NSW Nurses' Association v SOS Nursing and Home Care Service Pty Ltd
[2011] FMCA 349
•19 May 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NSW NURSES’ ASSOCIATION v SOS NURSING AND HOME CARE SERVICE PTY LTD & ANOR (No.2) | [2011] FMCA 349 |
| INDUSTRIAL LAW – contravention of industrial agreement – whether the agreed penalties to be paid by the respondents pursuant to s.719 of the Workplace Relations Act 1996 (Cth) and the agreed pecuniary penalties to be paid by the respondents pursuant to s.546 of the Fair Work Act 2009 (Cth) are appropriate – whether the pecuniary penalties should be paid to the applicant. |
| Workplace Relations Act 1996 (Cth), ss.3; 718; 719 Fair Work Act 2009 (Cth), ss.3; 539; 546; 557 Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth), Item 2 of Schedule 2; Item 40 of Clause 16(1) of Schedule 16 |
| NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225 Flattery v The Italian Eatery (t/a Zeffirelli's Pizza Restaurant) (2007) 163 IR 14 Williams v Macmahon Mining Services Pty Ltd (No 3) (2010) 195 IR 161 Community and Public Sector Union (CPSU) v Telstra Corp Ltd (2001) 108 IR 228 |
| Applicant: | NSW NURSES’ASSOCIATION |
| First Respondent: | SOS NURSING AND HOME CARE SERVICE PTY LTD (ACN 050 096 350) |
| Second Respondent: | ROSEMARY HYLES |
| File Number: | SYG 868 of 2010 |
| Judgment of: | Emmett FM |
| Hearing date: | 13 May 2011 |
| Date of Last Submission: | 13 May 2011 |
| Delivered at: | Sydney |
| Delivered on: | 19 May 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr. M. Gibian |
| Solicitors for the Applicant: | Mr. C. Blair, NSW Nurses’ Association |
| Counsel for the Respondents: | Mr. S. Coleman |
| Solicitors for the Respondents: | Mr. B. Moylan, Webb & Boland Lawyers |
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 868 of 2010
| NSW NURSES’ ASSOCIATION |
Applicant
And
| SOS NURSING AND HOME CARE SERVICE PTY LTD (ACN 050 096 350) |
First Respondent
ROSEMARY HYLES
Second Respondent
REASONS FOR JUDGMENT
Introduction
These reasons address the issue of the appropriateness of pecuniary penalties agreed among the parties arising from the first respondent’s contraventions of an industrial agreement, the SOS Nursing and Homecare Employee Collective Agreement of 2007 (“the SOS Agreement”), pursuant to the decision of this Court in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225. That decision also found that, in accordance with the relevant legislation referred to below, the second respondent was knowingly concerned in the first respondent’s contraventions.
The parties have agreed that it is appropriate that Orders be made that the first respondent pay pecuniary penalties in the amount of $25,000, consisting of $15,000 in respect of Declaration 1 made by the Court on 12 April 2011 in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225; and $10,000 in respect of Declaration 2 made on 12 April 2011 in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225.
The parties have further agreed that pecuniary penalties in the amount of $4,000 be paid by the second respondent, consisting of $2,000 in respect of each of the contraventions as disclosed in the Declarations mentioned above. The parties have further agreed that the total of the pecuniary penalties of $29,000 be paid to the applicant.
Agreed facts
In support of their agreement, the parties provided the Court with an agreed statement of facts. I make findings in accordance with the statement of facts as follows:
(i)The applicant is an industrial organisation of employees for the purposes of the Workplace Relations Act 1996 (Cth) (“the WRA”) and the Fair Work Act 2009 (Cth) (“the FWA”) which represents the industrial and professional interests of nurses in New South Wales.
(ii)SOS Nursing and Home Care Service Pty Ltd, the first respondent, is a corporation engaged in providing nursing and home care support services in North West NSW, the New England region, the Central Coast and Southern Queensland. Rosemary Hyles, the second respondent, is and was at all material times the founder and Managing Director of the first respondent.
