Queensland Nurses Union of Employees v Australian Red Cross Society
[2019] FCCA 706
•29 January 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| QUEENSLAND NURSES UNION OF EMPLOYEES v AUSTRALIAN RED CROSS SOCIETY & ORS | [2019] FCCA 706 |
| Catchwords: INDUSTRIAL LAW – Assessment of compensation – imposition of pecuniary penalties. |
| Legislation: Fair Work Act 2009 (Cth), ss.340, 361, 545, 545(1), 557(1), 557(2) Federal Circuit Court of Australia Act 1999 (Cth) s.76 |
| Cases cited: Defallah v Fair Work Commission (2014) FCA 328 McIlwain v Ramsey Food Packing Proprietary Limited (No 4) (2006) 158 IR 181 |
| Applicant: | QUEENSLAND NURSES UNION OF EMPLOYEES |
| First Respondent: | AUSTRALIAN RED CROSS SOCIETY |
| Second Respondent: | RHIANNON FEALY |
| Third Respondent: | LISA MCILROY |
| File Number: | BRG 680 of 2014 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 29 January 2019 |
| Date of Last Submission: | 29 January 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 29 January 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr R. Reed |
| Counsel for the Respondent: | Mr Y. Shariff |
| Solicitors for the Respondent: | Landers & Rogers |
UPON THE FIRST RESPONDENT UNDERTAKING given to the Court this day that:
(a)The monetary amount of the orders as to remedy and penalty made by the Court on 29 January, 2019 will be paid within seven (7) days into the trust account of Lander & Rogers Lawyers pending the determination of the appeal before the Federal Court of Australia in matter QUD934/2018.
(b)In the event that its appeal in the Federal Court of Australia is unsuccessful it will pay to the applicant, within seven (7) days:
(i)the sum of the money held in Lander & Rogers’ trust account, representing the monetary orders made by the Court on 29 January, 2019; and
(ii)a further sum representing the interest that would have accrued on the money held in Lander & Rogers’ trust account calculated at the rates prescribed in the Federal Court of Australia Practice Note GPN-INT for the period from 29 January, 2019 to the date of the Federal Court of Australia's determination of its appeal.
THE COURT ORDERS THAT:
Pursuant to s.545(1) of the Fair Work Act 2009 (Cth), the first respondent pay to Sandi Emblem, by way of compensation, the sum of $28,285.34 (inclusive of interest).
Pursuant to s.546(1) of the Fair Work Act 2009 (Cth) the first respondent pay a pecuniary penalty of $28,000.00 in respect of the contraventions the subject of the declarations made on 17 December, 2018.
The pecuniary penalty in order 2 hereof be paid to the applicant.
BY CONSENT THE COURT ORDERS THAT:
Orders 1, 2 and 3 hereof be stayed pending the determination of the appeal before the Federal Court of Australia in matter QUD934/2018.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 680 of 2014
| QUEENSLAND NURSES UNION OF EMPLOYEES |
Applicant
And
| AUSTRALIAN RED CROSS SOCIETY |
First Respondent
| RHIANNON FEALY |
Second Respondent
| LISA MCILROY |
Third Respondent
REASONS FOR JUDGMENT
The matter today involves the making of orders for compensation, interest and the fixing of a penalty to be imposed on the first respondent in these proceedings, following the delivery of some reasons for judgment by me on 28 November, 2018.
At the conclusion of the hearing, there was discussion about compensation to which the applicant says Ms Emblem was entitled. There were orders sought by counsel for compensation, which at that time took the form of orders for what essentially was economic loss, an amount calculated by reference to Ms Emblem’s earnings, the amount of time she had been out of work and what she says she had lost. The transcript reveals that at that time, that is on the final day of the hearing, there was also a claim for superannuation by the applicant, which had been calculated to be an amount of $1,002.81.
Counsel for the respondents suggested that there would be some benefit in him being given the opportunity to understand the calculations put forward by the applicant. It was suggested that the parties were likely able to reach an agreement about those matters.
As I have recorded in my principal reasons for judgment at paragraph 156, there was an agreement reached about the amount of compensation for economic loss. It seems that the parties are still in dispute about superannuation, interest and the amount of a penalty that should be imposed.
As to the question of compensation, and in particular the question of superannuation, the applicant says Ms Emblem ought to be entitled to an amount of superannuation calculated by reference to the amount of her economic loss claim, agreed at $19,800-odd dollars, and the then current rate of superannuation contribution of 9.5 per cent. Mr Reed of counsel took me to a case, a decision of Tracey J, where his Honour made a similar award. There are many others.
The respondents say that there should be no order reflective of the superannuation claim made by for Ms Emblem, because the amount that she is receiving by way of these orders – or is to receive by way of the orders – is not an amount which attracts the operation of the superannuation guarantee legislation. That is because the amount that she is receiving is not ordinary time earnings, but rather more akin to a lump-sum payment by way of compensation, upon the termination of her employment and the findings of the Court that entitle her to that compensation. The submissions for the respondents take me to a ruling made by the Australian Taxation Office, which it is said makes clear five points, set out in the written submissions for the respondents.
