Raeburn v Amici Bakery Cafe Pty Ltd & Ors and; Plaiche v Amici Bakery Cafe Pty Ltd & Ors and; Hill v Amici Bakery Cafe Pty Ltd & Ors and; Plaiche v Amici Bakery Cafe Pty Ltd
[2014] FCCA 1008
•2 July 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RAEBURN v AMICI BAKERY CAFE PTY LTD & ORS and PLAICHE v AMICI BAKERY CAFE PTY LTD & ORS and HILL v AMICI BAKERY CAFE PTY LTD & ORS and PLAICHE v AMICI BAKERY CAFE PTY LTD & ORS | [2014] FCCA 1008 |
| Catchwords: LAWYERS – Restraining lawyers from acting – grounds for restraint. |
| Legislation: Fair Work Act 2009, ss.45, 535, 545, 546, 550. |
| Bahonko v Nurses Boardof Victoria (No 3) [2007] FCA 491 Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 PhotoCure ASA v Queen’s University at Kingston (2002) 56 IPR 86 Canberra Residential Developments [2009] FCA 1484 Skipworth v State of Western Australia & Ors (No. 2) (2008) 218 FLR 16 Grimwade v Meagher and Ors [1995] 1 V.R. 446 |
| First Applicant: | KARA TAMIKA RAEBURN |
| First Respondent: | AMICI BAKERY CAFE PTY LTD |
| Second Respondent: | PAUL FRANCIS KORCZAK-KRZECZOWSKI |
| Third Respondent: | SANDRA LEE |
| Fourth Respondent: | JEAN LEE |
| Fifth Respondent: | DANIEL SCOTT KAGAN |
| File Number: | MLG 1496 of 2013 |
| Second Applicant: | NADINE PLAICHE |
| First Respondent: | AMICI BAKERY CAFE PTY LTD |
| Second Respondent: | PAUL FRANCIS KORCZAK-KRZECZOWSKI |
| Third Respondent: | SANDRA LEE |
| Fourth Respondent: | JEAN LEE |
| Fifth Respondent: | DANIEL SCOTT KAGAN |
| File Number: | MLG 1497 of 2013 |
| Third Applicant: | SOLOMON LIMAIRII HILL |
| First Respondent: | AMICI BAKERY CAFE PTY LTD |
| Second Respondent: | PAUL FRANCIS KORCZAK-KRZECZOWSKI |
| Third Respondent: | SANDRA LEE |
| Fourth Respondent: | JEAN LEE |
| Fifth Respondent: | DANIEL SCOTT KAGAN |
| File Number: | MLG 1498 of 2013 |
| Fourth Applicant: | BEATRICE PLAICHE |
| First Respondent: | AMICI BAKERY CAFE PTY LTD |
| Second Respondent: | PAUL FRANCIS KORCZAK-KRZECZOWSKI |
| Third Respondent: | SANDRA LEE |
| Fourth Respondent: | JEAN LEE |
| Fifth Respondent: | DANIEL SCOTT KAGAN |
| File Number: | MLG 1499 of 2013 |
| Judgment of: | Judge Jones |
| Hearing date: | 27 March 2014 |
| Date of Last Submission: | 8 May 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 2 July 2014 |
REPRESENTATION:
| Counsel for the Applicants: | Mr Bolton |
| Solicitors for the Applicants: | Gleeson & Co |
| Counsel for the Respondents: | Mr McDermott |
| Solicitors for the Respondents: | Peter Lustig |
ORDERS:
The application by the respondents for orders that Gleeson & Co be restrained from acting for all or any of the applicants is dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1496 of 2013
| KARA TAMIKA RAEBURN |
First Applicant
And
| AMICI BAKERY CAFE PTY LTD |
First Respondent
| PAUL FRANCIS KORCZAK-KRZECZOWSKI |
Second Respondent
| SANDRA LEE |
Third Respondent
| JEAN LEE |
Fourth Respondent
DANIEL SCOTT KAGAN
Fifth Respondent
MLG 1497 of 2013
| NADINE PLAICHE |
Second Applicant
And
| AMICI BAKERY CAFE PTY LTD |
First Respondent
| PAUL FRANCIS KORCZAK-KRZECZOWSKI |
Second Respondent
| SANDRA LEE |
Third Respondent
| JEAN LEE |
Fourth Respondent
DANIEL SCOTT KAGAN
Fifth Respondent
MLG 1498 of 2013
| SOLOMON LIMAIRII HILL |
Applicants
And
| AMICI BAKERY CAFE PTY LTD |
First Respondent
| PAUL FRANCIS KORCZAK-KRZECZOWSKI |
Second Respondent
| SANDRA LEE |
Third Respondent
| JEAN LEE |
Fourth Respondent
DANIEL SCOTT KAGAN
Fifth Respondent
MLG 1499 of 2013
| BEATRICE PLAICHE |
Applicants
