Reurich v Commercial PROJECTZ Pty Ltd
[2012] FMCA 991
•18 October 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| REURICH v COMMERCIAL PROJECTZ PTY LTD & ORS | [2012] FMCA 991 |
| INDUSTRIAL LAW – Compensation and penalties for contravention of the Fair Work Act 2009 – accessorial liability. |
| Fair Work Act 2009, ss.340, 341, 342, 360, 361, 539, 545, 546, 550, 551 Corporations Act 2001, s.471B Crimes Act 1914, s.4AA Occupational Health and Safety Regulation 2001 (NSW) |
| Kelly v Fitzpatrick (2007) 166 IR 14 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 |
| Applicant: | PETER GEORGE REURICH |
| First Respondent: | COMMERCIAL PROJECTZ PTY LTD ACN 149 174 345 |
| Second Respondent: | HOME PROJECTZ PTY LTD ACN 133 128 588 |
| Third Respondent: | KADE HANCOCK |
| File Number: | SYG 429 of 2012 |
| Judgment of: | Cameron FM |
| Hearing date: | 18 October 2012 |
| Date of Last Submission: | 18 October 2012 |
| Delivered at: | Sydney |
| Delivered on: | 18 October 2012 |
REPRESENTATION
| The Applicant appeared in person |
| No appearance for the Respondents |
ORDERS
There be judgment for the applicant against the third respondent in the sum of $46,178.81.
The third respondent pay a penalty of $4,000 for his contravention of s.340 of the Fair Work Act 2009 on 31 October 2011.
The third respondent pay a penalty of $5,000 for his contraventions of s.340 of the Fair Work Act 2009 on 9 and 11 November 2011.
The penalties ordered in orders 2 and 3 be paid to the applicant.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 429 of 2012
| PETER GEORGE REURICH |
Applicant
And
| COMMERCIAL PROJECTZ PTY LTD ACN 149 174 345 |
First Respondent
| HOME PROJECTZ PTY LTD ACN 133 128 588 |
Second Respondent
| KADE HANCOCK |
Third Respondent
REASONS FOR JUDGMENT
Introduction
The applicant (“Mr Reurich”) is a licensed builder who was employed by the first or second respondent on 1 August 2011 to be the site manager of a reconstruction project in Raglan, near Bathurst, in New South Wales. In October 2011 Mr Reurich was issued with a formal warning letter which advised him that his employment might be terminated if his performance did not improve. He was placed on suspension in November 2011 and his employment was terminated shortly thereafter. Mr Reurich alleges that these actions contravened s.340 of the Fair Work Act 2009 (“FWA”) because they were taken for reasons which included the fact that he had exercised his workplace rights to make a complaint in respect of his employment. Mr Reurich alleges that he had previously complained to the respondents about the conduct of his project manager, Ali Haralambis.
As the first and second respondents are in liquidation, the proceedings against them are stayed by virtue of s.471B of the Corporations Act 2001. However, Mr Reurich seeks compensation orders against the third respondent (“Mr Hancock”) only, as well as the imposition of pecuniary penalties, on the basis that Mr Hancock has accessorial liability under s.550 of the FWA for the alleged contraventions of the first and second respondents.
When the matter was called outside the court some time after 10:15 this morning, there was no appearance by or for the respondents. In this regard, Mr Reurich relied on the affidavit of service he affirmed on 11 September 2012 and which was filed in the Court that day, apparently by fax. In that affidavit of service Mr Reurich deposes to having served a copy of the orders of the Court made on 31 August 2012, identifying today as the date for hearing of this case and also identifying how and where he was to notify the respondents of that hearing date. I am satisfied by virtue of that affidavit of service that Mr Reurich has complied with the orders made by the Court on the last occasion which set out the means by which the respondents were to be served and alerted of today’s hearing date. Consequently, I am satisfied that it is appropriate that the matter proceed to judgment, notwithstanding the respondents’ absence.
