Paul Scudds (Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia)
[2019] FWC 6465
•27 SEPTEMBER 2019
| [2019] FWC 6465 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.483AA - Application for an order to access non-member records
Paul Scudds (Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia)
(RE2019/821)
COMMISSIONER HAMPTON | ADELAIDE, 27 SEPTEMBER 2019 |
Application for an order to access non-member records – principles discussed and applied – whether access to non-member records necessary for proper conduct of investigation into suspected contravention – nature of suspected contravention determined – not presently satisfied that access required given all of the circumstances – application dismissed.
1. What this decision is about
[1] On 26 August 2019, Mr Paul Scudds of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) applied to the Fair Work Commission (Commission) under s.483AA of the Fair Work Act 2009 (FW Act) for an order to access non-member records. The application concerns records held by Tyrone Electrical Services Pty Ltd (Tyrone or the Employer).
[2] Mr Scudds is an Organiser with the CEPU and holds an entry permit issued by the Commission (RE2018/284). There are no restrictions on this permit. Mr Scudds was, in effect, represented by the CEPU for the purpose of this application.
[3] Section 483AA provides that an entry permit holder may apply to the Commission to seek an Order allowing access to records held by an employer, relating to employees who are not a member of the relevant organisation, that would otherwise not be available to them under the standard right of entry arrangements provided by the FW Act. The Commission may grant such access where, amongst other matters, it is satisfied that making an Order is necessary for the permit holder to properly investigate an alleged contravention of instruments, including an enterprise agreement.
[4] The application is opposed by the Employer.
[5] Preliminary proceedings in this matter were conducted by Anderson DP but the application was assigned to the Commission as presently constituted due to the Deputy President’s unavailability.
[6] This Decision deals with the s.483AA application and related issues.
2. The context for the application
[7] The Employer is an electrical contractor primarily operating in the building and construction industry. This work is tender-based and workflows fluctuate depending on the award of contracts. The Employer presently employs approximately 64 onsite employees, though staff numbers vary significantly depending on the number of current contracts. Approximately 23% of onsite employees are casual employees. 1
[8] The Tyrone Electrical Services Pty Ltd Enterprise Agreement 2015 2 (the Agreement) applies to the Employer and its employees. The Agreement was approved by the Commission in December 2015, with a nominal expiry date of 23 December 2019.3 The CEPU is covered by the Agreement and continues to have members amongst the group of employees to whom that instrument applies.
[9] Prior to this application being lodged, the CEPU applied to the Commission 4 for a majority support determination (MSD) under s.236 of the FW Act. In that application, the CEPU contended that a majority of Tyrone’s employees covered by the Agreement wanted to begin bargaining for a new enterprise agreement with the Employer. The Commission,5 with the consent of the parties, compared a list of employees supporting the bargaining supplied on a confidential basis by the CEPU with a total list of relevant employees supplied on a confidential basis by the Employer. The parties were advised by the Commission of the results of that comparison. The MSD application was discontinued by the CEPU in August this year. No decision was made by the Commission concerning the MSD application.
[10] The application now before me was filed by Mr Scudds on the grounds that he suspects the travel allowance provisions of clause 33.4 of the Agreement have been contravened, based on some payslips sighted by the CEPU.
[11] The Order sought by Mr Scudds is in the following terms:
“The CEPU be provided with copies of all records relating to travel allowance payments to employees engaged under the Tyrone Electrical Services Pty Ltd Single Enterprise Agreement 2015 within 30 days of the order being made.” 6 (emphasis in original)
3. Permission for the Employer to be represented
[12] This application was subject to a hearing on 18 September 2019. The employer sought permission to be represented by a Lawyer under s.597 of the FW Act. Mr Scudds (and the CEPU) was represented by Ms Rogers, an Industrial Officer, who opposed the request for permission.
[13] Having heard the parties, I granted permission to the employer and indicated that I would subsequently provide reasons, which I now do.
[14] Section 596 of the FW Act provides:
“(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.
(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:
(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or
(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.
Note: Circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent include the following:
(a) where a person is from a non-English speaking background or has difficulty reading or writing;
(b) where a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee of an industrial association or another person with experience in workplace relations advocacy.
(3) The FWC’s permission is not required for a person to be represented by a lawyer or paid agent in making a written submission under Part 2-3 or 2-6 (which deal with modern awards and minimum wages).
(4) For the purposes of this section, a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent:
(a) is an employee or officer of the person; or
(b) is an employee or officer of:
(i) an organisation; or
(ii) an association of employersthat is not registered under the Registered Organisations Act; or
(iii) a peak council; or
(iv) a bargaining representative;
that is representing the person; or
(c) is a bargaining representative.”
[15] The circumstances contemplated by ss.596(3) and (4) do not apply. Accordingly, the Employer required permission under s.596(2) if it was to be represented by a Lawyer in the hearing of this matter.7
[16] The approach to be taken when considering whether permission to appear should be granted under s.596 was succinctly expressed by the Full Bench in Grabovsky v United Protestant Association of NSW Ltd T/A UPA. 8 The Full Bench in that matter stated:
“[35] Subsection 596(1) provides that a person ‘may’ be represented in a matter before the Commission by a lawyer or paid agent ‘only’ with the permission of the Commission. Subsection 596(2) provides that the Commission may grant permission ‘only if’it is satisfied as to the existence of one of the circumstances set out in s.596(2)(a) to (c). The use of the word ‘may’ makes it clear that a decision about whether to grant permission to be represented is discretionary. But that discretion is only enlivened if the Commission is satisfied as to the existence of one or more of the circumstances set out in s.596(2)(a) to (c).