(iii)The first respondent has in excess of 100 employees engaged to perform nursing related care and incidental services. Ms Helen Cornish, a member of the applicant, was employed by the first respondent as a casually employed registered nurse from 1993 until January 2011.
(iv)The SOS Agreement is a collective agreement made under the WRA which came into operation from 3 August 2007 and applied to Ms Cornish’s employment.
(v)After 1 July 2009, the SOS Agreement continued in existence as an agreement-based transitional instrument pursuant to Schedule 2, Item 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth).
(vi)The work of Ms Helen Cornish involved travelling by car to visit clients in their homes and the provision of nursing and home care services to clients. Ms Cornish’s work patterns typically involved consecutive and continuous visits to the homes of clients.
(vii)The first respondent paid Ms Helen Cornish at her hourly rate of pay only for face to face time with clients and refused or otherwise failed to pay Ms Cornish with respect to time spent travelling between the homes of clients, except insofar as she may have travelled more than 50 kilometres to visit a client.
(viii)The original hourly rates of pay prescribed by the SOS Agreement were increased pursuant to clause 11.2 of the Agreement in March 2008, and increased again in March 2009. From 7 December 2009, the first respondent unilaterally reduced hourly rates of pay it paid Ms Cornish and other employees.
(ix)The Court has found that that the first respondent contravened the SOS Agreement in two respects:
a.The first respondent contravened clauses 7 and 11 of the SOS Agreement by failing to pay its employee, Ms Helen Cornish, in accordance with the hourly rates of pay for time spent travelling between visiting clients in the period from 3 August 2007 to 1 July 2010.
b.
The first respondent contravened clause 11 of the SOS Agreement by failing to pay its employee, Ms Helen Cornish, in accordance with the hourly rates of pay determined in accordance with clause 11.2 of the SOS Agreement in the period from 7 December 2009 to
1 July 2010.
(x)The Court further found that the second respondent was involved in the contraventions of the first respondent for the purposes of s.728(1) of the WRA and s.550(1) of the FWA.
(xi)The contraventions by the first respondent resulted in underpayments of wages to Ms Helen Cornish of $8,000 with respect to the failure to pay for travel time in the period between 3 August 2007 and 1 July 2010 and $373.06 with respect to the reduction in the hourly rates of pay after 7 December 2009.
(xii)Ms Cornish’s gross earnings in her employment with the first respondent for the period from 1 July 2007 to 30 June 2010 were approximately $33,000 in total. As such, the underpayment amount of $8,373.06 constitutes approximately 25% of her gross earnings over that period.
(xiii)For the period from 3 August 2007 to 1 July 2009, the contraventions constituted contraventions for which penalties may be imposed under s.719(1) of the WRA. For the period from 1 July 2009 to 1 July 2010, the contraventions constituted contraventions for which pecuniary penalties may be imposed under s.546(1) of the FWA.
(xiv)The relevant maximum penalties are as follows:
a.Section 719(4) of the WRA provides that the maximum penalty for a breach of an applicable provision (including a collective agreement) is 60 penalty units ($6,600) for an individual and 300 penalty units ($33,000) for a body corporate.
b.Section 546(2) of the FWA (together with Item 40 of Clause 16(1) of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)) provides that the maximum penalty for a contravention of a civil remedy provision is 60 penalty units ($6,600) for an individual and 5 times as much or 300 penalty units ($33,000) for a body corporate.
(xv)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.
(xvi)
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.
(xvii)As such, the maximum penalties that are applicable in the present matter are as follows:
a.With respect to the failure to pay travel time, $33,000 for the first respondent and $6,600 for the second respondent.
b.With respect to the reduction in the rate of pay after 7 December 2009, $33,000 for the first respondent and $6,600 for the second respondent.
