Murphy v Astute Projects Pty Ltd (Subject to a Deed of Company Arrangement)
[2021] FedCFamC2G 146
•14 October 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)Murphy v Astute Projects Pty Ltd (Subject to a Deed of Company Arrangement) [2021] FedCFamC2G 146
File number(s): BRG 805 of 2019 Judgment of: JUDGE JARRETT Date of judgment: 14 October 2021 Catchwords: INDUSTRIAL LAW – Alleged contraventions of the Fair Work Act 2009 (Cth) – nature of engagement. Legislation: Building and Construction General On-site Award 2010 s. 45, cl. 17
Fair Work Act 2009 (Cth) ss. 44, 45, 90(2), 117(2), 117(3), 117(3)(b), 119, 121(1), 293 323, 345, 357, 535, 535(1), 535(2), 535(3), 536, 545, 550
Fair Work Regulations 2009 (Cth) regs. 3.31-3.41, 3.36(2), 3.42
Industrial Relations Act 2016 (Qld) s. 95(3)
Queensland Building and Construction Commission Act 1991 (Qld) s. 30A
Division Division 2 General Federal Law Number of paragraphs: 57 Date of last submission/s: 12 October 2020 Date of hearing: 31 August 2020 Place: Brisbane Counsel for the Applicant: Mr Martin Solicitor for the Applicant: Davidson Ryan Lawyers Solicitor for the Second and Third Respondents: MinterEllison ORDERS
BRG 805 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MICHAEL JAMES MURPHY
Applicant
AND: ASTUTE PROJECTS PTY LTD (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)
First Respondent
PAUL GREGORY CHAPPLE
Second Respondent
BRADLEY KANE HOOK
Third Respondent
ORDER MADE BY:
JUDGE JARRETT
DATE OF ORDER:
14 OCTOBER 2021
THE COURT DECLARES THAT:
1.Astute Projects Pty Ltd (subject to a deed of company arrangement) contravened:
(a)s.44 of the Fair Work Act 2009 (Cth) by failing to pay to Michael Murphy five weeks’ pay in lieu of notice as required by s.117(2)(b) of the Act;
(b)s.44 of the Fair Work Act 2009 (Cth) by failing to pay to Michael Murphy the amount for accrued but unpaid annual leave as required by s.90(2) of the Act;
(c)s.95(3) of the Industrial Relations Act 2016 (Qld) by failing to pay to Michael Murphy an amount for accrued but unpaid long service leave as required by that Act;
(d)s.535(1) of the Fair Work Act 2009 (Cth), by failing to make and keep for seven years records of the kind prescribed by reg.3.33(2) of the Fair Work Regulations2009 (Cth), being records of his entitlement to leave;
(e)s.535(1) of the Fair Work Act 2009 (Cth), by failing to make and keep for seven years records of the kind prescribed by reg.3.33(2) of the Fair Work Regulations2009 (Cth), being records of his superannuation details; and
(f)s.535(1) of the Fair Work Act 2009 (Cth), by failing to make and keep for seven years records of the kind prescribed by reg.3.33(2) of the Fair Work Regulations2009 (Cth), being a termination record; and
(g)s.535(1) of the Fair Work Act 2009 (Cth), by failing to make the records the subject of declarations 1(d), 1(e) and 1(f) hereof available for inspection by the applicant.
2.Paul Gregory Chapple was involved in the first respondent’s contraventions the subject of declaration 1 hereof for the purposes of s.550(1) of the Fair Work Act 2009 (Cth);
3.Bradley Kane Hook was involved in the first respondent’s contraventions the subject of declaration 1 hereof for the purposes of s.550(1) of the Fair Work Act 2009 (Cth).
THE COURT ORDERS THAT:
4.The second and third respondents pay to the applicant the following amounts:
(a)for the underpayment of notice $135.00;
(b)for the underpayment of annual leave $4,320.00;
(c)for the underpayment of long service leave $819.00;
Total: $5,274.00
5.The application is otherwise adjourned to a date to be fixed for a hearing as to penalty and interest.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE JARRETT:
Mr Michael Murphy has been a builder for some 45 years. Since 22 December, 2010 he has been the trustee of the Sharconick Family Trust.