Relevant legislation
Part 3-1 of chp.3 of the FWA provides for employees’ general protections. Division 3 of pt.3-1 provides for the protection of workplace rights. Sections 340 to 342 of the FWA are found in div.3 of pt.3-1 and relevantly provide:
340Protection
(1)A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)to prevent the exercise of a workplace right by the other person.
(2)A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.
341Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee–in relation to his or her employment. …
342 Meaning of adverse action
(1)The following table sets out circumstances in which a person takes adverse action against another person.
Meaning of adverse action Item Column 1
Adverse action is taken by ...
Column 2
if ...
1 an employer against an employee the employer:
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee’s prejudice; or
(d) discriminates between the employee and other employees of the employer.
…
Section 361 of the FWA is concerned with proof of the reason for action alleged to be contrary to a provision in pt.3-1 of the FWA. It provides:
361 Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise. …
Section 360 provides, in relation to multiple reasons for action:
360 Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
Section 539 provides that s.340 is a civil remedy provision.
Section 550 is concerned with accessorial liability and relevantly provides:
550 Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
Sections 539 and 546(2) of the FWA provide that the maximum pecuniary penalty for a contravention of s.340 of the FWA is 60 penalty units for an individual. A penalty unit is worth $110: s.4AA Crimes Act 1914.
Section 545(2)(b) of the FWA provides that the Court may award compensation for loss suffered because of a contravention of s.340.
Allegations
Mr Reurich’s allegations were contained in his points of claim filed on 13 August 2012.
Mr Reurich alleged that he was employed by the second respondent, or in the alternative by the first respondent, on 1 August 2011 to be the site supervisor at a service station site in Raglan, New South Wales, to demolish, extend and reconstruct a shop and hardstand and their surrounds. He alleged that Mr Hancock was at all material times a servant, officer or agent of the first and second respondents.
Mr Reurich alleged that on 27 October 2011 he made a complaint to Mr Hancock about the conduct of his project manager, Mr Haralambis. Subsequently, on 31 October 2011 Mr Reurich received a warning letter on the second respondent’s letterhead from Mr Hancock which stated that his performance had been unsatisfactory and that immediate improvement was required, failing which his employment might be terminated. Mr Reurich alleged that Mr Hancock took this adverse action against him on behalf of the first and second respondents for reasons which included the fact that he had exercised his workplace rights on 27 October 2011 to make a complaint in respect of his employment. He alleges that the first and second respondents thereby contravened s.340(1) of the FWA.
Mr Reurich further alleged that on 8 November 2011 a number of workers from B&J Stainless Steel Welding arrived at the Raglan site to start work. He alleged that two of the workers failed to produce an occupational health and safety construction induction training card (“white card”) as required by the Occupational Health and Safety Regulation 2001 (NSW) and that he consequently refused them entry into the site, despite Mr Haralambis’s insistence that they be admitted. Mr Reurich alleged that later that day he made a complaint to Mr Hancock about Mr Haralambis’s unlawful directive.
Mr Reurich further alleged that on 9 November 2011 he received a letter on the second respondent’s letterhead from Mr Hancock stating that he had been suspended without pay pending an investigation. His employment was terminated on 11 November 2011 by a letter of the same date, again on the second respondent’s letterhead and signed by Mr Hancock. Mr Reurich alleged that Mr Hancock’s actions constituted adverse action against him because they were taken for reasons which included the fact that he had exercised his workplace rights on 27 October 2011 and 8 November 2011 to make a complaint in relation to his employment. He alleged that the first and second respondents thereby contravened s.340(1) of the FWA.
Mr Reurich alleged that Mr Hancock was accessorily liable under s.550 of the FWA for the contraventions of the first and second respondents.
In his Form 4 claim form, Mr Reurich also alleged that he had not been paid overtime, had not been paid for work performed on weekends, had not been reimbursed for expenses in connection with his employment and had not had his superannuation contributions paid by the respondents. He further made a generalised claim entitled “Adverse Action Compensation” in an amount “For your Honour to decide”.
