RAOUFE v Restvest Pty Ltd
[2011] FMCA 732
•27 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RAOUFE v RESTVEST PTY LTD | [2011] FMCA 732 |
| INDUSTRIAL LAW – Alleged non-payment or underpayment of wages, annual leave entitlements, superannuation contributions, pay in lieu of notice and long service leave entitlements – alleged extortion of employee on subclass 457 visa seeking subclass 856 visa. |
| Workplace Relations Act 1996, ss.171, 232, 235, 580, 717, 718, 719, 722, cls.32, 34 and 43 of sch.8 Superannuation Guarantee (Administration) Act 1992, ss.19, 23 Trade Practices Act 1974, ss.52, 53B Long Service Leave Act 1955 (NSW), s.4 Fair Work (Transitional Provisions & Consequential Amendments) Act 2009, item 11 of sch.2, Annual Holidays Act 1944 (NSW), ss.3, 4 Workplace Relations Amendment (Work Choices) Act 2005 Competition & Consumer Act 2010 Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010, items 6 and 7 of sch.7 Superannuation Guarantee Charge Act 1992 Evidence Act 1995, s.140 |
| Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448 Briginshaw v Briginshaw (1938) 60 CLR 336 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition & Consumer Commission (2007) 162 FCR 466 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 |
| Applicant: | ABDUL RAOUFE |
| Respondent: | RESTVEST PTY LTD (ACN 57 111 184 644) |
| File Number: | SYG 268 of 2010 |
| Judgment of: | Cameron FM |
| Hearing dates: | 30 November 2010, 8 and 9 February 2011 |
| Date of Last Submission: | 9 February 2011 |
| Delivered at: | Sydney |
| Delivered on: | 27 September 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr C. Magee |
| Solicitors for the Applicant: | Colin Daley Quinn |
| Counsel for the Respondent: | Mr S. Galitsky |
| Solicitors for the Respondent: | Websters |
ORDERS
The application be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 268 of 2010
| ABDUL RAOUFE |
Applicant
And
| RESTVEST PTY LTD (ACN 57 111 184 644) |
Respondent
REASONS FOR JUDGMENT
Introduction
Between 2003 and 2008 the applicant, who at the relevant times was a Bangladeshi national, was employed as a cook in a café at the University of Sydney. The café was operated, at different times, by the respondent and by another company. The applicant alleges that the respondent failed to pay him, or to pay him in full, his wages or his public holiday, superannuation, long service leave and accrued annual leave entitlements. He further alleges that the respondent extorted a sum of money from him in exchange for it sponsoring his application for permanent residence.
Applicant’s allegations
The applicant alleges that he was an employee of the respondent from March 2003 until January 2009 although, even on his own case, he never worked for the respondent after 19 December 2008. In his amended points of claim he alleges that he was originally employed with the respondent in March 2003 and paid $400 net per week, which rose after three months to $450 net per week. In submissions he conceded that he was not employed by the respondent until July 2005. The applicant alleges that he was underpaid by the respondent as follows:
a)in about January 2005 the respondent agreed to pay him a base salary of $39,100 p.a. ($751.92 gross per week), together with four weeks’ annual leave, sick leave and superannuation once he was granted a subclass 457 visa. In or about late January 2006 this agreement came into effect. However, from late January 2006 to 30 June 2006 the respondent paid him $550 net per week (approximately $680 gross per week) which represented a weekly underpayment of $70 gross per week for twenty-four weeks totalling $1,680;
b)from 1 July 2006 to 26 November 2006 the respondent continued to pay him $550 net per week (approximately $680 gross per week) by reason of which he was underpaid $70 gross per week for twenty-one weeks totalling $1,470;
c)from 26 February 2007 to 30 June 2007 the respondent continued to pay him $550 net per week meaning that he was underpaid $70 gross per week for nineteen weeks, those underpayments totalling $1,330;
d)in reliance on representations made by the respondent in or about July 2007 that it would pay him a base salary of $39,100 p.a. from that point until the issuing of a subclass 856 visa (Employer Nomination Scheme) and that following its grant it would pay him a base annual salary of $41,850, he continued to work for the respondent but in the period 1 July 2007 to 8 December 2007 was only paid $600 gross per week which represented a weekly underpayment of $151 gross over twenty-three weeks totalling $3,473;
e)in the period 1 February 2008 to 19 September 2008, the respondent paid him $580 gross per week which represented a weekly underpayment of $171 gross over thirty-two weeks totalling $5,472;
f)in the period 1 October 2008 to 3 October 2008 the respondent paid him $150 gross which was an underpayment of $100 (gross) per day totalling $300;
g)from 3 October 2008 to 7 November 2008 the respondent paid him $250 gross per week, which represented a weekly underpayment of $500 (gross) over five weeks totalling $2,500;
h)from 8 November 2008 to 21 November 2008 the respondent paid him $300 gross per week which represented a weekly underpayment of $450 (gross) over two weeks totalling $900; and
i)from 22 November 2008 to 19 December 2008 the respondent paid him $250 gross per week which represented a weekly underpayment of $500 (gross) over four weeks totalling $2,000.
The applicant also alleges that in return for its support for his subclass 856 visa the respondent required him to pay its principal, Mr Baghdadi, or at his direction, the amount of $12,200 and that this amount was paid on about 19 September 2008.
The applicant further alleges that:
a)
on or about 13 February 2008 he and the respondent entered into an employment agreement which provided that the respondent would employ him as a cook for a minimum of three years from the grant of a subclass 856 visa. The applicant alleges that on 3 November 2008 the Department of Immigration and Citizenship (“DIAC”) approved the respondent’s application to employ him under the subclass 856 visa scheme and that on or about 9 December 2008 he was granted permanent residence.
The applicant worked for the respondent up to 19 December 2008 when the café was due to close for the semester break, whereupon the respondent advised him that he would not be required to return to work the following year. On or about 25 January 2009 Mr Baghdadi, on behalf of the respondent, advised the applicant that his employment with the respondent was terminated.
The applicant alleges that on or about 25 January 2009 the respondent terminated his services without notice and he thereby lost three years’ salary as well as pay in lieu of notice contrary to clause 4.4.1 of the Notional Agreement Preserving the Terms of the Restaurants &c Employees (State) Award (“Restaurant Employees NAPSA”);
b)at the time his employment was terminated he had accrued an entitlement to twelve weeks’ paid annual leave and this was not paid to him upon termination in breach of s.235 of the Workplace Relations Act 1996 (“WRA”); and
c)as at 19 December 2008 he had accrued an entitlement to 4.33 weeks of long service leave pursuant to the Long Service Leave Act 1955 (NSW) which the respondent failed to pay him on termination.
The applicant further alleges that:
a)between 19 December 2005 and 19 December 2008 the respondent directed him to not work on twenty-four days which were public holidays and, in breach of clause 12 of the Restaurant Employees NAPSA, failed to pay him his normal ordinary wages in respect of each of those public holidays;
b)the respondent failed to observe its statutory obligations under the Superannuation Guarantee (Administration) Act 1992 as a result of which he was underpaid superannuation;
c)the respondent breached s.53B of the Trade Practices Act 1974 by making representations, alleged to be misleading, deceptive or likely to mislead or deceive, as to the terms of his employment agreement and, in particular, as to:
i)his rate of pay;
ii)his period of employment;
iii)representations made by Mr Baghdadi, that:
(i) as a condition of the Respondent supporting the Applicant’s ENS [Employer Nomination Scheme] visa application, require the Applicant to accept a lower rate of pay in respect to his employment as a Cook at the Respondent’s Mint Café;
(ii) terminate the Applicant’s employment if the Applicant failed to agree to accept a lower rate of pay;
(ii) require the Applicant to pay to Mr Baghdadi the sum of $12,200.00, in return for the Respondent continuing to employ the Applicant and supporting the Applicant’s ENS visa application.
d)by reference to the particular matters referred to above in (c), the respondent also breached s.52 of the Trade Practices Act by engaging in conduct that was misleading or deceptive or likely to mislead or deceive.
The applicant seeks:
a)a declaration that the respondent has breached s.235 of the WRA;
b)a declaration that the respondent has breached clause 4.4 of the Restaurant Employees NAPSA;
c)a declaration that the respondent has breached clause 12 of the Restaurant Employees NAPSA;
d)a declaration that the respondent has contravened the Superannuation Guarantee (Administration) Act;
e)a declaration that the respondent has contravened s.53B of the Trade Practices Act;
f)a declaration that the respondent has contravened s.52 of the Trade Practices Act;
g)a declaration that, by reason of the conduct of the respondent by its servants or agents in breach of s.53B and/or s.52 of the Trade Practices Act, the applicant has suffered loss and damage; and
h)a declaration that the respondent has contravened the Long Service Leave Act 1955 (NSW).
The applicant seeks:
a)damages for breach of contract;
b)damages for breaches of the Trade Practices Act;
c)an order pursuant to s.719 of the WRA for payment by the respondent of the applicant’s accrued but untaken annual leave entitlements;
d)an order pursuant to s.719 of the WRA for payment by the respondent of the applicant’s entitlements to four weeks pay in lieu of notice pursuant to clause 4.4 of the Restaurant Employees NAPSA;
e)an order pursuant to s.719 of the WRA for payment by the respondent of the applicant’s entitlements to paid public holidays;
and interest on these amounts.
The applicant also seeks the imposition of pecuniary penalties under the WRA for the alleged contraventions of s.235 of the WRA and clauses 4.4 and 12 of the Restaurant Employees NAPSA.
Relevant legislation
Since the events the subject of these proceedings allegedly occurred, the relevant provisions of the WRA have been repealed by sch.1 to the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009 (“FW(TPCA) Act”). Nevertheless, item 11 of sch.2 to the FW(TPCA) Act provides that the WRA continues to apply on and after its repeal in relation to conduct that occurred before the repeal. Consequently, the WRA continues to apply to these proceedings and to the issues which the proceedings raise.
Part 3 of sch.8 to the WRA preserved the Restaurants &c Employees (State) Award as a notional agreement preserving state awards. Clause 32 of sch.8 to the WRA had the effect that the respondent was bound to observe the terms of the Restaurant Employees NAPSA.
Part 7 of the WRA was entitled “The Australian Fair Pay and Conditions Standard”. The provisions of divs.2-6 of pt.7 were the “Australian Fair Pay and Conditions Standard” (“AFPCS”).
Section 232 of the WRA was found in sub-division B of div.4 of pt.7 and relevantly provided:
232 The guarantee
(1) For the purposes of this Division, annual leave means leave to which an employee is entitled under this Subdivision.