The first respondent conducted a building and construction business. From 1 July, 2010 Mr Murphy was employed by the first respondent as a “site supervisor” or “foreman” pursuant to a wholly written contract of employment dated sometime in July, 2010. He was employed as a full-time employee working 40 hours per week.
In early 2011, the payment arrangements between Mr Murphy and the first respondent changed. The respondents contend that the employment arrangement came to an end at that point and that thereafter the first respondent’s ongoing relationship with Mr Murphy was one of principal and independent contractor. Mr Murphy says that he remained an employee of the first respondent.
In these proceedings Mr Murphy seeks declarations and orders for compensation, interest, and pecuniary penalties pursuant to the Fair Work Act 2009 (Cth) consequent upon what he claims are contraventions of that Act. Broadly speaking, he seeks orders in respect of:
(a)underpayment of wages;
(b)failures to make superannuation contributions;
(c)failures to make payments on termination and in particular:
(i)in lieu of notice;
(ii)for redundancy;
(iii)for accrued annual leave; and
(iv)for long service leave;
(d)a misrepresentation as to his workplace right to payment in lieu of notice;
(e)contraventions of employee records and pay slip obligations; and
(f)sham contracting.
Mr Murphy seeks relief against the second and third respondents who, he alleges, have been involved in the first respondent’s contraventions for the purposes of s.550 of the Fair Work Act. The first respondent is subject to a deed of company arrangement and so, Mr Murphy cannot proceed against it without obtaining leave. He has sought, but failed, to obtain the necessary leave.
The issue that attracted the parties’ attention the most in these proceedings was whether, from January, 2011 Mr Murphy was an employee or an independent contractor to the first respondent. But, for the most part, the resolution of that issue is irrelevant.
It is uncontroversial that the first respondent employed Mr Murphy from 1 July, 2010 to work 40 hours per week as a site supervisor or foreman, and also to be the first respondent’s nominee supervisor for the purposes of the Queensland Building and Construction Commission Act 1991 (Qld). A building and construction company such as the first respondent needed a nominee supervisor who had an open – building licence issued by the QBCC. Moreover, that person needed to be an employee of the company. It is uncontroversial that from 1 July, 2010 to 22 June, 2018 Mr Murphy held a nominee supervisor’s licence under s.30A of the QBCC Act authorising him as the nominee for the first respondent
Mr Murphy was to receive $10,000 per month by way of salary – $9,174.31 per month in salary and superannuation contributions of $825.69 per month.
It is common ground that the first respondent paid Mr Murphy in accordance with his employment contract from September, 2010 to December, 2010. The first respondent paid him $9,174.31 each month ($6,630.30 to Mr Murphy’s personal bank account, and $2,544.01 as PAYG withholding tax), and a superannuation contribution of $825.69 in respect of each monthly salary payment.
However, the evidence demonstrates, and I find, that at the end of 2010 Mr Murphy was concerned about the amount of tax he was paying on his earnings. I accept the evidence of Mr Steven McDonald that at that time Mr Murphy contacted him for advice. Mr McDonald is an accountant in his own practice who habitually worked for the first, second and third respondents. Mr Murphy sought advice about minimising his tax. I accept Mr McDonald’s evidence that it was Mr Murphy who approached him about that and not either the second or third respondents on Mr Murphy’s behalf.
I do not accept Mr Murphy’s evidence that “either Chapple or Hook or both of them” approached him and told him that he had to change his arrangements. I accept Mr Hook’s evidence that as a result of a casual conversation in early November, 2010 he gave to Mr Murphy, at Mr Murphy’s request, Mr McDonald’s details. An email from Mr Murphy to Mr Hook requesting the details for Mr McDonald corroborates Mr Hook’s account.
