Potter v Fair Work Ombudsman

Case [2014] FCA 187

FEDERAL COURT OF AUSTRALIA

Potter v Fair Work Ombudsman [2014] FCA 187

Citation: Potter v Fair Work Ombudsman [2014] FCA 187
Appeal from: Fair Work Ombudsman v Quincolli Pty Ltd [2011] FMCA 139
Fair Work Ombudsman v Quincolli Pty Ltd [2012] FMCA 712
Fair Work Ombudsman v Quincolli Pty Ltd (No 2) [2013] FMCA 17
Parties: JUDITH MADGE POTTER v FAIR WORK OMBUDSMAN
File number: NSD 249 of 2013
Judge: COWDROY J
Date of judgment: 7 March 2014
Catchwords:

APPEAL AND NEW TRIAL – whether the Federal Magistrate at first instance failed to apply his own reasoning to the issues in dispute

INDUSTRIAL LAW – decision of Federal Magistrates Court of Australia that a company had contravened the Workplace Relations Act 1996 (Cth) and the Fair Work Act 2009 (Cth) by failing to remunerate employees in accordance with the Clerical and Administrative Employees (State) Award – whether the Clerical and Administrative Employees (State) Award applied to employees of the company – whether the correct grade of employment under the Clerical and Administrative Employees (State) Award was attributed to the employees – whether a director of the company was accessorily liable for the contraventions of the company

INDUSTRIAL LAW – notice to produce issued upon company under s 712 of the Fair Work Act 2009 (Cth) – company refused to produce documents – whether the company had a reasonable excuse for refusing to comply with the notice to produce - whether a director of the company was accessorily liable for the contravention of the company

PRACTICE AND PROCEDURE – whether the Federal Magistrate erred in in refusing to exercise his discretion to reopen the proceeding
Legislation: Fair Work Act 2009 (Cth) ss 550, 712
Judiciary Act 1903 (Cth) s 55ZG
Workplace Relations Act 1996 (Cth) ss 342, 344, 345, 728
Cases cited:

Clerical & Administrative Employees (Classification Structure) State Award [1996] NSWIRComm 190
Fair Work Ombudsman v Nerd Group Australia Pty Ltd (No 2) (2012) 262 FLR 315
Federated Clerks’ Union of Australia (NSW Branch) v Australian Workers Union [1971] AR (NSW) 419
Giorgianni v The Queen (1985) 156 CLR 473
Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217
Richardson & Wrench (Holdings) Pty Ltd v Ligon No 174 Pty Ltd (1994) 123 ALR 681
Yorke v Lucas (1985) 158 CLR 661

Daryl Dawson 1991 ‘Recent Common Law Developments in Criminal Law’ vol 15 Criminal Law Journal p 5

Date of hearing: 19, 20 August 2013
Date of last submissions: 27 August 2013
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 92
Counsel for the Appellant: The Appellant appeared in person
Counsel for the Respondent: Ms C Howell
Solicitor for the Respondent: Fair Work Ombudsman

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 249 of 2013
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:

JUDITH MADGE POTTER
Appellant
AND:

FAIR WORK OMBUDSMAN
Respondent

JUDGE:

COWDROY J

DATE…

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AGLC
Potter v Fair Work Ombudsman [2014] FCA 187
Case
[2014] FCA 187
Decision Date

CaseChat Overview and Summary

The appeal heard in the case of Potter v Fair Work Ombudsman was brought by Mrs Judith Potter, a director and secretary of Quincolli Pty Ltd, against the Fair Work Ombudsman. The primary dispute was regarding the alleged underpayment of wages and other entitlements by Quincolli Pty Ltd to its employees at a Nowra call centre in 2009. The appeal concerned three decisions from the Federal Magistrates Court of Australia, now known as the Federal Circuit Court of Australia, that had ruled against Quincolli Pty Ltd and Mrs Potter for underpaying their employees and breaching relevant industrial awards and legislation.

The legal issues that the court had to decide were primarily focused on whether Quincolli Pty Ltd had properly lodged Australian Workplace Agreements (AWAs) for its employees and whether the applicable industrial award, the Clerical and Administrative Employees (State) Award (Clerical NAPSA), applied to the employees during the relevant period. The court also had to determine if Quincolli Pty Ltd had complied with a notice to produce documents issued by the Fair Work Ombudsman and if Mrs Potter was complicit in the contraventions of Quincolli Pty Ltd as per the relevant industrial legislation.

The court examined the evidence presented by Quincolli Pty Ltd and Mrs Potter regarding the lodgment of AWAs and found that only three of the 16 purported AWAs had actually been lodged, and even those were not lodged in accordance with the Fair Work Act 2009. The court concluded that the Clerical NAPSA applied to the employees as Quincolli Pty Ltd had not properly lodged AWAs for the majority of its employees. The court also found that Quincolli Pty Ltd had breached various subclauses of the applicable industrial award and had failed to comply with the notice to produce. Additionally, the court determined that Mrs Potter was involved in the contraventions of Quincolli Pty Ltd.

The appeal was ultimately dismissed, and the original decisions of the Federal Magistrates Court of Australia were upheld. The court found that Quincolli Pty Ltd and Mrs Potter were liable for the underpayment of wages and other entitlements to the employees and had breached relevant industrial awards and legislation.