(xviii)The parties have agreed upon penalties which they jointly ask the Court to impose with respect to the contraventions. The parties submit that the following penalties are appropriate in the circumstances:
a.A pecuniary penalty of $25,000 with respect to the first respondent.
1. For the contravention in Declaration 1 – $15,000
2. For the contravention in Declaration 2 – $10,000
b.A penalty of $4,000 with respect to the second respondent, the sum of $2,000 in each case.
(xix)Both contraventions of the SOS Agreement involved the failure by the first respondent to pay Ms Helen Cornish the periodic rate of pay prescribed by the SOS Agreement. The contraventions extended over a period of time between 3 August 2007 and
1 July 2010 in respect of the travel time contravention and from
7 December 2009 to 1 July 2010 in respect of the underpayment contravention.(xx)Between 2007 and 2010, the applicant wrote to the first respondent on several occasions alleging that the first respondent was contravening the SOS Agreement by failing to pay employees with respect to travel time. This included letters dated 15 November 2007, 14 February 2008, 5 September 2008, 7 October 2009 and 4 February 2010.
(xxi)Following the decision to reduce rates of pay which was announced in or around September 2009, the applicant wrote directly to the second respondent by letter dated 7 October 2009 contending that there was no right to reduce the rates of pay and that the proposed reduction in rates of pay was unlawful and subsequently lodged a dispute with the Industrial Relations Commission of NSW raising the issues in relation to payment of travel time and underpayment of wages.
(xxii)On 9 October 2009, Perram J in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd (2009) 190 IR 112 found that the first respondent was required to pay its employees travel time under the Nurses Other than in Hospitals & c. (State) Award.
(xxiii)In the proceeding before this Court, the Court found that the contraventions occurred with the involvement and knowledge of the most senior management of the first respondent, including the second respondent, who was the founder and at all times managing director of the first respondent. The Court found that the second respondent was involved in the contravention and had knowledge of and was the decision-maker in relation to the conduct constituting the contraventions.
(xxiv)The first respondent has previously been found to have contravened the Nurses Other than in Hospitals & c. (State) Award: see Roma Marshall v Havenwax Pty Ltd t/as SOS Visiting Nursing Home Service Home Help and Cleaning Agency (Chief Industrial Magistrates Court, Matter No 58596/04, 5 August 2005), on one prior occasion six years ago.
Relevant legal principles
The parties agree on the relevant legal principles to which the Court should have regard. They are set out in the written submissions on penalty of Mr Gibian, counsel for the applicant, and are as follows:
AGREED PENALTY
5. In circumstances in which the parties have agreed upon a penalty which they ask the Court to impose, the approach to be adopted was explained by Jessup J in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [129] as follows:
“In Mobil Oil [2004] ATPR 41-993, the Full Court considered NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and extracted therefrom a number of propositions (Mobil Oil [2004] ATPR 41-993 at [53]), one of which was that set out in [6] of the reasons the trial Judge in the present matter, namely:
Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.
Neither in NW Frozen Foods 71 FCR 285 nor in Mobil Oil [2004] ATPR 41-993 did the Full Court expand on the meaning of the phrase "permissible range". I consider that the phrase refers to a range which would be permitted by the Court, that is, a range within which the penalty is neither manifestly inadequate nor manifestly excessive.”
See also, for example, Standen v Feehan (No 2) (2008) 177 IR 276 at [10]-[12]; Construction, Forestry, Mining and Energy Union v Merhis Constructions Pty Ltd (2010) 199 IR 308 at [6].
6. The question of the appropriate penalty to be imposed is ultimately a matter for the Court. Where, however, the parties jointly propose a particular penalty, the Court will generally accept the approach of the parties if satisfied that the proposed penalty is within the permissible range in that it is neither manifestly inadequate or manifestly excessive.