And
| AMICI BAKERY CAFE PTY LTD |
First Respondent
| PAUL FRANCIS KORCZAK-KRZECZOWSKI |
Second Respondent
| SANDRA LEE |
Third Respondent
| JEAN LEE |
Fourth Respondent
DANIEL SCOTT KAGAN
Fifth Respondent
REASONS FOR JUDGMENT
Introduction
This is an application in a case made by the respondents seeking orders that the lawyers acting for the applicants (Gleeson & Co) be restrained from so acting in the substantive proceedings.
The substantive proceedings relate to separate applications made by KARA TAMIKA RAEBURN, BEATRICE PLAICHE, NADINE PLAICHE and SOLOMON LIMAIRII HILL seeking compensation and civil penalties pursuant to s.545 and s.546 of the Fair Work Act 2009 (“the Act”) in relation to alleged breaches by the respondents of the Restaurant Industry Award 2010 (“the Award”), the Act and the Fair Work Regulations 2009 (“the Regulations”).
AMICI BAKERY CAFÉ Pty Ltd (“the first respondent”) is in the business of a restaurant and associated catering and was at all relevant times the employer of the applicants. Ms Raeburn was employed by the first respondent full time in a managerial position, Cafe Manager. Each of the other applicants were employed by the first respondent as casuals and shall, for the purpose of this decision, be referred to collectively as “the casuals.” PAUL FRANCIS KORCZAK-KRZECZOWSKI was a director and secretary of the first respondent at various times and SANDRA LEE and JEAN LEE were directors of the first respondent at various times.
By order made 9 October 2013, the Court ordered that each of the applications be heard contemporaneously. The substantive proceedings in relation to the applications by the casuals are listed for final hearing on 15 October 2014. On 23 May 2014, orders were made joining DANIEL SCOTT KAGAN as fifth respondent. Leave was granted to the respondents to file and serve an amended response, including a cross-claim against the fifth respondent. Directions were made for the filing and serving of written submissions in relation to the respondents’ application in a case.
The crux of the respondents’ submissions is that there exists or there may exist a conflict of interest[1] in Gleeson & Co acting for all applicants because they allege that Raeburn, as Cafe Manager, had responsibility for various duties, the neglect of which, resulted in the claimed breaches (if any, as they are denied by the respondents). It is argued that because of this, Gleeson & Co cannot properly represent Raeburn, on the one hand, and the casual employees, on the other. The respondents’ submissions will be considered in more detail below.
[1] In their of Outline Of Submissions in reply the respondents submit there is a "prospect of conflict" (at [16]).
Courts Jurisdiction and Applicable Principles
The real issue in this case is whether the Court should restrain Gleeson & Co from acting for the applicants in accordance with general principles of the interests of the administration of justice and pursuant to a general power of the Court to control legal practitioners as officers of the Court. This principle has been discussed in two cases in the Federal Court. In Bahonko v Nurses Boardof Victoria (No 3) [2007] FCA 491 (“Bahonko”) Middleton J said at [4]:
“Justice Young in Geelong School [2006] FCA 1404 recently set out the relevant legal principles to be applied when considering whether to restrain a legal practitioner from acting for a particular party to litigation, there being three possible grounds for so restraining a legal practitioner.
