NSW Nurses and Midwives' Association v SOS Nursing and Home Care Service Pty Ltd
[2015] FCCA 2181
•14 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NSW NURSES & MIDWIVES' ASSOCIATION v SOS NURSING & HOME CARE SERVICE PTY LTD & ANOR | [2015] FCCA 2181 |
| Catchwords: INDUSTRIAL LAW – Approximately 400 contraventions of a term of an agreement-based transitional instrument – but for s.557(3) of the Fair Work Act 2009 (Cth) (FW Act) contraventions of the term would be taken as one contravention – approach to assessing pecuniary penalty for approximately 400 contraventions which but for s.557(3) of the FW Act would be treated as one contravention – whether it is necessary to assess each contravention separately before applying to such assessments the single transaction principle and the totality principle – whether instead it is appropriate to treat the approximately 400 contraventions as a single course of contravening conduct and apply to that single course of conduct the considerations that are applied when assessing a pecuniary penalty for a single contravention – if it is appropriate to treat the approximately 400 contraventions as a single course of contravening conduct whether it is appropriate to treat as the maximum penalty that which would apply to one of the contraventions that form part of the single course of contravening conduct – pecuniary penalties assessed on basis that the 400 contraventions constituted a single course of contravening conduct. |
| Legislation: Corporations Act 2001 (Cth), ss.58AA, 471(B) Crimes Act 1914 (Cth), s.4AA Fair Work Act 2009 (Cth), ss.4(1), 345, 539(1), 539(2), 546, 546(1), 546(2), 546(3), 550, 557(1), 557(2), 557(3) Fair Work (Registered Organisations) Act (Cth) |
| Attorney-General (SA) v Tichy (1982) 30 SASR 84 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2; (2014) 253 CLR 58 Channon v The Queen (1978) 33 FLR 433 Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 Contin v The Queen [2012] VSCA 247 Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 Fair Work Ombudsman vKentwood Industries Pty Ltd (No 3) [2011] FCA 579 Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 Fair Work Ombudsman v Offshore Marine Services Pty Ltd [2012] FCA 498 Kelly v Fitzpatrick [2007] FCA 1080 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 NSW Nurses' Association v SOS Nursing and Home Care Service Pty Ltd [2009] FCA 1147 NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor [2011] FMCA 225 NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor (No.2) [2011] FMCA 349 Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 R v H (1980) 3 A Crim R 53 R v Holder (1983) 3 NSWLR 245 R v Williscroft Weston, Woodley and Robinson [1975] VR 292 Royer v Western Australia [2009] WASCA 139 Russell and others re SOS Nursing and Home Care Services Pty Ltd Employee Collective Agreement 2007 [2013] FWCA 3596 Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338 SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 SOS Nursing and Home Care Service Pty Ltd v New South Wales Nurses' Association [2012] FCA 398 Vartzokas v Zanker (1989) 51 SASR 277 Walton v Gardiner (1993) 177 CLR 378 Wong v R [2001] HCA 64; 207 CLR 584 |
| Applicant: | NSW NURSES & MIDWIVES' ASSOCIATION |
| First Respondent: | SOS NURSING AND HOME CARE SERVICE PTY LTD (ACN 050 096 350) |
| Second Respondent: | ROSEMARY HYLES |
| File Number: | SYG 2015 of 2013 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 9 September 2014 |
| Delivered at: | Sydney |
| Delivered on: | 14 August 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Gibian |
| Solicitors for the Applicant: | NSW Nurses and Midwives’ Association |
| Counsel for the Respondents: | Mr A C Casselden |
| Solicitors for the Respondents: | Laycock Burke Castaldi Lawyers |
ORDERS
Pursuant to s.546(1) of the Fair Work Act 2009 (Cth) the second respondent pay to the applicant pecuniary penalties in the amount of $8,500.
The penalties referred to in order 1 be paid within 28 days or within such further time as the applicant agrees or the Court directs.
The applicant have liberty to apply for an order that the first respondent pay a pecuniary penalty provided that if leave to make such application is required to be given by “the Court” within the meaning of s.58AA of the Corporations Act 2001 (Cth) such leave is first given by such Court before an application is made under this order.
The parties have liberty to apply in relation to the implementation of these orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2015 of 2013
| NSW NURSES & MIDWIVES' ASSOCIATION |
Applicant
And
| SOS NURSING & HOME CARE SERVICE PTY LTD (ACN 050 096 350) |
First Respondent
| ROSEMARY HYLES |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The first respondent (SOS Nursing), which is now in liquidation, operated a business of providing home care and private nursing services primarily in regional areas of New South Wales and also in southern Queensland. It provided those services by directing nurses and assistants in nursing it employed to visit clients at their homes. The second respondent, Ms Hyles, was the managing director of SOS Nursing.
From 3 August 2007 until around 1 August 2013 the principal terms on which SOS Nursing employed the nurses and assistants in nursing were contained in the SOS Nursing and Home Care Services Employee Collective Agreement 2007 (SOS Agreement). SOS Nursing, however, failed to pay thirteen of its nurses and assistants in nursing (Nurses) amounts it was required to pay under the SOS Agreement. The amounts SOS Nursing failed to pay related to the time employees spent travelling between the homes of clients (travel time).
On 13 August 2014, by consent, I made declarations that SOS Nursing contravened the SOS Agreement by failing to pay amounts to the Nurses it was obliged to pay under that agreement, and that Ms Hyles is taken to have also contravened the SOS Agreement. I also ordered that SOS Nursing and Ms Hyles are jointly and severally liable to pay to the Nurses the amounts SOS Nursing ought to have paid to the Nurses under the SOS Agreement. On 9 September 2014, again by consent, I made a declaration that on two occasions SOS Nursing and Ms Hyles contravened s.345 of the Fair Work Act 2009 (Cth) (FW Act) by making false or misleading statements to its employees about their workplace rights.
The applicant (Association), which is a registered organisation under the Fair Work (Registered Organisations) Act 2009 (Cth), now claims an order under s.719(1) of the Workplace Relations Act 1996 (Cth) (WR Act) and s.546(1) of the FW Act that SOS Nursing and Ms Hyles pay pecuniary penalties to the Association for their contraventions of the WR Act and FW Act. In these reasons for judgment, therefore, I consider whether Ms Hyles should pay any pecuniary penalties for the admitted contraventions of the SOS Agreement, and for her admitted contravention of s.345 of the Act and, if so, the amount of the pecuniary penalties. I also consider whether SOS Nursing should pay pecuniary penalties for its contraventions and, if so, the amount of the penalties. Because SOS Nursing is in liquidation, however, I cannot make any order for the payment of any penalty without the leave of a “court” as defined in s.58AA of the Corporations Act 2001 (Cth).
Arrangement of reasons
These reasons are arranged as follows. First, I will set out the principal facts necessary to give context to the admitted contraventions of the SOS Agreement and s.345 of the Act. Second, I will identify the contraventions of the WR Act and FW Act Ms Hyles has admitted she engaged in or in which she was involved. Third, I will identify the contraventions of the SOS Agreement for which I must consider whether penalties should be imposed, and the statutory provisions I must apply when determining that question. For reasons that will appear later in these reasons for judgment, the only provisions that are engaged are those of the FW Act, even though the contravening conduct in relation to the SOS Agreement also occurred before 1 July 2009 when the FW Act came into effect, and even though the Association is seeking relief both under the WR Act and the FW Act. Fourth, I will consider the relevant principles that govern the assessment of penalties. Finally, I will consider whether pecuniary penalties should be imposed and the amount of the pecuniary penalties I should fix.
Facts
Business of SOS Nursing
SOS Nursing was established in 1990 to provide home services, including nursing and respite care, in regional areas of New South Wales and southern Queensland. Although SOS Nursing operated two respite houses, the bulk of the services SOS Nursing provided consisted in its staff travelling to provide nursing and home care to clients at their place of residence.[1] Most of SOS Nursing’s employees were employed on a casual basis, for a few hours a day.[2]
[1] T16.20
[2] T16.35
Formation of the SOS Agreement
Until 27 March 2006 SOS Nursing and its employee nurses and assistants in nursing were bound by an award known as the Nurses, Other than in Hospitals, & c., (State) Award (State Award) that was made by the Industrial Relations Commission of New South Wales. That award became a Notional Agreement Preserving a State Award (NAPSA) as a result of s.8 and Part 3 of Schedule 8 of the WR Act with effect from 27 March 2006.[3]
[3] Reflecting amendments that were introduced by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth).
In the meantime, in 2006 SOS Nursing decided to introduce an employee collective workplace agreement.[4] That was a type of workplace agreement that was permitted by s.327 of the WR Act. Under s.340(2) of the WR Act, employees could vote to approve a collective agreement; and if, on or after 1 July 2007,[5] a majority voted in favour of a collective agreement, s.342 of the WR Act required the employer to lodge the agreement with the Workplace Authority Director (WAD). The WAD was required to apply to the agreement the “fairness test”, as that term was defined in s.346M of the WR Act. Under s.347(1) of the WR Act, a workplace agreement came into operation on the day the agreement was lodged; and, under s.351 of the WR Act, the workplace agreement, once in operation, bound the employer and all persons whose employment was subject to the agreement.
[4] Affidavit of R D Hyles, 09.09.14, [26]. Under s.327 of the WR Act, an employer could make an agreement in writing with persons employed at the time in a single business of the employer. Such agreement was described in s.327 of the WR Act as an “employee collective agreement”.
[5] Being the date on which the Workplace Relations Amendment (A Stronger Safety Net) Act 2007 (Cth) came into effect.