[36] Even if one of the requirements in s.596(2)(a) to (c) is satisfied that is simply the condition precedent to the exercise of the discretion conferred by s.596(2). The satisfaction of any of the requirements in s.596(2)(a) to (c) does not of itself dictate that the discretion is automatically to be exercised in favour of granting permission.” (references omitted).
[17] In Warrell v Watson, 9Flick J also reinforced that it is apparent from the terms of s.596 of the FW Act that a party in a matter before the Commission must normally appear on their own behalf. That normal position may only be departed from where an application for permission has been made and resolved in accordance with law; namely only where one or other of the requirements imposed by s 596(2) have been taken into account and satisfied.
[18] As a result, in applying the approach set out above, the assessment of whether permission should be granted under s.596 potentially involves a two-step process. The first is consideration as to whether one or more of the criteria in s.596(2) is satisfied. The consideration required by this first step “involves the making of an evaluative judgment akin to the exercise of discretion”. 10 Only where the first step is satisfied, the second step arises, and involves a consideration as to whether in all of the circumstances the discretion created should be exercised in favour of the party seeking permission.11
[19] I determined that the prerequisites of s.596(2)(a) and (b) of the FW Act had been satisfied. Although the general factual context was relatively straightforward, the application of some aspects of s.483AA has not been subject to extensive consideration by the Commission. Further, there was room for legitimate debate about the weight to be given to some of the evidence and I considered that in all of the circumstances the application would be more efficiently dealt with by having the Employer represented. I also considered that given this legal complexity, and the apparent absence of an appropriately experienced internal resource for the employer, it would be unfair not to permit it to be represented in this matter. In terms of discretion, I had regard to all of the circumstances of the matter and determined that it was appropriate to grant the permission sought. In that regard, the fact that Mr Scudds and the CEPU were represented by an experienced and competent Industrial Officer was a significant factor weighing in favour of granting the request.
4. The provisions of the FW Act and the approach to be adopted
[20] Before considering the merits of this application, it is appropriate to set out the relevant provisions of the FW Act and the required approach of the Commission.
[21] The immediately relevant provisions of the FW Act are as follows:
“482 Rights that may be exercised while on premises
Rights that may be exercised while on premises
(1) While on the premises, the permit holder may do the following:
(a) inspect any work, process or object relevant to the suspected contravention;
(b) interview any person about the suspected contravention:
(i) who agrees to be interviewed; and
(ii) whose industrial interests the permit holder’s organisation is entitled to represent;
(c) require the occupier or an affected employer to allow the permit holder to inspect, and make copies of, any record or document (other than a non-member record or document) that is directly relevant to the suspected contravention and that:
(i) is kept on the premises; or
(ii) is accessible from a computer that is kept on the premises.
Note 1: The use or disclosure of information or documents obtained under this section is strictly controlled (see section 504).
Note 2: The use or disclosure of personal information obtained under this section is regulated under the Privacy Act 1988.
(1A) However, an occupier or affected employer is not required under paragraph (1)(c) to allow the permit holder to inspect, or make copies of, a record or document if to do so would contravene a law of the Commonwealth or a law of a State or Territory.
Meaning of affected employer
(2) A person is an affected employer, in relation to an entry onto premises under this Subdivision, if:
(a) the person employs a member of the permit holder’s organisation whose industrial interests the organisation is entitled to represent; and
(b) the member performs work on the premises; and
(c) the suspected contravention relates to, or affects, the member.
Meaning of non-member record or document
(2A) A non-member record or document is a record or document that:
(a) relates to the employment of a person who is not a member of the permit holder’s organisation; and
(b) does not also substantially relate to the employment of a person who is a member of the permit holder’s organisation;
but does not include a record or document that relates only to a person or persons who are not members of the permit holder’s organisation if the person or persons have consented in writing to the record or document being inspected or copied by the permit holder.
Occupier and affected employer must not contravene requirement
(3) An occupier or affected employer must not contravene a requirement under paragraph (1)(c).
Note: This subsection is a civil remedy provision (see Part 4-1).
(… …)
483AA Application to the FWC for access to non-member records
(1) The permit holder may apply to the FWC for an order allowing the permit holder to do either or both of the following:
(a) require the occupier or an affected employer to allow the permit holder to inspect, and make copies of, specified non-member records or documents (or parts of such records or documents) under paragraph 482(1)(c);
(b) require an affected employer to produce, or provide access to, specified non-member records or documents (or parts of such records or documents) under subsection 483(1).
(2) The FWC may make the order if it is satisfied that the order is necessary to investigate the suspected contravention. Before doing so, the FWC must have regard to any conditions imposed on the permit holder’s entry permit.
(3) If the FWC makes the order, this Subdivision has effect accordingly.