Evidence
Peter Reurich
Mr Reurich deposed that he was employed by the first and second respondents on 1 August 2011 to be the site supervisor for a project at Raglan, near Bathurst, New South Wales. According to the terms of his employment, which were set out in a letter of offer dated 27 July 2011 on the second respondent’s letterhead and signed by Mr Hancock as “director” of the second respondent, Mr Reurich was to be employed on a full-time basis on an annual salary of $100,000 (excluding superannuation), subject to a three month probation period. It is important to also note that the hours of work which that letter specified were five days per week from 7am to 4pm.
Mr Reurich deposed that Mr Haralambis was the project manager and his direct supervisor. He deposed that he found Mr Haralambis’s behaviour erratic and mad and that the latter constantly yelled at him and other workers on the site.
Mr Reurich deposed that during a meeting on 27 October 2011 Mr Haralambis started to blame him for everything that was going wrong and for things which Mr Haralambis himself had organised. He deposed that Mr Haralambis made comments like “I am the project manager, I’m smarter than you”, “you can’t read plans” and “you don’t do nothing without asking me” while yelling and waving his arms and occasionally thumping the table. Mr Reurich deposed that he agreed with Mr Haralambis’s comments in an effort to calm him down.
Mr Reurich deposed that that evening he sent an email to Mr Hancock complaining about Mr Haralambis’s conduct. Mr Reurich deposed that Mr Haralambis subsequently called him to apologise for yelling at him.
Mr Reurich deposed that on 31 October 2011 he received an official letter on the second respondent’s letterhead warning him about his performance. The letter was signed by Mr Hancock and it relevantly stated:
On 27th October 2011 you met with Ari Haralambis (Project Manager) to discuss your performance. At this meeting you were advised that you performance has been unsatisfactory, and that immediate improvement is required. In particular you were advised of the following items of unsatisfactory performance:
…
In the meeting you were asked if you had anything you wished to say or to respond to the situation and you said that you believed you had not done anything wrong but were willing to try to improve.
After considering the situation it is expected that your performance improves and specifically that you follow instructions directly from your Project Manager in all areas listed above.
The letter stated that the Mr Reurich’s probationary period would be extended by four weeks to allow adequate time for improvement with “a formal review in 2 weeks’ time”. The letter also stated that his employment might be terminated if his performance did not improve by 14 November 2011.
Mr Reurich deposed that the allegations made in the letter were false. He believed that Mr Haralambis was accusing him of these mistakes to cover up for his own incompetence.
Mr Reurich deposed that on 8 November 2011 workers from B&J Stainless Steel Welding arrived at the Raglan site to start work. However, because two of the workers did not have white cards, Mr Reurich refused to allow them to work on the site. He deposed that Mr Haralambis called him shortly afterwards and directed him, in an abusive manner, to allow the workers on site regardless. Mr Reurich deposed that when Mr Haralambis arrived on site later that day, he abused him and told him to take some time off so that the metal workers could come in while he was away.
Mr Reurich deposed that later that day he received a phone call from “Chelvie”, the contracts administrator, telling him angrily to let the workers on site. Mr Reurich felt sick and upset and went home early, whereupon he emailed Mr Hancock a message about what Mr Haralambis had wanted him to do.
Mr Reurich deposed that on the next day, 9 November 2011, he received from Mr Haralambis a suspension letter on the letterhead of the second respondent, again signed by Mr Hancock, which relevantly stated:
This letter serves to give you notice that with immediate effect, you are being placed on suspension without pay pending an investigation and subject to discharge. …
Mr Reurich then received a letter dated 11 November 2011, again on the second respondent’s letterhead. Although the second page of that letter, which one assumes would bear the signature of the person signing the letter, does not appear in the copy annexed to Mr Reurich’s affidavit affirmed 19 March 2012, I note that in para.5 of that affidavit Mr Reurich refers to the letter in question, as “my termination letter from Kade emailed me 15th November 2011”. From that I infer that that letter, as with the other letters, were signed by Mr Hancock.