Ms Hyles engaged a firm called AMB Workplace Solutions to advise her and SOS Nursing about how to introduce a collective agreement, and to draft a collective agreement. In the middle of 2007 SOS Nursing staff approved a draft of the SOS Agreement.[6] On 3 August 2007 SOS Nursing submitted the draft to the WAD. From that day SOS Nursing began to pay its employed nurses and assistants in nursing on the assumption that the SOS Agreement applied.[7]
[6] Affidavit of R D Hyles, 09.09.14,, [27]
[7] Affidavit of R D Hyles, 09.09.14,, [31]
Clause 11 of the SOS Agreement[8] dealt with employees’ pay. Subclause 11.1 referred to the “aggregated rates of pay in Appendix B” to the SOS Agreement. Appendix B listed various classes of employees, the chief classification being between nurses (registered, enrolled and assistants in nursing), carers, and domestic assistants; and, for each class of employee, assigned amounts for weekdays, Saturdays, Sundays, and public holidays. From cl.11.3 of the SOS Agreement, which provided that employees “shall be paid an hourly rate at the level of work allocated to them by SOS and for which they possess the appropriate professional qualifications and competence”, it is clear that the amounts set out in Appendix B were hourly amounts. Subclause 11.4 required each employee to “record each visit or service provided to a client on the appropriate form and to submit this form to SOS each fourteen days for payment”.
[8] The SOS Agreement is exhibited to the affidavit of R D Hyles, 09.09.2014, at pages 12-17
Subclause 11.2 of the SOS Agreement provided that “[w]age levels contained in Appendix B will be reviewed on an annual basis following any adjustments in the level of government funding and subscriptions provided to SOS”. The rates were reviewed pursuant to cl.11.2 on 31 March 2008 and on 30 March 2009, resulting in an increase in those rates.[9]
[9] NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor [2011] FMCA 225 at [136]-[137]
SOS Nursing heard nothing from the WAD until 17 February 2009 when WAD informed SOS Nursing that the SOS Agreement did not pass the fairness test.[10] After SOS Nursing claimed that the WAD had acted on inaccurate and incomplete information,[11] the WAD sent a letter dated 24 March 2009 in which the WAD again said the SOS Agreement did not meet the fairness test.[12] After further exchanges between SOS Nursing and the WAD, which included SOS Nursing offering to amend the SOS Agreement, and the WAD accepting that offer, WAD informed SOS Nursing that the SOS Agreement passed the fairness test. That occurred by letter dated 31 August 2009;[13] and the collective agreement was accepted as having satisfied the fairness test as at 1 September 2009.[14]
[10] Affidavit of R D Hyles, 09.09.14,, page 31
[11] Affidavit of R D Hyles, 09.09.14,, pages 38-39
[12] SOS Nursing and Home Care Service Pty Ltd v NSW Nurses' Association [2012] FCA 398 at [9]
[13] Affidavit of R D Hyles, 09.09.14, page 40
[14] SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 at [13]
The SOS Agreement, as approved by the WAD, contained a number of amendments to the draft agreement SOS Nursing had submitted.[15] One of the amendments was to the rates set out in Appendix B. These were higher than the rates specified in Appendix B before the 31 March 2008 review, but lower than the rates that SOS Nursing applied after those reviews.[16] Further, the SOS Agreement contained the following new clause 12.3:
Where employees travel in excess of 50 Klms for the first service, they are paid travel time at their relevant hourly rate of pay.
[15] Affidavit of R D Hyles, 09.09.14, page 17
[16] NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor [2011] FMCA 225 at [138]
On 1 July 2009 the FW Act and the Fair Work (Transitional Provisions and Consequential Amendment) Act 2009 (Cth) (Transitional Act) came into effect. As a consequence of Part 2 of Schedule 3 to the Transitional Act, the SOS Agreement continued in existence in accordance with that Schedule as an “agreement-based transitional instrument” to which item 2(2) of Schedule 16 to the Transitional Act applied. That item provides that a person must not contravene a term of an agreement-based transitional instrument that applies to that person.
The Fair Work Commission terminated the SOS Agreement with effect from the first full pay period on or after 1 August 2013.[17]
[17] Russell and others re SOS Nursing and Home Care Services Pty Ltd Employee Collective Agreement 2007 [2013] FWCA 3596 at [16]
Dispute about travel time
On 1 November 2007 a meeting took place at the office of SOS Nursing in Tamworth between a number of employee nurses, Mr Blair, an industrial officer of the Association, Ms Hyles, the nurse manager, Ms McKern, and the accountant of SOS Nursing. At the meeting, one of the nurses said she was not being paid for the time she travelled from particular patients’ homes. Ms McKern said “[w]e will have a look at that”. [18]
[18] Affidavit of C M Blair, 29.05.14, page 34
By letter dated 15 November 2007 the Association complained to Ms Hyles that SOS Nursing was not complying with the SOS Agreement in a number of respects, one of which was that it failed “to pay travel time where employees travel to patients/clients during their work time”.[19] By letter dated 14 February 2008 addressed to Ms Hyles on behalf of SOS Nursing, the Association stated it reasonably suspected that SOS Nursing had failed to pay travel time, and failed to pay certain vehicle allowances under cl.12 of the SOS Agreement.[20] The Association repeated the statement in a letter to Ms Hyles dated 5 September 2008.[21]
[19] Affidavit of C M Blair, 29.05.14, page 36
[20] Affidavit of C M Blair, 29.05.14, page 38
[21] Affidavit of C M Blair, 29.05.14, page 44
On 23 September 2008 the Association commenced proceedings in the Federal Court against SOS Nursing seeking orders to set aside the SOS Agreement and also orders in relation to alleged breaches by SOS Nursing of the State Award and the NAPSA. By 10 July 2009 the Association and SOS Nursing settled the Federal Court proceedings on terms that remain confidential. The parties agreed, however, to issue a joint statement that set out the substance of agreements they had reached. One of the agreements was as follows:[22]
The NSW Nurses’ Association wants a clear decision about whether employees should receive an hourly rate of pay for the time they take to travel from one client’s home to the next. SOS has agreed that this needs to be clarified. The parties have agreed that this question will be determined by the Federal Court of Australia.
[22] Affidavit of C M Blair, 29.05.14, page 49
That question was decided by Perram J who, on 9 October 2009, made the following declaration:[23]
Where an employee whose employment is subject to the NAPSA spends time travelling between the residences of clients of the employer for the purpose of providing services to those clients on behalf of the employer, the employee is, during that travelling time, on duty and working for all purposes of the NAPSA.
[23] NSW Nurses' Association v SOS Nursing and Home Care Service Pty Ltd [2009] FCA 1147
This declaration related to the proper construction of the following clause:
Day Workers – the ordinary hours of work for day workers shall not exceed 38 hours per week to be worked between the hours of 7.00am and 7.00pm in five days of not more than eight hours, Monday to Friday, inclusive and shall be consecutive except for breaks for meals.
According to Ms Hyles,[24] SOS Nursing did not commence to pay nurses for travel time under the SOS Agreement because of advice she received from a barrister. The barrister advised three things. First, the ruling of Perram J only related to organisations operating under the NAPSA and, because SOS Nursing was operating under an employment agreement approved by the WAD, Perram J’s decision did not apply to SOS Nursing. The second thing the barrister advised was that the “Collective Agreement” had been approved with the travel clause where staff members were only paid after they had travelled 50 km to their first job. That must have been a reference to clause 12.3 of the SOS Agreement. Ms Hyles says the barrister also advised her that the rates SOS Nursing was then paying, being rates that had been increased following the reviews that occurred in March 2008 and 2009, should be reduced to match the rates the WAD determined met the fairness test.
[24] Affidavit of R D Hyles, 09.09.14, [46]
The Association commenced proceedings in this Court on behalf of one of its members.[25] That claim related to two matters. The first was the member’s entitlement to being paid for the time of travel after the first 50 km to the first visit to a client (travel time pay). The second related to the reduction in the hourly rates to those the WAD determined passed the fairness test. The Association claimed SOS Nursing was not entitled to reduce the hourly rates because the rates SOS Nursing purported to reduce had been agreed in accordance with cl.11.2 of the SOS Agreement.