(4) An application for an order under this section:
(a) must be in accordance with the regulations; and
(b) must set out the reason for the application.”
[22] The approach required in these matters was discussed by the Federal Court of Australia in Independent Education Union of Australia v Australian International Academy of Education Inc 12as follows:
“[109] It is apparent that the extent of a permit-holder’s right to inspect and to copy documents which related only to employees who were not members of the relevant organisation has, over the years, been a sensitive question at the policy level. The balance which the legislature sought to achieve in Pt 3–4 was the subject of observation by Flick J (Tracey J concurring) in Australasian Meat Industry Employees’ Union v Fair Work Australia(2012) 203 FCR 389, 405–406 [56]–[59]. The provisions are beneficial ones, and should be construed with an eye on the important role of organisations in protecting their members against contraventions of statutory and award provisions. But the particular provisions with which I am concerned in this case have been the subject of very detailed attention by the legislature, and involve some rather fine discriminations which, the history shows, were consciously made.
[110] Returning to the terms of Pt 3–4 of the FW Act itself, s 482 operates only where there is a suspicion of contravention which relates to, or affects, a member of the permit-holder’s organisation (and then only where the organisation is entitled to represent the industrial interests of that member, and the member works on the premises concerned). The section permits the permit-holder to inspect any work, process or object that is relevant to the suspected contravention. Insofar as this provision relates to work, it is not limited to work done by the member concerned — nor even, for that matter, by a member — but it must be relevant to the suspected contravention. Under para (b) of subs (1), the person who may be interviewed is not limited to a member of the organisation (but is limited in other ways). And, absent the passage in parenthesis, the right to inspect and to copy a record or document would not be so limited either, but the record or document has to be directly relevant to the suspected contravention and be kept on the premises or accessible from a computer kept on the premises.
[111] But the passage in parenthesis places a further limit on the range of records and documents that may be inspected and copied under para (c) of subs (1). So, even a document which is kept on the premises and which is directly relevant to the suspected contravention may not be inspected or copied if it falls within the definition of “non-member record or document” in subs (2A). It is only with such a document that s 483AA is concerned.
[112] Section 483AA shows that the legislature recognised that there may be situations in which, for the proper investigation of the suspected contravention, it was necessary for the parenthetical exclusion in s 483(1)(c) to be lifted. The notion of “necessary” in s 483AA(2) carries the meaning that the investigation could not be properly investigated with that exclusion in place. Whether or not that would be so in a particular case was a matter for the satisfaction of FWA (as the Commission was called at the time of the facts of the present case). Absent the availability of a conventional ground of administrative law challenge (such as that made by the respondents here), the question whether a s 483AA order was necessary in a particular case would not be justiciable elsewhere.
[113] As a measure of how limited is the process for which s 483AA provides, FWA was required to consider the matter of necessity not in the broad, but only in relation to “specified non-member records or documents”. Thus, although under s 482(1)(c) in its primary operation it was a matter for the permit-holder (at least in the first instance) to identify the records or documents sought to be inspected and copied, in the operation of the paragraph as extended by an order made under s 483AA it was a matter for FWA to specify the non-member records or documents that might also be inspected and copied.
[114] Whatever order might have been made in a particular case under s 483AA, the permit-holder’s right to require inspection and copying of non-member records or documents could not travel beyond the other limits imposed in s 482(1)(c). Put another way, even with the assistance of such an order, he or she could never have a right to require inspection and copying of non-member records or documents more extensive than his or her right to require inspection and copying of other records or documents. Specifically in the context of the respondents’ point in the present case, those records or documents had to be directly relevant to the contravention — being one which related to or affected a member — which the permit-holder suspected.
[115] It follows, in my view, that the question which FWA was required to address under s 483AA was whether it was necessary, for the proper conduct of the investigation, that the documents which the permit-holder was entitled to require to be inspected or copied under s 482(1)(c), as being directly relevant to the contravention, included non-member records and documents as defined.”
[23] Accordingly, the general principles to be applied in this case include:
• The FW Act does not provide for entry holders to access non-member records except by Order of the Commission;
• There is a balance reflected in provisions of s.438AA which are beneficial, and should be construed with an eye on the important role of organisations in protecting their members against contraventions of statutory and award provisions, but also require some rather “fine discriminations” and limitations which deliberately reflect other considerations;
• The requisite jurisdictional fact permitting an Order to be made under s.483AA of the FW Act is that the Commission must be satisfied that it is necessary, for the proper conduct of the investigation of a suspected contravention related to or affecting a member, that the specified non-member records (as defined) be inspected or copied;
• The records must be materials of a class which the permit-holder would be entitled to require to be inspected or copied under s 482(1)(c), and the concept of “necessary” imports the notion that these records are directly relevant to the suspected contravention; 13
• The concept of being “necessary” also carries the meaning that the investigation of the suspected contravention could not properly be conducted without access to the particular non-member records sought; and
• If satisfied on the jurisdictional fact, a discretion exists to make an order providing the permit holder with access to (and/or copies of) the relevant non-member records or parts of such records.