(a)the danger of misuse of confidential information: Geelong School [2006] FCA 1404 at [24];
(b)breach of a fiduciary duty of loyalty not to act against a client or against a former client in the same manner or a closely related matter. Geelong School [2006] FCA 1404 at [24]; and
(c)the inherent jurisdiction of the Court to control the conduct of legal practitioners as officers of the Court: Geelong School [2006] FCA 1404 at [24], [32] and [33].”
At [11] his Honour said, in relation to the third principle:
“The crucial question is whether, on the evidence before the Court, a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that the legal practitioner be restrained from acting for its client in the proceedings: Geelong School [2006] FCA 1404 at [35].”
In Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404 (“Geelong School Supplies”) his Honour Justice Young referred to a decision of Goldberg J in PhotoCure ASA v Queen’s University at Kingston (2002) 56 IPR 86 and stated at [35]:
“The crucial question, therefore, is whether on the evidence before me a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that [the solicitors] be restrained from acting for [the party] in the proceedings. In answering this question it must be borne in mind that this is an application for a permanent injunction: Yunghanns v Elfic Ltd (unreported, Supreme Court of Victoria, Gillard J, 3 July 1998). It must also be borne in mind that the Court's jurisdiction is an exceptional one; it is to be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of a solicitor of its choice without due cause.”
In Canberra Residential Developments [2009] FCA 1484 (“Canberra Residential Developments”) his Honour Justice Stone stated at [20]:
“20.Finally, the inherent jurisdiction of the Court to control its processes in aid of the administration of justice would only be evoked to restrain a legal practitioner from acting for its client if “a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice” warrants such restraint; Geelong School Supplies at [35]. It is a jurisdiction that “is to be regarded as exceptional and is to be exercised with caution”; Kallinicos v Hunt (2005) 64 NSWLR 561 at 582. In this case the emphasis must be on reasonably informed”
I accept that this Court does not have inherent jurisdiction but rather an implied incidental power to make orders necessarily incidental to its express powers: Skipworth v State of Western Australia & Ors (No. 2) (2008) 218 FLR 16 at 27 per Lucev FM; [2008] FMCA 544. The Court, having statutory powers to issue injunctions, must be able to control its own processes including, controlling officers of the Court who appear before it. With this in mind, I respectfully adopt and apply the principles set out in Bahonko, Geelong School Supplies and Canberra Residential Developments in determining this matter.
Submissions
Respondents’ submissions
The respondents submit that the duties and responsibilities of Raeburn are set out in a document entitled, “Amici Bakery Cafe Pty Ltd Job Description Document” (“Job Description”) agreed to and signed by Raeburn and Mr Kagan, the then Managing Director of the first respondent on 15 February 2011. The job description is in relation to a position title, Café Manager Amici Prahran. The respondents submit that the Job Description refers inter alia to the following:
· “manage and maintain the front and back of house operations and areas
· ensure the front of house and back of house areas work in unison and cooperatively with each other and with all other areas of amici bakery, catering and management
· work with senior staff members to provide management cover during all hours of operation
· be up to date with all legislative and regulatory requirements”
The respondents submit that in the major responsibility areas section of the Job Description there are headings such as, “manage the Amici Prahran business and operation”, “manage and operate Amici within the company’s financial guidelines”, “ensure Amici Prahran always operates in conformance and compliance with all legislative and regulatory requirements … and understand the implications to Amici.” The respondents further rely on the specification of duties under the section, Staff Management which includes:
· “assist in preparing, reviewing and signing off on all staff timesheets
· assist in establishing and organising staff rosters, leave and timesheets”
Mr Korczak-Krzeczowski deposes that Ms Raeburn’s duties included, “the hiring and firing (as required) of staff, setting their appropriate hourly rate of pay (in accordance with statutory requirements), ensuring timesheets were kept properly (thereby enabling employees to be paid accurately) and otherwise, being responsible for the employees. Jean on the other hand, would collect the timesheets regularly – usually when she came into the cafe to assist over weekends – and from those timesheets and the rate of pay from each employee advised to her principally by Raeburn, would enter those details in Amici’s MYOB accounting system which produced the payslips, and then she would make the corresponding payments.”[2]
[2] Affidavit of Paul Francis Korczak – Krzeczowski sworn 20 May 2014 at [12].