In the letter of 11 November 2011 Mr Reurich was advised that his employment had been terminated because of the “misconduct incident” on 8 November 2011 and because there had been no significant improvement in his performance. On 15 November 2011 Mr Reurich emailed Mr Hancock the following:
I think you are missing something in our conversation on Friday the 11th November 2011 … Firstly I have never acted violently as you accuse me of. Also the performance thing you falsely accuse me of has absolutely no substance to it. If any one acted violently the police would have been called. I have never misbehaved. I have not obeyed a directive of The Project manager in only one instance which I referred to you on the Tuesday 8th November 2011 just after it occurred. That is when The Project Manager ordered me to do something illegal which I brought to your attention … you Kade seem to approve of the Project Managers action and then you Kade put your stamp on it when you illegally it seems proceed to suspend my work activities without pay??? The very next day Wednesday 9th November 2011; threatening my demise? So perhaps these Non White card holders can work while I was suspended as The project Manager told me specifically that is what his intentions were …
You have also ignored my complaint of adverse action in it many forms which were continually inflicted on me by yourself a few times and the Project Manager repeatedly on a regular basis; again in the presence of many people causing me to seek medical advice on three occasions …
Mr Reurich deposed that he had not been paid for lost time since 9 November 2011. He also deposed that he had not been provided with a remittance to show what he had been paid or what reimbursements were outstanding.
Mr Reurich gave oral evidence at the hearing of this application directed principally to his claim for payment of overtime. His evidence was that he worked an additional two hours every day on site beyond his ordinary hours of work, in addition to which he would work an hour or so every evening finishing up the paperwork for that day and preparing for the next day.
His evidence was that, on average, he worked between 6:30am and 5:30pm four days a week; he did not work as late on Fridays. He also said that he did not really take a lunch hour. Accepting that evidence as I do, I find that Mr Reurich on average worked somewhere between nine and ten hours, probably closer to ten hours, every day on site. In this regard, the fixed hours of work set out in Mr Reurich’s contract should be kept in mind. Also to be kept in mind is the fact that Mr Reurich was expected by that contract to work an amount of unpaid overtime. The way Mr Reurich put it in his evidence, it could be expected that the office work done away from site and out of hours would be unpaid overtime, whereas, in his experience, when one worked on site one would be paid for the time worked and it was that period of time on a Monday to Thursday basis that he claimed as overtime. He also gave evidence of having worked on 22 and 23 October 2011 for eight hours, on 1 October 2011 for eight hours and on 10 September 2011 for six hours, all those days being weekends and totalling 30 hours of weekend work.
Mr Reurich also relied on affidavits deposed by Noel Ross Ferry, John Patrick Phelan, Mark Buttsworth and Robert Picker, as well as his own additional affidavit of 4 May 2012. The second of Mr Reurich’s affidavits is essentially the same as the first, and for the reasons which follow, it is not necessary for me to refer in any greater detail to the affidavits of the other deponents.
Consideration
On the evidence, I conclude that it was the second respondent which was Mr Reurich’s employer. I am satisfied that Mr Hancock was involved in the management of that company. I find that the allegations of adverse action are made out. The first event, the warning, amounted to an alteration of Mr Reurich’s position to his detriment because, amongst other things, it extended his probationary period and subjected him to a formal review at a future date. The second event, the suspension, was also an alteration of Mr Reurich’s position to his detriment, and the third event was his dismissal, clearly meeting the definition of adverse action.
The terms of s.361 of the FWA are such that the allegations made against the second respondent as to what motivated it to take adverse action against Mr Reurich must be disproved by it, even though it has not been an active party in the proceedings. However, lest that be thought to work an injustice in this case, it should be remembered that it was Mr Hancock who signed those letters and thus it is his motivation with which the Court is concerned. If he had attended the hearing of these proceedings then evidence from the person most relevant to that question would have been received.
