Pipicella v Renewable Energy Australia Pty Ltd
[2023] FedCFamC2G 1167
•7 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Pipicella v Renewable Energy Australia Pty Ltd [2023] FedCFamC2G 1167
File number: ADG 48 of 2022 Judgment of: JUDGE BROWN Date of judgment: 7 December 2023 Catchwords: INDUSTRIAL LAW – Fair work – application for breaches of the provisions of the Fair Work Act 2009 (Cth) – employer failed to pay wages and commissions – termination of employment following provision on medical certificate – where the respondents have failed to take any steps in the proceedings – principles to be applied in undefended proceedings – assessment of damages – quantum of penalty to be imposed – to whom should the penalty imposed be paid – matters to be considered Legislation: Corporations Act 2001 (Cth) s 109X
Fair Work Act 2009 (Cth) Pt 3-1, 4-1, ss 3, 12, 340, 341, 342, 351, 352, 361, 539, 542, 545, 546, 550, 557
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules2021 (Cth) rr 4.04, 6.04, 6.07, 6.14, 6.15, 13.04, 13.05, 30.04
Fair Work Regulations 2009 (Cth) reg 3.01
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Licenced Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd [2011] FCA 333
Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8
Blandy v Coverdale NT Pty Ltd [2008] FCA 1533
Board of Bendigo Regional Institute of Technical & Further Education v Barclay (2012) 248 CLR 500
CFMEU v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157
Dafallah v Fair Work Commission [2014] FCA 328
Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151
Jones v Queensland Tertiary Admissions Centre Limited (No 2) [2010] FCA 399
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
McIlwain v Ramsay Food Packaging No 4 [2006] FCA 1302
Plancor Pty Ltd v Liquor Hospitality & Miscellaneous Union (2008) 171 FCR 357
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65
Qantas Airways v Gama [2008] FCFCA 69
Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62
Speedo Holdings BV v Evans (No 2) [2011] FCA 1227
State of Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184
Taylor v Taylor (1970) 143 CLR 1
Veen v R (No 2) (1988) 164 CLR 465
Division: Division 2 General Federal Law Number of paragraphs: 159 Date of hearing: 11 August 2023 Place: Adelaide Solicitor for the Applicant: Mr Bourne, SMB Workplace & Employment Law First & Second Respondents: No appearance
Table of Corrections 5 March 2024 On the judgment cover sheet, the name of the Solicitor for the Applicant has been amended from “SWB Lawyers” to be “SMB Workplace & Employment Law”. ORDERS
ADG 48 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: GREGORIO PIPICELLA
Applicant
AND: RENEWABLE ENERGY AUSTRALIA PTY LTD
First Respondent
MATHEW TAYLOR
Second Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
7 DECEMBER 2023
THE COURT DECLARES THAT:
1.The first respondent contravened the following provisions of the Fair Work Act 2009 (Cth) (hereinafter referred to as “the Act”):
(a)Section 340 of the Act, by taking adverse action against the applicant following the applicant exercising his workplace right to make a complaint regarding the non-payment of his commissions owed; and
(b)Section 352 of the Act, by terminating the applicant’s employment following the provision of a certificate indicating his temporary absence from work due to illness.
2.The second respondent was involved, within the meaning of subsection 550(2)(c) of the Act, in the first respondent's contraventions as set out in declaration 1 above, therefore is taken to have committed those contraventions pursuant to subsection 550(1) of the Act.
THE COURT ORDERS THAT:
1.Pursuant to subsection 545(1) of the Act within twenty-eight (28) days of the date of this order the first and second respondent jointly and severally pay as compensation to the applicant the amount of TWENTY-THREE THOUSAND, NINE HUNDRED AND TWELVE DOLLARS AND EIGHTY FOUR CENTS ($23,912.84).
2.Pursuant to subsection 546(1) of the Act the first respondent pay a total pecuniary penalty fixed in the sum of SIXTEEN THOUSAND, SIX HUNDRED AND FIFTY DOLLARS ($16,650.00).
3.Pursuant to subsection 546(1) of the Act the second respondent pay a total pecuniary penalty fixed in the sum of THREE THOUSAND, THREE HUNDRED AND THIRTY DOLLARS ($3,330.00).
4.Pursuant to subsection 546(3)(a) of the Act that the penalties imposed on each of the respondents pursuant to paragraphs (2) & (3) hereof be paid to the applicant within twenty-eight (28) days of the date of these orders.
5.The first and second respondent jointly and severally pay the applicant’s costs fixed in the sum of ELEVEN THOUSAND DOLLARS ($11,000.00).
6.The application filed 8 March 2022 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These reasons for judgment relate to proceedings brought pursuant to general protection provisions arising under the Fair Work Act 2009 (Cth)[1] in which Gregorio Pipicella, is the applicant and the respondents are firstly, Renewable Energy Australia Pty Ltd,[2] and secondly, Mathew Taylor.
[1] Hereinafter referred to as “the FWA” or “the Act”.
[2] Hereinafter referred to as “Renewable Energy” or “first respondent”.
Mr Pipicella was employed by the first respondent, Renewable Energy, as a Sales Representative, based out of its Adelaide office. The applicant commenced his employment, with the first respondent, on 1 October 2020 and was employed by it until his dismissal on 29 October 2021.
Renewable Energy provides solar panel, lighting and battery sales and installations. The second respondent, Mr Mathew Taylor, was the company’s sole director and single shareholder as well as its secretary.
The general protection provisions are contained in Part 3-1 of the FWA. The manner in which any proceedings arising under this Part are to be commenced is mandated by rule 30.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.[3]
[3] Hereinafter referred to as “the Rules”.
In general terms, such claims are to be made by filing an approved form and a claim. It is a simplified procedure. Such claims need not be accompanied by a statement of claim or points of claim. Pursuant to rule 4.04 an affidavit is to be filed unless an applicant opts to file a statement of claim. The rules recognise that some cases, may benefit from the utilisation of formal pleadings.
In addition, such claims can only be commenced if the Fair Work Commission itself is unable to resolve the dispute arising through its private conferencing procedures. The applicant engaged such a process, which the respondents initially contested and then abandoned, which Mr Pipicella asserts put him to greater expense.
In this case, Mr Pipicella, as he was entitled to do, has elected to proceed with an application utilising the pro forma claim form. He filed an affidavit on 4 August 2023. Under the printed heading, on the pro forma document, Contraventions alleged and against the following statement:
What are the grounds for the claim that the employee was dismissed in contravention of a general protection?
(Set out in numbered paragraphs the facts relied on and the provisions of the Fair Work Act relevant to the claim)
If relying on s.340 specify the ‘workplace right’ claimed.
If relying on s.351 specify the attribute in s.351(1)
The applicant indicated that his claim is as follows:
The Respondent’s terminated the Applicant’s employment without notice on 29 October 2021.
Prior to the dismissal the Respondent had at no time raised any performance or conduct issues of concern with the Applicant.
In a telephone conversation with Mathew Taylor, Director, on 27 October 2021 the Applicant;
Raised a grievance about the Director’s inappropriate conduct towards the Applicant;
Raised a grievance about non-payment of owed remuneration (ie commission of $20,000.00 approx) and intimated that he would take up this issue with the Fair Work Commission.
From about lunch-time on 28 October 2021 the Applicant was temporarily absent from work on medical grounds – the Applicant forwarded a certificate of incapacity to Mathew Taylor.
By email to the Applicant Mathew Taylor advised that he would send a courier to the Applicant’s home to collect his work laptop.
In a telephone call with the Applicant about 1.05pm on 29 December (sic), Mathew Taylor advised the Applicant that there is no coming back – we are terminating your employment.
The Applicant then received the letter of termination (attached).