All employees to whom this Division applies
(2) An employee is entitled to accrue an amount of paid annual leave, for each completed 4 week period of continuous service with an employer, of 1/13 of the number of nominal hours worked by the employee for the employer during that 4 week period. …
Section 235 of the WRA relevantly provided:
235 Annual leave—payment rules
(1) If an employee takes annual leave during a period, the employee must be paid a rate for each hour (pro-rated for part hours) of annual leave taken that is no less than the rate that, immediately before the period begins, is the employee’s basic periodic rate of pay (expressed as an hourly rate).
(2) If the employment of an employee who has not taken an amount of accrued annual leave ends at a particular time, the employee must be paid a rate for each hour (pro-rated for part hours) of the employee’s untaken accrued annual leave that is no less than the rate that, immediately before that time, is the employee’s basic periodic rate of pay (expressed as an hourly rate).
Arguably the applicant was entitled to rely on the slightly more beneficial terms of ss.3 and 4 of the Annual Holidays Act 1944 (NSW) which cl.34 of sch.8 to the WRA preserved as a term of the Restaurant Employees NAPSA. However, as he preferred to rely on the AFPCS for his claim to annual leave entitlements, that will be the instrument which will be considered.
The applicant alleged that the respondent breached the Superannuation Guarantee (Administration) Act but referred to no particular provision of that Act which was said to have been breached. Presumably the applicant intended to rely on ss.19 and 23 which respectively provide for the superannuation charge of 9 percent and for the reduction of that charge if the employer makes superannuation contributions for the benefit of the employee to a retirement savings account or a complying superannuation fund. For a discussion of the operation of the scheme see Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448 at 452-454 [3]-[14] where, amongst other things, it was said:
Broadly speaking, the effect of the superannuation guarantee scheme established by the SGA Act and the Superannuation Guarantee Charge Act 1992 (Cth) (the SGC Act) is that an employer is obliged to provide a prescribed minimum level of superannuation to all employees. If an employer fails to meet that obligation in full, any shortfall becomes a charge levied on the employer recoverable by the Commissioner, the SGC. (at 452 [4] per curiam)
As noted earlier, the applicant seeks the payment of certain outstanding wages and entitlements and the imposition of pecuniary penalties pursuant to s.719 of the WRA. Relevantly, that section provided:
719 Imposition and recovery of penalties
(1) An eligible court may impose a penalty in accordance with this Division on a person if:
(a) the person is bound by an applicable provision; and
(b) the person breaches the provision.
(2) Subject to subsection (3), where:
(a) 2 or more breaches of an applicable provision are committed by the same person; and
(b) the breaches arose out of a course of conduct by the person;
the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.
…
(4) The maximum penalty that may be imposed under subsection (1) for a breach of an applicable provision is:
(a) 60 penalty units for an individual; or
(b) 300 penalty units for a body corporate.
…
(6) Where, in a proceeding against an employer under this section, it appears to the eligible court that an employee of the employer has not been paid an amount that the employer was required to pay under an applicable provision (except a term of an ITEA), the court may order the employer to pay to the employee the amount of the underpayment.
(7)Where, in a proceeding against an employer under this section, it appears to the eligible court that the employer has not paid an amount to a superannuation fund that the employer was required, under an applicable provision (except a term of an ITEA), to pay on behalf of a person, the court may order the employer to make a payment to or in respect of that person for the purpose of restoring the person, as far as practicable, to the position that the person would have been in had the employer not failed to pay the amount to the superannuation fund. …
For the purposes of s.719, s.717 of the WRA provided that “applicable provision” included a term of the AFPCS and a term of a collective agreement. As noted earlier, s.235 of the WRA was part of the AFPCS: s.171(3). Under the WRA, a notional agreement preserving State awards could be enforced as if it were a collective agreement: cl.43(1) of sch.8 to the WRA. Section 718 provided that employees bound by a particular term of the AFPCS and employees bound by a collective agreement could apply for a penalty or other remedy in relation to a breach of such a term or agreement.
Section 722 of the WRA relevantly provided:
722 Interest up to judgment
(1)In exercising its powers under subsection 719(5) or (6) or in a proceeding under section 720 or 721, the eligible court must, upon application, unless good cause is shown to the contrary, either:
(a)order that there be included in the sum for which an order is made or judgment given, interest at such rate as the eligible court thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date on which the order is made or judgment entered; or
(b)without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which an order is made or judgment given, a lump sum instead of any such interest. …
In the amended application and the amended points of claim the applicant’s claim to long service leave entitlements was based on the Long Service Leave Act 1955 (NSW). In submissions he referred to s.580 of the WRA and to that Act’s transmission of business provisions. However, as the evidence discloses that the business passed from the original owner, Exoblend Pty Ltd, to the respondent in July 2005, before s.580 and related transmission of business provisions were inserted into the WRA by the Workplace Relations Amendment (Work Choices) Act 2005, those provisions have no relevance to these proceedings. The amended application and amended points of claim correctly refer to the Long Service Leave Act 1955 (NSW) as the relevant legislation. At no point during the applicant’s employment with the respondent did the WRA affect the operation of that Act in a way which was relevant to the entitlement asserted in these proceedings. Section 4 of the Long Service Leave Act 1955 (NSW) relevantly provides:
4 Long service leave
(1)Except as otherwise provided in this Act, every worker shall be entitled to long service leave on ordinary pay in respect of the service of the worker with an employer. Service with the employer before the commencement of this Act as well as service with the employer after such commencement shall be taken into account for the purposes of this section.
(2)(a) Subject to paragraph (a2) and subsection (13) the amount of long service leave to which a worker shall be so entitled shall:
…
(iii) in the case of a worker who has completed with an employer at least five years service, and whose services are terminated by the employer for any reason other than the worker’s serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of 2 months for 10 years service.
(a3) For the purposes of subsections (2), (3) and (3A), month means 4 and one-third weeks.
…
(5)(a) Where the services of a worker are terminated otherwise than by the worker’s death and any long service leave:
(i) to which the worker was entitled has not been taken, or
(ii) accrues to the worker upon such termination and has not been taken,
the worker shall, subject to subsection (13), be deemed to have entered upon the leave from the date of such termination and the employer shall forthwith pay to the worker in full the worker’s ordinary pay for the leave less any amount already paid to the worker in respect of that leave.
…
(11) For the purposes of this section:
(a)service of a worker with an employer means continuous service …
…
(c) where a business, undertaking or establishment or any part thereof has, whether before or after the commencement of this Act, been transmitted from an employer (in this paragraph called the transmittor) to another employer (in this paragraph called the transmittee) and a person who at the time of the transmission was a worker in the employ of the transmittor in that business, undertaking, establishment or part thereof becomes a worker in the employ of the transmittee:
(i) the continuity of the period of service of the worker shall be deemed not to have been broken by reason of the transmission, and
(ii) the period of service which the worker has had with the transmittor or any prior transmittor shall be deemed to be service of the worker with the transmittee.
In this paragraph transmission, without limiting its ordinary meaning, includes transfer, conveyance, assignment or succession, whether by agreement or operation of law, and transmitted has a corresponding meaning,
As far as the trade practices claims are concerned, recent legislative changes have transformed the Trade Practices Act into the Competition & Consumer Act 2010. However, as the events the subject of these proceedings are alleged to have occurred before the commencement of the legislative reform on 1 January 2011 and as the proceedings themselves were commenced before that date, the matter remains governed by the Trade Practices Act as it was before the reform: items 6 and 7 of sch.7 to the Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010.
Applicant’s evidence
Applicant’s arrival in Australia
The applicant gave evidence that he first arrived in Australia on 14 May 2000 on a multiple entry visitor visa valid for one year. He said that when he arrived he applied for and was granted a temporary protection visa based on a fear of political persecution in Bangladesh. The applicant said in this regard that he had been a Bangladesh National Party labour leader before he left Bangladesh in 1996 for Saipan, where he lived immediately prior to coming to Australia.
In cross-examination, the applicant admitted that he had arrived in Australia with the intention of seeing whether he liked the country and, if he did, of seeking to stay. He refused to respond to a proposition put to him by counsel for the respondent that he had knowingly misled Australian immigration authorities by not disclosing that he was intending to apply for a temporary protection visa when he got to Australia.
Applicant’s employment at the café
In his affidavit affirmed 3 November 2010 the applicant deposed that in or about January 2003 he commenced employment at the café as an assistant cook at an initial wage of $400 per week. He deposed that shortly after he commenced employment he was introduced to Stephen Baghdadi, who was described as the owner of the café. The applicant deposed that Mr Baghdadi would attend the café every week and give the employees’ wages to the head cook, Mr Rahman, for distribution and would do it himself if Mr Rahman was not present. After approximately three months, the applicant’s wages were increased to $450 per week. The applicant deposed that he was paid for public holidays. He also deposed that the café would close for approximately four weeks from late December to January each year.
The applicant denied that he had ever been an employee or contractor of Mr Rahman. He said that he worked for the company, not for Mr Rahman. In December 2004 Mr Rahman stopped working at the café and on or about 26 January 2005 Mr Baghdadi asked the applicant if he would take over as the head cook.
Applicant’s 457 visa
The applicant deposed that he asked Mr Baghdadi, given that he was going to employ him as the cook, whether he would sponsor him on a subclass 457 visa and that Mr Baghdadi agreed. The applicant also deposed that Mr Baghdadi agreed to pay him a wage of $39,100 on the basis that this was the wage for a cook under a subclass 457 visa. In or about late January 2005, with the respondent’s support, the applicant applied for a 457 visa.
The applicant said that on 23 October 2005 he went to Bangladesh for a period of about three months so that he could lodge his 457 visa application. He said that he had to leave the country to make the application although his migration agent was able to lodge the application here in Australia. The applicant gave evidence that there were no political issues for him in Bangladesh at that time and therefore he did not have any fear of political persecution.
The applicant deposed that prior to leaving Australia, Mr Baghdadi said that he would be re-employed upon his return. The applicant deposed that he also understood that it was a term of the 457 visa:
·that the respondent would employ him as a cook for a minimum of four years from the grant of the visa;
·at a base salary of $39,100 p.a.;
·that the respondent would pay superannuation;
·that he was entitled to four weeks annual leave per annum; and
·that he was also entitled to sick leave.
The 457 visa was granted on or about 6 December 2005. Upon his return to Australia on 18 January 2006 on his new visa, the applicant recommenced work at the café.
Wages and pay slips
The applicant said that after Mr Rahman left in December 2004 and he started as the new cook in January 2005, he was receiving about $450 a week. He said that even though he did not receive any pay slips, he remembered the amount because he wrote it down. He said that with the start of the 2005/06 financial year this amount was increased to $500 per week. The applicant deposed that he was paid $500 cash per week until he left Australia on 23 October 2005.