The respondents allege that Ms Raeburn’s duties as Cafe manager required her, “to ensure all staff completed and signed timesheets in order for their hours to be calculated preparatory to calculation of wage entitlements by Payroll.”[3] It is the respondents submission that Ms Raeburn was contractually responsible for the engagement of staff, the determination of wage rates, to advise the first respondent what each employee ought to have been paid, and if they were not being paid properly under the Award, to bring it to the attention of Payroll.
[3] Respondents’ Outline of Submissions at [7].
Ms Jean Lee deposes that she became aware of the engagement of employees by way of an Employment Record. She deposes that, “It was accepted practice that each new employee would start at a base rate unless Raeburn nominated otherwise. Later, as the employee became more skilled, Raeburn predominantly and occasionally Kagan would advise an increased rate. I dutifully relied on the data given to me to complete my bookkeeping duties in relation to such an employee.”[4]
[4] Affidavit of Jean Lee sworn 20 May 2014 at [5].
The respondents submit that Raeburn failed to discharge her contractual duties, having not once alerted any officer, Kagan or Payroll that the casuals were being underpaid.[5] The respondents submit that it follows from this, that:
“If the Court were to find that Raeburn was responsible for the underpayments to the casual employees, and that is the case for the respondents, then it would seem untenable for the legal practitioners to act for all of the Applicants, as their interests are conflicted” [6]
[5] Respondents’ Outline of Submissions at [10], [12].
[6] Ibid at [15]
The respondents refer to various authorities in support of its submissions. The extracts from the authorities relied on by the respondents is set out in full below:
“26.In Nangus Pty Ltd and Another v Charles Donovan Pty Ltd 1989 VR 184 at 185, Chief Justice Young made some observations concerning the issue of conflict of interest. His Honour stated:
“The general rule undoubtedly is that counsel ought not to appear for two clients whose interests may conflict: see Halsbury's Laws of England 4th Ed, vol 3, para 1143.”
His Honour referred to the authorities of Day v Ponsonby (1842)5 I. Eq R. 24 and Re Burton, Danby v Burton (1901] W.N. 202 where Farwell J would not allow the summons to proceed observing: “It is the duty of trustee's counsel to assist the Court, and he ought not to argue on behalf of a beneficiary.” The Chief Justice concluded at page 186:
“... It is sufficient to say that where the interests of two parties apparently conflict or may conflict it will be for the Court to say whether there may be a departure from the prima facie rule.”
27.Hill J in Trade Practices Commission v CC (New South Wales) Pty Ltd and Ors (1994) 125 ALR 94 at 105 observed:
“The conflict is so acute that mere disclosure to the parties of the conflict and authorisation that the conflict continue even where the parties are given the opportunity to seek independent legal advice on the question of authorisation, cannot solve the problem. Mere consent of the parties to the continuation of a conflict is not enough. There must be informed consent in the real sense of those words: Cf Commonwealth Bank of Australia v Smith [1991] FCA 375 That is not the case here. Whatever may be the situation where different persons in one firm act for clients of competing interest (the so-called Chinese-Walls case) it is obvious that a solicitor cannot place himself in a position where he or she has a duty to parties with conflicting interests where one party is under financial duress to accede to that course and no independent legal advice is obtained from an adviser fully informed of all the material facts and circumstances of the case.”