Mathew Taylor is the decision maker for the purpose of sec 550.
As can be seen, the applicant has not elected to specify, in his application the specific workplace rights, which he asserts have been infringed or to indicate which specific provisions of the FWA on which he relies. His lawyer, Mr Bourne, in lengthy written submissions, has alluded to sections 340 and 351 of the FWA, as well as section 352, which renders it illegal for an employer to dismiss and employee on the basis of a temporary absence from the workplace on the basis of illness or injury.
In general terms, it is Mr Pipicella’s case that his employment, with the first named respondent, was illegally terminated, whilst he was temporarily absent from his employment, due to an unspecified medical condition, which was supported by a medical certificate of his general medical practitioner, Dr Ljubincic dated 28 October 2021. This specified that Mr Pipicella was unfit for work between 28 October and 2 November 2021 due to a medical condition.[4]
[4] See Annexure A-06 to the applicant’s affidavit of evidence filed on 4 August 2023.
In addition, it is Mr Pipicella’s case that the evidence, which he has been able to muster support an inference that the substantive and operative reason for his termination was that he had complained, as he was entitled to do, to the management of Renewable Energy Australia Pty Ltd that he was entitled to be paid commissions in respect of sales completed by him.
He asserts that this engages the provisions of section 341(1)(c) of the Act or alternatively section 351 or 352. Each of these are characterised as a civil remedies provision as defined by Part 4-1 of the Act. In each case the maximum penalty prescribed is one of 60 penalty units.
At relevant times a penalty unit was $222.00. Accordingly, the maximum penalty for a contravention under each of these sections is $13,320.00. However, pursuant to the provisions of section 546(2), if it is found that contravention of the Act was committed by a corporation, the maximum penalty is to be multiplied by 5 leading to a maximum penalty for body corporates being $66,600.00.
As I understand his case, the applicant contends that the actions of the respondent have contravened each of these civil remedy provisions. However, they relate to the one course of conduct and therefore a composite penalty should be imposed, which should be payable to him, given that he has been put to the expense of privately mounting these proceedings, as envisaged by section 546(3)(c) of the FWA.
In addition, Mr Pipicella would characterise this contravention as being particularly serious in nature and, as such, notwithstanding the absence of any allegation of prior industrial misconduct, worthy of serious censure by the court. In these circumstances, he seeks penalties of between 50 and 70% of the statutory maxima be imposed on each of the respondents.
Finally, Mr Pipicella also relies on the provisions of section 545(2)(b) of the Act and seeks an order for compensation as a consequence of what he has characterised as the contravention of the general protection provisions applicable to him. In his original claim he calculated this to be $50,000.00 for economic loss and $20,000.00 for non-economic loss.
In the lead up to the hearing of his application, Mr Pipicella has filed an affidavit in support of his claim. From this affidavit and the submissions of his legal representative, Mr Bourne, it is apparent that his claim for compensation is quantified in the following manner:
·Commissions due to him - $23,912.84;
·Lost future commissions - $69,600.00 - $72,000.00;
·Lost superannuation - $3,365.39;
·Lost wages - $33,653.90;
·Interest - $6,000.00.
These amount to approximately $137,000.00. In addition, Mr Pipicella maintains his claim for non-economic loss in an amount of $20,00000. He has deposed that he was very upset at the manner in which he was terminated. More recently, he has candidly acknowledged that the termination has not had a lasting impact upon him.[5]
[5] Applicant’s affidavit of evidence filed on 4 August 2023 at [87].
In addition, Mr Pipicella estimates his legal costs to be in the vicinity of $10,000.00. He also claims to be out of pocket in respect of the conference convened by the Fair Work Commission, which he asserts was rendered nugatory by the failure of the respondents to engage with it appropriately.
By way of background, Mr Pipicella is 43 years of age. His vocational background is in sales and real estate. Following his termination, he elected to start his own business to capitalise on the experience he had gained with Renewable Energy but first he had to obtain formal qualifications to do electrical work and to instal solar panels.
As I understand his case, his claim for economic loss is based on the fact that he was not earning an income for approximately three months, whilst he obtained his contractor’s licence to instal solar panels and the difference between what he currently derives from his business and what he anticipated he would receive if he remained in the employment of Renewable Energy.
As will become apparent, Renewable Energy and Mr Mathew Taylor have elected not to take part in these proceedings. Therefore it falls to the court to consider the legal principles applicable to undefended proceedings and whether the applicant has provided sufficient evidence to support his contention that each of the respondent has breached the relevant provision of the Act.
If so, it will fall to the court to calculate what penalties should be imposed on the respondents and whether they should pay compensation, as sought by Mr Pipicella. Necessarily, given the lack of evidentiary involvement by each of the respondents concerned, this must be an imperfect exercise.
However, the unwillingness of both Mr Mathew Taylor and Renewable Energy to engage with the court does not abrogate the court’s obligation to finalise Mr Pipicella’s application and determine his case, as best it can, notwithstanding the obvious deficiencies in the evidence.
BACKGROUND
Renewable Energy cannot be regarded as a large corporation, although it operated two offices located in Melbourne and Adelaide. It is the effect of Mr Pipicella’s evidence that Mr Mathew Taylor,[6] was charged with overseeing the Melbourne office, whilst his brother Mr Troy Taylor,[7] was charged with operating the Adelaide office.
[6] Hereinafter referred to as “Mathew” or “Mathew Taylor”.
[7] Hereinafter referred to as “Troy” or “Troy Taylor”.
As a consequence, Troy had the role of being Mr Pipicella’s direct line manager until August 2021, when Troy suffered from an unexpected and serious illness requiring hospitalisation. It was this illness which provides the context in which the current dispute arose. Mr Pipicella submits from then on issues regarding his payment of his wages and commissions entitlements began to arise.
On the commencement of his employment, Mr Pipicella was paid an annual base salary of $50,000.00, in addition to commission based on the profits made from each sold job. Commission was based on a percentage of the net profit from each job, at time of commencement of his employment it was 15% of 20% of the total sales price, however from February 2021 it increased to 25% of 20% of the total sales price of any sold installed job.
Following Troy’s hospitalisation, Mr Pipicella continued to work out of the Adelaide office, facilitating appointments and client enquiries to ensure that the business maintained operation. Mathew assumed responsibility for managing the Adelaide office in addition to the Melbourne office, this included the task of issuing payments of both wages and commissions.
Following Troy’s ill health, Mr Pipicella, at times, communicated with Troy’s wife Simone in respect of his health, business needs and payment of wages. Mr Pipicella alleges he first raised the issue of the nonpayment of his wages and commission with Troy’s wife Simone via a phone call on 2 September 2021. This resulted in his wages being paid albeit no commission was forwarded to him.
Upon Mr Pipicella’s return from planned annual leave on 27 October 2021, he calculated that he was owed a total of $23,912.74 in commission for work completed. On that day, he forwarded an email to both Troy and Mathew, outlining a breakdown of the outstanding commission monies owed from lighting jobs that were due to him.[8]
[8] Annexure A-04 to applicant’s affidavit of evidence filed on 4 August 2023.
Following their receipt of the email Troy and Mathew both contacted Mr Pipicella. Firstly, Troy called stating that he was thinking half of commission owed would be sufficient to satisfy what was due to him.
A short time later, Mathew called, and he and Mr Pipicella engaged in a heated conversation. Mathew reiterated that Mr Pipicella was only going to be paid half of his commission owed. This was unacceptable to Mr Pipicella, who advised that he would be seeking advice from the Fair Work Commission in respect of his employment entitlements.