From late January 2006 until 30 June 2006 Mr Baghdadi paid the applicant $550 per week in cash. In about late July 2006 Mr Baghdadi gave the applicant a PAYG payment summary for the 2005/06 financial year showing gross payments of $29,324 with $6,239 tax deducted. The applicant deposed that during the first half of 2006 he thought that he should have been paid more than he was but without proper paperwork he was not sure how much he should have been paid. Because he had received no documents such as pay slips he was not in a position to work out whether the figures in his 2005/06 PAYG payment summary were correct.
The applicant deposed that the respondent continued to pay him $550 cash each week in the period 1 July 2006 to 26 November 2006. Following his return to work on or about 1 March 2007, the respondent paid the applicant $550 per week in cash. In about late August 2007 Mr Baghdadi gave the applicant a PAYG payment summary for the 2006/07 year showing gross payments of $29,324 with $6,239 tax deducted. Again, because he had not received pay slips, he was not in a position to work out whether the figures in the 2006/07 PAYG payment summary were correct.
From about July 2007 the respondent paid the applicant $600 in cash each week and from 1 February 2008 to a point in September 2008 it paid him $580 in cash each week. In the amended points of claim that date was alleged to have been 19 September but, based on the applicant’s affidavit of 3 November 2010, it would appear to have been 30 September 2010.
In about August 2008 Mr Baghdadi gave the applicant a PAYG payment summary for the 2007/08 year showing gross payments of $39,099 with $8,319 tax deducted. The applicant disputed that he had been paid a net amount of $30,780 during that financial year, deposing that he was not paid for the whole of December 2007 or January 2008, that from July 2007 to December 2007 he had been paid $600 per week and that from 1 February 2008 to 30 June 2008 had been paid $580 per week. He deposed that this amounted to approximately $24,000 in that financial year.
For the days 1 October to 3 October 2008 he was paid $150. In the ensuing period 3 October 2008 to 7 November 2008 the applicant continued to work for the respondent and was paid $250 per week.
In the period 8 November 2008 to 21 November 2008 the respondent paid the applicant $300 per week and in the period 22 November 2008 to 19 December 2008 it paid him $250 per week.
The applicant said that he had always been paid weekly during his employment at the café. He denied ever receiving pay slips that showed his total pay for the month in question, as reproduced on p.2 of Exhibit R3, and said that he had only ever received four pay slips during his whole period of employment. They were dated 14 November 2008, 21 November 2008, 28 November 2008 and 5 December 2008 and showed payments made on a weekly basis. The applicant said that he had asked Mr Baghdadi for those pay slips so he could provide them to a real estate agent for the purpose of renting a house for him and his wife who was arriving from Bangladesh.
He deposed that although the pay slips represented that he was being paid an annual salary of $40,590 he was not being paid the base salary or superannuation which they set out. The applicant said that in fact his “income” was $39,100.00 p.a. and Mr Baghdadi had manufactured the figures appearing on the pay slips.
The applicant said that he was unable to calculate from his annual PAYG payment summary how much he was paid on a weekly basis or to determine whether his weekly pay was what he should have been receiving.
The applicant said that he had not received a PAYG payment summary from the café from the beginning of his employment in 2003 to June 2005. He said that he was paid in cash and because he did not have a PAYG payment summary he did not declare his earnings from the café in his tax returns for the 2003, 2004 and 2005 years. However, he had a second job at Tempo cleaning service where he received PAYG payment summaries and he declared that income in his tax returns.
In cross-examination the applicant said that it was his understanding that he could not declare earnings for the purposes of a tax return if he did not have a PAYG payment summary and that was why he did not declare his earnings from the café. He did receive PAYG payment summaries for the years ending 30 June 2006, 2007 and 2008 and he took them to his tax agents to prepare tax returns for him.
The applicant said that he was not provided with a PAYG payment summary for the year ending 30 June 2009 even though he had worked for the respondent for about six months in that financial year. He said that he expected a PAYG payment summary from Mr Baghdadi as Mr Baghdadi had sent him an email saying that he had posted one.
He said that he never received it. In the 2008/09 year, the applicant also worked for himself and on the advice of his tax agent, he paid $400 in tax from his own pocket.
Applicant’s long absences from work and annual leave payments
The applicant deposed that the respondent did not pay him holiday pay for any part of the period when he was not at work from the end of November 2006 to February 2007, when he returned to Bangladesh to be married. The applicant further deposed that he took leave in December 2007 and January 2008 when the café was closed but was not paid annual leave during that period either. He denied that he had ever asked Mr Baghdadi for wages in advance in December 2007 or that Mr Baghdadi had given him an advance of $2,565 and three weeks’ holiday pay to fund his trip to Bangladesh and to pay his migration agent.
Application for permanent residence
In about July 2007 the applicant asked Mr Baghdadi if he would help him obtain an employer-sponsored permanent residence visa under the Employer Nomination Scheme. On about 13 February 2008 Mr Baghdadi gave the applicant a written offer of employment which, amongst other things, stated that:
·the respondent would employ him as a cook for a minimum term of three years from the grant of a visa under the Employer Nomination Scheme;
·the respondent would pay him a salary of $41,850 plus superannuation;
·he would be entitled to four weeks’ annual leave; and
·he would be entitled to eight days’ sick leave.
The applicant signed that letter on 13 February 2008.
In about September 2008 Mr Baghdadi had the applicant sign a blank sheet of paper but would not provide him with a copy. The applicant said that he had signed because Mr Baghdadi had told him that he needed his signature and he felt that he had no option but to do as he was asked.
The applicant deposed that later in September 2008 he had a conversation with Mr Baghdadi who said words to the following effect:
... if you want me to support your application for permanent residency you will have to give me $12,200. If not, I will not support your application. If you don’t bring the money, I will sack you. Also, if you want your permanent residence status then you will have to work for much less than your present rate of pay otherwise I will have to give you the sack.
The applicant deposed that because he believed he had no alternative, he agreed to Mr Baghdadi’s demands and, with the assistance of a friend, paid $6,000 to Alex Perry and, as directed by Mr Baghdadi, $1,500 to Clayton Utz and $4,700 to the respondent. Copies of bank cheques and credit card transaction details evidencing these payments were annexed to the applicant’s affidavit. The applicant said that, at the same time, the respondent also reduced his pay.
Immigration Department investigation
The applicant deposed that in the September 2008 conversation Mr Baghdadi had also said:
The immigration compliance people will be coming to the restaurant. When they come in, you must tell them that everything is okay. …
The applicant further deposed that on Tuesday 30 September 2008 at 6:45pm he received a text message on his mobile phone from Mr Baghdadi which said:
Please do not come to university until 10am tmw. I will have your pay and ref letter ready by then. I have informed immigration that you have resigned today.
Notwithstanding this, on 1 October 2008 the applicant went to work and continued to work for the remainder of that week. He said that he went to work because at the time he was awaiting the outcome of his visa application and had no choice but to continue working. He denied that Mr Baghdadi had told him that he received the message by accident as it was intended for someone else and that the reason he went back to work was because he was aware that he had actually not been terminated. He said that he went back to work quietly hoping that he still had his job because he needed it for his visa application and Mr Baghdadi had taken $12,200 from him. The applicant said that he never discussed the message with Mr Baghdadi, he just went back to work quietly.
The applicant deposed that on or about 8 October 2008 a person from DIAC came to the café. He deposed that none of the workers who normally worked there and did not have visas came to work that day but were replaced with someone who generally worked elsewhere.
The applicant told the immigration official that he was being paid correctly and being given holidays although this was not true. He was concerned that his chances of obtaining permanent residency would be jeopardised if he told the truth.
The applicant denied that Mr Baghdadi had back paid him any money or increased his weekly pay from $591 to $611 after DIAC officers told Mr Baghdadi that he had been underpaying the applicant as a result of changes to the award.
On 3 November 2008 DIAC approved the respondent’s nomination of the applicant for a position as a cook with the respondent under the Employer Nomination Scheme and on 9 December 2008 the applicant was granted permanent residence under that scheme.
Termination
On the evening of 19 December 2008 Mr Baghdadi telephoned the applicant and told him that he was not required to return to work when the cafe re-opened the following January. The applicant deposed that he was not given a separation certificate or moneys on termination nor was he paid his accrued annual leave entitlements or other statutory entitlements including payment in lieu of notice.
Further, the applicant deposed that a resignation letter purportedly signed by him and provided by the respondent to the applicant’s solicitors was not prepared or signed by him although the signature did appear to be his. He deposed that he did not resign from his employment with the respondent. He said that he had never signed a letter of resignation and referred to the blank piece of paper which he signed in September 2008.
It was put to the applicant that once his application for permanent residency had been approved on 9 December 2008 he no longer had anything to fear from Mr Baghdadi. He agreed and said that he could have asked that he be paid the correct contract wage. In his affidavit, the applicant deposed that Mr Baghdadi had asked him to come back to work the following year and had said that he would be paid a new wage. When this was put to him, he said that he had actually asked Mr Baghdadi for a pay rise and Mr Baghdadi had said that he would give him a pay rise in the next year. He also said that he asked Mr Baghdadi about paying him the amounts he had underpaid and that it was his intention to ask Mr Baghdadi in 2009 for the $12,200 he had paid to him. The applicant denied that he had told Mr Baghdadi that if he did not get a pay rise he would resign.
On 25 January 2009 the applicant telephoned Mr Baghdadi and asked him if he could come back to work because he had a contract with him. The applicant agreed that he thought that Mr Baghdadi had extorted money from him, had underpaid him, had abused him, owed him some money, was not honest and sometimes untrustworthy but he still wanted to go back to work because he had not resigned.
In January 2009, Mr Baghdadi gave him a reference letter dated 19 December 2008.
Respondent’s evidence
Applicant’s employment with Exoblend
The respondent’s managing director, Mr Baghdadi, deposed that the café was acquired by the respondent on 1 July 2005; prior to this, it had been owned by Exoblend Pty Ltd. Mr Baghdadi was the majority shareholder in Exoblend when the applicant began working at the café in 2003 and he became a director of that company in March 2004.
He was also the secretary of Exoblend and worked from an office on the café’s premises.
Mr Baghdadi deposed that originally the applicant worked at the café for a Mr Abdul Rahman who, as well as being the café’s principal chef, had been contracted by Exoblend to hire kitchen staff as necessary. Exoblend dealt exclusively with Mr Rahman and he, in turn, dealt with the kitchen staff. Mr Baghdadi deposed that until January 2005, any arrangements in relation to employment or wages for the applicant were made between him and Mr Rahman.