In early December, 2010 Mr Murphy sent an email request to Mr Hook for time off work so he could meet with Mr McDonald. The subject line of the email was “Poverty stricken”. That is consistent with the tenor of the conversation that Mr Hook says that he had with Mr Murphy in early November, 2010.
I accept Mr McDonald’s evidence that he gave Mr Murphy certain advice that included advice about trading through a family trust. That was not the only option put to Mr Murphy, but I accept that it was the option he found attractive because he could distribute the trust income to members of his family. Mr McDonald took Mr Murphy’s instructions to set up a trust and he instructed solicitors to prepare a trust deed that was subsequently executed. Mr Murphy’s evidence about his involvement in all of this was vague and unconvincing. He accepted that he was involved in the setting up of the trust’s bank account, but again his account was vague and unconvincing. Even if the true state of affairs was as Mr Murphy suggested, one would expect him to have taken a closer interest in what he was being asked to do.
According to Mr McDonald’s evidence, he knew that Mr Murphy was the nominee for the first respondent for the purposes of the QBCC Act. He had a concern about Mr Murphy becoming a contractor through a trust because he also knew that the nominee had to be an employee of the company. He instructed one of his off-siders to research the point and then take some instructions from the first respondent. As matters turned out, Mr McDonald satisfied himself that Mr Murphy remaining as an employee of the first respondent “for the purposes of his licence” and otherwise being a contractor earning the bulk of his income through the trust was a legitimate exercise. Mr Hook, who was given that advice on behalf of the first respondent, and Mr McDonald seemed to acquiesce in the arrangement.
Mr Murphy says that he has no knowledge of any of these arrangements and that it was set up for him, without any input from him, at the behest of the second or third respondents or both. This is true to a point, but it misrepresents the situation. I accept that Mr Murphy was not across the fine detail of the arrangements that he wanted put in place. He had instructed Mr McDonald to set up the trust and had assumed, I am satisfied, that being the first respondent’s accountant, Mr McDonald had passed on relevant information to the first respondent. The email correspondence in January, 2011 annexed to Mr Hook’s affidavit of evidence-in-chief, demonstrates Mr Murphy was being given information by Mr McDonald’s office regularly about the progress of the arrangements. It is apparent that those arrangements were not being shared necessarily with the first respondent or its officers. In evidence is an email from Mr Hook to Mr McDonald and others in his office to this effect:
Please find attached Astute projects Financials up to the December Period. We would be grateful if you could confirm payments required ASAP.
Also as a special note we urgently require further information on Mick Murphy and what arrangements we need to put in place to accommodate his payment for salary and as a subcontractor.
He is unaware of what's been set up and of the presumption we know what's been arranged with him. As we are not we have been unable to pay his salary this month so please advise us of the arrangements as soon as possible.
The terms of the final two paragraphs of this email are inconsistent with the proposition that Mr Hook or Mr Chapple were responsible for the change in arrangements for Mr Murphy. If they had been responsible and presented the changes to Mr Murphy as a fait accompli as he seems to suggest, the request for information about the arrangements makes no sense. It is inconsistent with the idea that Mr Hook or Mr Chapple organised the relevant arrangements with Mr McDonald.
I accept Mr McDonald’s evidence about the way in which Mr Murphy sought his advice and acted upon it in late 2010 and early 2011.
But, even on the respondents’ evidence, Mr Murphy remained an employee of the first respondent. Mr McDonald seemed to suggest that because Mr Murphy’s “employment” was for a particular purpose – namely making available to the first respondent his building licence – and because he only received a nominal wage of initially about $6,400 per annum (described by Mr McDonald as the threshold for an employee), he was in truth a contractor and not an employee at all. However, that pays no attention to the arrangements to which the parties had agreed by January, 2011. That Mr Murphy was an employee albeit for that limited purpose meant that he was an employee nonetheless.
