an order for compliance with the FWC order has been the subject of a number of decisions of the Federal Court of Australia.  I refer to Mayberry v Kijani Investments Proprietary Limited trading as the trustee for The Dawe Investments Trust Subway Wallsend trading as Subway (2011) FCA 1238 and Meadley v Sort Worx Proprietary Limited (2013) FCA 1012, as well as the Court as currently constituted in Fair Work Ombudsman v Wedderburn Petroleum Proprietary Limited (2015) FCA 2011.

4. Section 545 of the FW Act confers on the Court’s broad powers to grant relief to persons such as the applicant in this case who has suffered as a result of a contravention of a civil remedy provision. By virtue of s.545(2) of the FW Act, the Court has the power to order a payment of compensation for loss that has been suffered “because of” a contravention.

5. In Kennewell v MG & CG Atkins trading as Cardinia Waste & Recyclers (2015) FCA 716, the Federal Court of Australia considered the issue of compensation for the purposes of s.545 of the FW Act at paragraphs 86 and 87. In that case, there is, as well as in this case, an appropriate causal connection that His Honour identified for the compensation between the order, the contravention of the order, and the order by way of compensation sought by the applicant in this case.

6. Had the FWC order been complied with, the applicant would have been entitled to the compensation referred to in the FWC order dated 22 June 2015.  The applicant has been deprived of that compensation because of what I am satisfied, on the material before the Court, is the respondent’s failure to comply with the FWC order.  The FWC order was the subject of a stay application by the respondent.  The stay application was refused.  The FWC order was also the subject of an application to appeal. The respondent’s application to appeal the FWC order was refused. 

7. The FWC order dated 22 June 2015, made clear on its face that compliance with it was expected to occur within 21 days of the date of that order.  There is, on the material before the Court, no reason the applicant should not by now have been entitled to the monies due pursuant to the FWC order.

8. I am satisfied the respondent would have been well aware they were expected to comply with the FWC order.  There is no evidence the respondent was, or is insolvent, or is otherwise unable to comply with the FWC order.

9. The FWC order is an order of the industrial umpire.  In this case the umpire issued a decision on 30 April 2015 containing a finding that the applicant had been unfairly dismissed.  Subsequently in the reasons published for the FWC order made on 22 June 2015, there was an order by the industrial umpire for the respondent (both in those proceedings and in the matter currently before the Court), to pay by way of compensation the amounts that the applicant has had to seek by way of enforcement application in this Court.

10. The respondent did seek to appeal the FWC order.  However, that appeal has been heard and determined.  As the decision of the Full Bench of the FWC referred to earlier make clear, that appeal was unsuccessful.  The respondent’s subsequent action demonstrate a concerning disregard of workplace laws.

11. On the material before the Court, there is no acceptable explanation for why the FWC order has not been complied with.  The respondent’s director, who has appeared at Court today and filed an affidavit on 8 February 2016, has made various assertions in his affidavit which reveal an alarming lack of understanding of the workplace laws, and concerning attitude to compliance with orders of the industrial umpire.

12. Whilst there are “claims” made that the respondent is no longer trading, there is nothing to indicate that an order cannot be made against the respondent.

13. Accordingly, I will make the declaration that the respondent has contravened s.405 of the FW Act by failing to comply with the FWC order dated 22 June 2015. I will also make an order pursuant to s.545 of the FW Act for the compensation sought by the applicant. I will fix this matter for a penalty hearing so that the Court can on that date determine what, if any, penalty ought be imposed on the respondent for the breach of s.405 of the FW Act.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan

Associate:

Date:  1 March 2016