[25] Affidavit of C M Blair, 29.05.14, [18]; NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor [2011] FMCA 225
In a judgment delivered on 12 April 2011 (12 April 2011 Judgment) Emmett FM (as her Honour then was) held that the applicant in that case was entitled to be paid for all travel time that formed part of her working time between clients at the hourly rate specified in the SOS Agreement provided the nurse travelled consecutively and continuously between clients on her shift, whatever the distance between those clients.[26] Her Honour also held that SOS Nursing was not entitled to reduce the applicant’s hourly rate to reflect the determination of the WAD.[27] On 19 May 2011 Emmett FM made orders requiring SOS Nursing pay a pecuniary penalty totalling $25,000, and Ms Hyles pay a pecuniary penalty of $4,000.[28]
[26] NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor [2011] FMCA 225 at [132]
[27] NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor [2011] FMCA 225 at [149]
[28] NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & Anor(No. 2) [2011] FMCA 349
Ms Hyles was cross-examined before me about her understanding of Emmett FM’s findings concerning travel time pay. Ms Hyles agreed she understood the Court rejected the proposition that the hourly rates under the SOS Agreement incorporated a component to compensate for travel time,[29] and that the Court found that the employees were entitled to be paid for the time travelling from one client to another client.[30] Ms Hyles agreed that in the pecuniary penalty part of the proceeding before Emmett FM she understood one matter that was put to the Court as a factor that should be taken into account when imposing a pecuniary penalty was that SOS Nursing would have to pay other employees with respect to time travelled.[31] In re-examination, Ms Hyles said that after Emmett FM handed down her Honour’s reasons for judgment, Ms Hyles obtained legal advice from Mr Baroni, the solicitor for SOS Nursing.[32] Mr Baroni advised SOS Nursing should appeal her Honour’s decision and, until such time as that decision was reached, SOS Nursing “could continue to use our agreement the way we interpreted it”.[33]
[29] T25.20
[30] T25.25
[31] T25.45-26.5
[32] T44.15-20
[33] T44.30
By letter dated 4 May 2011 the Association wrote to Ms Hyles requesting that SOS Nursing commence to pay for travel time in the next full pay period on or after 4 May 2011.[34] Ms Hyles responded by letter dated 27 May 2011 in which she informed the Association that SOS Nursing had appealed against the orders of Emmett FM.[35] SOS Nursing and Ms Hyles did file a notice of appeal with the Federal Court on 24 May 2011.[36] The appeal did not, however, challenge Emmett FM’s orders to the extent they related to travel time pay.[37] The appeal challenged her Honour’s findings that the hourly rate payable under the SOS Agreement was the hourly rate determined as a result of the review undertaken in March 2009 pursuant to cl.11.2 of the SOS Agreement. That appeal was dismissed.[38]
[34] Affidavit of C M Blair, 29.05.14, page 64
[35] Affidavit of C M Blair, 29.05.14, page 67
[36] Affidavit of C M Blair, 29.05.14, [24]
[37] SOS Nursing and Home Care Service Pty Ltd v New South Wales Nurses' Association [2012] FCA 398 at [37]
[38] SOS Nursing and Home Care Service Pty Ltd v New South Wales Nurses' Association [2012] FCA 398
In response to a letter from the Association dated 3 June 2011 to Mr Baroni,[39] Mr Baroni, in a letter dated 7 June 2011, stated that SOS Nursing did “not concede that a travel time payment is payable to the rest of its workforce”, and that if “similar claims for travel time payments are brought against our clients by SOS employees, our clients believe that there is evidence that is able to be adduced at any future hearing (which was not adduced during the hearing of the above proceedings) that would defeat any such travel time claims”.[40]
[39] Affidavit of C M Blair, 29.05.14, page 69
[40] Affidavit of C M Blair, 29.05.14, pages 72-73
In around the middle of July 2011 the Association sent a letter to its members which discussed the decision of Perram J and the 12 April 2011 Judgment.[41] The Association stated it believed SOS Nursing “has only been paying employees (including nurses and domestics) for the time they are actually at a client’s home”. After referring to the orders made by Emmett FM, the Association stated that “employees must make a claim to obtain their lawful entitlements”.
[41] Affidavit of C M Blair, 29.05.14, page 75
The Association’s letter came to the attention of SOS Nursing. On about 4 August 2011, SOS Nursing sent a letter signed by Ms Hyles to a number of its employees. The letter referred to the Association’s “sending letters to our staff, past and present, regarding the matter of back payment of travel time that you may be entitled to” and stated:[42]
Since the SOS Nursing & Home Care Service Employee Collective Agreement came into effect in August 2007 we have paid all of our staff above the award. The hourly rate is calculated to incorporate a travel component. This in part is to cover travel time incurred by staff that travel from client to client as part of their roster. That said, this higher rate of pay is paid to all staff regardless of if they travel between clients or not, thus, we believe, ensuring all staff are better off overall than if they were simply paid at the award rate.
[42] Affidavit of C M Blair, 29.05.14, page 87
In the meantime, on 3 August 2011, on the advice of Mr Baroni,[43] SOS Nursing commenced proceedings in the Federal Court of Australia seeking a declaration that SOS Nursing is not obliged to pay to its casual staff for time spent travelling between visits to provide services during the course of a day. SOS Nursing commenced those proceedings apparently for the purpose of overcoming the 12 April 2011 judgment.[44]
[43] Affidavit of R D Hyles, 09.09.14, [52]
[44] SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 at [2]
Ms Hyles deposed that the letter “was settled on the advice of Mr Baroni (and his colleagues, including Mr James Simpson)”;[45] and that she “did not consider whether [she] was making a false representation about any issue as [she] relied upon the expert legal advice provided by Mr Baroni (and Mr Simpson)”.[46] In cross-examination, Ms Hyles said that she drafted the letter, sent it to Mr Baroni for his approval, and Mr Baroni re-wrote the letter and sent it back to Ms Hyles.[47] Ms Hyles accepted in cross-examination that she knew the letter made statements that had been rejected by Emmett FM, those statements being that the hourly rate was calculated to incorporate a travel component and that, in part, that was to cover travel time incurred by staff that travel from client to client as part of their roster;[48] that she understood that SOS Nursing had commenced proceedings in the Federal Court to try and seek a different outcome;[49] and that she would not know the outcome until the Federal Court proceedings had been concluded.[50]
[45] Affidavit of R D Hyles, 09.09.14, [57]
[46] Affidavit of R D Hyles, 09.09.14, [58]
[47] T33.5
[48] T33.30-40
[49] T33.45-34.1
[50] T34.5
The Association sent a letter dated 22 August 2011 to SOS Nursing to the effect that SOS Nursing’s letter of 4 August 2011 to its staff was false and misleading to the extent it represented employees may have no right to be paid for travel time under the SOS Agreement.[51] The Association requested that SOS Nursing write to all employees and inform them that they may be entitled under the SOS Agreement to be paid travel time, and further requested that SOS Nursing commence paying “travel time to all employees in accordance with the findings of Federal Magistrate Emmett”, and that SOS Nursing develop “a payment plan for the timely back payment of travel time to all employees who have not been paid in accordance with the findings of Federal Magistrate Emmett”.[52]
[51] Affidavit of C M Blair, 29.05.14, page 90
[52] Affidavit of C M Blair, 29.05.14, page 91
SOS Nursing responded to the Association’s letter through its solicitor’s letter dated 31 August 2011.[53] The letter stated:
The findings of Federal Magistrate Emmett in NSW Nurse’s Association v SOS Nursing and Home Care Services Pty Ltd & Anor [2011] FMCA 225 are limited to the specific circumstances of that particular case. The findings in that matter do not relate to, and are not in any way binding on, any other employee of SOS.
As we have stated previously, SOS does not accept that the interpretation by Emmett FM on the issue of travel time under the SOS Agreement is correct, and it has evidence (which was not adduced at the hearing of the above matter) that supports its interpretation. As you may be aware, SOS has commenced proceedings in the Federal Court seeking declarations to properly and finally resolve this issue.
Accordingly, it cannot be said that SOS has been misleading and deceptive in any way by simply setting out to its employees, in a response to the NSWNA Correspondence, its view as to the correct interpretation of the SOS Agreement.
[53] Affidavit of C M Blair, 29.05.14, page 96
According to Ms Hyles, in January 2013 Mr Baroni advised SOS Nursing that “SOS Nursing’s contract of employment was not clear and he would draft a letter rectifying this”.[54] Following that advice, Mr James Zeng, a lawyer who worked for Mr Baroni, or Mr Baroni himself, drafted a letter which SOS Nursing sent to its employees on or about 4 February 2013.[55] The letter refers to the Fair Work Commission not having approved a proposed enterprise agreement which SOS Nursing staff approved in September 2012. After stating that it was the intention of SOS Nursing to look towards negotiating and achieving a new enterprise agreement in the near future, the letter stated that the “letter and its comments below outlines the terms and conditions of your employment replacing all other agreements, contracts of employment or any other arrangement between SOS Nursing . . . and you”. The letter contained the following statement:
We note that in the Collective Agreement 2007, the aggregated rates of pay provides compensation for any travel time that does not fall within clause 12.3 of Appendix B. This has always been the case and will not change.
[54] Affidavit of R D Hyles, 09.09.14, [59]
[55] Affidavit of R D Hyles, 09.09.14, page 190
On 5 April 2013 Buchanan J of the Federal Court dismissed the application of SOS Nursing pursuant to s.31A of the Federal Court of Australia Act 1976 (Cth).[56] His Honour dismissed the application because the SOS Agreement was binding on SOS Nursing “in respect of all the casual staff to whom it applies”,[57] and that the decision of Emmett FM, therefore, was a final decision that bound SOS Nursing.[58] His Honour also found that the proceedings were an abuse of process[59] in that it “sought to litigate anew a case which has already been disposed of by earlier proceedings”.[60]
[56] SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295
[57] SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 at [46]
[58] SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 at [48]
[59] SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 at [51]
[60] Walton v Gardiner (1993) 177 CLR 378 at page 393, quoted with approval in SOS Nursing & Home Care Service Pty Ltd v Smith [2013] FCA 295 at [50]
After 28 August 2013, when the Association commenced these proceedings, Ms Hyles took steps to estimate from time sheets completed by employees the amount of travel time.[61] Ms Hyles deposed she contacted all staff by telephone and made offers of settlement,[62] but these attempts were not brought to fruition because staff preferred to have the matter dealt with through the Association.[63] These efforts, however, only related to the Nurses, the persons on behalf of whom the Association commenced these proceedings.[64] On or about 20 June 2014, SOS agreed to pay a total of $65,000 to the Association in two instalments: 50% by 1 September 2014, and 50% by 1 December 2014.[65]
[61] Affidavit of R D Hyles, 09.09.14, [64]
[62] Affidavit of R D Hyles, 09.09.14, [65]
[63] Affidavit of R D Hyles, 09.09.14, [66]-[70]
[64] T39.10-20
[65] Affidavit of R D Hyles, 09.09.14, [71]
The admitted contraventions
Ms Hyles admits SOS Nursing failed to pay the Nurses, as required by the SOS Agreement, for the time they travelled between the homes of clients, and that she was involved in that contravention. That failure occurred during the periods for which each of the Nurses was employed by SOS Nursing up to 31 July 2013 when the SOS Agreement ended, as shown in the following table:
Nurse
Period of underpayment
Susan Bell
April 2000 to August 2009
Elizabeth Easey
28 February 2002 – 14 December 2011
Kathleen Murphy
May 2000 – January 2013
Rosemary Rampling
October 2002 – October 2010
Annette Pinto
June 2001 – April 2008
Tracy Marle
August 2005 – September 2008
Christine McNamara
May 2011 – November 2012
Juanine Mansfield
April 2007 – 31 July 2013
Kim Gordon
2009 – 31 July 2013
Gillian Russell
2002 – 31 July 2013
Elizabeth Gallagher
December 2002 – April 2013
Therese Delaney
August 2002 – 31 July 2013
Donna Donovan
2009 – 14 July 2013
The agreed statement of facts do not, however, identify the provision or provisions of the SOS Agreement or of the WR Act or FW Act SOS Nursing and Ms Hyles contravened by failing to make the travel time payments. Nor does the agreed statement of facts identify the occasion or occasions on which SOS Nursing and Ms Hyles contravened the SOS Agreement.