APPROACH TO THE ASSESSMENT OF PENALTY
7. In the assessment of penalties under the WR Act or FW Act, guidance is provided by a list of factors identified in the authorities. A convenient checklist of the factors that the court might consider in determining penalty include the matters that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [26]-[59] and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14 at [14]. That list is as follows:
(a) The nature and extent of the conduct which led to the breaches.
(b) The circumstances in which that conduct took place.
(c) The nature and extent of any loss or damage sustained as a result of the breaches.
(d) Whether there had been similar previous conduct by the respondent.
(e) Whether the breaches were properly distinct or arose out of the one course of conduct.
(f) The size of the business enterprise involved.
(g) Whether or not the breaches were deliberate.
(h) Whether senior management was involved in the breaches.
(i) Whether the party committing the breach had exhibited contrition.
(j) Whether the party committing the breach had taken corrective action.
(k) Whether the party committing the breach had cooperated with the enforcement authorities;
(l) The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
(m) The need for specific and general deterrence.
8. Whilst checklists of this kind can be useful, there are no mandatory statutory criteria and a checklist should not be used as a rigid catalogue of matters for attention: A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 at [6]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [91]. The task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions occurred and the need to sustain public confidence in the statutory regime: Australian Ophthalmic Supplies at [91].
9. The courts have repeatedly emphasised that penalties for contraventions of industrial instruments must reflect the importance that the Parliament has placed upon compliance with industrial laws and instruments and the need for general deterrence: Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [37]. The objects of both the WR Act and the FW Act include the object of ensuring compliance with minimum standards and industrial instruments: WR Act, s 3(c) and (f) and FW Act, s 3(b).
10. The Parliament has increased the maximum penalties applicable to contraventions of industrial instruments and the Courts have made clear that the imposition of penalties in industrial law proceedings is no longer to be approached with a light hand: Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462 at [72]; Commonwealth Bank of Australia & Anor v Finance Sector Union (2007) 157 FCR 329 at [192]; Fair Work Ombudsman v Golden Maple Pty Ltd (2009) 186 IR 211 at [57].
11. In Fair Work Ombudsman v Golden Maple Pty Ltd (2009) 186 IR 211, for example, Lucev FM said (at [65]-[66]):
“65 Since the introduction of major reforms to the WR Act in 2005, the courts have put more emphasis on the importance of employers complying with their obligations, including minimum standards of employment, and being responsible for their conduct, in the context of a more devolved and deregulated workplace relations environment under the provisions of the WR Act. The maximum amount of penalties has increased significantly.
66 In the context of the objects of the WR Act requiring compliance with minimum standards and facilitating enforcement of the WR Act and industrial instruments, a long period of deliberate (but not defiant) contravention involving dozens of employees by Golden Maple is serious, because it involved an undermining of the statutory objects and purposes of the WR Act, and particularly s 3(c) and (f)(i). In that context it is conduct that in this case warrants a meaningful penalty. The conduct of CityTeam and
Mr Chia, for a lesser number of contraventions and over a lesser period still warrants a meaningful penalty in this context.”
12. The need for general deterrence is particularly significant in determining penalty in circumstances in which the employees involved or employees generally in a particular industry are potentially vulnerable employees, particularly those who are young, low paid, migrants or with poor English or there is a poor history of compliance: Flattery v The Italian Eatery (t/a Zeffirelli's Pizza Restaurant) (2007) 163 IR 14 at [66]; Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [37]; Fair Work Ombudsman v Golden Maple Pty Ltd (2009) 186 IR 211 at [59].”
Effect of relevant pecuniary penalty provisions
In the case before this Court, penalties may be imposed pursuant to s.719(1) of the WRA in respect of contraventions for the period
3 August 2007 to 1 July 2009, and pecuniary penalties may be imposed pursuant to s.546(1) of the FWA in respect of contraventions for the period from 1 July 2009 to 1 July 2010.
Section 719(4) of the WRA provides, relevantly, that the maximum penalty for breach of a collective agreement, such as the SOS Agreement, is $6,600 for an individual and $33,000 for a body corporate. The same maximum for pecuniary penalties are provided in s.546(2) of the FWA (together with Item 40 of Clause 16(1) of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth)).