From January, 2011 the first respondent started paying Mr Murphy differently to how it had paid him from September, 2010 to December, 2010. As part of the new arrangements in January, 2011 instead of paying $6,630.30 to his personal bank account, withholding $2,544.01 as PAYG withholding tax, and making $825.69 in superannuation contributions in respect of each monthly salary payment, the first respondent promised that it would pay $9,951.70 per month directly to Mr Murphy ($536.70 to his personal bank account, and $9,415 to a separate business transaction account for the trust that he had set up), and make $48.30 in superannuation contributions, being 9% of the $536.70 paid to his personal bank account. The total amount paid was still $10,000.
The first respondent continued to make these payments to Mr Murphy until June, 2011. The payment then became a little erratic. According to the evidence, the first respondent only paid $6,956.09 in July, 2011 then from August, 2011 to March, 2012, paid exactly $10,000 per month. It failed to pay anything for April, 2012. The first respondent paid Mr Murphy $8,333.35 per month from May, 2012 to June, 2013. From July, 2013 to May, 2016 the first respondent paid Mr Murphy $9,950.36 per month (except for October, 2013, December, 2013, and January, 2014, when the first respondent paid $7,596.95 each month, and December, 2015, when the first respondent paid $11,833.09).
In 2016 the parties agreed to increase the amount Mr Murphy was paid from $120,000 per annum to $150,000 per annum or $12,500 per month. The first respondent paid Mr Murphy $12,500 per month from June, 2016 to June, 2018 (except for January, 2017, when the first respondent paid $6,518.35).
From January, 2011 to 22 June, 2018 Mr Murphy continued working for the first respondent. Nothing changed apart from the payment arrangements. The work that he did and the way that he did it did not change. But he had the benefit of the tax minimisation arrangements that he sought advice about from Mr McDonald. I am satisfied that his employment agreement had changed, such that he was employed for the specific purpose of making himself available as a nominee supervisor to the first respondent. His other payments were pursuant to the arrangement, put in place after discussions with Mr McDonald, that he should be considered a contractor operating via a family trust and accounting for his income accordingly.
That Mr Murphy continued as an employee is acknowledged by the second and third respondent’s in their defence at paragraphs 6(g) and 9.
Mr Murphy submits, somewhat disingenuously in my view, that subject to any variation of his original employment contract, the first respondent had to pay him at least $9,174.31 each month until June, 2018. His case is that the first respondent did not because it paid most of that amount to his family trust rather than to him.
It is uncontroversial that the rate of payments to which Mr Murphy was entitled was varied on two occasions: once in about January, 2011, resulting in a salary increase to $9,951.70 per month, and once in early 2016, resulting in a pay rise to $150,000 per annum or $12,500 per month.
Arising from all of this is Mr Murphy’s case that the respondents misrepresented the arrangements between he and the first respondent. However, I do not consider that there was any misrepresentation by the respondents. The arrangements that were put in place were put in place at Mr Murphy’s request so as to minimise his tax. The arrangements that were put in place in January, 2011 at Mr Murphy’s behest were not a sham. They were legitimate arrangements that he wanted established for tax purposes. To the extent that it is now suggested that the respondents, or one of them, represented to Mr Murphy that:
(a)the employment contract under which Mr Murphy had from 1 July, 2010 been employed by the first respondent had come to an end;
(b)the employment contract under which Mr Murphy would continue to be employed by the first respondent until 22 June, 2018 was a contract for services under which Mr Murphy would perform work as an independent contractor; or
(c)that he would also continue to be employed by the first respondent but only on a limited basis, to fulfil his duties as the first respondent’s nominee supervisor, so that the first respondent could comply with requirements of the QBCC Act that its nominee supervisor be either an officer or employee of the company
I reject those suggestions. I am not satisfied on the evidence that any of the respondent’s made such representations.