5. The cases of the parties
5.1 The CEPU
[24] The substance of Mr Scudds’ position included the following:
• Mr Scudds and the CEPU had received a number of queries from CEPU members employed by Tyrone regarding payment of the travel allowance;
• Provisions under the Agreement relating to payment of a travel allowance were suspected of being contravened;
• The contraventions were suspected based on Mr Scudds’ sighting of a member’s pay slip but these were not complete and were insufficient to investigate the suspected contravention;
• The suspected contravention concerned underpayment of the travel allowance, stemming from annual increases applying from an incorrect time;
• Circumstances of the Employer included that a significant proportion of the workforce are engaged on a casual basis, the size of the workforce would increase as Tyrone won new contracts and vice versa, and that a downturn in work was projected by the Employer;
• Members of the CEPU were reluctant to identify themselves as union members for fear this would impact their ongoing employment, such as by being amongst the first employees made redundant should a downturn occur. Concerns of this nature have been previously found by the Commission to support an order being made;
• A large proportion of employees left employment during the bargaining process that involved three ballots leading to the making of the Agreement;
• A narrowly defined and directly relevant class of non-member records was being sought; and
• To investigate the suspected contravention as it impacted upon the CEPU members, whilst also protecting member anonymity, an order allowing the permit holder (Mr Scudds) access to specified non-member records was required.
[25] Mr Scudds provided a statement 14 and gave evidence in support of the application.
[26] I found Mr Scudds to be an honest and open witness and I accept his evidence on the objective facts. Some aspects of his evidence relied upon recollections of earlier events that he was not directly involved in and others relied upon hearsay regarding concerns that employees had raised with him. Given the nature of these proceedings and the issues in dispute, that evidence is admissible and of some assistance; albeit that the Commission is unable to fully test the veracity of the stated concerns.
[27] The CEPU contends that the capacity to investigate the matter without disclosing the identity of members was an important consideration that had been expressly accepted by the Commission in another matter. 15
[28] During final submissions, the CEPU also advanced what I consider to be a broader approach for the contravention and proposed, if considered appropriate, that the non-member records could be redacted to remove the family names and all contact details for the employees concerned. Further, the CEPU indicated that it would not press for Mr Morgan’s records to be provided. 16
5.2 The Employer
[29] The substance of the Employer’s position included the following:
• The suspected breaches relate to the timing of increases to the travel allowance, where the CEPU and the Employer hold different views as to when these increases should be applied;
• The records sought by Mr Scudds are neither directly relevant, nor necessary, to investigate the suspected breach;
• The CEPU believes the increases should apply on the anniversary of the start of the Agreement, whereas the Employer’s position is that the increases should apply from dates provided in the Agreement itself;
• It is not necessary that the CEPU access non-member records as the CEPU can fully investigate the suspected contravention by analysing member records;
• The records are not relevant as they are being sought for a collateral purpose - being to conceal the identity of CEPU members employed by Tyrone;
• Allegations that the Employer is trying to, or would, discriminate against an employee on the basis of union membership are extremely serious and scandalous in nature, and should be rejected by the Commission;
• The evidence did not support the proposition that CEPU members or employees raising payroll or other concerns were targeted or treated adversely, and the opposite was true based upon the evidence;
• The Employer sought the views of non-members regarding CEPU access to their records, and no employee provided consent;
• The CEPU’s aim to maintain member anonymity is not sustainable as the CEPU is not a “party” to the Agreement. Consequently if the suspected contravention existed, an employee would need to identify themselves in future enforcement proceedings;
• There is a risk that personal information contained in non-member records could be misused, particularly given the recent MSD proceedings before the Commission and the confidential basis upon which those proceedings were progressed;
• Although some of the personal information could be redacted, it was necessary for the Commission to be satisfied that access to the non-member records was necessary and appropriate under the strict terms of the Act; and
• Even if the Commission did consider that the records could be accessed, the Commission should not exercise its discretion to grant access for the reasons advanced.
[30] Two witnesses gave evidence for the Employer:
• Mr Christopher Carroll, Managing Director of Tyrone; and
• Mr Daren Lee Morgan, an Electrician employed by Tyrone.
[31] Mr Carroll provided a witness statement 17 and gave evidence on a range of matters. This included the history of bargaining; the content of Tyrone’s pay slips and how the travel allowance is reflected; his knowledge of union members within the workforce and how he came upon that information; the circumstances by which various employees’ employment ended; and the Employer’s treatment of and attitude towards union members.
[32] Mr Morgan provided a statement 18 and gave evidence regarding his response to the CEPU’s request to access his records, and his experience when making pay inquiries and participating in enterprise bargaining at Tyrone more generally. Mr Morgan opposed the CEPU (via Mr Scudds) being granted access to his records.
[33] I found the evidence of these witnesses to be given openly and honestly and I accept their evidence as to the objective facts. As with Mr Scudds, some of Mr Carroll’s evidence relied upon hearsay and the caveats outlined above also apply to that evidence. As a result, I accept that no employees have provided written consent to have the CEPU access their records but I do not consider that this is particularly relevant in this matter. Further, given that there was no ability to test the basis of the employees’ views, I place little weight upon the indication provided by Mr Carroll that some employees had stated they had a preference that this access not occur; Mr Morgan’s views being the exception.