Ms Hyles also admits she contravened s.345 of the FW Act on two occasions. The first is by SOS Nursing’s sending a letter to its employees on about 4 August 2011, and the second is by SOS Nursing’s sending a letter to its employees on about 4 February 2013. Ms Hyles admits that (a) the letter of 4 August 2011 represented that the hourly rate of pay to SOS Nursing’s employees incorporated a travel component which was in part to cover travel time incurred by staff that travel from client to client as part of their roster; (b) the letter dated 4 February 2011 represented that the hourly rate of pay under the SOS Agreement provided compensation for time spent travelling between the homes of clients; (c) the representations related to workplace rights of the Nurses; (d) the representations were false or misleading; (e) SOS Nursing made the representations recklessly; and (f) Ms Hyles made the representations recklessly, and was involved in SOS Nursing’s making the representations recklessly. [66]
[66] Further Statement of Agreed Facts, [3]-[8]
Contraventions of the SOS Agreement for which pecuniary penalties are to be assessed
Before the Court can assess any pecuniary penalty, it is necessary to identify the provisions pursuant to which the Court may make an order for the payment of pecuniary penalties, and the contraventions for which pecuniary penalty orders may be made under such provisions.
Association’s submissions
The Association submits that, for the period 3 August 2007 until 1 July 2009, SOS Nursing’s contraventions of the SOS Agreement constituted contraventions of the WR Act for which a pecuniary penalty under s.719(1) of the WR Act may be imposed; and that, for the period from 1 July 2009 until 1 August 2013, SOS Nursing’s contraventions of the SOS Agreement constituted contraventions of the FW Act for which a pecuniary penalty under s.546(1) of the FW Act may be imposed.[67] From the fact that the Association seeks an order for the payment of a pecuniary penalty pursuant to both s.719(1) of the WR Act and s.546 of the FW Act,[68] it appears the Association submits that any pecuniary penalty the Court imposes for the admitted contraventions should in part relate to the contraventions that occurred before 1 July 2009. Somewhat incongruously, however, the Association submits that SOS Nursing engaged in nine contraventions of the SOS Agreement. This submission is based on the combination of two matters. The first is that, because of s.557(3) of the FW Act (which I will consider shortly), the Court’s ordering of pecuniary penalties on 19 May 2011 prevents SOS Nursing’s contraventions of the SOS Agreement that occurred after 19 May 2011 from being treated as a single contravention. The second matter is that SOS Nursing employed nine of the thirteen Nurses after 19 May 2011. The Association submits, therefore, that SOS Nursing committed one contravention of the SOS Agreement for each of these nine Nurses. Whether these submissions are correct requires me to identify the powers pursuant to which the Court may impose pecuniary penalties for contraventions of the WR Act and the FW Act.
[67] Applicant’s Outline of Submissions on Penalty [19]
[68] Applicant’s Outline of Submissions on Penalty [4]
Provisions for the imposition of pecuniary penalty under WR Act
The Court’s power to order pecuniary penalties under the WR Act is found in item 11 of Part 3 of Schedule 2 to the Transitional Act. That item provides that the WR Act continues to apply on and after the “WR Act repeal day”, namely, 1 July 2009,[69] in relation to conduct that occurred before the “WR Act repeal day”. Subsection 719(1) of the WR Act provides that an “eligible court” (which, under s.717 of the WR Act, includes this Court) may impose a pecuniary penalty on a person in accordance with Division 2 of Part 14 of the WR Act if the person is bound by “an applicable provision”, and the person breaches that provision. The expression “applicable provision” in relation to a person is defined in s.717 of the WR Act as a term of, among other things, a “collective agreement” that applies to the person. The expression “collective agreement” is defined in s.4 of the WR Act to mean, among other things, an “employee collective agreement” as defined in s.327 of the WR Act.
[69] Which, when read with the definition of “WR Act repeal” in item 2 of Schedule 2 to the Transitional Act and s.2 of the Transition Act, is defined as 1 July 2009
Subsection 719(2) of the WR Act must also be considered. It provides that if the same person commits two or more breaches of an applicable provision, and the breaches arose out of a course of conduct by the person, the breaches shall, for the purposes of s.719 of the WR Act, be taken to constitute a single breach of the term. Subsection 719(2) of the WR Act, however, is subject to s.719(3) which provides that s.719(2) does “not apply to a breach of an applicable provision that is committed by a person after an eligible court has imposed a penalty on the person for an earlier breach of the provision”.
Provisions for the imposition of pecuniary penalty under FW Act
The Court’s power under the FW Act to order a pecuniary penalty lies in s.546(1) of the FW Act. Under that subsection, this Court “may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision”. The expression “civil remedy provision” is defined in s.539(1) of the FW Act as a provision referred to in column 1 of an item in the table in s.539(2) of the FW Act. Column 1 of that table includes s.345 of the FW Act.
As I have already noted, the SOS Agreement continued in existence in accordance with Part 2 of Schedule 3 to the Transitional Act as an “agreement-based transitional instrument” and to which item 2(2) of Schedule 16 to the Transitional Act applied. SOS Nursing’s contraventions of the SOS Agreement on and after 1 July 2009, therefore, constitute contraventions of item 2(2) of Schedule 16 to the Transitional Act. Under item 16 of Schedule 16 to the Transitional Act, Part 4-1 of the FW Act applies as if item 2 (among other items) of Schedule 16 was a provision of the FW Act and was included in the table provided for in s.539(2) of the FW Act. A contravention of item 2(2), therefore, is a contravention of a civil remedy provision within the meaning of s.546 of the FW Act.
Sub paragraph (1)(f) of item 16 of Schedule 16 to the Transition Act provides that the FW Act applies as if s.557(2) of the FW Act included a reference to, among other thing, item 2 of Schedule 16 to Transition Act. Subsection 557(2) identifies the civil remedy provisions to which s.557(1) of the FW Act applies. Subsection 557(1) of the FW Act provides that two or more contraventions of a civil remedy provision referred to in s.557(2), if committed by the same persons and the contraventions arose out of a course of conduct by the person, are taken to constitute a single contravention. Subsection 557(1) of the FW Act is subject to s.557(3) which provides that s.557(1) of the FW Act “does not apply to a contravention of a civil remedy provision that is committed by a person after a court has imposed a pecuniary penalty on the person for an earlier contravention of the provision”.
Contraventions liable to a pecuniary penalty under s.719(1) of the WR Act
If I ignore s.719(2) of the WR Act, and the orders the Court made on 19 May 2011 imposing pecuniary penalties on SOS Nursing and Ms Hyles (19 May 2011 Orders), s.719(1) of the WR Act would apply to SOS Nursing’s contraventions of the SOS Agreement that occurred before 1 July 2009. The SOS Agreement falls within the definition of “collective agreement”; and contraventions of a provision of such agreement would constitute a breach by SOS Nursing of “an applicable provision”. Further, each occasion on which SOS Nursing failed to make a travel time payment to the Nurses will have constituted “a separate contravention of an applicable provision for the purposes of s 719 of the WR Act”.[70]
[70] Fair Work Ombudsman vKentwood Industries Pty Ltd (No 3) [2011] FCA 579 at [10] (McKerracher J)
If I do not ignore s.719(2) of the WR Act, but continue to ignore the 19 May 2011 Orders, SOS Nursing’s contraventions of the SOS Agreement by failing to make travel time payments to the Nurses would be treated as one contravention. That is so because the contraventions were committed by the one person – SOS Nursing or, more particularly, Ms Hyles acting as the directing mind of SOS Nursing – and the contraventions would have arisen out of a course of conduct by SOS Nursing. That was admitted as part of the agreed statement of facts that was before the Court on the basis of which it made the 19 May 2011 Orders:[71]
Each of the contraventions found against the respondents comprised instances of failing to pay its employee as required by the SOS Agreement. However, s.719(2) of the WRA and s.557 of the FWA permit multiple contraventions to be treated as a single contravention if they were committed by the same person and arose out of a single course of conduct.
The occasions on which the first respondent failed to pay Ms Cornish with respect to travel time arose out of a single course of conduct. The occasions after 7 December 2009 on which the first respondent paid Ms Cornish less than the applicable rate of pay arose out of a single course of conduct.
[71] NSW Nurses Association v SOS Nursing & Home Care Service Pty Ltd & AnorNo.2) [2011] FMCA 349 at [4(xv), (xvi)]
Finally, I consider the position taking into account, not only s.719(2) of the WR Act, but also the 19 May 2011 Orders. If, because of s.719(2) of the WR Act, SOS Nursing’s contraventions of the SOS Agreement up to 1 July 2009 constituted one contravention, and if, under the 19 May 2011 Orders, the Court made orders for the payment of a pecuniary penalty for that contravention, it is not open to the Court now to make an order for the payment of a pecuniary penalty under s.719(1) of the WR Act for any contraventions of the SOS Agreement by SOS Nursing or Ms Hyles that occurred before 1 July 2009. That is so because, as a result of s.719(2) of the WR Act, SOS Nursing and Ms Hyles each committed but one contravention of an applicable provision of the SOS Agreement; and, by the 19 May 2011 Orders, SOS Nursing and Ms Hyles have been punished for that contravention. They cannot be punished a second time for what in law is a single contravention.