As no evidence has been adduced to counter the allegations concerning the motivation for the second respondent’s actions, I find that it has not discharged the onus placed upon it by s.361 of the FWA with the consequence that I find Mr Reurich’s allegations in this regard proved. I find that the second respondent contravened s.340 of the FWA when it warned, then suspended and then dismissed Mr Reurich. I further find that given that he signed the relevant letters, Mr Hancock was knowingly concerned in that conduct and is thus taken to have been involved in those contraventions and to have contravened s.340 of the FWA on each of those occasions.
Turning to the question of compensation, Mr Reurich has sought a large amount in relation to pay for a period between the date of his dismissal and the date upon which the second respondent went into liquidation. However, given the nature of the contract that Mr Reurich had with the second respondent, I am satisfied that he could be dismissed with reasonable notice. Given that he was paid fortnightly, I consider that a reasonable period of notice in his case would have been two weeks. I am satisfied from what Mr Reurich has said in his affidavits and in his oral evidence that he was essentially dismissed summarily and received no pay in lieu of notice. I am satisfied that Mr Reurich was engaged at a salary of $100,000 per year, and that on a weekly basis, this is $1,923 gross. For a two-week period, that amounts to $3,846 gross and he will be awarded that amount for pay in lieu of notice.
Although Mr Reurich did not articulate in so many words a claim for annual leave, this claim was raised at the hearing of this application. Even though the respondents are not present, I am satisfied that it is appropriate to consider this claim under the general heading appearing in Mr Reurich’s form 4 application “Adverse Action Compensation”, “$ For your Honour to decide”. I have calculated in rough terms that Mr Reurich worked for fifteen weeks for the second respondent. Fifteen weeks at $1,923 per week amounts to $28,845 gross and Mr Reurich will be awarded that amount in relation to unpaid accrued annual leave.
Mr Reurich also gave evidence that superannuation contributions had not been made on his behalf. His employment contract stipulated that he would be paid the superannuation guarantee minimum of nine per cent superannuation on his salary. Based on fifteen weeks of accrued annual leave plus two weeks of the pay in lieu of notice, I have calculated that the amount to which Mr Reurich is entitled by way of damages for failure to pay superannuation contributions is $2,942.19.
Mr Reurich also made a claim for living away from home allowance but was unable to specify a basis upon which he would be entitled to have been paid such an amount. His employment contract made no reference to it.
In relation to overtime, in light of the oral evidence given by Mr Reurich, I am satisfied that it is appropriate to award him amounts representing two hours per day for four days a week, together with the time he worked on weekends, by way of overtime at his ordinary hours rate. It is arguable that Mr Reurich worked more overtime on the site but his claim for two hours seems to me to strike a reasonable balance. For the weekdays, I have calculated him to have worked 120 hours of overtime which entitles him to an amount of $5,769.60. For the thirty hours that he worked on weekends, I calculate that he is entitled to an amount of $1,442.40, giving a total amount of overtime being $7,212.
On my calculations the total amount of compensation to which Mr Reurich is entitled is $42,845.19.
As I have found that Mr Hancock was involved in the second respondent’s contraventions and is thereby taken to have contravened s.340 of the FWA on three occasions, the order will be that Mr Hancock pay that amount of compensation and that judgment be entered against him for that amount.
As already noted, Mr Hancock is not present in Court today. However, the procedural history of this matter satisfies me that he has been adequately notified of the interlocutory stages of the case and of the hearing today. Section 551 of the FWA provides that a court must apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention or proposed contravention of a civil remedy provision. In those circumstances, I see no reason why the Court should not proceed to consider whether civil penalties should be imposed on Mr Hancock.