Subsection 545(1) of the Fair Work Act 2009 (Cth) provides the Court with the discretion to make an order for compensation in an amount which the Court sees as appropriate. Thus, in fixing compensation, the Court is doing just that, making an order which is intended to compensate an applicant for loss that the applicant has suffered by reason of a contravention of the Act.
Section 545 has been the subject of judicial exposition from time to time; so has its precursors. Perhaps one of the more useful expositions, with respect, is that of Greenwood J in McIlwain v Ramsey Food Packing Proprietary Limited (No 4) (2006) 158 IR 181. At paragraph 87 his Honour said this:
In reaching the conclusion that it is appropriate in the circumstances of the case to order compensation, I recognise that compensation must be confined within reasonable limits and that restraint is required (Burazin v Blacktown City Guardian Proprietary Limited). In addition, not every termination of employment will attract compensation. In Burazin, their Honours Wilcox CJ, Von Doussa and Marshall JJ concluded that in the circumstances of that as, there were “unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for distress unnecessarily caused to Mrs Burazin”.
His Honour then goes on to cite from a number of other authorities. The section was also considered by Mortimer J in Defallah v Fair Work Commission (2014) FCA 328. At 148 her Honour there points out that:
The language of section 545 is broad and it allows 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 own facts.
Her Honour pointed out that fixing compensation under s.545 is a statutory task, not one which is to be substituted with the approaches derived from the general law.
If one bears in mind that the task of the Court is to assess compensation, then it becomes clear that the arguments raised by the respondent in opposition to the order to compensate Ms Emblem for her lost superannuation entitlements cannot succeed. That is because the order is not one for restoration to her of an entitlement under the Superannuation Guarantee (Administration) Act1992, but rather an attempt to assess compensation – an amount that she would otherwise have received were it not for the contravening conduct. In those circumstances, the applicant’s claim for superannuation for Ms Emblem is well made, and I will make an order for the amounts claimed by way of compensation for lost superannuation, as set out in the applicant’s outline.
The next question is one of interest. The first thing to record is the significant delay between the hearing of the case and the delivery of judgment. The next thing to consider are the submissions from the respondents, which point out that interest is a matter of discretion. The Court has power to make an order for interest; it is not obliged to do so. But it needs to exercise the discretion to order interest judicially. The discretion in respect of the award of interest is very broad. For example, in the Federal Circuit Court of Australia Act 1999 (Cth), s.76, provision is made for interest to be awarded for the whole or any part of a particular period.
The respondents argue that in the present case the compensation is payable only by virtue of the finding by the Court that the Red Cross has not discharged its onus to rebut the statutory presumption in s.361 of the Act. That is so. The respondents seek to contrast that with a situation where an employer may have underpaid an employee, such that the cause of action arose from the time when the employee was underpaid. But the difference the respondents seek to draw is illusory, in my view, because the cause of action here arose when the respondents committed the acts which the Court subsequently found to be a contravention of the Act.
Ordinarily, interest is awarded from the date that a cause of action accrues. Sometimes it is ordered from the time proceedings are commenced, because there might be a delay in the commencement of proceedings, but ultimately interest is generally awarded in respect of that period which passes from when the cause of action accrues to when judgment is given.
Here, the cause of action did not accrue upon the Court’s findings. The cause of action accrued when the relevant acts were committed by the respondent. Having said those things, it is appropriate, in my view, to reduce the interest award by half, to take into account the delay in the delivery of the judgment. That works something of a disadvantage to the applicant and an advantage to the respondents, but the delay has the opposite effect.
In those circumstances, the interest will be awarded on the total amount of compensation but for half of the rate otherwise set out in the outline of submissions for the applicant.
There is a question of non-economic loss. The Court has power to make an order for compensation for hurt, humiliation and general distress. The authorities make that clear. The decision to which I have already referred, McIlwain v Ramsey Food Packaging, in the passages to which I have referred, make that clear as well. It is not necessary for an applicant who seeks compensation for hurt, humiliation and general distress, to bring medical evidence to prove those things. The cases where such an award has been made make that clear, too. There needs to be some evidence, of course, upon which the Court can make an assessment of that type of compensation. The respondents say here there is no evidence, but there is evidence. There are the depositions from Ms Emblem. And in a case where compensation is sought in respect of hurt, humiliation and general distress, she would be – and is, in my view – the primary witness to give evidence about those things.
The applicant has in its written submissions identified various parts in my reasons for judgment where there is reference to how it was that Ms Emblem felt at particular points in time. In respect of the first contravention, she gave evidence about her distress. The respondents point out that in my reasons I do not use the formula that “I find” particular things to have occurred in respect of the applicant’s evidence about these matters, but is not necessary to do so.
It is, in my view, appropriate to record that in respect of those matters deposed to by Ms Emblem, her distress, her feelings of humiliation and her general hurt, she was not challenged about those matters. And, consistent with the approach that is revealed in my reasons for judgment, there is no reason not to accept what the applicant says about them. Indeed, there are paragraphs in my reasons for judgment identified by the applicant in its written submissions where I have accepted what she has said.