Accordingly, none of the admitted contraventions are liable to an order under s.719(1) of the WR Act for the payment of a pecuniary penalty.
Contraventions up to 19 May 2011 liable to pecuniary penalty orders under the FW Act
If I ignore paragraph 1(f) of item 16 of Schedule 16 to the Transitional Act and the 19 May 2011 Orders, s.546 of the FW Act would apply to each of the occasions on which SOS Nursing failed to make a travel time payment to the Nurses during the period 1 July 2009 to 19 May 2011. SOS Nursing’s contraventions of the SOS Agreement would have been a contravention of Item 2(2) of Schedule 16 to the Transitional Act and, therefore, contraventions of a civil remedy provision for the purposes of s.546 of the FW Act. Further, each occasion on which SOS Nursing failed to make a travel time payment would have constituted a separate contravention of a term of the SOS Agreement and, hence, would have constituted a separate contravention of Item 2(2) of Schedule 16 to the Transitional Act.
If do not ignore paragraph 1(f) of item 16 of Schedule 16 to the Transitional Act, but continue to ignore the 19 May 2011 Orders, SOS Nursing’s contraventions of the SOS Agreement by failing to make travel time payments to any of the Nurses during the period 1 July 2009 to 19 May 2011 would be treated as one contravention of Item 2(2) of Schedule 16 to the Transitional Act. That is so for the same reasons SOS Nursing’s contraventions of the SOS Agreement before 1 July 2009 constituted one contravention of s.719(1) of the WR Act: the contraventions would have been committed by the one person, SOS Nursing, and the contraventions would have arisen out of a course of conduct by SOS Nursing.
Finally, if I take into account both paragraph 1(f) of item 16 of Schedule 16 to the Transitional Act and the 19 May 2011 Orders, the Court cannot make any order for the payment of a pecuniary penalty in relation to SOS Nursing’s contraventions of Item 2(2) of Schedule 16 during the period 1 July 2009 to 19 May 2011. For “the purposes of considering the imposition of penalties, multiple contraventions of the same civil remedy provisions of the WR Act and FW Act is to be treated as a single contravention”.[72] Thus, at the time of the 19 May 2011 Orders, SOS Nursing’s contraventions of the SOS Agreement before 19 May 2009 constituted but one contravention of Item 2(2) of Schedule 16. The 19 May 2011 Orders imposed pecuniary penalties for that contravention. It is now no longer open to the Court to impose an additional penalty under s.546 of the FW Act for SOS Nursing’s contraventions of the SOS Agreement before 19 May 2011.
[72] Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 at [48] (Mansfield J)
Contraventions after 19 May 2011 liable to pecuniary penalty orders under the FW Act
It follows from my conclusions that the only contraventions of the SOS Agreement for which an order for the payment of a pecuniary penalty may be made are those that occurred after 19 May 2011. Unlike the contraventions that occurred before 19 May 2011, however, SOS Nursing cannot have the benefit of s.557(1) of the Act. That is because, as a result of the 19 May 2011 Orders, s.557(3) of the FW Act applies. That means that, even though the contraventions have been committed by a single person, SOS Nursing, and the contraventions arose out of a course of conduct by SOS Nursing, each of SOS Nursing’s contraventions of the SOS Agreement remains a distinct contravention. It also means that I do not accept the Association’s submission that there are nine contraventions, one contravention for each Nurse that was employed by SOS Nursing after 19 May 2011. There were as many contraventions of Item 2(2) of Schedule 16 as there were failures by SOS Nursing to make travel time payments to the Nurses.
The statement of agreed facts does not identify the occasions on which SOS Nursing ought to have made, but did not make, travel time payments to the Nurses. Subclause 11.4 of the SOS Agreement required the Nurses to submit every fourteen days a form recording visits to clients, and provided that the Nurses would be paid fortnightly. It is reasonable to infer from clause 11.4 of the SOS Agreement, and I find, that throughout the period SOS Nursing and Ms Hyles admit SOS Nursing did not make travel time payments to the Nurses, each of the Nurses submitted to SOS Nursing the relevant forms every fourteen days claiming payment of amounts that included amounts for travel time, and that, once every fourteen days, SOS Nursing paid the Nurses amounts excluding amounts for travel time. On these findings, SOS Nursing contravened the SOS Agreement in relation to each Nurse every two weeks.
The statement of agreed facts does not allow a precise calculation of the number of times after 19 May 2011 SOS Nursing did not pay travel time to those Nurses who were employed by SOS Nursing. Assuming, however, each Nurse who was employed by SOS Nursing after 19 May 2011 was paid once between 19 and 31 May 2011, and was then paid twice every month up to 31 July 2013, or, if she left before 31 July 2013, was paid twice a month up to the day on which she left SOS Nursing, then, after 19 May 2011, SOS Nursing contravened the SOS Agreement on approximately 400 occasions as follows:
Nurse
Period of underpayment
Number of contraventions 19.05.11 - 31.07.13
Susan Bell
April 2000 to August 2009
0
Elizabeth Easey
28 February 2002 – 14 December 2011
14
Kathleen Murphy
May 2000 – January 2013
40
Rosemary Rampling
October 2002 – October 2010
0
Annette Pinto
June 2001 – April 2008
0
Tracy Marle
August 2005 – September 2008
0
Christine McNamara
May 2001 – November 2012
36
Juanine Mansfield
April 2007 – August 2013
53
Kim Gordon
2009 – February 2014
53
Gillian Russell
2002 – August 2014
53
Elizabeth Gallagher
December 2002 – April 2013
46
Therese Delaney
August 2002 – August 2014
53
Donna Donovan
2009 – 14 July 2013
52
TOTAL
400
Thus, the number of contraventions for which I must assess a pecuniary penalty under s.546 is around 400.
Maximum penalty
Subsection 546(2) of the FW Act provides that, where the person who contravenes a civil remedy penalty provision is an individual, the pecuniary penalty must not be more than the maximum number of penalty units referred to in the relevant item in column 4 of the table in s.539(2). The penalty units assigned in that table to contraventions of s.45 of the FW Act and Item 2(2) of Schedule 16 to the Transitional Act are 60 penalty units. Subsection 546(2) of the FW Act provides that where the person who contravenes a civil remedy provision is a body corporate, the pecuniary penalty must not be more than five times the maximum number of penalty units referred to in the relevant item in column 4 of the table in s.539(2).
Under s.4(1) of the FW Act the expression “penalty unit” has the meaning given by s.4AA of the Crimes Act 1914 (Cth). Up to 26 December 2012 the penalty unit was $110. On 27 December 2012 the penalty unit was increased to $170.[73] That means that before 27 December 2012 the maximum pecuniary penalty for a contravention by an individual of each of s.45 of the FW Act and Item 2 of Schedule 16 to the Transition Act was $6,600 for an individual, and $33,000 for a body corporate; and, on and after 27 December 2012, the maximum pecuniary penalty for a contravention of an individual of each of the s.45 of the FW Act and Item 2 was $10,200 for an individual and $51,000 for a body corporate.
[73] Section 4AA was amended by the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Crimes Amendment Act). Part 2 of Schedule 3 to the Crimes Amendment Act amended the definition of “penalty unit” from $110 to $170. The Crimes Amendment Act states that the amendments made by Part 2 of Schedule 3 commence on 28 December 2012.
Thus, the maximum penalties for each contravention SOS Nursing and Ms Hyles committed between 19 May 2011 to 26 December 2012 are $33,000 and $6,600 respectively, and the maximum penalties for the contraventions they committed after 26 December 2012 are $51,000 and $10,200 respectively.
Having identified the contraventions for which pecuniary penalties may be imposed, it is now necessary to identify the principles that I should apply to determining whether to make an order for the payment of pecuniary penalties and, if so, the amounts for which I should assess the pecuniary penalties.
Principles for assessing pecuniary penalties
When assessing a pecuniary penalty for a contravention of a provision of the FW Act, it is necessary to bear in mind the purposes for which pecuniary penalties are imposed. One purpose is punishment or retribution.[74]
[74] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 at [6] (Barker J)
“Retribution” refers to visiting on the offender a level of suffering that reflects the nature and gravity of the offender’s wrongdoing. Retribution is premised on the view that “offenders deserve to suffer and that the institution of punishment should inflict the suffering they deserve”, and that “punishment must be equivalent to the level of wrongdoing”.[75] When giving effect to the purpose of retribution the overriding principle is to ensure that the sentence is proportionate to the gravity of the contravening conduct,[76] and it must accord with prevailing standards of punishment.[77] Further, because the purpose of retribution is to inflict the punishment the offender deserves, the circumstances of the contravention of the law are especially important.[78]
[75] Bagaric, Mirko; Amarasekara, Kumar --- “The Errors of Retributivism” [2000] MelbULawRw 5; (2000) 24(1) Melbourne University Law Review 125 at page 127
[76] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 at [5] (Barker J)
[77] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 at [6] (Barker J)
[78] Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at [93] (Lander J)
Another purpose for imposing a pecuniary penalty on a person who contravenes the FW Act is deterrence, both personal and general:[79]
The pecuniary penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.
[79] Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at [93] (Lander J)
A third purpose of imposing a pecuniary penalty is to communicate society’s disapproval of the person’s contravention of the law; it “is the means by which society marks its disapproval of criminal conduct”.[80] This purpose is often referred to as denunciation.[81] The degree of disapproval of a given offence, however, is not to be determined by reference to the disapproval of actual members of the community, for the “extent of community abhorrence of a crime or type of crime is not a matter of evidence”.[82]
[80] Channon v The Queen (1978) 33 FLR 433 at page 437 (FCA, Brennan J)
[81] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 at [72] where the Court refers to the recognition in the field of “white collar” crime of “the more abstract notion of denunciation”.