Mr Murphy argues that although the amounts paid to him each month generally speaking met the first respondent’s obligations to him in terms of the amount agreed to be paid, he was nonetheless worse off under the new arrangement. He argues that under the previous arrangement, all of the money paid by the first respondent went to Mr Murphy directly (subject to income tax obligations reflected in PAYG amounts withheld by the first respondent) or was held for his benefit in a superannuation fund. Under the changed arrangements, 10% of the amount paid to Mr Murphy’s business transaction account was treated as GST, so Mr Murphy ultimately had to remit it to the ATO. This argument, however cannot be accepted because it pays no attention to the fact, as I have found, that Mr Murphy sought for such an arrangement to be put in place to assist him to minimise the tax he ultimately had to pay on his income from the first respondent. There is no evidence that it did not have that effect.
Consistently with the proposition that Mr Murphy was still an employee for the limited purposes identified above, the first respondent made superannuation contributions calculated by reference to the wage allocated to his employment contract.
THE ALLEGED CONTRAVENTIONS
Regular monthly payments and superannuation
Given my findings about the arrangements between the parties, the ground falls away from underneath Mr Murphy’s claim that the first respondent underpaid him his contracted wages and consequential superannuation amounts.
He argues that during the period from 26 October, 2012 to 30 June, 2018, the first respondent had to make 68 monthly salary payments: 43 payments of $9,951.70 from November, 2012 to May, 2016, and 25 payments of $12,500 from 1 June, 2016 to 30 June, 2018. From 26 October, 2012 to 28 July, 2018, the first respondent had to make at least 24 quarterly superannuation contributions of at least the applicable superannuation percentage for each quarter by reference to total value of relevant monthly salary payments for that quarter.
Further, he submits that the first respondent made 68 monthly salary payments during the relevant period. Only 25 of those monthly salary payments were of at least the full monthly amount that the first respondent had to pay in accordance with the 2010 employment contract. In the circumstances he argues, from 26 October, 2012 to 30 June, 2018 the first respondent contravened s.323 of the Fair Work Act on 43 occasions by failing to pay Mr Murphy amounts payable in relation to the performance of work under his employment contract in full and at least monthly. In total, the 43 underpayments add up to $28,034.26 in underpaid wages.
Further, he submits that despite making 34 superannuation contributions on 28 different dates during the relevant period, the first respondent failed to make superannuation contributions of the required amount to avoid a superannuation guarantee charge liability in respect of any of the 24 quarters during the relevant period. In the circumstances he argues that, from 26 October, 2012 to 28 July, 2018, the first respondent contravened s.45 and cl.17 of the Building and Construction General On-site Award 2010 on 24 occasions by failing to make, by the relevant due date for each of the 24 quarters during the relevant period, such superannuation contributions as would avoid it becoming liable to pay the superannuation guarantee charge in respect of Mr Murphy. The total value of the accumulated shortfall from those 24 occasions is $69,606.099.
I would accept all of these submissions and find accordingly if the initial arrangements had never been varied. But they were varied at Mr Murphy’s behest. The subsequent payments were all made in accordance with Mr Murphy’s arrangements put in place upon the advice of Mr McDonald. In those circumstances, for the reasons that I have given, these submissions must be rejected.
Termination entitlement contraventions
Payment in lieu of notice
Mr Murphy’s employment by the first respondent began on 1 July, 2010. Although it was varied in January, 2011, it nonetheless continued until it came to an end on 22 June, 2018. I accept that was after 7 years 11 months and 22 days of continuous service. The first respondent dismissed Mr Murphy on 22 June, 2018. He was given notice of his dismissal by email. He was given payment in lieu of four weeks’ notice which was “to be credited to your account 29th of June.”
However, the period of notice was one week short. Mr Murphy was entitled to 5 weeks’ notice because he was more than 45 years of age: s.117(3)(b) of the Fair Work Act. Subsection 117(2) operates to prohibit an employer from terminating an employee’s employment contract unless the time between giving the notice on the day of termination is at least the period required under s.117(3) of the Act or the employer has paid to the employee payment in lieu of such notice. Neither of those things were done here and it is clear that the first respondent was in contravention of s.117(2) of the Act.