Mr Baghdadi gave evidence that in 2003 he paid staff at the café in cash and handed out these wages but that he had never handed out any wages to the applicant in 2003. He also said that he gave Mr Rahman $2,000 plus GST a week and he believed that, once divided equally between Mr Rahman and the others working in the kitchen, this was sufficient to ensure that everybody was being paid appropriately.
He would give Mr Rahman the money in a bundle with an elastic band but he had no knowledge of how much each worker was given.
Mr Baghdadi deposed that the applicant’s direct employment with Exoblend commenced following Mr Rahman’s departure and that he worked for Exoblend as the café’s cook from January 2005 to 30 June 2005.
Applicant’s 457 visa
On 26 January 2005, after Mr Rahman had left, Mr Baghdadi asked the applicant to take over as cook. The applicant then asked Mr Baghdadi whether, if he was intending to employ him as a cook, he would be willing to sponsor him for a 457 visa. Mr Baghdadi had never heard of a 457 visa before and asked that the applicant’s lawyers contact him to discuss it. After the applicant’s lawyer explained to Mr Baghdadi, either later that day or the following day, what a 457 visa was, the applicant commenced working for Exoblend as a cook. Mr Baghdadi did not remember giving the applicant a written contract at that time but acknowledged that he had been informed that the rate of pay under a 457 visa was going to be $39,100 p.a. He said that he paid the applicant about $590 a week cash in hand, denying that he paid him $500, but he also said that he did not have any records of those payments. He said, however, that he had provided the applicant with a PAYG payment summary for the year ended 30 June 2005 as well as pay slips for that period (Jan-July 2005).
On 9 September 2005 Mr Baghdadi, on behalf of the respondent, provided the applicant with a reference letter in support of the latter’s application for a 457 visa. He deposed that, at the suggestion of the applicant’s lawyer, the letter said that the applicant had been employed at the café as a full-time cook since January 2003, rather than that the applicant had been employed by two successive owners of the business. He agreed to write the letter in this way because he wanted to help the applicant and saw no harm in describing the applicant’s employment in this fashion.
Applicant’s employment with the respondent
Mr Baghdadi deposed that the applicant’s employment with the respondent commenced on 1 July 2005 when it became the owner of the café. Mr Baghdadi was the respondent’s sole director and shareholder. He deposed that the applicant was paid by the respondent as recorded in the payment advices which were part of exhibit R3.
This ownership transition did not effect a significant change in the employment relationship. The workers at the café were not told of the change in the business’s ownership or that they had been terminated by Exoblend and hired by the respondent. A new bookkeeper, Peter Laforest, attended the premises to enter the employment data on the computer system at the direction of Mr Baghdadi.
Wages and pay slips
Mr Baghdadi said that the respondent’s payroll advice regarding the applicant did not record the hours he worked because he was on a salary and Mr Laforest had split the annual salary by twelve and entered it as monthly payments. He later said that Mr Laforest had divided the applicant’s salary by twelve and entered it into the records monthly for convenience and to reduce his workload, not in an effort to disguise what was being paid. Mr Baghdadi admitted that the respondent’s records reflected that he paid the applicant monthly although he actually paid the applicant weekly and in that sense the records were incorrect. He admitted that because he paid the applicant weekly, the monthly amount in the records did not reflect the actual amount that the applicant was paid but he insisted that on an annual basis, the applicant was paid all that he was entitled to.
Mr Baghdadi denied that in the period commencing 1 July 2005 he had paid the applicant $500 and said that he paid him about $591 in cash per week. He said that at the time the 457 application was on foot he was aware of his obligations and would not have broken the law in such a manner. He also said that he had told the applicant what his net pay was going to be.
Mr Baghdadi deposed that the applicant was provided with pay slips as well as PAYG payment summaries. Occasionally, pay slips would not be available at the time of pay, however, they would be given with later pays as they became available. He said that the applicant’s rate of pay was the rate indicated on the pay slips.
In August or September 2008 Mr Baghdadi began giving the applicant pay slips weekly with his pay. Before that, he or Mr Laforest would give the applicant monthly pay slips every month or two. Mr Baghdadi rejected the proposition that he only started to prepare pay slips because of DIAC’s check or that they existed only for the purpose of satisfying DIAC rather than because they had been supplied to the applicant.
Mr Baghdadi said that the applicant never told him that he felt cheated, that he wanted a weekly pay slip or that he did not understand the monthly pay slips. He also said that he did not have a hold over the applicant, given that the applicant had lawyers and an accountant who he could turn to if he was unhappy or thought laws were being broken. Mr Baghdadi also added that there was no threat to the applicant’s 457 visa because if he was terminated, he would be given a period of 90 days to find another job.
Mr Baghdadi admitted that the applicant’s superannuation accruals for July 2006 to December 2008 were not paid to the applicant’s superannuation fund until 10 September 2010.
Mr Baghdadi admitted that some of the records in the system were not made contemporaneously. The details would be entered from time to time when he or Mr Laforest got around to it but the delay was rarely more than two months. He said when he got around to entering the data on the system, he would then print out the pay slips and give them to the applicant (as a bundle) and admitted that the applicant could go for a period of six to eight weeks without receiving a pay slip.
Mr Baghdadi said that the reason why the applicant asked for pay slips in December 2008 was because his wife was moving to Australia and he needed them in order to rent a property. He said that the applicant asked him because, as Mr Baghdadi supplied pay slips only periodically, he had not yet received some. He denied that the applicant needed to ask for pay slips because he had never received any in the first place. Mr Baghdadi said that the applicant needed the four most recent ones.
Mr Baghdadi denied that he had told the applicant that DIAC was investigating whether he was paying the applicant properly under the 457 visa and that this was the reason why he began giving the applicant pay slips. Mr Baghdadi said that DIAC’s business monitoring unit asked him to submit pay slips and when he could not get in contact with Mr Laforest, he printed out a weekly pay slip himself from MYOB and forwarded it to them. It was based on this pay slip that the department informed him that he was using the wrong award.
Applicant’s long absences from work and annual leave payments
Mr Baghdadi agreed that when the café closed down from December to January of each year, the applicant would be on extended leave.
Some time prior to his departure for Bangladesh on about 23 October 2005, the applicant told Mr Baghdadi that he had to return there in order to have his 457 visa application approved. Mr Baghdadi deposed that, as a consequence, he terminated the applicant’s employment pending the grant of the visa and his return to Australia. He deposed that the applicant’s PAYG payment summary in relation to the 2005/06 financial year did not include the period when he was overseas.
Mr Baghdadi said that although the applicant’s employment was terminated when he went back to Bangladesh in October 2005 he supposed that the applicant was treated as if he was on leave without pay. Mr Baghdadi did not pay the applicant any termination entitlements at that time as he had only been with the respondent for a few months. He said that although he had thought that there was a chance that the applicant might not return, he did not really think about whether the applicant had been terminated or not. He admitted that if the applicant had been terminated, then instead of one PAYG payment summary for the whole financial year as was the case, there should have been two PAYG payment summaries to reflect the break in the employment. He said that for the sake of convenience Mr Laforest might not have done this.
In October 2006 the applicant advised Mr Baghdadi that he would be returning to Bangladesh in early November to be married. Mr Baghdadi deposed that on 3 November 2006 he paid the applicant his weekly wage as well as his 2006 holiday pay. In his oral evidence Mr Baghdadi said that he also gave the applicant some leave without pay. Mr Baghdadi said that the applicant also asked for a loan and denied that he had refused to pay the applicant holiday pay. Mr Baghdadi said that even though the relevant payroll advice did not state that the applicant had been paid holiday pay, the applicant knew he had been paid when he received the holiday pay of “four times $591”. Mr Baghdadi said that the applicant’s holiday pay payment was recorded in the November 2006 payroll advice figures.
He acknowledged that the November 2006 figure in the payroll advice did not accurately reflect what the applicant was paid in November 2006 saying that it was, rather, the annualized pay figure divided by twelve. He said that although viewed in isolation the figure was not accurate, when taken in the context of the whole year it was completely accurate.
Mr Baghdadi conceded that he could point to no record which showed that the applicant’s holiday leave entitlements were paid to him in November 2006 or, indeed, what was actually paid to him at that time.
Mr Baghdadi deposed that the applicant’s PAYG payment summary for the 2006/07 financial year represented the applicant’s salary for the period he was in the country together with his entitlements for the financial year.
In late November 2007 the applicant told Mr Baghdadi that he was going to Bangladesh in early December to visit his family. He asked Mr Baghdadi for a $2,500 loan in order to pay his numerous expenses, including legal fees relating to his application for permanent residence. Mr Baghdadi agreed to lend the applicant the money and on 7 December 2007 he gave the applicant one week’s pay, three weeks’ holiday pay and four weeks’ pay in advance. Mr Baghdadi said that the pay in advance was exactly $2,565, the net wage figure produced by dividing the annual figure by twelve, and was recorded as being made on 31 January 2008 as wages for the month of January. During the course of 2008, the applicant asked Mr Baghdadi to off-set the advance of $2,565 against his holiday pay for 2008 and Mr Baghdadi deposed that he did this.
At one point Mr Baghdadi said that he did not know if annual leave accruals were recorded by Mr Laforest. He said that his understanding of how the computer system worked was that when an employee’s hours and wages or salary were entered, the program calculated the annual leave accrual and therefore when he told Mr Laforest the hours and wages of the employees he thought that this was enough for the leave accrual to be worked out. Later Mr Baghdadi said that although he did not have any written records of the applicant’s leave accruals, he knew “exactly what was owing” because he employed a small number of people and it was “not that difficult to keep track of” each person’s leave entitlements without any written records. He said that the applicant was paid his leave entitlements at the end of each calendar year so the new year started as a clean slate with the applicant’s leave entitlements calculated from his first working day in the new year.
Application for permanent residence
At some point, the applicant asked if Mr Baghdadi would sponsor him for a permanent residence visa so that his wife could come to Australia. On or about 13 February 2008, Mr Baghdadi provided the applicant with a letter of offer of employment in connection with his application for permanent residence through the Employer Nomination Scheme.
As part of that sponsorship, Mr Baghdadi agreed to employ the applicant for a minimum term of three years and to increase his salary to $41,850.
Mr Baghdadi said that he never viewed himself as being in a position of power over the applicant due to the fact that if he withdrew his nomination the applicant would not be able to gain residency.