[82] R v H (1980) 3 A Crim R 53 at page 65 (NSW CCA, Moffitt P)
Rehabilitation has been identified as another purpose for imposing a pecuniary penalty.[83] Rehabilitation “is aimed at the renunciation by the offender of his wrongdoing and his establishment or re-establishment as an honourable law-abiding citizen”;[84] it is achieved by “reducing or eliminating the factors which contributed to conduct for which” the offender is sentenced.[85]
[83] Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at [93]
[84] Vartzokas v Zanker (1989) 51 SASR 277 at page 279 (King CJ)
[85] Channon v The Queen (1978) 33 FLR 433 at page 438 (FCA, Brennan J)
Although in any given case one of these purposes may be the pre-eminent purpose for assessing a pecuniary penalty, it need not be the sole purpose. This point was made by the Full Federal Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union:[86]
We consider that in any system of penalties the various identified purposes of punishment will have greater or less relative significance, depending upon the type of misconduct in question, its prevalence at a particular point in time, difficulty of detection, potential for causing damage and many other considerations. Further, the peculiar circumstances of a particular example of such misconduct may lead to one aspect of punishment being more important in that case than in other cases of the same kind.
[86] [2015] FCAFC 59 at [71] (Dowsett, Greenwood and Wigney JJ)
Courts have identified a number of factors that may be relevant in the circumstances of a particular case to assessing the appropriate pecuniary penalty for contraventions of the FW Act or the WR Act. Factors that are frequently referred to are those Mowbray FM identified in Mason v Harrington Corporation Pty Ltd.[87] These are:
[87] [2007] FMCA 7. In Kelly v Fitzpatrick [2007] FCA 1080 at [14] Kenny J adopted this same list of factors as “potentially relevant and applicable”.
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 party committing the breach;
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.
Although any one or more of these factors may be relevant to the assessment of a pecuniary penalty in any given case, the factors must not be treated as a checklist.[88] That is so because the task of the Court when assessing a pecuniary penalty “is to take account of all of the relevant factors and to arrive at a single result which takes due account of them all”.[89] The end result of this task, and the process by which it is arrived at, is referred to as an “instinctive synthesis”.[90] That expression originated in the decision of the Full Court of the Supreme Court of Victoria in R v Williscroft Weston, Woodley and Robinson where Adam and Crockett JJ said:[91]
Now, ultimately every sentence imposed represents the sentencing judge’s instinctive synthesis of all the various aspects involved in the punitive process.
[88] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 at [10] (Barker J)
[89] Wong v R [2001] HCA 64; 207 CLR 584 at [75] (Gaudron, Gummow, Hayne JJ)
[90] See, for example, Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 at [7] (Barker J)
[91] [1975] VR 292 at 300
The expression “instinctive synthesis” is used “to make plain that the sentencer is called on to reach a single sentence which . . . balances many different and conflicting features”.[92] This approach is contrasted with that which has the appearance of a mathematical exercise of addition and subtraction, where the sentence is “broken down into some set of component parts”.[93]
[92] Wong v R [2001] HCA 64; 207 CLR 584 at [75] (Gaudron, Gummow, Hayne JJ)
[93] Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2; (2014) 253 CLR 58 at [34] (French CJ, Hayne, Kiefel, and Bell JJ)
One other relevant factor should be mentioned; and that is the maximum amount of the penalties provided for under the WR Act and FW Act. The Federal Court has held[94] that the following passage from the judgment of Gleeson CJ, Gummow, Hayne and Callinan JJ in Markarian v The Queen applies to the assessment of pecuniary penalties under the FW Act:[95]
It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick. That having been said, in our opinion, it will rarely be, and was not appropriate for Hulme J here to look first to a maximum pecuniary penalty . . . and to proceed by making a proportional deduction from it. That was to use a prescribed maximum erroneously, as neither a yardstick, nor as a basis for comparison of this case with the worst possible case.
[94] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [108] (Buchanan J)
[95] [2005] HCA 25; (2005) 228 CLR 357 at [31]
Multiple contraventions – “one transaction” principle
I have already referred to s.557 of the FW Act and s.719(2) of the WR Act which take two or more contraventions of a provision of the FW Act or of an applicable provision respectively, to be a single contravention where the contraventions were committed by the one person arising out of a course of conduct by that person. Even where those provisions do not apply, however, it is permissible when assessing a pecuniary penalty to consider whether a person’s multiple contraventions occurred as part of a single course of conduct. It is relevant under a sentencing principle that is sometimes referred to as the “one transaction principle”.
A useful statement of that principle was given by Owen JA in Royer v Western Australia:[96]
At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.
[96] [2009] WASCA 139 at [22]. This passage was included in a longer passage which was set out in Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 with apparent approval of the Full Federal Court in Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 at [17] (Moore, Middleton, Gordon JJ)
This principle has been held to be relevant to the assessment of penalties under the WR Act and the FW Act;[97] and, as was noted by Mortimer J in Sayed v Construction, Forestry, Mining and Energy Union,[98] the Federal Court has regularly referred to the following passage from the judgment of Wells J in Attorney-General (SA) v Tichy as being relevant to the assessment of penalties under the WR Act and the FW Act:[99]
It is both impracticable and undesirable to attempt to lay down comprehensive principles according to which a sentencing judge may determine, in every case, whether sentences should be ordered to be served concurrently or consecutively. According to an inflexible Draconian logic, all sentences should be consecutive, because every offence, as a separate case of criminal liability, would justify the exaction of a separate penalty. But such a logic could never hold. When an accused is on trial it is part of the procedural privilege to which he is entitled that he should be made aware of precisely what charges he is to meet. But the practice and principles of sentencing owe little to such procedure; what is fitting is that a convicted prisoner should be sentenced, not simply and indiscriminately for every act that can be singled out and brought within the compass of a technically identifiable conviction, but for what, viewing the circumstances broadly and reasonably, can be characterised as his criminal conduct. Sometimes, a single act of criminal conduct will comprise two or more technically identified crimes. Sometimes, two or more technically identified crimes will comprise two or more courses of criminal conduct that, reasonably characterized, are really separate invasions of the community’s right to peace and order, notwithstanding that they are historically interdependent; the courses of criminal conduct may coincide with the technical offences or they may not. Sometimes, the process of characterization rests upon an analysis of fact and degree leading to two possible answers, each of which, in the hands of the trial judge, could be made to work justice. The practice of imposing either concurrent or consecutive sentences cannot avoid creating anomalies, or apparent anomalies, from time to time. What must be done is to use the various tools of analysis to mould a just sentence for the conduct of which the prisoner has been guilty. Where there are truly two or more incursions into criminal conduct, consecutive sentences will generally be appropriate. Where, whatever the number of technically identifiable offences committed, the prisoner was truly engaged upon one multi-faceted course of criminal conduct, the judge is likely to find concurrent sentences just and convenient.
[97] See, for example, Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 (Moore, Middleton, Gordon JJ); Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 (Moore, Middleton, Gordon JJ)
[98] [2015] FCA 338 at [31]
[99] (1982) 30 SASR 84 at pages 92-93
After referring to this passage, Mortimer J in Sayed v Construction, Forestry, Mining and Energy Union, said:[100]
In fixing a penalty, just as imposing a sentence, the aim is, as Wells J observed, to “mould a just sentence for the conduct” found to have occurred, and where there are “truly two or more incursions into criminal conduct” to punish these incursions separately.
[100] [2015] FCA 338 at [34]
It is not entirely clear at what stage of the sentencing process the Court should consider the one transaction principle. In Royer v Western Australia, Buss JA said the orthodox approach was to decide on the appropriate sentence for each offence before deciding whether the sentences should be served concurrently or cumulatively.[101] In Construction, Forestry, Mining and Energy Union v Williams the Full Federal Court noted this aspect of the judgment of Buss JA without any comment.[102]
[101] [2009] WASCA 139 at [128]
[102] [2009] FCAFC 171 at [19]
Multiple contraventions – totality principle
A related, but distinct,[103] sentencing principle that may require the Court to consider multiple contraventions as reflecting a single course of unlawful conduct is the “totality principle”. Under that principle, a sentencing judge is required “to impose a sentence or sentences which reflect the overall criminality of the offending for which the offender has been convicted”.[104] In R v Holder Street CJ described the principle as follows:[105]
The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences.
[103] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70. At [42], Stone and Buchanan J said: “For the purpose of the present discussion the general principle which appears to be relied upon by the appellant [i.e., the “one transaction” principle] may be accepted, although it is important to distinguish it from the application of the totality principle which is a final check to be applied to ensure that a final, total or aggregate, penalty is not unjust or out of proportion to the circumstances of the case.”
[104] Contin v The Queen [2012] VSCA 247 at [38]
[105] R v Holder (1983) 3 NSWLR 245 at 260
The totality principle has been held to apply to the fixing of fines.[106]
[106] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 at [41]
The Full Federal Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union, explained the method of applying the totality principle to the fixing of fines:[107]
The court must fix a fine for each offence and then review the aggregate, considering whether it is just and appropriate, as a reflection of the overall criminality. Such consideration may lead to moderation of the fine imposed in respect of each offence . . . . It is at this stage that it is relevant to consider matters such as whether the separate offences were part of a single course of conduct (or whether the offences may be grouped together in some way as representing separate courses of conduct) and whether there is an overlap between the legal elements of some of the offences.