Mr Murphy argues that the email giving notice of his dismissal misrepresented his “workplace right to be paid 5 weeks in lieu of notice”. But I do not accept that. The notice provided that he was going to be given 4 weeks’ pay in lieu of notice but did not represent or misrepresent his workplace right to be paid 5 weeks in lieu of notice. I am not satisfied that this represents a contravention of s.345 of the Fair Work Act.
Mr Murphy argues that he was underpaid his 4 weeks’ notice in any event because he ought to have been paid “at his full rate of pay”. He was entitled to be paid pursuant to the amount agreed between the parties to be paid for his employment, namely $536.70 per month or $7020 gross per annum. He was underpaid $135.
The first respondent’s failure to pay that amount was a contravention of s.44 of the Fair Work Act.
Redundancy
Mr Murphy claims that the first respondent dismissed him either because he was redundant, because the first respondent no longer required the job done by Mr Murphy to be done by anyone, or because of the first respondent’s insolvency. He argues that in the circumstances, cl. 17 of the award applied to require the first respondent to pay Mr Murphy an amount for redundancy, namely, $25,000.
However, given the role in which Mr Murphy was employed, (as a nominee supervisor) he was not covered by the award. The highest classification of employee relating to construction workers under the award was the CW8 classification. I find that he was not within that classification having regard to the supervisory role that he undertook as nominee supervisor. Mr Murphy further claims that he was entitled to redundancy pay pursuant to s.119 of the Fair Work Act. The first respondent is not liable to make redundancy payments if it is a small business employer: s.121(1) of the Fair Work Act. The respondents argue that the first respondent was a small business employer. The evidence of the third respondent as to the number of employees employed by the first respondent as at the date of Mr Murphy’s dismissal demonstrates that the first respondent was a small business employer and s.121(1) of the Act was engaged.
This claim cannot succeed.
Annual leave
Mr Murphy alleges that he accrued an entitlement to 32 weeks of paid annual leave in the course of his 7 years 11 months and 22 days of continuous employment by the first respondent. I accept that argument. There is no evidence that he ever took annual leave, as such, during the period of his employment. Whilst there is evidence that he was absent from his employment from time to time, the nature of those absences is not described in the evidence.
Accordingly, on 22 June, 2018, Mr Murphy was entitled to 32 weeks of paid annual leave. I accept that s.90(2) of the Fair Work Act applied. Assuming that Mr Murphy’s base rate of pay was $3.375 per hour ($7020 gross per annum divided by 52 weeks divided by 40 hours per week) his entitlement was $4,320.00. I accept the respondent’s argument that Mr Murphy was not entitled to annual leave loading because he was not covered by the award.
The first respondent’s failure to pay that amount was a contravention of s.44 of the Fair Work Act.
Long service leave
I accept that the Industrial Relations Act 2016 (Qld) applied to Mr Murphy’s employment. Pursuant to s.95(3) of that Act Mr Murphy was entitled to a proportionate amount of long service leave namely, 7/10 of 8.6667 weeks. Accordingly, Mr Murphy was entitled to $819 by way of long service leave entitlement.
Record and pay slip contraventions
Records
Mr Murphy establishes his claim that the first respondent contravened ss.535(1)-(2) of the Fair Work Act and regs 3.31 to 3.41 of the Fair Work Regulations 2009 (Cth) to make and keep for 7 years employee records in relation to Mr Murphy, in a legible form readily accessible to an inspector. The respondents did not attempt to demonstrate that the first respondent complied with its record-keeping obligations insofar as Mr Murphy’s employment was concerned. I accept Mr Murphy’s evidence that he requested on a number of occasions copies of the relevant records but none have ever been produced. Although some documents that have been produced contain some of the information required by the Regulations to be kept, the records produced did not include a record specifying any leave Mr Murphy took and the balance of Mr Murphy’s entitlement to that leave from time to time (relating to any period after April 2011), as required by s.535(1) and reg 3.36(2). I accept Mr Murphy’s submission that if the first respondent had made and kept the employee records required by s.535 of the Act and the Regulations, and specifically records that recorded his entitlement to leave from time to time and any leave that he might have taken and his leave balance, those records would have been provided to the deed administrators and thereafter produced pursuant to Mr Murphy’s request.