He denied that he had ever told the applicant that as part of the trade-off for sponsoring him he would either be paid less money or sacked. He further denied that he had ever asked the applicant to give him $12,200 in return for his support of the permanent residence application and had threatened to terminate his employment if he did not.
Mr Baghdadi deposed that in July 2008 the applicant had begged him for an additional loan as the lawyers handling his permanent residence application were going to drop his case unless their fees were paid. Mr Baghdadi deposed that in the final week of July he lent the applicant $6,000 in cash and a further $6,200, presumably also in cash, the following week. He deposed that the applicant promised to repay the loans by the end of August 2008. Mr Baghdadi deposed that the September 2008 conversation about the $12,200 related to the loans which he had made to the applicant. He said he had wanted the money repaid but the applicant avoided him and made excuses for his inability to pay.
Mr Baghdadi deposed that in September 2008 the applicant told him that he would withdraw $6,200 in cash against his credit card in order to repay a portion of the loan. However, the next day the applicant told him that the bank would only issue a bank cheque. Mr Baghdadi deposed that as he was due to pay $1,500 to Clayton Utz and had told them that he would give them a bank cheque, he instructed the applicant to obtain a bank cheque in that sum drawn in favour of Clayton Utz with the remaining amount to go to the respondent.
A few days later the applicant advised Mr Baghdadi that he would be able to repay him the remaining $6,000 through a friend’s credit card. As the respondent did not have a credit card processing facility, Mr Baghdadi directed the applicant to make the transaction at his partner’s business, Lontena Holdings (trading as Alex Perry). After the transaction was cleared, Lontena Holdings forwarded the funds to the respondent.
Immigration Department investigation
Mr Baghdadi deposed that in mid-2008 he advised the applicant that DIAC would be visiting as part of the business migration monitoring process. He deposed that he said:
The Department of immigration has advised me that they need you to be available on the scheduled visit date and you will need to make time to sit with them. I don’t know how long they will need to speak with you but you should try to do as much of your job’s preparation work as possible before the meeting so that the rest of the staff are not inconvenienced.
Mr Baghdadi denied that in September 2008 he had told the applicant to tell the DIAC officers that everything was fine. He deposed that he never advised the applicant to say anything. He deposed that the applicant had asked him not to tell the officers that he, the applicant, had been out of the country for several months at a time because he feared that this would be a breach of his 457 visa. Mr Baghdadi deposed that he had not planned to say anything about that unless he was specifically asked by the officers, and he was not asked.
Mr Baghdadi deposed that he sent the 30 September 2008 text message, referred to above at [44], to the applicant by mistake; it was meant to be sent to another employee. At work the following day, Mr Baghdadi told the applicant that the message had not been meant for him. Nothing further was said about it and the applicant continued to work for the respondent beyond 30 September 2008.
Mr Baghdadi deposed that on the day the DIAC officers were visiting, he rostered another of the respondent’s cooks, who also held a 457 visa but normally worked elsewhere, to work at the café. He did this because the DIAC officers were visiting to speak to both the applicant and the other cook and it was less disruptive if they were in the same place.
Mr Baghdadi deposed that he had never threatened, abused or underpaid the applicant, but instead had been generous and sympathetic to him. He said that he was advised by DIAC that the applicant’s award had changed and that he would need to make an adjustment to the applicant’s pay from August 2008 to the day he was advised by the department, a period of ten weeks. Mr Baghdadi deposed that he made this adjustment by increasing the applicant’s net pay from $591 per week to $611 per week. He paid the applicant $611 on the following pay day, plus a further $200, being the adjustment for the ten week period during which he had paid the applicant under the old award.
MrBaghdadi said that records in MYOB could not be edited and therefore he had to delete the entire payroll advice and enter a new payroll advice reflecting the new salary. He entered that he had been paying the applicant $611 per week from August. The adjusted records reflected an extra $20 for each week as if it had happened weekly when in fact it had not and he had given the applicant the outstanding amount as a lump sum. Mr Baghdadi said that he did it this way because he did not know how to record the amount as a lump sum and it was easier for him to make the changes to the weekly pay records.
Termination
On 11 December 2008 the applicant asked Mr Baghdadi for a pay rise. He told Mr Baghdadi that he needed to earn more money as his wife was now in Australia. He also said that he no longer wished to be paid less than the causal chefs as he felt that he had more responsibility than they did. When Mr Baghdadi refused his request, the applicant said:
I plan to look for work that pays more money immediately.
to which Mr Baghdadi replied:
If you decide you want to leave then you will have to sign a letter of resignation.
Mr Baghdadi deposed that he then turned to his computer and typed up a letter of resignation which he printed and handed to the applicant, saying:
You can sign that whenever you like. I have had enough of your demands. This is the end of the road. Either honour your undertakings or get lost.
Mr Baghdadi denied that at an earlier point he had asked the applicant to sign a blank piece of paper. He said that the resignation letter did not have a date because Microsoft Word did not automatically date a new document and he did not look at the date on it. Mr Baghdadi denied that he manufactured the letter and said that the applicant signed it in front of him.
Mr Baghdadi denied that the applicant had asked to be paid what had been agreed under the letter of offer of employment of 13 February 2008 or that he had ever told the applicant that he would pay him a new rate of pay in 2009. Mr Baghdadi denied that he had telephoned the applicant on 19 December 2008 to tell him that his employment had been terminated. Mr Baghdadi denied that he had terminated the applicant because he thenceforth had to pay him $41,850, saying that he had engaged a chef to replace the applicant who was paid much more than the applicant.
Mr Baghdadi deposed that on the Friday following the conversation referred to above the applicant told him that he intended to leave and said that he would sign the letter of resignation if Mr Baghdadi provided him with a reference. The applicant then signed the letter of resignation. Mr Baghdadi proceeded to type up a reference letter which he printed and signed. He deposed that they then exchanged the reference letter for the resignation letter. In his oral evidence Mr Baghdadi denied that the applicant had contacted him about two weeks after 19 December 2008 requesting a reference letter, that he had agreed to send the applicant such a reference letter or had actually sent one pursuant to such a request.
Mr Baghdadi gave evidence that the applicant telephoned him on 25 January 2009 to ask if he could come back to work. Mr Baghdadi told him that he could not because someone else had already been hired.
Mr Baghdadi said that the applicant contacted him some time in 2009 asking for a PAYG payment summary. Mr Baghdadi told the applicant that he had already sent a PAYG payment summary to his address in Strawberry Hills but it had been returned. He then asked the applicant for a different address where he could send it. The applicant did not give him a new address, simply telling him to send it to the post office box address (at Strawberry Hills). During the exchange, Mr Baghdadi told the applicant that the PAYG payment summary was available for him to collect. In an email dated 1 September 2009, Mr Baghdadi told the applicant that he had already posted the PAYG payment summary to the Strawberry Hills address. Mr Baghdadi admitted that this was incorrect as the PAYG payment summary was actually dated
12 November 2009.
Applicant’s submissions
The applicant submitted that although the documents tendered by the respondent were advanced as the complete answer to his claim, they could not be relied on as proof that the payments they said had been made had actually been made. He submitted that the records provided by Mr Baghdadi were simply bookkeeping entries made by Mr Laforest after the event based on information given to him by Mr Baghdadi.
The applicant submitted that from 2003 to 2005 he was an employee of Exoblend. He submitted that in circumstances where Mr Baghdadi would give employees’ wages to Mr Rahman for distribution, the payments were being made by Exoblend and Mr Rahman was simply distributing the money on behalf of Exoblend.
The applicant submitted that it was the employer’s obligation to pay tax, and that his obligation was to lodge tax returns, which he did with whatever documentation he had.
The applicant submitted that prior to applying for a 457 visa he was not being underpaid but that circumstances changed when he applied for a 457 visa. He submitted that because he was paid in cash, with no pay slips, he was not in a position to calculate whether the net pay which he was receiving was actually the net pay to which he was entitled.
He submitted that even if he was being given pay slips on a month to month basis as claimed by Mr Baghdadi, he would still not have been able to reconcile what he was being paid weekly with what the pay slips purported to record he was being paid monthly.
The applicant submitted that it was more than coincidence that the pay slips produced by Mr Baghdadi were for the period when DIAC was carrying out its investigation. He submitted that the pay slips were produced simply to satisfy DIAC that he had been, and was being, paid correctly and provided with pay slips.
The applicant submitted that the respondent’s payroll records were not accurate. He submitted that his evidence of being paid a gross amount in the vicinity of what he was entitled to on a net basis had a ring of truth and consistency to it. He submitted that he only became aware of being underpaid when he was given the four pay slips in December 2008.
The applicant submitted that prior to his application for a 457 visa, he was being paid annual leave and public holiday pay. He submitted that had he been seeking to maximise what he could get out of the respondent he would have claimed that he was not paid his annual leave entitlements for the whole period of his employment rather than just part of it. The applicant submitted that the respondent’s documents did not record accrual of annual leave, annual leave taken or annual leave payments made, even though Mr Baghdadi gave evidence of how and when annual leave entitlements were paid to the applicant.
The applicant submitted that he had been employed by Exoblend from 2003 until his employment was transferred to the respondent on or about 1 July 2005 when the respondent acquired the café business.
The applicant submitted that he was entitled to 4.33 weeks of long service leave based on a continuous period of employment from 2003 to 19 December 2008. He submitted that even if there had been a transmission of employment from Mr Rahman to Exoblend and then from Exoblend to the respondent, this was a continuous period of employment and that the transmissions of business did not affect the continuity of his employment.
In relation to any penalties that might be ordered, the applicant conceded that the quantum of the respondent’s breaches in relation to the non-payment of annual leave entitlements, the non-payment of public holiday pay and the non-payment of notice on termination was not large. However, he submitted that the respondent’s actions were not an oversight or taken without knowledge of its obligations, but that it had deliberately disregarded its obligations under the legislation and had failed to comply with those obligations on a systematic basis.
He submitted that the respondent had deliberately attempted to defeat his legitimate interests and that whilst its conduct did not fall within the higher range, it also did not fall within the lower end of the scale.
Respondent’s submissions
The respondent submitted that the pay slips provided to the applicant were totally consistent with the payroll advice, indicating that they came from the same source data. It submitted that Mr Baghdadi’s evidence, which identified the computer system which was used, explained how it was used and indicated that a pay slip was generated at the same time as a pay advice was generated, showing that the data was the same and that a pay slip could be retrieved from the system.
The respondent submitted that when the applicant obtained his permanent residence, he did not confront Mr Baghdadi about the supposed extortion, underpayment and exploitation, but rather sought a pay rise. It was also submitted that Mr Baghdadi’s refusal to increase the applicant’s pay was not a refusal to pay him the award rate but rather a refusal to pay the figure the applicant was seeking and that it was for this reason that the applicant resigned.