Section 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. To the extent that I have found that there were a number of instances of contraventions of the SOS Agreement, I am satisfied that they were committed by the same person and arose out of a single course of conduct.
In the circumstances, I am satisfied that the maximum pecuniary penalties in respect of the contraventions arising from the failure by the first respondent to pay travel time to Ms Cornish are $33,000 for the first respondent and $6,600 for the second respondent.
I am also satisfied that the maximum pecuniary penalties in respect of the contraventions arising from the reduction of Ms Cornish’s rate of pay after 7 December 2009 are $33,000 for the first respondent and $6,600 for the second respondent.
Issues relevant to pecuniary penalties
Both parties submitted that the pecuniary penalties agreed upon have taken account of the notions of specific deterrence and general deterrence required to ensure compliance with industrial agreements. Both parties submit that the agreed penalties are significant and reflect the seriousness of the breaches. I agree with those submissions and the necessity for those matters to be reflected in any pecuniary penalty ordered.
Both parties further submitted, and I accept, that the matters referred to in counsel for the applicant’s written submissions are matters to which the Court should properly have regard and arise from the Court’s findings in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225. Those submissions are, relevantly, as follows:
“Appropriate Penalty
18. The applicant submits that the agreed penalties of (in total) $25,000 for the first respondent and $4,000 for the second respondent constitute an appropriate penalty having regard to the considerations including the following:
…
(b) Whilst (with respect to Ms Cornish) the amounts of the underpayments may not appear to be enormous, the amount of the underpayment must be seen in the context of Ms Cornish’s overall earnings. Ms Cornish’s gross earnings for the period from 1 July 2007 to 30 June 2010 were approximately $33,000: see Affidavit of Amanda Hawkins, 26 November 2010, Exhibit AH17. As such, the underpayment amount of $8,373.06 constitutes approximately 25% of her earnings over that period.
(c) The failure to pay Ms Cornish for travel time continued for a very substantial period of time, notwithstanding the applicant repeatedly informing the respondents that it regarded the failure as a contravention of the SOS Agreement. The respondents were also on notice as a result of the decision of Perram J in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd (2009) 190 IR 112 that there must have been real doubt as to the lawfulness of refusing to pay employees to travel time.
(d) The contraventions occurred with the involvement and knowledge of the most senior management of the first respondent, specifically the second respondent, who was the founder and at all times managing director of the first respondent. As found by the Court, the second respondent was involved in the contraventions and had knowledge of and was the decision-maker in relation to the conduct amounting to contraventions of the SOS Agreement.
(e) The first respondent operates a private nursing and care service covering North West NSW, the New England region, Central Coast and Southern Queensland as well as respite care homes in Glen Innes and Tamworth. The first respondent employs over 100 nursing employees: see Affidavit of Christopher Blair,
4 August 2010, para 5.”
The applicant further submitted that there was no evidence of any contrition by the respondents and that the respondents did not cooperate with the applicant in securing the enforcement of the SOS Agreement despite repeated attempts. Counsel for the respondents,
Mr Coleman, sought to qualify that submission.
Mr Coleman submitted that the second respondent had cooperated in confining the issues before this Court, had agreed the amount of compensatory damages to be paid to Ms Cornish prior to the commencement of the hearing in the event the alleged contraventions were found to have occurred. He further submitted that, following the Court’s Orders made on 12 April 2011 and the publishing of the Court’s reasons, the respondents agreed the amount of pecuniary penalties to be paid by each of the respondents to the applicant.
Whilst not necessarily evidence of contrition on the part of the respondents, in considering the appropriateness of the agreed pecuniary penalties, I do have regard to the cooperative manner in which the respondents have participated before this Court and the efforts they have made to confine the issues and agree damages, including pecuniary penalties, in the event that the Court found the contraventions proved.