[34] In closing submissions, the Employer rejected the notion that the additional grounds now being pursued by the CEPU were relevant or appropriate in this matter and relied more generally on a decision 19 of the Commission dealing with very similar circumstances and considerations.
6. Consideration
The suspected breach
[35] I accept that Mr Scudds holds a genuine suspicion that a breach of the Agreement, a contravention for present purposes, has occurred. In particular, the suspected contravention is that the travel allowance provided by clause 33.4 of the Agreement has not been paid by the Employer in accordance with the terms of that instrument.
[36] Clause 33.4 provides as follows:
“33.4 Travel Allowance
33.4.1 Employees required to, under the express direction of their employers, use their own vehicle in the service of the employer (travel between sites and/or workshop, travel to supplier to pick up materials etc.) shall be paid a mileage rate of $0.78 per kilometre.
33.4.2 Employees required to travel in their own vehicle in order to start and/or finish work at the normal start and/or finish time/s at a place other than the company shall be paid a travel allowance in accordance with the following table.
Travel Allowance | ||||
DISTANCE FROM COMPANY PREMISES | Start of Agreement | 1 years from agreement | 2 years from agreement | 3 years from agreement |
0-50km | $28 | $29 | $30 | $31 |
This equates to a total of 14.81% over the lifetime of the agreement
33.4.4 Employees shall be paid (at ordinary rates) for any such travel in excess of a 50km radius of the Company Premises. A diagram explanation of this is available from the office to help explain your entitlements.
33.4.5 Where the employer provides, or offers to provide an employee with company transport as the means of travel to a place other than the company premises for work, the employee shall be paid an allowance of $20.00 per day travelling allowance and relinquish private use of the company vehicle that will be monitored. This allowance is included in the all-purpose rate.”
[37] The alleged contravention was stated in the application in the following terms:
“The Tyrone Electrical Services Pty Ltd Single Enterprise Agreement 2015 came into effect 31st December 2015. The Form f17 statutory declaration lodged with the FWC in support of the approval of the enterprise agreement states that the agreement was made on 2nd December 2015.
Based on the table in clause 33.4.2 the travel allowance payable to employees each year would be
- 2016 - $28
- 2017 - $29
- 2018- $30
- 2019 - $31
Electricians employed at Tyrone Electrical Services Pty Ltd are currently being paid $30/day travel allowance. Inspection of worker pay slips which we have been provided indicate that the Travel Allowance increased from $29 to $30 in August 2018, and that previous travel allowance increases have been applied annually each August, resulting in an underpayment to employees of the travel allowance each year.
(… …)
The contraventions are suspected based on pay slips sighted by the CEPU.
Workers whose industrial interests the CEPU represents who are employed as Electrical Tradespersons by Tyrone Electrical Services Pty Ltd, whose employment is governed by the Tyrone Electrical Services Pty Ltd Single Enterprise Agreement 2015.
Workers whose industrial interests the CEPU represents employed as Electrical Tradespeople by Tyrone Electrical Services Pty Ltd are not receiving travel allowance payments in accordance with the provisions of Tyrone Electrical Services Pty Ltd Single Enterprise Agreement 2015.”
[38] Based upon the evidence before the Commission the alleged contravention includes what appears to be the “late” adjustment of the allowance in August of one year (and potentially other years) and a more significant difference of view about the intended operation of clause 33.4 more generally; namely when the milestones (the increased level of payments) in the table should have been applied – January or July of each year of the nominal life of the Agreement.
The serious contravention basis
[39] During closing submissions, the CEPU relied upon the concept of a serious contravention offence under s.557A of the FW Act. This provision was introduced in 2017 20 and provides as follows:
“557A Serious contravention of civil remedy provisions
(1) A contravention of a civil remedy provision by a person is a serious contravention if:
(a) the person knowingly contravened the provision; and
(b) the person’s conduct constituting the contravention was part of a systematic pattern of conduct relating to one or more other persons.
Note: For the liability of bodies corporate for serious contraventions, see section 557B.
Example: Generally, subsection 323(1) requires an employer to pay an employee the full amount payable to the employee in relation to the performance of work.
A contravention of subsection 323(1) is a serious contravention if the employer knowingly does not pay the employee in full (even if the employer does not know the exact amount of the underpayment) and that contravention is part of a systematic pattern of conduct by the employer. The systematic pattern of conduct of the employer may relate to more than one employee and may consist of different contraventions.
Systematic pattern of conduct
(2) In determining whether the person’s conduct constituting the contravention of the provision was part of a systematic pattern of conduct, a court may have regard to:
(a) the number of contraventions (the relevant contraventions) of this Act committed by the person; and
(b) the period over which the relevant contraventions occurred; and
(c) the number of other persons affected by the relevant contraventions; and
(ca) the person’s response, or failure to respond, to any complaints made about the relevant contraventions; and
(d) except if the provision contravened is section 535—whether the person also contravened subsection 535(1), (2) or (4) by failing to make or keep, in accordance with that section, an employee record relating to the conduct constituting the relevant contraventions; and
(e) except if the provision contravened is section 536—whether the person also contravened subsection 536(1), (2) or (3) by failing to give, in accordance with that section, a pay slip relating to the conduct constituting the relevant contraventions.