One matter not addressed by the submissions for either party is the contravention against which the order for compensation for her humiliation and general damages ought to be made. There are, of course, four contraventions here, and each episode led the applicant to react in different ways. Having regard to the fact that no submissions have been made about how the compensation might be assessed as against each of the contraventions, in my view, it is appropriate to make a global assessment, and if it is necessary to identify a particular contravention against which that global assessment is made, it is the last contravention, the dismissal from her employment. In my view, the evidence of Ms Emblem about the general distress that she suffered, her feelings of anxiety, her inability to sleep and the like warrant an award of compensation of $3,000.
There is then the question of penalty. As I remarked during the course of submissions, this is not a case where I am dealing with a respondent who is a recidivist. There is another case in which this respondent has been dealt with by the Court for a contravention of the Fair Work Act. The decisions have been placed before me by the applicant, but, in my view, that other decision, the one of Queensland Nurses Union of Employees v Australian Red Cross Society (2016) FCCA 2320 referred to as Baillie, is not of particular significance in this case.
There are four contraventions identified both in the reasons for judgment and the declarations that were made on 17 December, 2018. The first contravention occurred when there was a first and final disciplinary warning issued to Ms Emblem. The second contravention occurred on 28 May, 2018 when Ms Emblem was given a written request to attend to a meeting. The third contravention occurred when Ms Emblem was suspended from her employment from 30 May, 2014 and the fourth occurred when she was dismissed from her employment on 2 June, 2014.
Both parties agree that the provisions of s.557(1) do not apply to these contraventions. That subsection requires the Court to treat as a single contravention multiple contraventions of prescribed pecuniary penalty provisions where those multiple contraventions are committed by the same person and arise out of the same course of conduct. Here, the contraventions are all of s.340 of the Fair Work Act, and s.340 is not a prescribed section for the purposes of s.557(1).
Notwithstanding that the statutory aggregation provision does not apply, nonetheless, the Court must be careful not to punish the same offending conduct more than once. That general principle finds expression in a number of different approaches to the imposition of a pecuniary penalty. That is assuming, of course, that the contraventions here arise out of the same course of conduct. The respondents argue that it does. The common thread is the involvement of Ms Emblem and the general notion that it was her conduct, her behaviour and ultimately her employment that was under consideration. Common also is the involvement of the second and third respondents.
In a general sense, it might be said there was a course of conduct because all of those matters are common factors, but, in my view, the first contravention, as counsel for the respondents submitted in the alternative, is separate to the second, third and fourth contraventions.
Nonetheless, it seems to me that it is appropriate to impose penalty on the respondents for each of the contraventions concerned but taking into account the overlap that there might be between the second, third and fourth.
The contraventions, the first, second and third and, in the way explained by counsel for the respondents in the course of submissions, the fourth, involve middle management of the first respondent. It involved people who were charged and given responsibility for disciplinary procedures and processes. As I have expressed in my reasons for judgment, the investigations undertaken by the second and third respondents, variously, were nothing more than a sham designed to give the appearance of a proper investigation but where none had been done at all. The contraventions, but more particularly the last contravention, are serious.
I take into account the evidence that the respondent now leads that there has been some steps undertaken to assist those people employed by the first respondent to understand their obligations. That is something of some significance.
It is also important to record that there has been no expression of contrition by the respondents. There has been no resolution of the case short of a judgment.
In fixing a penalty, the last contravention should attract the greatest penalty. It is, in my view, the most significant of the four. A penalty of $20,000 is appropriate. I immediately recognise that in the case of Baillie which did not involve termination of employment the penalty was the same, but these cases need to be determined according to their own facts and, as has been often said, comparisons to other cases are often of no particular assistance. In my view, for the fourth contravention, a penalty of $20,000 is appropriate.
In respect of the third contravention, the suspension of Ms Emblem from her employment, a penalty of $4,000 is appropriate. It is more significant than the two contraventions preceding it, the delivery of a letter requiring her to attend a meeting and the delivery of the first and final warning letter, but it effected a significant change in her status. She was suspended from attending her employment. For those reasons, it ought to attract a penalty of $4,000. The first two contraventions, in my view, are the least serious of them all. That is not to say they are not significant, but they should, in the circumstances of this case, attract penalties of $2,000 each. In total, therefore, having regard to those figures, the penalty is $28,000 in aggregate.
In my view, that is an appropriate response to the offending in this case. It takes into account that in respect of all four of the contraventions, the maximum penalty that could be imposed upon the first respondent would be $51,000 in respect of each, but it also takes into account the matters to which I have earlier referred and seeks to avoid punishing the same behaviour more than once.
It is appropriate that the penalty be paid to the applicant. That is the usual order, and there was nothing in the circumstances of this case to suggest that it should be departed from. The applicant has been in these proceedings – or by bringing these proceedings was discharging an appropriate function.
[RECORED: NOT TRANSCRIBED]
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 29 January, 2019.
Associate:
Date: 21 March, 2019
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