I note the prior contravention by the first respondent of an industrial instrument 6 years ago referred to in the agreed statement of facts (see Roma Marshall v Havenwax Pty Ltd t/as SOS Visiting Nursing Home Service Home Help and Clearing Agency (Chief Industrial Magistrates Court, Matter No 58596/04, August 2005)) and I accept that it is a relevant consideration. However, there is no evidence before me of the circumstances of that contravention. It was also almost 6 years ago.
In the circumstances, whilst I place some weight on the past contravention, such weight is minimal having regard to the time elapsed and the dearth of further evidence about the nature of the contravention. At least, it is relevant to the issue of specific deterrence in considering the appropriate pecuniary penalty.
I also have regard to the fact that the first respondent’s employees and the applicant did make several attempts to raise their concerns about the failure of the first respondent to pay travel time to its nurses.
I also have regard to the complexity of the industrial legislation and the various Acts that applied over the relevant periods of the contraventions.
In addition, I have regard to the delay of more than 18 months by the Workplace Authority Director in notifying the first respondent of its determination of the fairness test as it applied to the SOS Agreement.
I am satisfied on the evidence and material before me that the conduct of the respondents in maintaining their understanding of the terms of the SOS Agreement was not intended to be a deliberate flouting of its obligations under the SOS Agreement. I accept that there was a genuine dispute between Ms Cornish and the respondents as to her entitlements under the SOS Agreement and that the second respondent’s conduct did not involve a deliberate intention to deal with Ms Cornish in contravention of the SOS Agreement (see Dowling v Kirk [2007] FMCA 2106 at [33] per Cameron FM).
However, in assessing the seriousness of the respondents’ conduct and the appropriate pecuniary penalties, I do have regard to the statutory purposes of the WRA and the FWA. The objects of the WRA as set out in s.3 of the WRA are, relevantly, as follows:
“3 Principal object
The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by:
(c) providing an economically sustainable safety net of minimum wages and conditions for those whose employment is regulated by this Act; and
…
(f) ensuring compliance with minimum standards, industrial instruments and bargaining processes by providing effective means for the investigation and enforcement of:
(i) employee entitlements; and
(ii) the rights and obligations of employers and employees, and their organisations;”
Similarly, the objects of the FWA as set out in s.3 of the FWA, are relevantly, as follows:
“3 Object of this Act
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
…
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;”
In light of the objects of the WRA and the FWA in requiring compliance with minimum standards and enforcement of employee entitlements as reflected in industrial instruments, I accept that a period of deliberate, but not defiant, contraventions was serious because it involves undermining those statutory objects and purpose.
I do not accept counsel for the respondents’ written submission that there is no pressing need in this case for general deterrence. The objects of the WRA and the FWA clearly require that the need for general deterrence be taken into account in the imposition of any pecuniary penalty (see Williams v Macmahon Mining Services Pty Ltd (No 3) (2010) 195 IR 161 at 173-174 per Lucev FM).
In the circumstances, and having particular regard to the need for general deterrence to ensure that employers comply with the terms of the industrial agreements into which they enter, I am satisfied that the agreed pecuniary penalties in respect of the contraventions by each of the respondents is within the proper range and is otherwise appropriate. I am further satisfied that the proposed pecuniary penalties have taken proper account of the need for specific and general deterrence.
Accordingly, Orders should be made requiring the first respondent to pay pecuniary penalties of $15,000 for its contraventions of clauses 7 and 11 of the SOS Agreement by reason of its failure to pay Ms Cornish in accordance with her hourly rate of pay for time spent travelling between clients; and $10,000 for its contravention of the SOS Agreement in failing to pay Ms Cornish the applicable hourly rate of pay pursuant to clause 11.2 of the SOS Agreement from 7 December 2009.
Orders ought also to be made requiring the second respondent to pay pecuniary penalties of $2,000 in respect of each of the contraventions referred to above.