Moreover, the second and third respondents confirmed in cross-examination that the first respondent failed to make a record specifying Mr Murphy’s entitlement to leave, his superannuation details, or a termination record in respect of Mr Murphy. I find that the first respondent contravened s.535(1) of the Act and reg.3.36(2) of the Regulations in respect of each of these three types of records.
Further, in contravention of s.535(3) of the Act and reg.3.42 of the Regulations, the first respondent did not make a copy of the required records available for inspection and copying on request by Mr Murphy.
Pay slips
Mr Murphy’s case is that the first respondent gave Mr Murphy a pay slip for the purposes of s.536 of the Fair Work Act within one business day of each of the 68 monthly payments it made to him prior to the termination of his employment. Mr Murphy’s case is that each of those pay slips largely accorded with the form and content requirements prescribed for the purposes of s.536 of the Act, but he says that the payslips only related to the $536.70 portion of the monthly amount paid in relation to the performance of work which went to Mr Murphy’s personal bank account. None of them related to the larger portion paid in relation to Mr Murphy’s performance of the same work which went to his business transaction account. However, given my findings above, the payslips did not need to do anything more than they did. This contravention is not made out.
ALTERNATIVE CLAIM
Mr Murphy pleads that in the event the Court determines that there was a contract between he and the first respondent at an annual rate of $7020 gross per annum, then the first respondent is in breach of the minimum wage provisions of the Fair Work Act. At the conclusion of the hearing, the parties in these proceedings requested to deliver written submissions. I acquiesced to that request. I made it clear to the parties, however, that in the event that they required further oral hearing in addition to the written submissions, they should say so. Neither party made a request for an opportunity for a further oral hearing.
None of the alternative claims made by Mr Murphy in his statement of claim including the alternative claim pursuant to the minimum wage provisions of the Fair Work Act were addressed in Mr Murphy’s written submissions. I have assumed from that, that those claims are abandoned and no longer prosecuted by him. Were it otherwise, submissions no doubt would have been made in support of them. No doubt there was good reason for the abandonment of those claims given that they were inconsistent with the principle claim advanced by Mr Murphy. Moreover, given my findings above about how the relevant arrangements were put in place at the request of Mr Murphy for the purposes of his tax minimisation, it is difficult to see how he could advance his alternative claim without giving the first respondent credit for the amounts paid to the Trust on his behalf.
INVOLVEMENT OF CHAPPLE AND HOOK
Similarly, no attempt is made by the second and third respondents in their written submissions to suggest that they were not involved in the first respondent’s contraventions of the Fair Work Act that I have identified above. They were the directors of the first respondent and they were involved in its day-to-day activities. Mr Chapple was involved according to the evidence in more of the construction side of the business and Mr Hook involved in the administrative side of the business. They were the key actors in the arrangements with Mr Murphy. Their evidence in these proceedings demonstrates that to be so.
I accept Mr Murphy’s submissions that accessories can be ordered to pay compensation under s.545 of the Fair Work Act. I also accept that it is appropriate to order the second and third respondents to pay compensation commensurate to the amount of Mr Murphy’s loss that I have set out above.
CONCLUSION AND DISPOSITION
Having regard to my findings above, it is appropriate to declare that the first respondent contravened in the Fair Work Act as set out above.
There should be declarations that the second and third respondents were involved in the first respondent’s contraventions and are therefore liable to orders requiring them to pay Mr Murphy compensation, interest, and penalties.
The amount of compensation should be fixed as follows:
(a)underpayment of notice $135.00
(b)underpayment of annual leave $4,320.00
(c)under payment of long service leave $819.00
Total: $5,274.00
There will be declarations and orders accordingly. The application is otherwise adjourned to a date to be fixed to hear the parties as to interest and penalties.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Jarrett delivered on 14 October 2021. Dated: 14 October 2021
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