[107] [2015] FCAFC 59 at [41]
Steps in assessing penalties for multiple contraventions
In Fair Work Ombudsman vKentwood Industries Pty Ltd (No 3) McKerracher J applied the following four-step approach to assessing a pecuniary penalty under s.719 of the FW Act for a contravention of a term of an “applicable provision”:[108]
1.First, each contravention of each separate obligation sourced in the Standard or the NAPSA is a separate contravention of an applicable provision for the purposes of s 719 of the WR Act. However, pursuant to s 719(2), multiple contraventions of the same applicable provision may be treated as a single contravention, if the Court considers them to be part of a single ‘course of conduct’. It is necessary to identify the maximum penalty for each separate contravention.
2.Second, it is necessary then to consider an appropriate penalty to impose in respect of each contravention (whether a single contravention alone or as part of a course of conduct), having regard to all of the circumstances of the case.
3. Next, to the extent that two or more contraventions have common elements, this may be taken into account when considering what is an appropriate penalty for each contravention. The respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to the respondents’ actions.
4. Finally, having fixed an appropriate penalty for each separate contravention, group of contraventions or course of conduct, a final review of the aggregate penalty is necessary to determine whether it is an appropriate response to the conduct which led to the contraventions. Put another way, a Court may apply an overall ‘instinctive synthesis’
[108] [2011] FCA 579 at [10]
Assessment of penalties for contraventions of SOS Agreement
I have found SOS Nursing and Ms Hyles committed around 400 contraventions of the SOS Agreement and, hence, of Item 2(2) of Schedule 16 to the Transitional Act. According to the authorities to which I have referred, it would be necessary for me to assess the pecuniary penalty for each of the 400 contraventions SOS Nursing and Ms Hyles committed and, after that has been done, to apply the one transaction principle and the totality principle to the penalties so assessed. It is impossible to imagine, however, a Court should undertake that task in the circumstances of this case. Not only would the approach consume an inordinate amount of time and judicial resources; it would lack utility.
Each of SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement was constituted by the same act, namely, the non-payment of an amount for travel time; and each contravention constituted the implementation of a single decision by SOS Nursing and Ms Hyles that SOS Nursing not make travel time payments to the Nurses. Even if, therefore, I were to assess a pecuniary penalty for each contravention, the application of the one transaction principle and the totality principle would require me to assess a pecuniary penalty for each of SOS Nursing’s and Ms Hyles’ contraventions having regard to the overall conduct of SOS Nursing and Ms Hyles. Whether or not I were to assess a pecuniary penalty for each of the 400 contraventions, therefore, the pecuniary penalties I would impose would in all likelihood be the same.
These considerations should lead me to assess the pecuniary penalties on the basis that SOS Nursing and Ms Hyles contravened the SOS Agreement approximately 400 times, but that I should impose one pecuniary penalty on each of SOS Nursing and Ms Hyles; and that I should do so on the assumption that SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement in truth constituted a single course of contravening conduct. That means I should apply to that conduct as a whole the factors courts apply when assessing the amount of a pecuniary penalty for a single contravention.
In applying this approach, it is necessary to have in mind the maximum penalties that may be imposed on SOS Nursing and Ms Hyles. Given that s.557(1) of the FW Act does not apply to SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement after 19 May 2011, one possibility is to regard the maximum penalties to be the sum of the maximum pecuniary penalty payable for each contravention. Assuming SOS Nursing and Ms Hyles contravened the FW Act approximately 400 times, and ignoring the increased penalties that apply to contraventions that occurred after 26 December 2012, the total maximum penalties SOS Nursing would be liable to pay is around $13,200,000, and the total penalties Ms Hyles would be liable to pay is around $2,640,000.
I cannot accept, however, that these amounts reflect the maximum penalties I must take into account when assessing the penalties for SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement. If s.557(1) applied to SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement after 19 May 2011, the contraventions would have been treated as constituting one contravention, just as the contraventions before 19 May 2011 were required to be treated as one contravention, and would have exposed SOS Nursing and Ms Hyles to maximum penalties of $33,000 and $6,600 respectively. It is difficult to accept that it was Parliament’s intention that a course of conduct that, but for the operation of s.557(3) of the FW Act, would attract maximum penalties of $33,000 and $6,600 (and, after 26 December 2012, $51,000 and $10,200) would, where s.557(3) did apply, attract maximum penalties many times greater than these penalties – in the case before me, at least $13,200,000 and $2,640,000 – and that a court, when assessing penalties in those circumstances must take into account as the maximum pecuniary penalty the larger penalties.
What amount, then, should I treat as the maximum pecuniary penalty that would be payable by SOS Nursing and Ms Hyles when I assess the penalties they should pay? In my opinion, the appropriate maximum amount should be the pecuniary penalty for which SOS Nursing and Ms Hyles would have been liable to pay on the assumption that s.557(1) of the FW Act applied to their conduct after 19 May 2011. It is the best, if it is not in fact the only, guide to what Parliament can be taken to have regarded as being the appropriate pecuniary penalty that should be imposed on a person who commits two or more contraventions that arise out of a course of conduct.
It could be said that this approach leaves s.557(3) of the FW Act with no work to do. That, however, would not be correct. Subsection 557(3) prevents – and this may well be its principal purpose – a person who has engaged in contraventions to which s.557(1) of the FW Act applies from being immune to the imposition of a pecuniary penalty if, after being penalised for those contraventions, the person continues to engage in the same course of conduct out of which the earlier contraventions arose. That may be illustrated by the circumstances of this case. SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement were undertaken throughout the life of the SOS Agreement – from 3 August 2007 to 31 July 2013. But for s.557(3) of the FW Act, s.557(1) would require that this course of conduct be treated as one contravention. Without s.557(3) of the FW Act, SOS Nursing’s contraventions of the SOS Agreement after 19 May 2011 would be taken to constitute one contravention for which the Court on 19 May 2011 would have already imposed a pecuniary penalty; and having been penalised for that one contravention, SOS Nursing would not have been liable to be penalised for its conduct after 19 May 2011. Subsection 557(3), however, avoids such absurdity from arising.
There is one final question I must consider. What is the maximum penalty that I should bear in mind when assessing the contravening conduct of SOS Nursing and Ms Hyles? That question arises because for approximately three quarters of the period over which the contravening conduct occurred (11 May 2011 to 26 December 2012), the value of the penalty unit was $110, and for the last quarter of the period during which the contravening conduct occurred (27 December 2012 to 31 July 2013), the value of the penalty unit was $170. The maximum penalty that should be born in mind, therefore, should reflect both values and the periods of the contravention for which those values applied. That can be done by averaging. That will result in the penalty unit having an average value of $125.[109] The maximum penalty, therefore, that I should bear in mind based on this average penalty should be $37,500 for SOS Nursing and $7,500 for Ms Hyles.
[109] (110 + 110+ 110 + 170)/4 = $125
I now turn to consider the factors that are or may be relevant to the assessment of pecuniary penalties for SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement. I will not differentiate between the positions of SOS Nursing and Ms Hyles. That is so because, on the evidence before me, Ms Hyles was the directing mind of SOS Nursing.
Nature and gravity of contraventions
There are a number of matters to note. First, the contraventions in question occurred over an extended period of time – from 19 May 2011 to 31 July 2013 – and occurred with regularity. Second, SOS Nursing and Ms Hyles continued to engage in the contravening conduct after 14 April 2011 when this Court held that SOS Nursing was liable under the SOS Agreement to pay amounts for travel time, and after the Court had imposed a pecuniary penalty on SOS Nursing and Ms Hyles, and after Ms Hyles understood that the Court held that SOS Nursing was liable under the SOS Agreement to pay for travel time. Third, nine of the Nurses were affected by the contraventions. None of the underpayments to those Nurses can be regarded as trifling. All these are matters that merit the imposition of a penalty.
SOS and Ms Hyles submit they relied and acted on legal advice. It is not clear, however, on what legal advice Ms Hyles relied. I have referred to the legal advice Ms Hyles says she received from a barrister after the Federal Court handed down its decision in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd on 9 October 2009.[110] The barrister advised, among other things, that “the collective agreement has been approved with the travel clause where staff were only paid once they had travelled 50 kilometres to their first job”.[111] It appears that Ms Hyles understood that to be advice to the effect that SOS Nursing did not have to pay for travel time. If that is the sum total of the legal advice Ms Hyles received on the question, it was unreasonable for her to rely on it. The advice was unclear, and it was not supported by any form of reasoning.
[110] [2009] FCA 1147
[111] Affidavit of R D Hyles, 09.09.14, [46]
Even if, however, it was reasonable for Ms Hyles to rely on the barrister’s advice at the time she received it, it was unreasonable for her to rely on it after 12 April 2011 when this Court concluded SOS Nursing was liable to pay to the applicant nurse in that case amounts that reflected travel time. As I have noted earlier in these reasons, Ms Hyles accepted she understood the effect of this Court’s decision was that SOS Nursing was liable under the SOS Agreement to pay for travel time.
Ms Hyles gave evidence – in re-examination – of the legal advice she says she received from Mr Baroni after 12 April 2011 when the Court handed down its decision. Ms Hyles said that Mr Baroni advised that SOS Nursing should appeal the Court’s decision and that, until such time as that appeal was determined, SOS Nursing “could continue to use our agreement the way we interpreted it”.[112] I have doubts about this evidence. SOS Nursing did not appeal against the Court’s orders of 19 May 2011 that related to SOS Nursing’s contraventions of the SOS Agreement. It is doubtful, therefore, that Ms Hyles received advice that SOS Nursing should appeal the Court’s orders in relation to travel time.