It is the effect of Mr Pipicella’s evidence that his complaint to the management of Renewable Energy in regard to his underpayments and his indication to it that he would seek advice from the Commission was the substantive and operative reason for his termination and represented a contravention of the general provisions of the FWA.
As a consequence, he seeks the imposition of civil penalties against Renewable Energy and also on Mathew Taylor on the basis that each bear accessorial liability for the action of the company which he is sole director and Troy held, at relevant times a senior managerial and decision making role. Mr Pipicella also seeks compensation in respect of what he asserts are the commissions due to him.
Following the respective conversations with each of the Taylor Brothers, Mr Pipicella booked a doctor’s appointment the following day, having attended work in the morning and leaving just prior to the appointment. In these circumstances, Dr Ljubincic issued a medical certificate stating:
I have examined Mr Gregorio Pipicella who in my opinion is suffering from a medical condition and will be unfitfor (sic) work from 28/10/2021 to 02/11/2021 inclusive.
The specific health reason is confidential medical information and can only be revealed to an employer with the express permission of the patient.[9]
[9] Annexure A-06 to applicant’s affidavit of evidence filed on 4 August 2023.
Mr Pipicella did not return to work that day and tendered the above medical certificate to Mathew and Troy via their respective email addresses at 12.51pm. The email reads as follows:
Hi Troy and Mat
I was at work this morning and went to a Dr appointment at 12:00.
As a result of my appointment, please find attached a sick certificate for your information.
Kind Regards
Greg Pipicella[10]
[10] Affidavit of Greg Pipicella filed 4 August 2023 at [52].
The following day, Mr Pipicella received a telephone call from Mathew in which he was informed his employment with Renewable Energy would not be continuing. This decision was later confirmed in a letter forwarded to Mr Pipicella, under the hand of Tamara King, who is described in the letter as the Director of Kings Commercial. Although her relationship with the respondents is unclear to me, I assume she is some form of HR advisor to Renewable Energy.
The letter detailed the various grounds on which it was asserted Renewable Energy was justified in terminating his employment. The letter reads as follows:
I refer to the recent telephone discussion between yourself and Mr Mathew Taylor of Renewable Energy Australia Pty Ltd (the Company). I am confirming todays discussion in writing regarding your termination, along with the previous conversations we have had about your performance and conduct. As you are aware the termination of your employment with the Company is effective as at 29 October 2021.
On the 27th of October 2021, Mr Mathew Taylor spoke to you following an email dated the same. In that conversation, you were advised on several occasions that you needed to improve your conduct within the workplace for various reasons. Following this and multiple discussions over the last 6 months around your solar commission structure and what it applies to, your behaviors in the office have not improved. At times staff, management and immediate family have felt intimidated and bullied. It is clear in the contract how much the Company is required to pay you.
Your conduct and behavior have been unacceptable for many months without improvement. The Adelaide Manager, Mr Troy Taylor has been critically ill, and after many attempts asking you not contact Mr Taylors wife, you persisted to do so. Your discussions with her and management surrounding commissions are inappropriate given the pressure that the family is under.
We note there has been many breaches of the Company's confidential information and intellectual property and your behavior towards other staff members has been inappropriate. We consider that your performance and conduct is unsatisfactory and have decided to terminate your employment for the reasons noted above.
We will contact you regarding the end payout figure in accordance with your employment contact and your notice period. You will also be paid your accrued entitlements if any. You are welcome to contact the undersigned if you have any further questions.
The contents of this letter are self-explanatory and not accepted by Mr Pipicella. He does not accept that there was a proper basis for his termination based on any misconduct attributable to him. Given the lack of any evidence from the respondents, I am not in a position to determine comprehensively what was the substantial and operative reason for Mr Pipicella’s dismissal other than by having regard to the unchallenged evidence of Mr Pipicella.
At the time, of this correspondence, Mr Pipicella was then on paid sick leave, pursuant to the above sick certificate. It is Mr Pipicella’s assertion that the decision to terminate him, when he was on sick leave, represents a breach of the general protection provisions of the FWA.
It is the effect of Mr Pipicella’s evidence that he suffered a significant level of emotional disturbance as a consequence of his dismissal leading to him suffering disturbed sleep resorting to overeating, weight gain and reliance on alcohol. He was later referred for counselling by a representative of the Fair Work Commission.
In all these circumstances, Mr Pipicella seeks the following orders:
·A declaration that Renewable Energy and Mathew Taylor have contravened general protection provisions pursuant to the FWA;
·He be paid compensation for both economic and non-economic loss in respect of these contraventions;
·The imposition of financial penalties in respect of these contraventions; and
·An order that any penalty imposed by the court in respect of the contraventions arising under the FWA be paid to him personally.[11]
[11] Outline of Submissions of the applicant at [148].
HISTORY OF THE PROCEEDINGS
Mr Pipicella commenced these proceedings, in this court, on 8 March 2022, by way of application, which was supported by a Form 2 – Claim form. The case first came before the court on 6 July 2022, where the matter was adjourned to 10 August 2022 as there was no appearance by either of the respondents.
On that occasion, Mr Bourne appeared for the applicant and informed the court that the respondents were yet to be served. Therefore, in order to allow for service to occur, the matter was further adjourned to 12 September 2022.
Mr Bourne on this latter occasion made submissions to the court regarding the difficulty he was having serving the respondents. Mr Bourne further advised the court that the previous solicitors acting for Renewable Energy and Mathew Taylor had advised him via email they did not have instructions to accept service and therefore were no longer acting.
However, in these circumstances Mr Bourne submitted to the court that the matter should be referred to mediation in the event the respondents retained new legal representation. I fell in with that course and along with referring the matter for mediation, I directed that a copy of the orders made be served on their last known address.
During the period of the adjournment, the mediation was vacated by the registrar of the court and the applicant filed an application in a proceeding seeking pursuant to rule 6.04 of the Rules the court deem that the respondents have been served and in the alternative orders for substituted service.
In the affidavit accompanying the application, Mr Bourne deposes throughout the early months of 2023 numerous and extensive efforts were made to serve both respondents, they include by email; prepaid post; personal service by an agent located in Victoria.
Mr Bourne submits that he received a read receipt from a company’s email address on 12 March 2023, further to that the documents were said to be delivered to Renewable Energy’s registered office.
The proceedings returned to court on 12 April 2023, where Mr Bourne sought that the court make orders in relation to the first respondent and relief as sought in the Form 2, against Renewable Energy on the basis they had been served pursuant to section 109X of the Corporations Act 2001 (Cth).
Further, he sought similar orders in relation to the second respondent, although he noted that personal service had yet to be effected on Mr Mathew Taylor it was overwhelmingly likely that he was aware of the proceedings.
I declined to do so and decided that Mr Matthew Taylor was to be formally placed on notice that, in the event he (and by implication Renewable Energy) did not appear, the court would enter judgment against them with no further notice. I directed on that occasion for Mr Bourne, who again appeared, for the applicant to draft the necessary order that would contain the necessary endorsements and adjourned the hearing to 14 April 2023 to allow that to occur.
In these circumstances, I made the following orders on 14 April 2023:
1Pursuant to rule 6.14 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) rules 2021 the requirement for personal service of the following documents on the first and second respondents be dispensed with:
a. Application - Fair Work Division dated 8 March 2022; and
b. Form 2 – Claim under the Fair Work Act 2009 alleging dismissal in contravention of a general protection dated 8 March 2022.
(together, the Originating Documents);
2The Originating Documents be served together with a letter which advises the first and second respondents that an order for substituted service has been made and enclosing a copy of these Orders.