28.In Maguire v Makaronis [1997] HCA 23, the High Court referred at 465 with approval to the formulation of the principle by Richardson J in Farrington v Rowe McBride & Partners [1985] 1NZLR 83 where His Honour held:
“A solicitor's loyalty to his client must be undivided. He cannot properly discharge his duties to one whose interests are in opposition to those of another client. If there is a conflict in his responsibilities to one or both he must ensure that he fully discloses the material facts to both clients and obtains their informed consent to his so acting ...and there will be some circumstances in which it is impossible, notwithstanding such disclosure for any solicitor to act fairly and adequately for both. But the acceptance of multiple engagements is not necessarily fatal. There may be an identity of interests or the separate clients may have unrelated interests. Such cases seem straightforward so long as it is apparent that there is no actual conflict between duties owed in each relationship.”
29.And in Archer v Howell (No 2) (1992) 10 WAR 33 at 49 Rowland J added:
“It seems to me that the whole of the case has been run on the basis that there is an absolute rule of professional conduct that a practitioner cannot act for two persons where there is a prospect of conflict ....”
30.Kirby P, as he was then, said in Waimond Pty Ltd and Another v Byrne (1989) 18 NSWLR 642 at 643:
“this appeal ... Illustrates once again the dangers which exist when a solicitor acts for more than one client, where the interests of the several clients do not exactly coincide. The only safe course in such circumstances, where the pursuit of one client's interest might result in foreseeable damage to another, is to send the other to another solicitor for independent advice or, at least, to obtain with scrupulous care the specific instructions of the other in order to ensure the discharge of the duty separately owed to it.”
Applicants’ submissions
The applicants submit that there is no conflict of interest for the following reasons:
a)the allegation of a conflict of interest is based on disputed evidence, given that Ms Raeburn denies that the Job Description formed part of her employment contract with the first respondent. She says she was employed as the Cafe Manager (front-of-house) not Operations Manager. Raeburn submits that the lack of specificity in her duties were an ongoing issue during her employment as evidenced by an email dated 16 December 2012 forwarded by Mr Korczak-Krzeczowski to her; and
b)the Job Description, even if it were accepted as a reflection of Raeburn’s responsibilities and duties at the relevant time, did not empower her to determine wages. The applicants submit that the production of timesheets, pay advice, superannuation, contract documentation and wage agreements were the responsibility of Ms Sandra Lee and Ms Jean Lee. They refer to an exchange of text messages as between Ms Raeburn and Ms Jean Lee on 19 April 2012 and between Ms Raeburn and another employee on 24 October 2012, which they submit on their face, demonstrates that the responsibility for the payment of wages (including the actual wage rate) rested with Ms Sandra Lee and Ms Jean Lee.[7]
[7] Affidavit of Bradley Grant Bolton sworn 7 May 2014, “BGB–4” and “BGB-5”
The applicants submit that the response of the respondents to the notifications of breaches of the Award demonstrate that the authority to determine wage rates rested with the respondents. The relevant extracts from the applicants’ submissions are set out below: [8]
“12.On 24 November 2012 Fancis Korczak-Krzeczowski, sent an email entitled FOH Payroll Proposal to various officers of the Respondent company, including Raeburn, in which he refers to a meeting of that date. The body of Korczak-Krzeczowski’s email makes it clear that the Respondents failure to comply with the Restaurant Industry Award 2010 was discussed at the meeting. His email states:
After our meeting of today I thought it would be worthwhile to examine the proposal to pay staff extra in exchange for them not being paid extra for working public holidays… if we were to pay staff an extra $1 per hour above the standard award rate for every hour worked then they would earn an additional $2,080 plus super. In order for them to get this additional pay they would have to sign that they agree to be paid the standard rate whatever day they work.
13.By way of email Raeburn responded to Korczak-Krzeczowski’s email of the 24th, stating:
I think that’s a great idea this will cover all bases. Please let me know when you would like to implement this and I will get the new contracts drawn up for each staff member.