Orders

Orders of the court

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Background

Background to the litigation

This appeal arises from three decisions of Driver FM (as his Honour then was) in the Federal Magistrates Court of Australia (‘the FMCA’) (now the Federal Circuit Court of Australia). The proceedings in the court below concerned the alleged underpayment of wages and other entitlements by Quincolli Pty Ltd (‘Quincolli’) to its employees in the role of call centre operators at a Nowra call centre during 2009. BACKGROUND By virtue of the nature of the appeal, only a brief background of the facts giving rise to the proceedings need be set out. From 1 January 2009 to 31 December 2009 (‘the relevant period’), 33 employees of Quincolli at its Nowra call centre (‘the Employees’) were paid in accordance with agreements that were purportedly lodged as Australian Workplace Agreements (‘AWAs’) by Quincolli with the Office of the Employment Advocate. Quincolli and Mrs Judith Potter, a director and secretary of Quincolli during the relevant period and the appellant to this appeal (‘Mrs Potter’), claimed that such lodgment occurred by post sometime in February and March 2007. If AWAs had been lodged in accordance with the Workplace Relations Act 1996 (Cth) (‘the WR Act’) for each of the Employees, then the Employees would have been properly paid at the rate prescribed by those agreements. However, based upon the evidence of Quincolli and Mrs Potter, AWAs were only lodged in respect of three of the 33 employees. The Fair Work Ombudsman, being the respondent to this appeal (‘the FWO’), submitted that the three AWAs that were purportedly lodged had, on all of the available evidence, not been received by the Office of the Employment Advocate (‘OEA’) or in the alternative had not been lodged in accordance with the Fair Work Act 2009 (Cth) (‘FW Act’) and were therefore of no effect. As a result, the respondent submitted that each of the Employees was entitled to be remunerated under the applicable industrial award, namely the Clerical and Administrative Employees (State) Award (‘the Clerical NAPSA’). On 5 July 2010, Quincolli was issued with a notice to produce by an inspector of the FWO in accordance with s 712 of the FW Act (‘the notice to produce’). Such notice in effect required Quincolli to produce to the FWO any and all documents in relation to whether the Clerical NAPSA applied or should have applied to the employees of the Nowra call centre from March 2006 to December 2009. Compliance was required by s 712(2)(c) of the FW Act within 14 days, being 19 July 2010. On 20 July 2010, the respondent received a letter from Quincolli and Mrs Potter stating that the notice to produce would not be complied with. The respondent received another letter from Quincolli and Mrs Potter on 26 July 2010 setting out the reasons for their non-compliance with the notice to produce. The FWO instituted proceedings in the FMCA against Quincolli and Mrs Potter due to the alleged underpayment of the Employees. The first decision of Driver FM was delivered on 28 November 2011: Fair Work Ombudsman v Quincolli Pty Ltd [2011] FMCA 139. The primary judge determined that during the relevant period:a)Quincolli (then known as Well Done Group Pty Ltd) had underpaid wages and entitlements to the Employees in contravention of s 182(1) of the WR Act;b)Quincolli breached various subclauses of the applicable industrial award, namely the Clerical and Administrative Employees (State) Award (‘the Clerical NAPSA’);c)Quincolli breached s 712(3) of the FW Act by failing to comply with the notice to produce;d)Mrs Potter was involved in each of the contraventions of Quincolli within the meaning of s 728 of the WR Act and s 550 of the FW Act.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Mrs Potter represented herself at the hearing of the appeal, but had assistance from a person with legal training in preparing her written submissions. Mrs Potter also relied upon additional material which was said to supplement her oral submissions. CONSIDERATION Each of the six grounds of appeal will be considered in turn.Ground 1: Application of the Clerical NAPSA The principal dispute between the parties is whether the Clerical NAPSA applied to the relevant employees of Quincolli during the relevant period. This involves three issues:a)Whether Quincolli had properly lodged AWA’s in respect of each of its relevant employees;b)If not, whether the Clerical NAPSA applied to those employees; andc)If so, which grade of the Clerical NAPSA was applicable? The legislative background to these issues was succinctly stated by the primary judge at [31]-[35] of the first decision as follows:In respect of breaches occurring prior to 1 July 2009, item 11(1) of Part 3 of Schedule 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) provides that the Workplace Relations Act continues to apply on and after 1 July 2009 in relation to conduct that occurred before that date. Part 5-2 of the Fair Work Act applies to conduct that occurred prior to 1 July 2009, pursuant to sub-item 14 of Part 3 of Schedule 18 of the Transitional Act and Sub-item 13(1) of Part 3 of Schedule 18 of the Transitional Act gives Fair Work Inspectors the power to make or continue applications under the Workplace Relations Act. Part 4-1 of the Fair Work Act applies as if items 2 to 8 and 10 to 15 of Schedule 16 of the Transitional Act were provisions of the Fair Work Act. Item 2 deals with contraventions of award-based transitional instruments (which include NAPSAs) and Item 5 deals with contraventions of section 182 of the Workplace Relations Act as it continues to apply. On 27 March 2006 the Clerical and Administrative Employees State (Award) (Clerical Award) was taken to be replaced by an instrument called a Notional Agreement Preserving State Award (NAPSA)]. Pursuant to clause 43(1) of Part 3 to Schedule 8 of the Workplace Relations Act, a NAPSA may be enforced as if it were a collective agreement. [Footnote omitted]Purported lodgment of AWAs Quincolli claimed that it had entered into Australian Workplace Agreements (‘AWAs’) in February and March 2007 with respect to 16 of its employees. The effect of such agreements under the relevant industrial legislation would, if valid, have determined the working conditions of those employees. As referred to above at [3], it appears that only three of the 16 employees who had signed AWAs remained employed by Quincolli by 1 January 2009. Putting to one side the fact that the remaining 30 of the relevant employees could not in any event have been covered by AWAs, Mrs Potter claimed that she had endeavoured to effect registration of the agreements online. As she found it was difficult to use such service she posted the AWAs to the OEA. Mrs Potter stated before the primary judge that she assumed that the 16 AWAs had been properly processed.