3 The following method of substituted service is to be utilised:
a.Sending a copy of the Originating Documents and letter by express post with tracking number to the following addresses:
i. xx xxx Street, xxxx;
ii. xx xxx Road, xxxx;
iii.and c/- xx xxx Street, xxxx.
b.By emailing a copy of the Originating Documents and letter to the following email addresses:
i. xx@xx;
ii. xx@xx;
iii. xx@xx;
iv. xx@xx;
v. xx@xx.
c.By sending a copy the Originating Documents and letter via text message to the telephone number xxxx xxx x75, followed by a separate text message which reads:
The previous text message contains important information with respect to Court proceedings commenced against you by Gregorio Pipicella in the Federal Circuit and Family Court of Australia, proceeding number ADG48/2022. The Court has made orders to allow service of the proceedings via text message to this telephone number. If you ignore this correspondence, the Court may deal with the proceedings, including by way of entering a default judgment against you, in your absence.
4Service is taken to have been affected on the first and second respondents five business days after satisfaction of the methods of service listed above.
5The matter be listed for a further directions hearing on 27 April 2023 at 9.30am (Adelaide time).
6The question of costs is reserved.
The application and Form 2 were served in accordance with the above orders on 19 April 2023, and therefore service was deemed to be effected on 26 April 2023. The matter returned to court on 27 April 2023 and again there was no appearance by or on behalf of either of the respondents and therefore the matter was adjourned to 22 June 2023 to allow for the respondents to file any responding documents.
Ordinarily, it is a requirement of the court’s rules that individuals be personally served.[12] Corporations can be served by personal provision of the necessary process to a person at its registered office. However, the court has authority pursuant to rule 6.14 of the to dispense with such personal service if one or all of the matters specified in rule 6.15 are satisfied. The matters are as follows:
·whether reasonable steps have been taken to attempt to serve the document; and
·whether it is likely that the steps have been taken have brought the existence and nature of the document to the attention of the person to be served; and
·whether the person to be served could become aware of the existence and nature of the document by means of advertising or other means of communication that is reasonably available; and
·the likely cost to the party of serving the document, the means of that party and the nature of the proceedings; and
·any other relevant matter.
[12] See rule 6.07 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.
On 23 June 2023, again neither of the respondent’s appeared and the matter was set down for summary judgment and assessment of damages for 11 August 2023, the applicant was directed to file and serve an affidavit of the evidence he sought to rely on.
In all these circumstances, I am satisfied that the first and second respondents are aware of the proceedings and have been given ample opportunity to take part in the proceedings by filing any documents they wished to. For reasons about which I can only conjecture, both respondents have elected not to take part in the proceedings. Mr Pipicella now seeks that I deal with his application on an undefended basis.
The hearing on 11 August 2023 before me proceeded on an undefended basis in the absence of any of the respondents. The hearing involved sworn evidence from Mr Pipicella and lengthy written and oral submissions from his legal advisor, Mr Bourne.
THE LEGAL PRINCIPLES APPLICABLE TO DEFAULT JUDGMENT
It is a significant thing for proceedings to be determined in the absence of one of the parties, particularly proceedings which potentially include the imposition of a pecuniary penalty on the absent party. The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings. Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[13]
[13] See Taylor v Taylor (1970) 143 CLR 1.
The court cannot compel a respondent to engage in litigation. It is however obliged to give a respondent the opportunity to put evidence before the court and, if he or she wishes to do so, contest any evidence relied upon by the applicant. In this case, the respondents have not chosen to attend court or contest any of the evidence put forward by Mr Pipicella.
A respondent, whether by intransigence, disinterest or manipulation cannot succeed in denying an applicant a just resolution, according to law, of his or her application, by choosing not to take part in a proceeding. In these circumstances, the court has mechanisms to resolve applications in the absence of a party, if it is satisfied it is appropriate to do so.
In this matter, I am satisfied that Mr Mathew Taylor is aware of Mr Pipicella’s application, particularly in respect of the central evidentiary issues which arise in it, namely the non-payment of Mr Pipicella’s commissions and the reason why Mr Pipicella was terminated from his employment. Neither Mathew nor Renewable Energy have elected to formally put their position in respect of the issues.
On the other hand, Mr Pipicella, has exhaustively and thoughtfully put his positions in respect of the matter. He has filed a detailed affidavit.[14] In addition, he gave sworn evidence to the court, particular in respect of the circumstances surrounding the non-payment of his commissions and his termination.
[14] See affidavit of Gregorio Pipicella, filed 4 August 2023.
In my view, in these circumstances, I am obliged to accept Mr Pipicella’s unchallenged evidence unless it appears to me to be improbable or inherently unreliable. I have not formed any such conclusion after having had the opportunity to observe him.
Mr Pipicella deposed that following his termination from Renewable Energy he was left feeling hesitant to be employed by another company as a result of his mistreatment by the company directors of Renewable Energy, therefore he took steps to start his own business in his area of expertise. This has left him under undue stress, in addition to working significant greater hours then previously.
In his oral evidence, I formed the view that Mr Pipicella was an honest and decent person. Although he was not subject to the rigours of any cross-examination, I have no reason to think anything other than he is a person of credit. It was obvious to me that he remains deeply upset by what occurred to him during his later months of his employment with Renewable Energy.
From Mr Pipicella’s perspective, he has done everything available to bring a resolution of his claim. A conference at the Fair Work Commission was held, although that did not assist to resolve the dispute between the parties. Notwithstanding the respondents raising a judicial objection in which Mr Pipicella was tasked with responding to, albeit at a late stage such objection was withdrawn.
Rule 13.04(2) of the Rules outlines the circumstances in which a respondent is taken to be in default. It includes the following:
(a) has not satisfied the applicant’s claim; and
(b) fails to:
(i)give an address for service before the time for the respondent to give an address has expired; or
(ii)file a response before the time for the respondent to file a response has expired; or
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.
The powers of the court, when a respondent is found to be in default, are set out in rule 13.05(2) as follows:
(2) If a respondent is in default, the Court may:
(a)order that a step in the proceeding be taken within the time limited in the order; or
(b)if the claim against the respondent is for a debt or liquidated damages—grant leave to the applicant to enter judgment against the respondent for:
(i) the debt or liquidated damages; and
(ii) if appropriate—costs; or
(c)if the proceeding was started by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant; or
(d) give judgment or make any other order against the respondent; or
(e)make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.
In Speedo Holdings BV v Evans (No 2)[15] Flick J identified some principles which are to be applied by the court when considering whether to enter a judgment against a defaulting respondent. They can be summarised as follows: the power is discretionary; and it must necessarily be utilised cautiously.
[15] Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [20] – [21].
In all the circumstances of this case, I am satisfied that Mathew and Renewable Energy have failed to defend the proceedings with due diligence, as each has failed to provide an address for service nor file a response as required by the Rules. The ongoing failure of the respondents to participate in these proceedings has caused the applicant to incur ongoing legal expenses in which needs to be brought to a closure. Therefore, I am satisfied that it is appropriate for the court to proceed with determining Mr Pipicella’s application, notwithstanding the absence of each of the respondents.
LEGISLATIVE PROVISIONS APPLICABLE TO GENERAL PROTECTION PROCEEDINGS
Part 3-1 of the FWA is headed General Protections. Pursuant to section 340(1) a person must not take “adverse action” against another person because that other person has a workplace right.
Section 342(1) of the FWA contains a table setting out the circumstances in which a person is to be regarded as having taken adverse action against another person. The table provides as follows:
Meaning of adverse action
Item
Column 1
Adverse action is taken by …
Column 2 if …
1
an employer against and employee
the employer:
a) dismisses the employee; or
b) injures the employee in his or her employment; or
c) alters the position of the employee to the employee’s prejudice; or
d) discriminates between the employee and other employees of the employer
Section 341(1) provides the definition of workplace right. A person has such a right if, amongst other matters, he or she:
(1)A person has a workplace right if the person:
….