14.On 29 November 2012 Korczak-Krzeczowski sent a further email to Jean Lee, in which he again confirmed that the Respondents would not be complying with the award stating:
We will not be paying 1.25 x rate for Saturdays. Nor will we be paying 1.5 rate for Sundays. The idea is that we pay (say) a $1 above the normal award for every hour worked whatever day it is worked, Monday to Sunday, public holiday, whatever.
The above exchange not only demonstrate that Raeburn was not orchestrating underpayments to the Respondents employees but also that the authority to determine wages rested with the Respondents.”
[8] Outline of Submissions on Behalf of the Applicants [12] to [14]
The applicants argue that the respondents’ submission that any underpayments were the responsibility of Ms Raeburn is one of recent invention. In making this argument, the applicants refer to a letter from the respondents’ solicitor dated 23 February 2013[9] to Ms Raeburn following Ms Raeburn’s complaints made to Fair Work Australia (sic) which refers to certain anomalies alleged by the respondents in relation to Ms Raeburn’s employment with the first respondent. The applicants point to the fact that none of the eight anomalies alleged involve allegations that Ms Raeburn was responsible for the underpayments.
[9] Ibid, “BGB-8”
Finally, the applicants submit that explicit instructions have been obtained by Gleeson & Co from all the applicants, “that Jean Lee was the person responsible for all money matters and that Jean Lee was the person who set rates of pay, in consultation with Korczak-Krzeczowski, Daniel Kagan and later Sandra Lee.”[10] These instructions, they state were conveyed to the respondents then Counsel by email dated
10 October 2013.[11]
[10] Ibid at [25]
[11]Affidavit of Bradley Grant Bolton sworn 7 May 2014, “BGB-10”
I note for completeness that the respondents, in their Outline of Submissions in Reply and by way of affidavits sworn by Ms Sandra Lee and Ms Jean Lee, refute much of the matters alleged by the applicants. They are critical of the applicants reliance on hearsay evidence, their failure to adduce evidence in support of the allegations and, in particular, their failure to produce evidence, by affidavit material, that there is informed consent by the casuals to Gleesons & Co acting for all applicants.[12]
[12] Outline of Submissions in Reply at [12]
Consideration
The paramount consideration in determining whether the Court should exercise its implied powers to control its processes by restraining a solicitor from acting for a party is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice warrants such restraint. As observed by the Federal Court in Canberra Residential Developments the emphasis must be on a “reasonably informed member of the public.” Moreover, the exercise of such a restraint must have regard to and give due weight to the public interest that a litigant should not be deprived of his or her choice of solicitor without good cause: Grimwade v Meagher and Ors [1995] 1 V.R. 446 at p.432.
It is appropriate to turn first to the pleadings of the parties.
The claims by the applicants can be briefly summarised as:
·Ms Raeburn – she was employed by the respondent from 9 March 2011 to 12 January 2013, full time as a Food and Beverage supervisor, classified as Level 5 under the Award in the position of Café Manager (front of house). Her terms of employment were governed by the Award, the Act and her contract of employment. Pursuant to her contract of employment she was entitled to annual remuneration of $57,200 plus superannuation and a car park space. Ms Raeburn claims the first respondent failed to pay her entitlements under the Award, the Act and her contract of employment. She claims the first respondent failed to comply with the requirements of s.535 of the Act;
·Ms Nadine Plaiche - she was employed by the respondent from 18 December 2011 to 1 December 2012 as a casual waiter, front of house attendant, at Level 2 of the Award. Her terms of employment were governed by the Award and the Act. She claims the first respondent failed to pay her entitlements, under the Award (including casual loadings) and the Act. She claims the first respondent failed to comply with the requirements of s.535 of the Act;
·Ms Beatrice Plaiche – she was employed by the respondent from 5 November 2011 to 7 July 2012, on a casual basis, initially at Level 2 of the Award and subsequently at Level 5 of the Award. Her terms of employment were governed by the Award and the Act. She claims the first respondent failed to pay her entitlements, under the Award (including casual loadings) and the Act. Further the first respondent failed to comply with the requirements of s.535 of the Act;
·Mr Solomon Limairii Hill – he was employed by the respondent from 2 November 2011 to 29 September 2012, on a casual basis at Level 2 of the Award. His terms of employment were governed by the Award and the Act. He claims the first respondent failed to pay his entitlements, under the Award (including casual loadings) and the Act. He claims the first respondent failed to comply with the requirements of s.535 of the Act.