(3) Subsection (2) does not limit the matters that a court may have regard to.
(4) Subsection 557(1) does not apply for the purposes of determining whether the person’s conduct was part of a systematic pattern of conduct.
(5) Subsection (4) does not otherwise affect the operation of subsection 557(1) in relation to serious contraventions of civil remedy provisions.
Involvement in a serious contravention
(5A) A person (the involved person) who is involved in a contravention of a civil remedy provision by another person (the principal) commits a serious contravention of the provision only if:
(a) the principal’s contravention was a serious contravention; and
(b) the involved person knew that the principal’s contravention was a serious contravention.
Application for a serious contravention order and alternative orders
(6) If a person is applying for an order in relation to a serious contravention of a civil remedy provision, the person’s application under subsection 539(2) must specify the relevant serious contravention.
(7) If, in proceedings for an order in relation to a serious contravention of a civil remedy provision, the court:
(a) is not satisfied that the person has committed a serious contravention against that provision; and
(b) is satisfied that the person has contravened that provision;
the court may make a pecuniary penalty order against the person not for the serious contravention but for the contravention of that provision.”
[40] Although not referenced by the CEPU in support of the application, I set out below for context the other directly related provisions introduced at the same time as s.557A or that operate in conjunction with that provision:
“557B Liability of bodies corporate for serious contravention
(1) For the purposes of subsection 557A(1), a body corporate knowingly contravenes a civil remedy provision if the body corporate expressly, tacitly or impliedly authorised the contravention.
(2) This section does not limit section 793.
557C Presumption where records not provided
(1) If:
(a) in proceedings relating to a contravention by an employer of a civil remedy provision referred to in subsection (3), an applicant makes an allegation in relation to a matter; and
(b) the employer was required:
(i) by subsection 535(1) or (2) to make and keep a record; or
(ii) by regulations made for the purposes of subsection 535(3) to make available for inspection a record; or
(iii) by subsection 536(1) or (2) to give a pay slip;
in relation to the matter; and
(c) the employer failed to comply with the requirement;
the employer has the burden of disproving the allegation.
(2) Subsection (1) does not apply if the employer provides a reasonable excuse as to why there has not been compliance with subsection 557C(1)(b).
(3) The civil remedy provisions are the following:
(a) subsection 44(1) (which deals with contraventions of the National Employment Standards);
(b) section 45 (which deals with contraventions of modern awards);
(c) section 50 (which deals with contraventions of enterprise agreements);
(d) section 280 (which deals with contraventions of workplace determinations);
(e) section 293 (which deals with contraventions of national minimum wage orders);
(f) section 305 (which deals with contraventions of equal remuneration orders);
(g) subsection 323(1) (which deals with methods and frequency of payment);
(h) subsection 323(3) (which deals with methods of payment specified in modern awards or enterprise agreements);
(i) subsection 325(1) (which deals with unreasonable requirements to spend or pay amounts);
(j) any other civil remedy provisions prescribed by the regulations.”
[41] In the absence of any widespread judicial consideration of these provisions, the Explanatory Memorandum 21 is of assistance and states as follows:
“Section 557A – Civil contraventions of civil remedy provisions
20. New section 557A establishes the regime for serious contraventions under the Fair Work Act. New subsection 557A(1) provides that a contravention is only a ‘serious contravention’ if the contravening conduct was deliberate and part of a systematic pattern of conduct relating to one or more other persons.
21. The new section requires several steps to be taken. First, identify the relevant proscribed conduct in the applicable civil penalty provision (e.g. a term of a modern award has been contravened under section 45; or employee records have not been made or kept under section 535(1)). The proscribed conduct may consist of an act or omission. Second, consider whether the conduct was deliberate (e.g. a term of a modern award was deliberately contravened, or employees’ records were purposefully not made or kept). New section 557B explains how a body corporate’s conduct may be assessed to determine whether it ‘deliberately’ contravened the law for the purposes of new subsection 557A(1). Third, consider whether the conduct formed part of a systematic pattern of conduct.
22. The term ‘deliberate’ is not defined, but is intended to be read synonymously with the term ‘intentional’ that is used elsewhere in the Fair Work Act.
23. New subsection 557A(2) provides examples of the kinds of matters a court may have regard to in determining whether a person’s conduct constituting the contravention of the provisions was part of a systematic pattern.
24. The reference to a ‘systematic pattern of conduct’ is to a recurring pattern of methodical conduct or a series of coordinated acts over time. It does not encompass ad hoc or inadvertent conduct. A contravention is more likely to be considered part of a systematic pattern of conduct if:
• there are concurrent contraventions of the Fair Work Act occurring at the same time (e.g. breaches of multiple award terms and record-keeping failures);
• the contraventions have occurred over a prolonged period of time (e.g. over multiple pay periods) or after complaints were first raised;
• multiple employees are affected (e.g. all or most employees doing the same kind of work at the workplace, or a group of vulnerable employees at the workplace); and
• accurate employee records have not been kept, and pay slips have not been issued, making alleged underpayments difficult to establish.