(c)is able to make a complaint or inquiry:
(i)to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee—in relation to his or her employment.
Pursuant to section 351(1) of the FWA
(1)An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person’s race, colour, sex, sexual orientation, breastfeeding, gender identity, intersex status, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin,
As previously indicated, Mr Pipicella has not indicated what is the precise attribute pertaining to him, arising under section 351(1), which he asserts was the operative reason for him being subject to adverse action. I presume it is the medical condition which was the subject of Dr Ljubincic’s certificate.
Mr Pipicella submits that he exercised his workplace right as outlined in section 341(1)(c) of the FWA by making a complaint to Renewable Energy’s directors by email regarding his unpaid commission and indicating his intention to bring such issues to the attention of the Fair Work Commission.
As a consequence of the use of the word because in section 340 there must be a factual link between the taking of the adverse action against the applicant concerned and a protected attribute relating to that applicant as a consequence of a workplace right exercised by him or her.
In a general protection claim, section 361 of the FWA is of central importance. This section places the onus of disproving the necessary causal link on the respondent, which is often described as the reverse onus. It reads as follows:
361 Reason for action to be presumed unless proved otherwise
(1) If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
For obvious reasons, it is a very difficult task for an applicant to prove what was occurring in the mind of any person alleged to have taken the adverse action in question. The task is made more difficult in the case of decisions made in a corporate or managerial environment, or in this case where relevant decision makers have not provided evidence to discharge the onus. These difficulties, arising in the context of beneficial legislation directed toward remedying injustices, against employees, in an industrial setting.
Considerations of this kind inform the rationale for the implementation of one of the central features of the general protection provisions, namely the creation of the reverse onus. The effect of section 361 is to reverse the legal onus in relation to the establishment of the reason or reasons for which any alleged adverse action was taken. Essentially, Mr Pipicella does not have to prove what was the specific reason why his employment was terminated.
Rather, if it is established, by any applicant, that there their employment is subject to a relevant workplace right and they have also established that they have been subject to adverse action, the onus passes to the employer to provide the substantive and operative reasons for the adverse action, particularly that it was not for a reason protected by the FWA.
Section 361 of the Act comes into operation only after it has been established “that adverse action was taken” and “that a relevant workplace right exists” “as an objective fact”.[16]In Jones v Queensland Tertiary Admissions Centre Limited (No 2) Collier J explained the operation of section 361 in the following terms:
That the employee is required to first prove the existence of objective facts which are said to provide a basis for the alleged adverse action, before the onus shifts to the employer in respect of the prohibited reason … it is not sufficient for [an applicant] to simply allege that she had a workplace right and that she was the subject of adverse action – rather on the assumption that [an applicant] is able to prove these allegations, the burden is then cast on to [the employer] to prove that adverse action was not taken against [an applicant] because of [her] workplace rights for the purposes of section 340 and 361 of the Act.[17]
[16] See CFMEU v Anglo Coal (Dawson Services) Pty Ltd [2015] FCAFC 157 at [76].
[17] See Jones v Queensland Tertiary Admissions Centre Limited (No 2) [2010] FCA 399 at [10].
Necessarily, after adverse action has been established and its relation to a workplace right, the reverse onus must involve an analysis, by the court, of the reason or reasons why the adverse action was taken by the person or persons who made the relevant decision to take the adverse action.
These were issues which were subject to detailed analysis, by the High Court, in Board of Bendigo Regional Institute of Technical & Further Education v Barclay. In order to determine whether the onus has been discharged, French CJ and Crennan J made it clear that the court is required to take into account all the relevant facts and circumstances of the case, as established by the evidence. They said as follows:
This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in section 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.[18]
[18] See Board of Bendigo Regional Institute of Technical & Further Education v Barclay (2012) 248 CLR 500, 517 at [45] per French CJ and Crennan J (footnotes omitted).
In similar vein, Gummow and Hayne JJ said that:
In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a "substantial and operative factor" as to constitute a "reason", potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under section 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.[19]
[19] See Board of Bendigo Regional Institute of Technical & Further Education v Barclay (2012) 248 CLR 500, 542 at [127] per Gummow and Hayne JJ.
In summary, an application arising under Part 3-1 of the Act involves three elements:
·Does the applicant have a workplace right or other protected attribute arising under either section 340 or 351 of the Act;
·Did the respondent concerned take adverse action against the applicant;
·If so, was the adverse action taken because of the applicant’s possession, exercise or proposed exercise of that workplace right or because of one of the protected attributes of the applicant concerned.
The applicable principles were summarised by the Full Court in State of Victoria (Office of Public Prosecutions) v Grant as follows:
·The central question to be determined is one of fact. It is: “Why was the adverse action taken?”
·That question is to be answered having regard to all the facts established in the proceeding.
·The court is concerned to determine the actual reason or reasons which motivated the decision-maker. The court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker. Nor should such an enquiry be made.
·It will be “extremely difficult to displace the statutory presumption in section 361 if no direct testimony is given by the decision-maker acting on behalf of the employer.”
·Even if the decision-maker gives evidence that he or she acted solely for non-proscribed reasons other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable.
·If, however, the decision-maker’s testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by section 361.[20]
In addition, section 352 of the FWA is headed Temporary absence – illness or injury and provides as follows:
An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
Pursuant to regulation 3.01(2) of the Fair Work Regulations 2009 (Cth) a prescribed illness or injury exists if the employee concerned provides a medical certificate within 24 hours after the commencement of the commencement of the absence. The expression medical certificate is defined by section 12 of the FWA simply as a certificate signed by a medical practitioner.
The medical certificate submitted by Mr Pipicella to Mathew indicated an incapacity to work for a duration of six days. Regulation 3.01(5) provides for provisions which exclude some certificates from the operation of the legislative regime, however the medical certificate does not fall within those parameters. In those circumstances, I find that the certificate of Dr Ljubincic was for a prescribed illness or injury and so falls within the purview of section 352.
ACCESSORIAL LIABILITY
As indicated above, the applicant seeks a declaration be made that Renewable Energy Australia and Mathew Taylor have contravened the provisions of the FW Act and that they both be jointly and severally liable for the compensation payments if attributable.
Section 550(2) of the Act provides that the circumstances in which individuals are taken to have been involved in a contravention of a civil remedy provision. They can be summarised as follows:
·the person has aided, abetted, counselled, or procured the contravention;
·has induced the contravention;
·has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
·has conspired with others to bring the contravention about.
In Fair Work Ombudsman v Devine Marine Group Pty Ltd[21] White J explained the concept of a party being knowingly concerned in a contravention under the FWA in the following terms:
The notion of being “knowingly concerned” in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring” a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which “implicates or involves him or her” in the contravention so that there be a “practical connection between” the person and the contravention…
[21] Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [178].
Mathew Taylor was the company’s sole director and secretary; Mr Pipicella submits that he significantly involved in the day to day running of the business and the decisions that are accompanied with such responsibility.
Mr Pipicella raised with Mathew the concerns he was having regarding the nonpayment of his wages and his commissions. Further, Mr Pipicella was dismissed by a letter shortly after the telephone conversation with Mathew.
In these circumstances, I am satisfied, and I find that Mathew Taylor is liable, on a personal basis, for the general protection breaches of the first respondent, given his managerial and decision-making role at Renewable Energy. The evidence indicates that he was directly involved in the decision to terminate Mr Pipicella. In a practical sense, he made the decision of which Mr Pipicella complains.
FINDINGS
Clearly, Mr Pipicella was subject to adverse action in that his employment was terminated. On the evidence available to me I accept that the termination was as a consequence of the heated argument which occurred between Mr Pipicella and Mathew Taylor, which took place on 27 October 2021.