The relevant parts of the Response filed by the respondents on 8 October 2013, for the purpose of this decision, in relation to Ms Raeburn can be found at paragraphs 5 and 13A. Paragraph 5 of the Response, responds to Raeburn’s claim that she was employed pursuant to a contract and at a classification level under the Award (paragraph 5 of her Statement of Claim) and is as follows:
“5.Daniel Scott Kagan (“Kagan”) was a Director of the First Respondent (“Amici”) from 8 July 2003 until 18 October 2012.
Particulars
(i) Kagan was Managing Director of Amici from 8 July 2003 until 18 October 2012 and he was in charge of all operations of Amici until that date. As director of the First Respondent he executed a Contract of Employment with Kara Raeburn (“Raeburn”) on 15 February 2011, full particulars of which will be referred to at the trial of this action. Inter alia Raeburn was engaged by Kagan to recruit, engage, appoint, induct all employees from that date, and supervise their work, rosters, time sheet submission and payment and inter alia, “be up to date with all legislative and regulatory requirements.”
(ii) Raeburn, under Kagan’s direction and supervision, was to be responsible for and manage all administrative and operational functions for “front and back of house” of Amici, including, but not limited to, understanding and implementing Amici’s obligations and responsibilities to staff.
(iii) Raeburn prepared rosters governing all employees under her supervision, prepared, reviewed and amended timesheets from time to time, signing off on same and submitting same to the bookkeeper for processing. The full particulars of the rosters and timesheets will be provided after discovery and prior to the trial of this action.
(iv) Raeburn was employed as Operations (Café) Manager of Amici pursuant to an agreement signed by Raeburn on 15 February 2011 that she commenced on 1 March 2011 as a full time employee, being a Level 5 food and beverage supervisor and operations manager of the café as aforesaid.
They otherwise deny the allegations set out in paragraph 5.”
Paragraph 13A of the Response is as follows:
“13A.Further, if there were breaches of the Award and the Regulations, which is denied, Raeburn was responsible for such breaches as it was her contractual responsibility and obligation to ensure that the regulations and all regulatory and legislative requirements were complied with, that in particular governed all staff including herself .”
The Responses filed by the respondents in relation to the claims made by the casual employees are in similar terms. Relevantly paragraph 4A of each Response to the Statement of Claims of the casual employees, pleads as follows:
“4A.Dan Kagan (“Kagan”) was a Director of the First Respondent (“Amici”) from 8 July 2003 until 18 October 2012.
Particulars
Kagan was Director of Amici from 8 July 2003 until 18 October 2012 and he was in charge of all operations of Amici until that date and in sole charge of all operations from 19 March 2012 to that date. He executed a Contract of Employment with Kara Raeburn on 15 February, 2011 full particulars of which will be referred to at the trial of this action. Inter alia Raeburn was engaged by Kagan to recruit, engage, appoint, induct all employees from that date, and supervise their work, rosters, time sheet submission and payment. Raeburn, under Kagan’s supervision was responsible for all administrative and operational functions for “front and back of house” of Amici and the Applicant herein completed and submitted her timesheets in accordance with such direction from Raeburn and Kagan.”