[112] T44.30
Even so, assuming Ms Hyles received advice to that effect, and she acted on it, it was not reasonable for her not to pay travel time on the basis of that legal advice. Ms Hyles ought to have known that the legal advice was simply that – advice – and that the Association had an opposing view about SOS Nursing’s obligations to pay travel time. Ms Hyles also ought to have known that the opposing view of the Association had considerable merit because this Court agreed with that view; and also because SOS Nursing did not appeal against the Court’s orders relating to travel time. By not making travel time payments to the Nurses, Ms Hyles and, through her, SOS Nursing, took the risk that they would continue to contravene the FW Act, and, to that extent, at the very least could be said to have acted recklessly.
Similar previous conduct
SOS Nursing and Ms Hyles engaged in similar conduct as the contravening conduct with which these reasons are concerned. That previous conduct occurred from August 2007 until 19 May 2011. SOS Nursing and Ms Hyles engaged in that conduct in circumstances where by no later than November 2007 – when the Association informed SOS Nursing it was breaching the SOS Agreement by not making travel time payments – SOS Nursing was on notice that by not making travel time payments it may have been in breach of the SOS Agreement.
Size of business
The size of a business that contravenes the FW Act is relevant because the smaller the business, the lesser would be the capacity of the business, and the persons who conduct it, to be in a position to understand and comply with what sometimes may be complicated provisions of the FW Act. That consideration, however, does not apply in the circumstances of this case. From the outset of the period for which SOS Nursing engaged in the contravening conduct with which these reasons are concerned, it had the benefit of a decision of this Court which SOS Nursing and Ms Hyles knew was to the effect that SOS Nursing’s failure to make travel time payments constituted a contravention of the SOS Agreement.
Corrective action
SOS Nursing and Ms Hyles also rely on SOS Nursing having paid to the Nurses the amounts they ought to have been paid for travel time. Although SOS Nursing’s making these payments amounted only to SOS Nursing complying with its legal obligations, I nevertheless consider it to be a factor that weighs in favour of SOS Nursing and Ms Hyles.
Contrition
The Association submit there is no evidence of contrition. To a large degree I agree. SOS Nursing and Ms Hyles admitted their contraventions late in the proceedings and after the Association had prepared and filed its evidence. Nevertheless, I must recognise and give weight to SOS Nursing and Ms Hyles having admitted the contraventions, thus avoiding the costs of a contested hearing on liability.
The Association also points to the absence of evidence which shows that SOS Nursing has taken steps to make good underpayments made to other employees. This last submission assumes SOS Nursing has contravened the SOS Agreement in relation to other employees. I am not prepared to make any such finding.
Deterrence
The pecuniary penalties that I should impose should reflect specific deterrence in the case of Ms Hyles. Ms Hyles engaged in the contravening conduct even after this Court imposed a pecuniary penalty on her in relation to her involvement in SOS Nursing’s previous failure to make travel time payments. Ms Hyles’ having continued to engage in contravening conduct after 19 May 2011 indicates that the pecuniary penalty the Court imposed on Ms Hyles on 19 May 2011 did not act as a deterrent, and the element of the pecuniary penalty for the contraventions before me should, therefore, reflect specific deterrence.
The pecuniary penalty should also reflect general deterrence. It should signal to other employers that it is inappropriate for an employer to pursue a course of conduct for which there are at the very least good grounds for believing the employer may be in contravention of the FW Act, even where the conduct is undertaken in reliance on legal advice.
Amount of pecuniary penalty
All but two of the matters I have considered point to my imposing a pecuniary penalty at the upper end of what I have found to be the maximum penalties for SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement. I have been particularly impressed by the systematic failure by SOS Nursing to comply with the SOS Agreement throughout the life of that agreement in the face not only of views firmly expressed by the Association by no later than November 2007 that SOS Nursing was not complying with the SOS Agreement, but, more importantly, but also in the face of a decision of this Court. The matters that weigh in favour of SOS Nursing and Ms Hyles is SOS Nursing having made good the underpayments to the Nurses, and SOS Nursing and Ms Hyles having admitted their contraventions.
In my opinion, the appropriate pecuniary penalties that should be imposed on SOS Nursing and Ms Hyles for their contraventions of the SOS Agreement, viewed alone, would be $30,000 for SOS Nursing, and $6,000 for Ms Hyles.
Assessment of penalties for contraventions of s.345
I first consider the contravention committed by SOS Nursing making the representation contained in its letter dated 4 August 2011.
Representation made in letter dated 4 August 2011
The representation was to the effect that travel time pay was reflected in the hourly rate specified in the SOS Agreement. There are a number of factors that bear on the nature and gravity of Ms Hyles and, through her, SOS Nursing making that representation.
First, the representation was incorrect. Second, at the time the representation was made, this Court, in the 12 April 2011 Judgment, arrived at a conclusion that was inconsistent with the representation. Third, Ms Hyles knew that in the 12 April 2011 Judgment the Court rejected the correctness of the representation. Fourth, the representation was addressed to all employees of SOS Nursing, although the evidence does not permit me to infer the number of employees who received or read the letter.
Ms Hyles and SOS Nursing submit the representation was made after Mr Baroni settled the letter that contained the representation. In the circumstances of this case, that carries no weight. That Mr Baroni settled the letter does not alter the fact that Ms Hyles knew the representation that was conveyed by the letter was inconsistent with the findings made in the 12 April 2011 Judgment. At best, Ms Hyles’ reliance on Mr Baroni’s settling the letter manifested an unthinking and uncritical attitude to legal advice. It also reflected an unwillingness or inability on the part of Ms Hyles to attempt to understand what her and SOS Nursing’s obligations were under the FW Act.
The pecuniary penalty should reflect specific deterrence. The pecuniary penalty should be set at a level that will deter Ms Hyles from relying unthinkingly and uncritically on advice she receives from lawyers in relation to representations she proposes to make about the workplace rights of employees. The pecuniary penalty should also reflect general deterrence. It should deter all employers from relying unthinkingly on legal advice, and instead encourage them to make it their business to understand their obligations when making statements about the workplace rights of their employees.
There is no evidence that any employee or other person relied on the representation or, if that occurred, anyone suffered any injury. These are matters that weigh in favour of SOS Nursing and Ms Hyles. Also weighing in favour of SOS Nursing and Ms Hyles is that they have admitted the representation was made in breach of s.345 of the FW Act.
Considered alone, the appropriate pecuniary penalties for SOS Nursing’s and Ms Hyles’ contravention of s.345 of the FW Act by sending the letter dated 11 August 2011 are $21,000 for SOS Nursing and $3,500 for Ms Hyles. I must consider, however, whether the making of the representation in the letter dated 4 August 2011 is sufficiently related to SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement to attract the single transaction principle.
In my opinion, there is a significant connection between the contraventions. Both relate to SOS Nursing’s and Ms Hyles’ belief that its employees were not entitled to be paid for travel time. There is a distinction, however. The drafting and sending of the 4 August 2011 letter reflected a deliberate articulation of a position concerning the workplace rights of SOS Nursing employees that was false and misleading, and which Ms Hyles admit she made recklessly.
I propose, therefore, to reduce the amount of the pecuniary penalty I would otherwise impose on SOS Nursing’s and Ms Hyles’ contraventions of s.345 of the FW Act because of their connection with their contraventions of the SOS Agreement. I would reduce the penalty to $18,000 for SOS Nursing and $2,500 for Ms Hyles
Representations made in letter dated 4 February 2013
The representation contained in the letter dated 4 February 2013 was to the same effect as the representation contained in the letter dated 4 August 2011. The letter, however, was composed and sent in circumstances which differed from those in which the letter of 4 August 2011 was sent. Mr Baroni initiated the drafting and sending of the letter; and an employed solicitor of Mr Baroni drafted the letter. All the other matters to which I have referred in assessing the pecuniary penalty for SOS Nursing’s and Ms Hyles’ contravention of s.345 by sending the letter dated 4 August 2011 apply to SOS Nursing’s and Ms Hyles’ sending of the letter dated 4 February 2013.
Considered alone, therefore, the appropriate penalties for SOS Nursing’s and Ms Hyles’ contravention of s.345 of the FW Act by sending the letter of 4 February 2013 would be the same as the penalties I have concluded would be appropriate to be imposed in relation to the sending of the 4 August 2011 letter. In my opinion, however, both sets of contraventions reflect essentially the same contravention, both in terms of their nature and degree. In those circumstances, I am of the opinion it would be appropriate that there be imposed on each of SOS Nursing and Ms Hyles the one pecuniary penalty for the two contraventions of s.345 of the FW Act, namely, $18,000 and $2,500 respectively.
Overall assessment of pecuniary penalty
I finally consider whether the pecuniary penalties I have considered are appropriate for SOS Nursing’s and Ms Hyles’ contraventions of the SOS Agreement and s.345 of FW Act, when aggregated, reflect the overall wrongdoing of SOS Nursing and Ms Hyles. In my opinion, the penalties I have found to be appropriate, when aggregated, reflect the overall wrongdoing of SOS Nursing and Ms Hyles.
Conclusions and Disposition
SOS Nursing should pay pecuniary penalties in the amount of $48,000; and Ms Hyles should pay pecuniary penalties in the amount of $8,500. I will order, therefore, that Ms Hyles pay pecuniary penalties in the amount of $8,500, and that Ms Hyles pay that amount within 28 days of my so ordering or within such longer period as the Association may agree or the Court may direct.
The Association has submitted that I should order pursuant to s.546(3) of the FW Act that Ms Hyles pay the pecuniary penalty to the Association. I propose to so order, for the reasons the Association has submitted I should make such order.
I do not propose to make any order against SOS Nursing because SOS Nursing is in liquidation. Under s.471B of the Corporations Act 2001 (Cth) no fresh steps in these proceedings may be taken against SOS Nursing without obtaining the leave of “the Court” as defined in s.58AA of that Act. I will, however, reserve to the Association liberty to apply to this Court for an order that SOS Nursing pay pecuniary penalties in the amount of $48,000.
I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 13 August 2015
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