The argument centred on Mr Pipicella’s claim for payment of the outstanding commissions owed by Renewable Energy for the jobs performed by him and Mathew Taylor’s indication that he would pay only half of these amounts, on the basis that he assessed that the applicant had not done much work on those jobs.
Mr Pipicella concedes that he raised his voice in the argument and alleges that Mathew Taylor also swore at him. Mr Pipicella deposes that he was upset by the conversation and had a sleepless night as a result. It was because of what he describes as the stress of this workplace altercation and the fact that he suffers from high blood pressure that he elected to consult Dr Ljubincic, who provided him with the relevant medical certificate on 28 October 2021.
I am satisfied that Mr Pipicella had a workplace right to raise issues relating to the payment of commissions to him with Mr Mathew Taylor, who was his manager. Given the terms of his employment agreement, particularly the sales incentive/bonus scheme contained in the addendum to it, it was his right to both inquire and complain, if he was of the view that he was not being properly remunerated.
It is the degree of connection between the exercise of this right and his subsequent dismissal from employment on the following day following his provision of Dr Ljubincic’s medical certificate, which is the central evidentiary issue in the case. As previously indicated the onus is on the respondents to furnish what was the substantial and operative reason why Mr Pipicella’s employment was terminated. Mr Pipicella himself bears no onus in this regard.
From his perspective, the circumstances surrounding his termination are clear – he had an argument with his manager about his terms and conditions which upset him. He consulted his doctor, as he was entitled to do, and which is an ordinary incident of employment – workers fall ill for both physiological and psychological reasons. His doctor certified him unfit for work, as a consequence.
Again, a commonplace matter in the workplace and one which, in my view, is an inherent aspect of the industrial safety net. Shortly thereafter he was terminated. Given the temporal coincidence of these events, it is Mr Pipicella’s submission that there can be no mistake why he lost his job – it was because he complained about his terms and then went on sick leave.
The only person who can provide an explanation for this coincidence of events is Mathew Taylor, who has elected not to take part in the proceedings. He was the relevant decision-maker. The only other evidence available to me is the termination letter under the hand of Ms King, whose relationship with the respondents is unclear to me.
Ms King makes many complaints regarding Mr Pipicella’s work performance. For his part, Mr Pipicella refutes the assertion that he had been previously counselled about his performance and conduct at work or had behaved inappropriately towards other staff members. He further denies breaching any confidences relating to Renewable Energy.
Neither Ms King nor Mathew Taylor have submitted themselves to any independent scrutiny as to the veracity of these complaints, which from the applicant’s point of view are uncorroborated and self-serving. In these circumstances, I find that respondents have not discharged the onus upon them arising from section 361 of the Act.
Accordingly, I find that the respondents have breached the provisions of both section 340 and 352 of the Act and are therefore liable to civil penalty and the possibility of making recompense to Mr Pippicella as a consequence of their breaches.
THE LEGAL PRINICPLES APPLICABLE TO THE CALCULATION OF CIVIL PENALTIES
The fundamental task, for the court, is to determine, from all the factual circumstances arising, the gravity or seriousness of the offending, which it is called upon to penalise. The considerations relevant to this task, which has been delineated in a number of decisions of both this court and the Federal Court.[22] The considerations are as follows:
[22] See Mason v Harrington Corporation Pty Ltd [2007] FMCA 7; Kelly v Fitzpatrick [2007] FCA 1080 at [14]. (Tracey J); Blandy v Coverdale NT Pty Ltd [2008] FCA 1533 at [23] (Reeves J).
·The nature and extent of the conduct which led to the breaches;
·The circumstances in which the conduct took place;
·The nature and extent of any loss or damage sustained as a result of the breaches;
·Whether there has been similar previous conduct by the respondent;
·Whether the breaches were properly distinct or arose out of the one course of conduct;
·The size of the business enterprise involved;
·Whether or not the breaches were deliberate;
·Whether senior management was involved in the breaches;
·Whether the party committing the breaches has exhibited contrition;
·Whether the party committing the breaches has taken corrective action;
·Whether the party committing the breaches has cooperated with the enforcement authorities;
·The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
·The need for specific and general deterrence.
The court needs to be careful not to apply a formulaic approach to the imposition of penalties or attempt to extrapolate the penalties imposed in one case to the circumstances of another. Each case involving the imposition of a civil penalty warrants an idiosyncratic approach and a careful analysis of all relevant circumstances. As was stated in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith:
Penalties are not a matter of precedent. The choice of penalty must be dictated by the individual circumstances of a case, not by a line by line comparison with another case.[23]
[23] Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8 at [12] (Graham J).
Clearly the checklist, as enumerated above, is useful. However, it is not to be regarded as an exhaustive list of factors to be considered. The ultimate control on any sentence is that it must be proportionate to the offence committed. A court is not permitted to impose a sentence greater than is warranted by the objective circumstances of the offending.[24]
[24] See Veen v R (No 2) (1988) 164 CLR 465, 472 (Mason CJ, Brennan, Dawson, and Toohey JJ).
Penalties have to be fixed at a meaningful level, not set at a level at which their imposition, on an errant employer, can be seen as an acceptable cost of doing business for the employer. In short, penalties must hurt so that others who are considering cutting corners, so far as the payment and protection of their employees are concerned, will be deterred from doing so.
In the recent case of Australian Building and Construction Commissioner v Pattinson[25] the High Court discussed the inherent problems likely to arise when principles of retributive sentencing, relevant to the criminal law, are applied in civil penalty proceedings. In this context, the High Court rejected the principle of proportionality being applied to the calculation of penalties in the civil sphere. Essentially, the High Court indicated the principle that the maximum penalty should be reserved only for the worst or most egregious examples of the applicable offence did not apply in civil penalty proceedings.
[25] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.
In addition, the High Court indicated that the primacy of deterrence is the objective of any civil penalty regime. As such a sentencing court, in a civil penalty matter, is required to impose a penalty which is proportionate in the sense that it strikes a reasonable balance between deterrence and what is described as oppressive severity.[26]
[26] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [41].
In this context, concepts also applicable in criminal sentencing, such as totality, parity and course of conduct remained relevant. As such, a court sentencing in respect of a civil penalty provision matter retained a discretion. As with all discretions, it is one which must be exercised fairly and reasonably given the subject matter, scope and purpose of the legislation being applied. The aim being to arrive at a penalty which is appropriate.
In this context the High Court indicated as follows:
It is important to recall that an "appropriate" penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a "one‑off" result of inadvertence by the contravenor rather than the latest instance of the contravenor's pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law … In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.
The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors … [such as] where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.
It is not necessary to multiply examples further. It is sufficient to say that a court empowered by s 546 to impose an "appropriate" penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act.[27]
[27] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [46] – [48].
IS THERE A SINGLE COURSE OF CONDUCT
The approach, which the court is required to take, in respect of these contravention proceedings, has been delineated in a number of decisions of the Federal Court.[28] The process can be summarised as follows:
·The court should identify each separate contravention, arising from a breach of either the applicable award or the FWA itself. Pursuant to section 539(2) each such contravention is a distinct incident for penalty purposes;
·The court should determine whether any of these incidents arise in a single course of conduct, within the terms envisaged by section 557(1);
·Then give consideration as to whether any of these contraventions contain elements and factor this into considering what is an appropriate penalty, in all the circumstances, for each contravention;
·Thereafter, the court should fix an appropriate penalty for each single or group contravention, taking into account all relevant circumstances;
·Finally, the court should apply the totality principle. This final step constitutes a review of the aggregate penalty thus far calculated and envisages a consideration of whether such a penalty is an appropriate response to the conduct, which lead to the various contraventions in question. This case has been described as a process of instinctive synthesis.[29]
[28] See Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 at [42] (Mansfield J), citing Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 3) [2011] FCA 579 at [10] (McKerracher J).