Whether pecuniary penalties should be paid to the applicant
In relation to the issue as to whom those penalties should be paid, I note the parties’ agreement that such payment should be to the applicant.
I accept that the applicant brought this proceeding on behalf of its members in accordance with its statutory entitlement. The applicant is a registered union and is recognised by the relevant legislation as having a special interest in the enforcement of industrial agreements affecting its members. It is an organisation of employees and has standing to bring this proceeding on behalf of its member pursuant to s.718(1) Item 4C and ss.718(6)(f) and (g) of the WRA. Section 539(2) of the FWA provides for certain persons, such as the applicant, to apply to courts for Orders in relation to contraventions of civil remedy provisions.
The hearing involved 4 days as well as several directions hearings and preparation. I also note that the parties attended Court annexed mediation. I note that there has been no Order made as to costs in respect of this proceeding and none is sought by the applicant.
In the circumstances, I am satisfied that the agreed pecuniary penalties would not give rise to a “windfall” to the applicant in the sense referred to by Finkelstein J in Community and Public Sector Union (CPSU) v Telstra Corp Ltd (2001) 108 IR 228 at [22]-[28] and referred to by Branson and Lander JJ in Plancor Pty Ltd v Liquor, Hospitality, and Miscellaneous Union (2008) 171 FCR 357 (“Plancor”) at 377-379, particularly at [69] as follows:
“69. In our view, neither the total penalty actually imposed in this case, nor the amount of the penalty likely to be imposed on reconsideration of that penalty, is sufficient to give rise to concerns about a “windfall”. We understand a ‘windfall’ in this context to involve an unexpected and relatively large financial benefit. Within an organisation such as the respondent, the true cost of bringing a legal proceeding is likely to prove substantial if the time of all staff involved is appropriately accounted for and other costs, possibly including overheads, identified. Before a penalty could constitute a ‘windfall’ in the relevant sense it would need to exceed the total amount of that cost by a significant margin. For this reason, and because we did not hear full argument on the appropriateness of the observation of Finkelstein J in the CPSU case, we do not consider that we should express a concluded view on whether, in a case in which it would otherwise be appropriate for “the usual order” to be made, such an order should not be made if it would be likely to result in a windfall to the applicant.”
In the circumstances, I accept the applicant’s submission that the applicant brought this proceeding seeking compliance with an industrial instrument made under the WRA and the FWA.
I am satisfied that the applicant is the proper recipient of the pecuniary penalties as part of a system of recognising particular interests in certain classes of persons in upholding the integrity of industrial agreements, such as the SOS Agreement (see Plancor at 371 per Gray J).
Accordingly, I am satisfied that the pecuniary penalties to be paid by the respondents should be paid to the applicant.
I further note the agreement of the parties that the penalties be paid in three instalments over a period of three months with the first instalment to be paid within one month of the date of the Court’s Order, the second instalment within two months, and the third instalment within three months.
Conclusion
The pecuniary penalties agreed by the parties are appropriate to be imposed on the respondents as follows:
The first respondent pay pecuniary penalties in the amount of $25,000, consisting of $15,000 in respect of Declaration 1 made by this Court on 12 April 2011 in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225; and $10,000 in respect of Declaration 2 made by this Court on 12 April 2011 in NSW Nurses’ Association v SOS Nursing and Home Care Service Pty Ltd & Anor [2011] FMCA 225.
The second respondent pay pecuniary penalties in the amount of $4,000, consisting of $2,000 in respect of each of the contraventions arising from the Declarations made by this Court on 12 April 2011 mentioned above.
The pecuniary penalties to be paid by the respondents, totalling $29,000, should be paid to the applicant.
The pecuniary penalties be paid in three instalments over a period of three months with the first instalment to be paid within one month of the date of the Court’s Order, the second instalment within two months, and the third instalment within three months.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Emmett FM
Deputy Associate:
Date: 19 May 2011
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