25. These factors are intended to be indicative only, and a ‘serious contravention’ may still be established if one or more of these factors are not present. For example a pattern of systematic conduct may affect an individual or group of employees. Other factors may also be relevant, such as a failure to address complaints about alleged underpayments.
26. New subsection 557A(3) clarifies that subsection 557A(2) provides a non-exhaustive list and does not limit the matters a court may have regard to.
27. New subsection 557A(4) clarifies that, in determining whether there is a ‘systematic pattern of conduct’, the ‘grouping’ of contraventions under section 557(1) should be disregarded. This allows the total number of relevant contraventions to be considered, so the entirety of the relevant conduct may be taken into account.
28. New subsection 557A(5) clarifies that, for the purpose of determining penalties, the ‘grouping’ exercise under subsection 557(1) is undertaken in relation to serious contraventions.
29. New subsection 557A(6) requires an applicant seeking the higher penalties for ‘serious contraventions’ to make this clear in their application for relief. This ensures procedural fairness by requiring applicants to put respondents on notice about the seriousness of the allegations being made against them from the beginning of proceedings.
30. New subsection 557A(7) applies if alleged ‘serious contraventions’ have not been proved (e.g. the applicant has failed to prove the contraventions were deliberate). It allows the courts to determine whether the corresponding strict liability provisions were contravened and make appropriate orders accordingly.
Section 557B – Liability of bodies corporate for serious contravention
31. New section 557B explains how a body corporate’s conduct may be assessed, to determine whether it ‘deliberately’ contravened the law for the purposes of new subsection 557A(1).
32. A contravention by a body corporate is deliberate if it expressly, tacitly or impliedly authorised the contravention. The authorisation may be given by an individual within the organisation (see section 793); or via a policy, rule, course of conduct or practice that exists within the organisation. The body corporate’s actions, however, must be considered as a whole. This reflects elements of Part 2.5 of the Criminal Code. The criminal framework has been adapted in the present context for use in a civil penalties framework: see Principled Regulation: Federal Civil and Administrative Penalties in Australia, ALRC Report 95, paragraphs 7.138, 7.139. It recognises that it may sometimes be simplistic to merely correlate the culpability of an agent with the culpability of the corporation without investigating the actions of the corporation as a whole.
33. There may be some instances where the misconduct of a ‘rogue’ senior manager does not represent the corporation’s policy. In these cases, the actions of the corporation as a whole may be taken into account. There is no liability if the body corporate proves that it exercised due diligence to prevent the ‘rogue’ conduct or authorisation.
34. New subsection 557B(2) clarifies that the new provision does not limit section 793 (Liability of bodies corporate).” (emphasis in original)
[42] The CEPU contended that this element of the alleged contravention provided additional justification for requiring access to the non-member records and in particular whether there was a pattern of conduct and the extent of the alleged underpayment.
[43] The Employer opposed consideration of this aspect on a number of grounds. Firstly, it contends that the evidence does not support the proposition that this is the contravention alleged by Mr Scudds; rather it is an afterthought to attempt to bolster the application. Secondly, that there was no evidence to support the notion that Mr Scudds considers that there has been a knowing breach of the Agreement and in any event the claimed access to the non-member records is not relevant to that suspicion. Thirdly, it contends that if a permit holder could simply rely upon an alleged serious offence in a s.483AA application, this would undermine and render nugatory the limitations on access to non-member records contemplated by the FW Act.
[44] In my view, it is not critical that the non-member records would not reveal all elements of the alleged (serious) contravention, only that they be directly relevant. Confirmation of the extent and incidents of the alleged underpayments would appear to be directly relevant to those elements of a serious offence. The fact that the records would not tend to shed any light on whether the practice of the employer was a knowing or deliberate breach is, in my view, not of concern in the present context.
[45] Further, although care should be applied not to allow an artificial alleged contravention to be constructed so as to undermine the statutory intention of s.483AA, there is no reason to read down or limit the provision so as to exclude the investigation of a genuinely held suspicion of a serious contravention from consideration in the present context.
[46] I also do not consider that a narrow approach should be adopted to the statement of the suspected contravention and I would allow for the fact that there might be developments after the application has been lodged. However, the difficulty for the CEPU in this matter is that there is no suggestion that Mr Scudds actually suspects that there has been a serious breach within the meaning of the FW Act. This element did not form part of the application or his evidence, even by implication. The serious breach, at least in terms of any alleged deliberateconduct to underpay the employees, is not the suspected contravention that has underpinned this application before the Commission.
[47] I add for completeness that there is also presently no suggestion that the Employer has knowingly breached the Agreement or that there are no employee records that would make s.577C of the FW Act relevant. Tyrone has a different view about what the Agreement requires in relation to the timing of the adjustment of travel allowance based upon the terms of that instrument and the alleged intention of the parties and that interpretation is disputed by the CEPU based upon the ordinary and natural meaning of the relevant clause itself.
Is access to the non-member records necessary to investigate the suspected breach?
[48] The CEPU substantially relies upon two (further) aspects to support its notion that the access is necessary. I deal with each in turn, noting that they are related.