[29] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [55] (Graham J).
The totality principle arises when a court is called upon to sentence an individual, as here, in respect of a number of identifiable offences. It is directed to a review of the penalties imposed, in total, in respect of individual offences to determine whether those penalties, in aggregate, constitute a just and appropriate penalty, in all the circumstances arising. As indicated earlier, it has been characterised as a process of instinctive synthesis best summarised in the well-known line from The Mikado “the punishment must fit the crime.”
As indicated above, the legislative provisions relating to how contraventions arising under the FWA are to be grouped for the purposes of calculation of penalty are contained in section 557(1) of the FWA, which reads as follows:
(1)For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a)the contraventions are committed by the same person; and
(b)the contraventions arose out of a course of conduct by the person.
The leading case, on the application of section 557 is the Full Court authority of Rocky Holdings Pty Ltd v Fair Work Ombudsman.[30]The Full Court did not accept that these various incidents of breach were to be regarded as a single course of conduct, referral to a common incident of the employer breaching the applicable modern award per se. The Full Court’s reasoning, in my view, can be summarised as follows:
·The key legislative intent of the FWA is to ensure, through an effective penalty regime, compliance with the minimum terms of relevant modern awards, not to reduce the number of contraventions of civil penalty provisions;[31]
·It is the provision of the Act, set out in subsection 557(2), which is relevant to the course of conduct delineated in 557(1);[32]
·Subsections (1) and (2) are ambiguous. They are capable of referring to the existence of the identified provision or the substance of the identified provision. As such, it is acceptable to have regard to the relevant Explanatory Memorandum, in resolving the ambiguity;[33]
·The object and purpose of section 557 is to ensure that an offender is not punished twice for what is essentially the same criminality. What is or is not the same criminality is an exercise requiring close consideration. However bare identity of motive is seldom sufficient to establish the same criminality in separate and distinct acts of offending;[34]
·It potentially confusing to apply principles dealing with the punishment and sentencing of criminal offences to the application of civil penalties;[35]
·Such an analysis has the prospect of leading to arbitrary and capricious outcomes. By way of example an employer who had contravened a wide range of award provisions, leading to widespread underpayment of a number of employees would be subject to the same maximum penalty as an employer who had contravened one award provision, in respect of one employee on one occasion. This is counter-intuitive.[36]
[30] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62.
[31] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [12] (North, Flick and Jagot JJ).
[32] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [13].
[33] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [14]; see Acts Interpretation Act 1901 (Cth) s 15AB(1)(b).
[34] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [18].
[35] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [25].
[36] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [26].
In my view, although Mr Bourne has alluded to three distinct provisions of the Act as having been contravened by each respondent, the offending constitutes a single course of conduct and, as such, only one pecuniary penalty should be imposed. I do not consider that any breach has been established under section 351. In addition, in my view, the adverse action connected to Mr Pipicella complaining about his terms and conditions and is inextricably intertwined with his submission of the relevant medical certificate.
In my view, it is not an uncommon occurrence that employees become incapacitated as a consequence of workplace disputes. Given the objects of the Act, this cannot provide any pretext or justification for their termination. In my view, it is inimical to the industrial safety net.
CALCULATION OF PENALITIES
The nature and extent of the conduct leading to the breaches.
The evidence available to me indicates that Mathew was the one who elected to not pay Mr Pipicella his entitled wage benefits and commission, as he assumed responsibility of same. It was only until Mr Pipicella raised the non-payment of his entitlements that his wages were paid, yet he was not forwarded the same for his outstanding commissions. This ultimately led to the termination of Mr Pipicella’s employment.
In addition, the termination was following the tender of the medical certificate. In my assessment there is an obvious causal link between the tender of the medical certificate and the decision to terminate Mr Pipicella’s employment. One of the objects of the industrial legislation contained in the FWA is to ensure the maintenance of an economic safety net for employee and the maintenance of a minimum set of conditions applicable to all workers. (see FWA at section 3)
It is inevitable that employees will fall ill and be compelled to seek medical attention to recover and recuperate. In my view, it is one of the most basic aspect of the industrial safety net. Employees are entitled to be confident that if they are certified as unwell by a medical practitioner, they will not be subject to adverse consequences. In my view, represents a significant breach of the Act and is the aspect of the case most deserving of the court’s censure.
Previous conduct by the respondents
Mr Pipicella submits, and I accept that there has been no previous conduct reported where the respondent has breached the general protections provisions relating to the industrial safety net therefore this is not a factor for consideration.
The size of the business
The court has been provided little evidence regarding the size of the business operated by Renewable Energy, in particular no evidence has been provided of its turnover. Mr Pipicella has informed the court that it employed an administrative assistant alongside himself.
Although Mr Bourne has provided evidence that outlines that Mathew Taylor is also listed as a director of a separate company, no additional information has been provided regarding that company either.
It is well established that the size and financial circumstances of an employer do not, of themselves, provide extenuating circumstances sufficient to reduce the penalty to be imposed. To the contrary, the court must bear in mind that small businesses of one form or another represent a large component of employers in this country In Rajagopalan v BM Sydney Building Materials Pty Ltd, Driver FM, as he then was, said as follows:
Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to the Court’s consideration of penalty.[37]
[37] See Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at [27] (Driver FM).
Contrition and corrective action
The respondents concerned have not demonstrated any contrition in respect of their conduct. Rather, they have not participated in the current proceedings which has inadvertently caused delay for Mr Pipicella in bringing finality to his case and therefore, he has incurred significant additional legal costs. This has had the consequence of intensifying Mr Pipicella’s distress throughout that period, resulting in his reliance on alcohol and increased weight gain.
On the evidence available to me no regret or remorse has been expressed from the Taylor brothers on behalf of Renewable Energy. Clearly the best mechanism for the respondents to express any such regret would be through taking part in these proceedings which I am satisfied they have elected to ignore.
Whether the breaches were deliberate
In my view, the failure to pay Mr Pipicella his earnt commissions is a serious breach of the FWA. The evidence available to me as outlined above, suggests both directors were aware of the non-payments to Mr Pipicella as he had voiced such complaints to them directly.
I am satisfied that, the breaches as identified in this case cannot be characterised as one of inadvertence or lack of knowledge. In these circumstances, I find that Mr Mathew Taylor deliberately elected to breach the provisions of the Act pertaining to him.
General and specific deterrence
Deterrence has two aspects – general deterrence directed towards the community as a whole, and specific deterrence directed towards the individual concerned whose conduct is to be sanctioned. As the High Court has recently indicated, issues of deterrence must be accorded primacy in the imposition of any civil penalty.[38]
[38] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.
In imposing a penalty to reflect general deterrence, the court must impose fines that cannot be seen by others as the cost of doing business.[39]The role of general deterrence in fixing appropriate penalty is demonstrated by what Lander J said in Ponzio v B & P Caelli Constructions Pty Ltd,[40] namely:
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…. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded 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.
[39] See Fair Work Commission v Yogurberry World Square [2016] FCA 1290 at [27].
[40] Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 at [93] (Lander J).
In my view, this is a case which calls for both some level of both general and specific deterrence because of the importance that the legislation gives to the need to protect employees who are compelled by illness to take a temporary absence from their employment. In this context, the breach must be regarded as a significant one.