The respondent submitted that the applicant had not provided important documents or tax invoices from his migration agents to show how much he had owed or paid them, saying that this reflected on the applicant’s credibility. It was submitted that the migration agents could have given evidence of what work they did and how much they charged the applicant, considering the respondent’s allegation that the money the applicant said was extorted from him was actually loaned to him by Mr Baghdadi to pay his migration agents.
The respondent submitted that its record keeping system was adopted to suit Mr Baghdadi and the accountant, rather than for dishonest motives, and that that should weigh heavily in an assessment of penalties. It submitted that this was not a case of contumelious disregard for award wages or an unwillingness to pay what was required. Admittedly, the respondent submitted, there was a less than desirable system of periodic reporting, but it did allow for annual reporting and also allowed for proper PAYG payment summaries to be furnished.
Further, the respondent submitted that any imposition of a penalty required the Court to be satisfied that there was a positive provision that was breached and that the breach was sufficiently serious to warrant a penalty. It was submitted that the respondent had complied with its legal obligations and that there was no contumelious or intentional transgression on its part.
Consideration
Underpayment of wages
The applicant’s allegations that he was underpaid from the commencement of his employment with the respondent in July 2005 until his employment came to an end in December 2008 can be divided into two distinct periods. The applicant said in relation to the first of those periods, which preceded his conversation with Mr Baghdadi in September 2008, that he was inadequately aware that he was being underpaid or the extent to which he was being underpaid. In relation to the second period he said that he knew that he was being underpaid because Mr Baghdadi had told him that he was going to be underpaid in exchange for the respondent’s continued support for his application for permanent residence.
Although the applicant’s amended points of claim detailed with some precision the periods he was underpaid and the amounts he was underpaid in respect of each of those periods, other than his PAYG payment summaries he produced no documentary evidence in support of these allegations. The absence of documentary support for his allegations was said to be explained by the respondent’s failure to provide him, except on one occasion late in his employment, with any pay slips evidencing the amounts he was paid from time to time.
The respondent’s defence to the applicant’s allegations of underpayment of wages was similarly hampered by a dearth of proper documentation.
I found the evidence of the applicant and Mr Baghdadi concerning what the applicant was paid to be, ultimately, unsatisfactory. I have arrived at this conclusion principally because of the inconsistencies and improbabilities in their evidence when compared with the documents which were tendered. I also found the applicant to be, at times, unresponsive when questioned on important issues, an unresponsiveness which I do not believe arose out of any difficulties which might have been caused by his frequent need to give his evidence through the interpreter who was present at the hearing. Further, I found his claimed understanding of what income had to be included in an income tax return to be improbable. In this regard, although he said that it was only when he was cross-examined in these proceedings that he became aware of his obligation to declare all income regardless of whether he was in possession of a relevant PAYG payment summary, prior to these proceedings in his draft 2009 tax return, he did include income which was not included in such a summary.
Mr Baghdadi’s evidence on aspects of the respondent’s accounting system and its record keeping was similarly improbable. The idea he propounded, that it was somehow easier to record wages on a monthly basis although they were being paid on a weekly basis, cannot be accepted. The purpose of accounts is to maintain an accurate record of an entity’s financial position and the maintenance of a set of wages records which did not reflect actual payment, and the periodic necessity to reconcile those records with the amounts actually paid, would make the overall task more difficult, not simpler. Moreover, accepting from the PAYG payment summaries that the respondent paid PAYG instalments to the Australian Taxation Office (“ATO”), it is impossible to accept that those remittances were based on monthly salary calculations, as some of the pay records of the respondent suggest, if wages were actually being paid on a weekly basis. Such an arrangement would mean that the respondent’s returns to the ATO were inaccurate and may have even amounted, from time to time, to an overpayment of its obligations. I consider this most unlikely and do not accept that the respondent’s payroll records based on monthly rather than weekly figures are an accurate record of the wages paid to the applicant in the period prior to July 2008.
Turning to the first period of alleged underpayment, it may be that the applicant never received any pay slips from the respondent, as he alleges. However, as far as the payment of his wages is concerned, and given the lack of confidence I have in the payroll records prior to July 2008, that is a matter which goes principally to the question of his ability to tell, at the time he was being paid, whether he was being underpaid. The applicant’s evidence was that in 2005 Mr Baghdadi said that he would be paid $39,100 p.a once he was granted a 457 visa and that thus, from the start of 2006, that was the wage he should have been paid but was not. In 2006 and 2007 the applicant lodged tax returns which disclosed gross earnings of $29,324 derived from his employment with the respondent, which was the amount which appeared in his PAYG payment summaries for those years. Even if the applicant had not received pay slips and was uncertain from week to week whether he was being paid what he was due, it is not credible that he would have been unaware, upon completion of his 2006 and 2007 tax returns, that he had received approximately $10,000 less in gross wages than he believed he should have been paid. I do not accept that he was unaware of the significance of the declared income or that he believed that it was less than he should have received.
However, if, as the applicant alleges, he was unaware of whether his 2005/06 and 2006/07 PAYG payment summaries were accurate because he had not been provided with pay slips, it is surprising and unconvincing that he could be in a position in his amended points of claim in these proceedings, so much later, to identify the particular underpayments which he now alleges occurred. In this regard, it should also be noted that the applicant did not say that he had written down what he had been paid in 2006 and 2007, as he said he had in 2005 when he first took over from Mr Rahman.
By reason of these matters I am not satisfied that, week to week in 2005/06 and 2006/07, the applicant was underpaid as he alleges.
I conclude that in the 2006 and 2007 financial years the applicant was receiving what he thought he was due and, in particular, had no complaints about the wages he received every week.
As to the 2007/08 year, although the applicant disputed the accuracy of the PAYG payment summary which said that his gross wages had been $39,099, he adduced no evidence other than his own uncorroborated recollection of what he had been paid in that year. Given that the PAYG payment summary recorded not only gross wages but also PAYG tax payments made by the respondent to the ATO, an amount which might well, at some point, be reconciled at the ATO with the tax returns lodged by the applicant and by the respondent, I conclude that it is more likely to be an accurate record than not, a conclusion which applies equally to all of the PAYG summaries issued to the applicant by the respondent. Consequently, I do not find that the applicant was underpaid wages in the 2008 financial year as he alleges.
In relation to the second period of alleged underpayment, the applicant says that he was aware that he was being underpaid because Mr Baghdadi told him that this was going to happen in exchange for the respondent’s support for his application for permanent residence. The burden of his evidence was that he felt he had no alternative but to stay in his employment with the respondent, although he failed to explain why this was so. He adduced no evidence of having tried to find alternative employment.
The PAYG payment summary for 2008/09 discloses that the respondent paid the applicant gross wages of $18,619 during that financial year, close to half of the relevant annual wages. There is no objective evidence other than this PAYG payment summary and the respondent’s other records, which show what the applicant was paid in the second period of his alleged underpayments. Those documents do not support the applicant’s allegation to have only been paid:
a)$580 gross per week from 1 July 2008 to 19 September 2008;
b)$150 gross from 1 October 2008 to 3 October 2008;
c)$250 gross per week from 3 October 2008 to 7 November 2008;
d)$300 gross per week from 8 November 2008 to 21 November 2008; and
e)$250 gross per week from 22 November 2008 to 19 December 2008
as his amended points of claim alleges. Further, the applicant failed to include in his draft tax return for 2008/09 any reference to his earnings from the respondent in that financial year. I do not accept his explanation that he believed that such income only needed to be disclosed if he had the relevant PAYG payment summary – he was aware that he had to declare in that return his earnings as an independent contractor, for which he would have had no PAYG payment summary. The applicant’s failure to include his income from the respondent in his draft 2009 tax return and the reason he gave for this give me no confidence that his other evidence as to what he received on a weekly basis in that period was accurate. Moreover, if the respondent was underpaying the applicant as he alleges, it is curious that it finally produced proof of that in the form of the four pay slips provided in December 2008, simply because the applicant wanted to rent a property.
In the circumstances, I do not accept that in the second period the applicant was underpaid wages in the manner alleged. I therefore conclude that the applicant has failed to prove the allegations of underpayment made in his amended points of claim as detailed above at [2].
Annual leave
In his amended points of claim the applicant alleges that he is entitled to twelve weeks’ pay in satisfaction of his entitlement to annual leave accrued in the three year period from 19 December 2005 to 19 December 2008. It should be noted at this point that the applicant was in Bangladesh in December 2005 and did not return to work until late January 2006 and so he did not relevantly start to accrue annual leave until January 2006.
It can be assumed that the applicant’s total annual leave entitlement related to his employment with the respondent commenced to accrue on 1 July 2005 and that it ceased to accrue on 19 December 2008, a period of nearly three and a half years. However, the applicant did not work for approximately three months from October 2005 to January 2006, when he returned to Bangladesh to permit the lodgment of his 457 visa application; for approximately three months from November 2006 to February 2007 when he returned to Bangladesh to be married; and for nearly three months from December 2007 to February 2008 when he holidayed in Bangladesh. The applicant’s claim appears to be based on an entitlement to four weeks’ paid leave each summer but this cannot be made out as, because of his lengthy summer absences, he had not accrued four weeks’ leave in any one of the years he was employed by the respondent. He could have accrued not more than approximately eleven weeks’ leave during the totality of his employment with the respondent and thus could not, in the three years from 19 December 2005 to 19 December 2008, have accrued the twelve weeks claimed.
The pay which the applicant’s PAYG payment summaries disclose he did receive in the 2005/06 and 2006/07 years was seventy-five percent of the amount which he should have received in a twelve month period at an annual wage of $39,100. The missing twenty-five percent of the applicant’s total annual wage reflects the applicant’s absence from work over summer when the café was closed and suggests that the PAYG payment summaries for those years did not evidence the particular underpayments of wages which the applicant alleges but, instead, that for about three months in each of the 2005/06 and 2006/07 years the applicant received no pay at all. The evidence concerning the 2007/08 year is different, however. The PAYG payment summary for that year disclosed payment of gross wages totalling $39,099, indicating that the applicant was paid throughout the 2007/08 summer.