[49] Firstly, the CEPU contends that access to the non-member records is required as Mr Scudds is unable to properly investigate the contravention without the ability to access all, or most, of the relevant records including those relating to the non-members. I am not persuaded that this is the case. Mr Scudds already has some pay slips from members that confirm the level of payment of the travel allowance at some junctures. Further, there are already a number of confirmed CEPU members whose identity is known to the Employer and Mr Scudds could seek access to all their relevant records without disclosing anything not already known to the Employer. This would enable the records of a cross-section of the workforce to be examined that would demonstrate when the travel allowances were adjusted. Further, the approach adopted by the Employer as to when the adjustments to the allowance have been made more generally and how clause 33.4 of the Agreement has been applied in practice, which is disputed by the CEPU on grounds that are clearly arguable, are already known and confirmed by the Employer. In addition, there is no suggestion at present that the suspected contravention involves the differential treatment of the union members or different classes of employees.
[50] Secondly, the CEPU contends that there is a genuine concern that the identification of members will likely jeopardise their employment, particularly given the extent of casual employment within the business and that a reduction in employment numbers was expected based upon comments by the Employer. There is some very circumstantial support for this proposition and I do not doubt the genuineness of Mr Scudds’ views that employees have expressed some reservations. This includes the level of casual employment at Tyrone, the fact that some CEPU members had declined to provide a statement as part of the proceedings and the probability that there will be a decline in overall employment levels in the foreseeable future due to projects concluding. However, there is some direct evidence that is not consistent with this proposition. This includes:
• There are a number of CEPU members who are known within the workplace (as understood and identified by the Employer) and there is no suggestion that these have been subject to any form of adverse treatment or threats. Indeed, these include both relatively senior employees and one member whose employment might have been considered to be more vulnerable at some stages; 22
• The employee who invited the CEPU into the earlier enterprise agreement negotiations eventually leading to the making of the Agreement was known to the Employer at that time and was not subject to any adverse treatment and was reemployed after resigning from his employment at some point;
• There is no evidence to support a connection between the reduction in staff numbers (a limited number due to project completions) and the bargaining for the Agreement; and
• Employees, including Mr Morgan, have previously raised concerns about payments and publicly opposed employer proposed enterprise agreements, without adverse treatment or threats of any description.
[51] Accordingly, whilst I am mindful of the concerns held by Mr Scudds, the above objective circumstances and the findings made about the first proposition advanced by the CEPU together do not, on balance, persuade me that an order allowing access the non-member records is necessary to enable the investigation of the suspected contravention to be properly undertaken. As a result, I am not persuaded that the jurisdictional fact has been made out.
[52] For completeness given some the submissions advanced, I indicate that I do not consider that the application has been taken for an ulterior purpose. The fall-back position of the CEPU to accept an Order that provided for the redaction of the contact and other personal details of the employees, and the relatively narrow scope of the Order being sought, was constructive and not consistent with the suggestion made by the Employer. In addition, I would not accept that the fact that CEPU might ultimately have to disclose the identity of its members in order to launch any enforcement or dispute proceedings is a relevant consideration. 23 The focus of this matter is the investigation and whether access to relevant non-member records is necessary for the proper conduct of that investigation.
7. Conclusions
[53] For reasons outlined earlier, I am not presently satisfied that it is necessary for Mr Scudds to be given access to the nominated non-member records to properly conduct the investigation of the suspected contravention relied upon in this application.
[54] As a result, the jurisdictional requirement is not met and there is no basis for the Commission to consider making the Order sought.
[55] The application is dismissed.
COMMISSIONER
Appearances:
J Rogers for Mr Scudds and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
T Earls of Fair Work Lawyers (with permission) for Tyrone Electrical Services Pty Ltd.
Hearing details:
2019
Adelaide
18 September.
Printed by authority of the Commonwealth Government Printer
<PR712471>
1 Exhibit R2.
2 AE417247.
3 [2015] FWCA 8897
4 B2019/554.
5 Constituted by Anderson DP.
6 Taken from the application. The CEPU also sought during submissions that as an alternative, Mr Scudds be given physical access to the records. Both would be permissible if an order was made under s.483AA of the FW Act.
7 The Fair Work Commission Rules 2013, in effect, provide permission for a lawyer to file documents and provide written submissions in relation to a matter before the Commission. That permission does not extend to a hearing of this nature.
8 [2018] FWCFB 4362.
9 [2013] FCA 291.
10 See also Asciano Services Pty Ltd v Hadfield[2015] FWCFB 2618 at [19].
11 See also Calleri v Swinburne University of Technology[2017] FWCFB 4187 at [36].
12 [2016] FCA 140 per Jessup J.
13 See Independent Education Union of Australia v Australian International Academy of Education Inc [2016] FCA 140 at [115].
14 Exhibit A1.
15 Beau Seiffert [2018] FWC 1439.
16 The reason for this indication will become apparent shortly.
17 Exhibit R2.
18 Exhibit R1.
19 The Maritime Union of Australia [2017] FWC 6228.
20 Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.
21 Explanatory Memorandum for the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.
22 An apprentice who had completed the indenture period and was immediately offered ongoing employment.
23 I also note that the CEPU is covered by the Agreement and the impact of this upon the requirement to disclose the identity members in enforcement proceedings is beyond the scope of this present matter.
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