In the Particulars to paragraph 5 of each of the responses filed by the respondents in response to paragraph 5 of the Statement of Claim of each of the casual employees which plead that they were employed at a classification level under the Award, the respondents particularise as follows:
“… (she/he) was engaged by Raeburn on behalf of Amici who prepared and monitored rosters that included (the applicant). (The applicant) submitted timesheets to Raeburn. Raeburn advised the bookkeeper as to the rate of pay to be paid to (the applicant) which instruction was followed by the bookkeeper for the duration of her employment.”
At paragraphs 16 and 17 of the Response to Ms Raeburn’s Statement of Claim and at paragraphs 13 and 14 of each of the Responses to the casual employees’ Statement of Claim, the respondents plead that if the Court, “makes any orders that the Respondents committed a contravention of the civil remedy provision as set out in the Fair Work Act 2009”, they “claim an indemnity from Raeburn” (as well as Mr Kagan). This indemnity is claimed “by reason of Raeburn being at all material times responsible for any breaches found by the Court by her failure to abide by the terms and conditions of her contract of employment.”
As can be seen, having regard to the pleadings, the respondents deny the breaches alleged by each of the applicants and plead that, if there were any breaches, they are the responsibility of Ms Raeburn. The conflict of interest issue which arises in this matter, can only concern the claims made by the casual employees. That is, by representing Ms Raeburn, the legal representatives of the casual employees cannot fully discharge the duty owed to those casual employees in representing them in these proceedings.
In the broad brush, the task of the Court in these proceedings is to firstly, determine whether the first respondent breached the Award and Act as alleged. If I find that the first respondent engaged in any of the breaches alleged, the Court must, secondly, proceed to determine what remedy should be granted, including compensation and whether penalties should be ordered.
In determining whether the respondents breached the Award and the Act, the Court must make findings of fact in relation to issues in dispute. There appears to be no dispute that the casual employees were employed by the first respondent and that their terms and conditions were covered by the Award and the Act. The disputes between the casual employees and first respondent include the periods of the casual employees’ employment with the first respondent, the applicable classification level of the Award and the hours and days worked.
On the pleadings of the respondents, Ms Raeburn was authorised to and acted within her authority in engaging the casual employees, setting their wage rates, their rosters and ensuring the accurate completion of their timesheets. Much of this is disputed by the applicants. However, whether or not Raeburn was responsible for the engagement of the employees, the setting of their rates of pay, the rosters and the accuracy of the timesheets as well as compliance with the requirements of the Act in relation to the wages records and provision of payslips, is not relevant to the Court’s task in determining whether the first respondent engaged in the breaches alleged. If, as the respondents allege, Ms Raeburn was responsible for these duties, then there can be no doubt that she discharged those duties and responsibilities in her capacity as the first respondent’s manager. No doubt, the respondents can pursue the cross claims (which they have foreshadowed by reason of their pleadings as to indemnity) against Ms Raeburn and Mr Kagan for any amounts they may be ordered to pay flowing from any findings that the first respondent contravened the Award and Act. However, I fail to see how these cross claims bear on the casual employees claims regarding breaches of the Award and Act.
Any dispute between Ms Raeburn and the respondents relating to the scope and discharge of her duties pursuant to her contract of employment, does not, on the pleadings, impinge on the determination of the claimed contraventions of the civil penalty provisions of the Act. For example, irrespective of Raeburn’s authority or responsibility for setting the casual employees rates of pay, a finding by the Court that the hourly rates of pay applied for the calculation of a casual employees wages were not paid in accordance with the applicable Award is a finding of fact which will give rise to a consequential finding that there was a breach of section 45 of the Act by the first respondent. Ms Raeburn’s alleged responsibility for underpayment is irrelevant to this finding.
In the circumstances I am not satisfied on the evidence before me that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that Gleeson & Co be restrained from acting for Raeburn and/or the casual employees in the proceedings.
Conclusion
The application by the respondents that Gleeson & Co be restrained from acting for Raeburn and/or the casual employees in the proceedings is dismissed.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Jones
Associate:
Date: 2 July 2014
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