When determining whether the respondent did give the applicant paid annual leave regard must be had to the respondent’s records, but they provide little basis to conclude that such leave was ever provided or paid out. On the reliability of the records generally, in relation to the period before the DIAC visit I have already rejected Mr Baghdadi’s evidence that although he paid the applicant weekly, the respondent’s records were kept on a monthly basis. As to the subsequent period, again Mr Baghdadi’s evidence is unsatisfactory; at one point in cross-examination he said that in August or September 2008 he began to give the applicant pay slips on a weekly basis, but later he said that when he got around to entering data on the system he then printed pay slips and the applicant could go six to eight weeks without a pay slip and then receive a bundle of them. The fact that on even one version of events information was not entered into the respondent’s management system contemporaneously and could be delayed by up to two months gives little reason to be confident that those records are accurate and precise.
Finally, such records as there are give no explicit support for the respondent’s claim to have provided the applicant with paid annual leave. They contain no reference to it at all. Given that clause 17 of the Restaurant Employees NAPSA provided for a 17.5% leave loading for employees of more than one year’s standing, it might have been expected that payment of annual leave would have been treated in the respondent’s records differently from standard time wages. For these reasons, I am not confident that the respondent’s records provide a basis to conclude that the applicant was provided paid annual leave in 2006/07, or indeed at any other time, or that he received payment in lieu.
Mr Baghdadi said that he knew the applicant’s leave accruals even though he had no written records of them. This statement is difficult to accept particularly as the claimed practice applied not only to the applicant but also to the respondent’s other employees. Moreover, the evidence does not suggest that it is accurate. For instance, in relation to the holidays which the applicant took in late 2006, Mr Baghdadi stated that he paid the applicant four weeks’ accrued leave. However, if Mr Baghdadi’s evidence concerning the termination of the applicant’s employment in October 2005 were to be accepted, the applicant’s employment only recommenced in about January 2006 when, on the applicant’s evidence and according to the respondent’s pay records, he was at work again. On that basis, the applicant had only been working for nine to ten months before he went on leave again late that year. Mr Baghdadi did not explain why the applicant would have been paid four weeks’ leave when he was not entitled to that much. Further, Mr Baghdadi said that he gave the applicant four weeks’ pay in advance in December 2007, which was said to have been recorded as wages paid in January 2008 and to have been off-set later against the applicant’s leave accrual for 2008. However, on the assumption that the applicant was owed no annual leave when he returned to work in February 2008, by the time his employment was terminated on 19 December 2008, he had not accrued four weeks’ leave. Consequently, I have no confidence that I can rely on Mr Baghdadi’s recollection of the applicant’s leave accruals and payments.
As I do not accept that the respondent’s payroll records are completely accurate and I do not accept that Mr Baghdadi’s evidence can be relied on as far as it relates to the applicant’s annual leave accruals and payments, the applicant’s PAYG payment summaries assume considerable importance when determining whether the applicant is to be accepted when he says that he did not receive paid annual leave. In this regard it should be recalled that the applicant’s PAYG payment summaries for both 2005/06 and 2006/07 reveal that he was paid seventy-five percent of the amount which he should have received in a twelve month period at an annual wage of $39,100.
Although the only reliable evidence of the applicant’s remuneration is his PAYG payment summaries, which are based on financial years, his annual leave accruals appear to have been based on calendar years, in that he would work from the end of one summer until the beginning of the next, when he would travel to Bangladesh. So much is made clear by the fact that the applicant’s annual leave claim concerns a period which commenced on 19 December 2005, when he was in Bangladesh, having left Australia on 23 October 2005 in association with his 457 visa application.
Relevantly for present purposes, the applicant claims that he was not paid annual leave at the end of the 2006 calendar year and deposes in his affidavit of 3 November 2010 that when he asked Mr Baghdadi for holiday pay in November that year, he was told that the latter could not pay him holidays. The applicant deposed that he worked until late November 2006 and left Australia on 26 November. Mr Baghdadi said that the applicant left work in early November 2006 to be married, was paid his 2006 holiday pay at that time and that this was recorded in the respondent’s monthly wage records as the applicant’s November 2006 wages. Although I am willing to accept that the applicant did not leave Australia until 26 November 2006, inferring from the specificity of that evidence that the date in question was sourced from his passport, I do not accept that he worked until close to that date. Mr Baghdadi said in his evidence that the café was closed in early November 2006 because of “reconstructing work” the university was doing outside the café using bulldozers and jackhammers. Although I have concerns with other aspects of what Mr Baghdadi had to say, that evidence seemed to me to have the ring of truth and I accept it. Consequently, I conclude that the applicant finished work in early November 2006 and not late November 2006 as he states.
Given the shortcomings in the documentary and other evidence adduced by the parties, the question whether the applicant was not given holiday pay in 2006/07 is, in light of the acknowledgement that he had been paid for annual leave up to 23 October 2005 and the fact that his PAYG payment summaries for 2005/06 and 2006/07 disclose the same gross wages, to be determined by a consideration of those PAYG payment summaries and the periods he worked in those years.
I also note at this point that the applicant did not allege that his periods of leave over summer were longer than they might otherwise have been because the café was closed and there was no work for him to do. Indeed, in his affidavit affirmed 3 November 2010 the applicant deposed to having received a text message from Mr Baghdadi on
25 January 2008 asking when he was returning and saying “I need you here already”. I infer that the length of the applicant’s absences was determined by him, not by the respondent, and that he extended his leave by taking it without pay.
In relation to the 2005/06 year, it can be roughly calculated that, having started working for the respondent on 1 July 2005, the applicant was entitled to approximately one week’s holiday pay when he left for Bangladesh in October that year. As he did not return to work until late January 2006, it appears that he was away from work for about three months and one week. These dates confirm that the seventy five per cent of annual wages which the applicant received as recorded in his 2005/06 PAYG payment summary included the holiday pay to which he was entitled and which he conceded he had received.
On examination, a similar situation applied in the 2006/07 year. After his absence over the 2005/06 summer, the applicant had returned to work at the end of January 2006 and worked until early November 2006. He had therefore accrued approximately three weeks’ annual leave. According to his affidavit of 3 November 2010 he did not return to work until 1 March 2007, indicating that he had been away from work for about three months and three weeks. The seventy five per cent of annual wages which the applicant’s 2006/07 PAYG payment summary records indicates that, although the applicant was not paid for his three months’ absence in December 2006, January 2007 and February 2007, at some point in the 2006/07 year, presumably November 2006, he received the holiday pay which he had accrued since late January 2006.
I find that in 2006/07, as in 2005/06, the applicant was paid holiday pay.
Turning to subsequent years, the applicant alleged that he was absent in Bangladesh from December 2007 to January or February 2008 and received no paid annual leave in that period. However, as indicated earlier in these reasons, the applicant’s 2007/08 PAYG payment summary records that in that financial year he was paid $39,099, his full wages entitlement for that period. This was also the amount which the applicant disclosed in his 2007/08 tax return as the wages which he received from the respondent in that period. Interestingly, the respondent’s payroll records state that the applicant was paid wages in every month of that financial year. It is difficult to conclude in such circumstances that the applicant was not paid his full entitlements in the 2007/08 financial year and yet the fact remains, as I accept, that the applicant did not work for at least two months. In this regard the applicant alleges he was not paid during or for that period, while the respondent claims that on 7 December 2007 the applicant was not only paid one week’s wages and pay for three weeks’ annual leave but was also lent four weeks’ pay in advance. Mr Baghdadi later said that this amount was exactly one calendar month’s pay.
Although I have difficulties with Mr Baghdadi’s evidence concerning the precise quantum of the advance and with the details of its claimed set off against the applicant’s subsequent annual leave accruals in 2008, the 2007/08 PAYG payment summary and the applicant’s 2007/08 income tax return, in combination, satisfy me that the applicant received all the wages and annual leave entitlements which were his due in that financial year. That conclusion leads me to accept that in December 2007 the respondent paid the applicant his annual leave entitlement. Because of what was contained in the 2007/08 PAYG payment summary and the applicant’s 2007/08 income tax return I also accept that the applicant was paid for January 2008. Given that the café was closed and that he was not working I accept that he was lent something like a month’s wages and that this was recorded as January 2008 pay. The applicant has not proved that he was not paid for annual leave accrued in the 2007 calendar year.
As to the applicant’s allegation concerning unpaid annual leave for the 2008 calendar year, I accept that none of the documentary evidence supports a finding that the applicant was given paid annual leave, or payment in lieu, in that period. However, as the payment made to the applicant, recorded as pay for January 2008, was not made as payment for work done and was, I accept, an advance of some sort I also accept Mr Baghdadi’s evidence that he set that advance off against the applicant’s annual leave entitlement when the applicant’s employment was terminated in December 2008. That it could not have been an exact set off as Mr Baghdadi appeared to claim it was is, in my opinion, no more than a reflection of the casual attitude which the respondent took to its record keeping. As a result, I conclude that the applicant’s annual leave entitlement for the 2008 calendar year was satisfied by the payment in advance recorded in January 2008.
Public holidays
The applicant’s allegation is that in the three years before 19 December 2008, when he ceased work at the café, the respondent directed him to not work on twenty-four public holidays and failed to pay him for those days, i.e. eight public holidays in each of those years.
The applicant did not identify which public holidays were the ones in question and it is difficult to deduce what they might be. The applicant took leave in summer and the public holidays declared for the rest of the year were only five in number: Good Friday, Easter Monday, Anzac Day, the Queen’s Birthday and Labour Day. That suggests that the applicant claims an entitlement to paid public holidays when he was overseas in Bangladesh in addition to ones which fell on days when he would otherwise have been at work in the café.
In relation to those parts of the summers of 2005/06, 2006/07 and 2007/08 when the applicant was not at work at the café, it seems to be accepted by both parties that, apart from the disputed holiday pay payments and the advance paid in the 2007/08 year, he received no wages of any sort for any reason. In this regard, I note that the applicant does not allege an entitlement to wages in those periods. This silence reflects the terms of the allegation concerning non-payment of wages for public holidays, that being that the applicant was not paid for “42 days which were public holidays, and on which the Applicant would normally be rostered”. Plainly, during his employment with the respondent the applicant was not normally rostered to work over summer and I therefore conclude that he does not allege an entitlement to be paid for public holidays falling in the periods he was on leave over the summers of 2005/06, 2006/07 and 2007/08.
I recognise that that conclusion appears inconsistent with the discussion above at [136]. However, the express allegation in the amended points of claim that the applicant was entitled to be paid for public holidays falling on days when he would ordinarily have worked precludes consideration of the periods during which he had never worked when employed by the respondent. In light of these matters, I conclude that the reference to twenty-four unpaid public holidays was a miscalculation on the part of the drafter of the amended points of claim and that the applicant’s public holiday claim is concerned with the periods when he was at work, not on leave.