COMPENSATION
In Dafallah v Fair Work Commission (“Dafallah”)[41] Mortimer J (as she then was) said as follows:
The language of section 545 is broad, allowing the Court to provide remedies which meet the circumstances of any given contravention, taking into account the range of parties who may have brought proceedings in relation to the contravention, and the actions which might in any given circumstance be required to remedy the contravention, or to ensure it does not occur again. Awarding compensation for loss is but one example and may not be appropriate, depending on what other action has been taken in respect of any losses. Each case will turn on its facts in that sense.
[41] Dafallah v Fair Work Commission [2014] FCA 328 at [148].
In addition, it is clear from the wording of section 545(3) that any award of compensation is subject to the court’s discretion.[42] It is also clear from the section, particularly the use of the word because in it that there must be a connection between the loss suffered by the person concerned and the contravention established under the legislation. It is also apparent that the power is subject to what the court considers appropriate. This follows from a reading of section 545(1) of the FWA which states as follows:
The Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
[42] Qantas Airways v Gama [2008] FCFCA 69 at [94].
In Dafallah Mortimer J considered that this what the court considered appropriate was the governing consideration in respect of how compensation arising under section 542(2)(b) should be approached, along with the overall statutory context of the Act, which, as previously noted, is to provide an industrial safety net for workers and to deter employers from breaching their obligations under it. Given these factors, there is no obligation, on the court, to provide full compensation for all losses in contravention cases arising under the FWA.[43]
[43] See Darfallah v Fair Work Commission [2014] FCA 328 at [157].
In addition, there must be an appropriate causal connection between the contravention and the loss claimed.[44] Mr Pipicella has deposed that he registered his current business name in mid December of 2021, a few weeks after his termination but could not commence solar panel installation until he obtained relevant building qualifications in February 2022. He has provided the profit and loss statement for his business for its first six months of operation. It is trading at a modest profit and Mr Pipicella has deposed that he draws a salary of $50,000.00 per annum. He has injected his own capital into the business. He describes the process of starting the business as both rewarding and harrowing. He is earning about the same as he was with Renewable Energy but is working more hours.
[44] See Australian Licenced Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd [2011] FCA 333 at [423] per Barker J.
In all these circumstances, I do not think that it would be appropriate that the claim for economic compensation should play a significant role in the assessment of compensation due to Mr Pipicella. In addition, as previously noted, Mr Pipicella seeks the payment of the pecuniary penalties to be levied against the respondents to be paid personally to him. The court must be cautious about Mr Pipicella potentially double dipping or amount to him receiving a windfall by, in effect, being compensated twice.
I accept that Mr Pipicella was emotionally disturbed following his termination and slept poorly and ignored his general health for a number of months afterwards. As I have previously indicated there is no expert medical evidence available to me to assess professionally and independently what were the objective consequences of this period of incapacity.
In addition, Mr Pipicella’s own evidence indicates that he regained his emotional equilibrium relatively quickly. This is evidenced by the fact that he commenced business in his own account and undertook a course of training. He has also candidly acknowledged that he has not suffered any long-term psychological problems. In these circumstances I assess his claim for non-economic loss as being towards the lower end of the range.
CONCLUSIONS
Mr Pipicella has not received a significant sum of monies to which he is entitled by way of commissions. I am satisfied that the respondents have had both formal and informal notice of this claim and have elected not to contest it. Having found Mr Pipicella to be a credible witness and he having provided documentary evidence to support his calculation,[45] I accept this aspect of his case.
[45] See Annexure A-10 to the applicant’s affidavit of evidence filed 4 August 2023.
I accept the business was in a time of economic hardship following the sudden illness of Troy. However, I also accept on the basis of the evidence available to me that Mr Pipicella undertook extra work during that time to ensure the business maintained its operations. He is not to be deprived of his contractual entitlements because of the financial vicissitudes of his employer.
It is appropriate that Mr Pipicella be resituated what is owed to him by way of commissions. As earlier indicated, I also find that Mr Pipicella was subject to adverse action by way of termination of his employment. I will make orders to this effect and the declarations as sought by him.
Mr Mathew Taylor is a first-time offender, who although has done all that is possible to avoid these proceedings. The need of specific and general deterrence is required in this case given the matters to which I have referred to above, particularly for the court to endorse the effect which is to given to medical certificates by employers and to the right of employees to query their payments and conditions, without fear of retribution.
In all these circumstances, I am of the view that it is appropriate that a penalty of around twenty five percent of the maximum prescribed amount under the FW Act be applied in respect of the composite breaches of section 340 and 352, which I will treat as arsing from the same course of conduct. Accordingly, the penalty imposed is $3,330.00 for Mathew Taylor; and a penalty of $16,650.00 for Renewable Energy – a total of $19,980.00.
Pursuant to section 546(3) of the Act, the court may order the payment of any penalty imposed be paid to the Commonwealth; a particular organisation or a particular person. In this case, Mr Pipicella commenced these proceedings, and, in these circumstances, he seeks the payment of any penalty, to be paid to him personally.
For the reasons, which follow, I accept that submission. However, in applying the totality principle, I must be cautious not to penalise the respondents unduly harshly or impose a double penalty, which result in Mr Pipicella receiving, in effect, a windfall from the proceedings.
In Plancor Pty Ltd v Liquor Hospitality & Miscellaneous Union the Full Court of the Federal Court (Gray, Branson and Lander JJ) discussed the principles to be applied in respect of the appropriate recipient of any penalty imposed by the court in respect of a violation of an industrial law provision.
In his separate judgment Gray J said as follows:
“The correct view is that the initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons (now specified in s 718 of the WR Act) in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the Gibbs exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted.”[46]
[46] See Plancor Pty Ltd v Liquor Hospitality & Miscellaneous Union (2008) 171 FCR 357 at [44] per Gray J.
The Gibbs exception arises when an industrial organisation, such as a union, commences proceedings on behalf of one of its members, in respect of a breach of an industrial provision or award. The proper prosecution of any such breach has the potential to benefit not only the individual directly affected by it, but also members of the union concerned generally.
In such circumstances, it is appropriate that such an organisation be recompensed, in some way, for the costs incurred in bringing the action, rather than consolidated revenue or the individual concerned. Justice Gray rejected any notion that for an applicant to receive a penalty imposed, in circumstances not involving a representative group, could potentially be characterised as a windfall and that it was therefore inappropriate for a penalty to be paid to an applicant, who had personally brought an application.
The majority (Branson and Lander JJ) took a different view but did not specifically rule that a penalty should never be paid to an applicant, in circumstance in which that the applicant was not represented by an industrial organisation. In this context, they characterised the concept of the windfall represented by the payment of a penalty to involve an unexpected and relatively large financial benefit.
Mr Pipicella commenced these proceedings on his own motion, and they have had a somewhat tortuous path to resolution. It is clear that he is not legally aided and has not had the assistance of a union or industrial advocate in preparing or running his case as he submits; he has been put to the expense of approximately $11,600.00 in legal, company search and service fees to finalise his claim.
In all the circumstances of this case, particularly the fact that Mr Pipicella has pursued it personally and at some cost to himself, I am of the view that any penalties imposed should be paid to Mr Pipicella personally.[47]
[47] See McIlwain v Ramsay Food Packaging No 4 [2006] FCA 1302 per Greenwood J approved in Plancor Pty Ltd v Liquor Hospitality & Miscellaneous Union (2008) 171 FCR 357 at [70] per Branson and Lander JJ.
I also consider in these circumstances that these penalties will provide him with an appropriate level of compensation in terms of his claim brought pursuant to the provisions of section 545 of the FWA along with the payments of the monies due to him pursuant to his contract of employment with Renewable Energy.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and fifty-nine (159) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 7 December 2023
[20] See State of Victoria (Office of Public Prosecutions) v Grant [2014] FCAFC 184 at [32].
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