However, in relation to the periods when the applicant was not on leave, I have already found that he was paid what he was due. The nine months’ pay which he received in 2005/06 and 2006/07 and the twelve months’ pay which he received in 2007/08 indicate to me that, at least in the months when he was working, the applicant was paid for those occasions when a public holiday fell on a working day. Consequently, this aspect of the applicant’s claims is not made out.
Superannuation
In his amended points of claim, the applicant alleges that in breach of the Superannuation Guarantee (Administration) Act the respondent failed to pay superannuation contributions for his benefit at the rate of nine percent of his ordinary time earnings over the three years prior to the time when he ceased to work at the café on 19 December 2008. Although he was entitled to annual leave payments to the extent already identified, for the reasons given earlier I do not accept that the applicant was entitled to any wages during the summer periods he spent in Bangladesh. Consequently, the applicant’s entitlement to superannuation contributions is limited to nine percent of the figures found in his PAYG payment summaries together with an amount in respect of the annual leave entitlements which I have found should have been paid to him.
Based on the applicant’s tax returns and PAYG payment summaries, from 1 July 2005 until he ceased work in December 2008, he earned gross wages of $116,366 from his employment with the respondent.
At a rate of nine percent, superannuation contributions for his benefit totalling $10,472.94 should have been paid to his superannuation fund. It appears agreed that the respondent paid $7,763.68 as a lump sum prior to the hearing in these proceedings.
As far as it concerns superannuation, the applicant’s claim relates only to the period 19 December 2005 to 19 December 2008. The alleged underpayment is particularised as:
Superannuation payable - $39,100 x 9% x 3 years = $10,557.00
Less superannuation payments made $TBA on provision of particulars by Respondent
Amount owing $TBA on provision of particulars by Respondent
However, as the three year period to which the applicant refers is one which includes three long summer breaks when he did not work at the café and was not receiving wages he cannot make out the claim as particularised.
But, more significantly, the claim for superannuation contributions is based on what is alleged to have been a breach of the Superannuation Guarantee (Administration) Act, rather than on a breach of a NAPSA-based superannuation entitlement. The Superannuation Guarantee (Administration) Act, in combination with the Superannuation Guarantee Charge Act 1992, does not, in terms, impose an obligation to pay superannuation, although that is its practical effect. Relevantly, unless an employer makes superannuation contributions on behalf of an employee the employer becomes liable to pay the superannuation guarantee charge to the Commonwealth which then receives it for the ultimate benefit of the employee in question. In broad terms, a charge will accrue unless superannuation contributions are paid. Consequently, there is no “breach”, in the sense pleaded by the applicant, which sounds in damages which this Court can order be paid. If the superannuation entitlement had been provided by the Restaurant Employees NAPSA, which does not appear to be the case, then s.719 of the WRA might have provided some basis for this claim. However, as it is, the allegation concerning unpaid superannuation contributions does not disclose a cause of action.
Long service leave
The applicant claims a long service leave entitlement based on continuous employment from the time he started to work at the café in 2003. As recorded above at [18], in circumstances where an employee’s employment is terminated by the employer before the employee is entitled to an amount of long service leave, he or she must have completed at least five years’ continuous service, which can include employment which has continued through the transmission of the business from one employer to another,
In 2005/06 the applicant went to Bangladesh in connection with his application for a subclass 457 visa. The applicant deposed that Mr Baghdadi said that he would be re-employed upon his return and Mr Baghdadi’s evidence suggests that the applicant’s employment ceased for the period he was away in late 2005 and early 2006. In light of what both witnesses have either deposed or said, which reflect the cessation but intended resumption of employment, and given that when he left for Bangladesh in 2005 the applicant could not guarantee that he would be able to return to Australia to work because he could not guarantee that he would be granted a 457 visa, I find that his employment was terminated at the end of 2005. That, having been granted his visa, the applicant subsequently resumed his employment in 2006 after the summer break does not change what I conclude occurred in 2005, namely the termination of his employment coupled with an invitation to return to work at the café if he was able to.
A consequence of the conclusion that the applicant’s employment ceased in 2005 and re-commenced in 2006 is that he did not serve the five continuous years necessary to be entitled to the payment of long service leave were it to be shown that his employment was subsequently terminated by the respondent and not by him.
Termination of employment
The applicant’s allegation is that in December 2008 the respondent told him not to return in 2009 and fabricated a resignation letter, having earlier procured his signature on a blank sheet of paper. The applicant’s case appeared to be that the groundwork for the termination of his employment had been laid three months earlier when, in September 2008 and prior to the DIAC visit in October 2008, he had been asked to sign a blank piece of paper. Associated with that visit was what he appeared to portray as a suspicious change in the staff on duty and the receipt of a text message telling him not to come to work and also saying that a reference letter was ready for him. In association with these actions, the applicant alleges, the respondent cut his pay and extorted $12,200 from him. The final act was his effective dismissal on 19 December 2008. However, in his oral evidence he seemed to suggest that his dismissal was related to his request to be paid what had been promised in the February 2008 letter coupled with a request to be paid the underpayments which had been made over the previous years.
The respondent alleges that the applicant resigned in December 2008 when he was refused a pay rise. Although Mr Baghdadi’s evidence suggested that he was unwilling to grant a pay rise sought by the applicant, it was never put to him that he would not honour the offer made in the sponsorship letter of February 2008 that he would pay the applicant $41,850 once he was granted his new permanent visa.
The applicant has not demonstrated why the respondent would dismiss him simply because it was required to pay him an additional two thousand dollars a year. First, for the reasons already given I do not accept that the applicant was historically underpaid as he alleges.
In particular, and of most relevance to this issue, I accept Mr Baghdadi’s evidence that the respondent increased the applicant’s pay in 2008 as required by DIAC. A comparison of the applicant’s PAYG payment summary for 2008/09, which related to an employment period of almost twenty-five weeks, indicates that the applicant’s average weekly wage was higher in that period than in the previous financial years, if the applicant’s long absences in two of those years are taken into account, indicating that the pay rise required by DIAC was paid.
Secondly, if the respondent had been willing to sponsor the applicant over a period of years and had not underpaid him during that period, and had not dismissed him in October 2008 when DIAC advised that the award had changed and pay rates had risen, it is unlikely that it would then dismiss him in December 2008 because in a month or two it was going to have to pay a higher wage in accordance with the offer made in its letter of February 2008. In this regard, I also accept Mr Baghdadi’s evidence that casual agency chefs were more costly than a permanent employee such as the applicant.
Thirdly, I accept that the text message received a week before the DIAC visit was sent to the applicant by mistake. If it had not been a mistake, it is improbable that the applicant could then have continued to go to work unchallenged as he did. I also see nothing sinister in the respondent having its 457 workers on site when DIAC visited. This appears to have been a sensible and convenient arrangement. The applicant said that the respondent employed workers who did not hold visas and essentially hid them from DIAC when its officers visited. However, this claim was not put to Mr Baghdadi and was not supported by other evidence. I accord no weight to the applicant’s evidence that the respondent employed workers who did not hold visas.
Fourthly, there seems no logical reason for Mr Baghdadi to have sought the applicant’s signature on a blank sheet of paper in September 2008. The applicant has not demonstrated why in September 2008 and prior to the DIAC visit the respondent might have wanted to be in a position to manufacture a document signed by him, presumably a letter of resignation, for use at that or some later time. To the extent that it is related to the alleged extortion, I reject that hypothesis as, for the reasons which are set out below, I do not accept that $12,200 was extorted from the applicant.
I do not accept the applicant’s allegations and submissions concerning what he claims to have been his dismissal. I prefer, as more probable, the version of events advanced by Mr Baghdadi. In particular, I accept that the applicant signed the resignation letter in December 2008. I find that he was not dismissed.
The $12,200
As has become apparent during this consideration of the parties’ allegations and evidence, I have little confidence in the respondent’s records, such as they were, or in what I have been told by the witnesses. The difficulty in fact finding which this poses is pronounced when the extortion allegation is considered as it seems unlikely that the respondent would have lent the applicant more than a quarter of his annualised gross earnings and yet, if the respondent or Mr Baghdadi had extorted money from the applicant, it is unlikely that they would have sought or accepted payment by bank cheque and credit card.
When considering whether the respondent and Mr Baghdadi extorted $12,200 from the applicant, the seriousness of that allegation has to be kept in mind. Section 140 of the Evidence Act 1995 provides:
140 Civil proceedings: standard of proof
(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.
The matters which s.140(2) of the Evidence Act requires the Court to take into account can be found in Dixon J’s discussion of the equivalent common law principles in Briginshaw v Briginshaw (1938) 60 CLR 336. His Honour said:
No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency. (at 361-362)
An analysis of important authorities relevant to this issue was undertaken by the Full Court of the Federal Court in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition & Consumer Commission (2007) 162 FCR 466 at 479-482 [29]-[36]. Their Honours’ discussion makes its plain that although the seriousness of the allegations against the respondent does not change the civil standard of proof, nevertheless, a court should not lightly make a finding that, on the balance of probabilities, a party is guilty of moral delinquency or unlawful conduct. As was said in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove.
In this case, the applicant seeks to prove acts which would ordinarily attract serious criminal penalties. Consequently, the Court cannot be reasonably satisfied that the applicant has proved the relevant conduct without an actual persuasion, based on clear and cogent evidence, that the allegations have been proven.
As I have difficulties with the reliability of the witnesses’ accounts, my consideration of this issue is not much assisted by their evidence. Otherwise, it seems to me that $12,200 is an improbable figure to demand. It seems peculiarly precise and more reflective of a debt than a criminal exaction. It is also, when compared with the applicant’s earnings, so large a figure that the applicant would be most unlikely to be able to raise it himself and thus would have to involve others and thereby increase the possibility that the extortion would become known. Also significant is the fact that the payments totalling $12,200 were made by transactions of which there would have been clear bank records. Finally, by not adducing evidence of detailed billing records from his migration agent for the relevant period, the applicant left essentially unanswered the respondent’s allegation that the $12,200 was a loan to pay the agent.
In all the circumstances, I am not persuaded that the respondent or Mr Baghdadi extorted $12,200 from the applicant as he alleges.
Trade Practices Act claims
For the reasons given above in relation to the wages, termination of employment and extortion issues, I find that the alleged breaches of the TPA have not been made out.
Pecuniary penalties under the WRA
In the circumstances, there is no need to consider the imposition of pecuniary penalties under the WRA.
Conclusion
The applicant has not been made out the claims advanced in the amended points of claim.
Consequently, the application will be dismissed.
I certify that the preceding one hundred and sixty-four (164) paragraphs are a true copy of the reasons for judgment of Cameron FM
Associate:
Date: 27 September 2011
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