As Tracey J said in Kelly v Fitzpatrick (2007) 166 IR 14 at 18-19 [14], in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [24] Mowbray FM identified:
… a non-exhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of that penalty …
In Kelly v Fitzpatrick at 18-19 [14], Tracey J set out a number of considerations, certain of which are relevant to this case.
The nature and extent of the conduct which led to the breach
It appears that the warning, suspension and dismissal of Mr Reurich all arose out of a very poor relationship which he had with Mr Haralambis, which I accept, based on the evidence of Mr Reurich together with that of the deponents of the affidavits to which I have made brief reference, was really the fault of Mr Haralambis. He seems to have been a difficult man to work with and to have been both ignorant of the task he had to perform and resentful of Mr Reurich when he attempted to do what had to be done. I am satisfied that Mr Reurich was endeavouring to the best of his abilities to fulfil his obligations to his employer and his statutory duties in relation to the running of a building site. For this it appears that he was punished most severely, most particularly by the loss of his employment.
It is a matter of considerable concern that a person who was skilled in the discharge of his duties, as I accept Mr Reurich was, and who was considerably more skilled than his supervisor, as I also accept was the situation, and who had a better understanding of the statutory occupational health and safety requirements which were relevant in the circumstances of this matter than his supervisor, was punished for doing what any reasonable employer would have expected him to do.
Circumstances in which the conduct took place
The conduct took place in the circumstances of Mr Reurich’s employment and it was visited upon him for, I accept, the simple reason that he attempted to discharge his employment obligations in an appropriate manner.
Nature and extent of any loss or damage sustained as a result of the breach
Not only did Mr Reurich lose his continuing employment which, based on the evidence, would have run at least until some time in 2012 when the second respondent went into liquidation, but as has been made plain by the orders for compensation and the findings I have made in relation to the compensation to which Mr Reurich is entitled, he was also denied pay in lieu of notice and payment for accrued annual leave.
I do not think that the failure to pay overtime or the failure to pay superannuation contributions can properly be said to have been associated with the contraventions of s.340 alleged by Mr Reurich.
Whether there has been any similar previous conduct by the respondents
It is unknown to me whether either the second respondent or Mr Hancock has engaged in any conduct of this nature in the past or any other time.
Whether the breaches are properly distinct or arose out of the one course of conduct
I find that the second and third contraventions were part of the same course of conduct in that they appear to me to have been two steps along the one path, namely, the path to get rid of Mr Reurich. Consequently, only one penalty will apply to two of those contraventions. I am not satisfied that the first contravention was part of that course of conduct. It appears to me to have been separate, in that it was not part of a design to terminate Mr Reurich’s employment. I therefore conclude that Mr Hancock is liable to two maximum penalties of $6,600.
The size of the enterprise involved
The evidence is far from clear on this issue but it seems that the second respondent’s operation was not a large one, although the smallness of the enterprise is hardly relevant in circumstances where an employee has received treatment of the nature considered in this matter.
Deliberateness of the breaches
I am satisfied that the breaches were quite deliberate and not inadvertent in any way.
Whether the respondents had a culture of compliance
It appears to me, based on the conduct of Mr Haralambis towards Mr Reurich, that the second respondent, and by implication the third respondent, Mr Hancock, did not display or practise a culture of compliance. In my view, if the second respondent had truly been concerned with the relevant obligation under the FWA it would not have acted towards Mr Reurich in the manner it did.
Whether the respondents have taken corrective action and have co-operated with the applicant
At no point in these proceedings have any of the respondents co-operated with the applicant, although I do accept that it is probable that only Mr Hancock was in a position to do so. Nevertheless, the evidence throughout this case at interlocutory stages has satisfied me that Mr Hancock has been aware of the proceedings but has chosen not to involve himself. He has thereby not sought to demonstrate any co-operation with Mr Reurich in his pursuit of his just entitlements.
Nor does it appear that any corrective action has been taken by the respondents. I accept that the second respondent is in liquidation and thus is unlikely to be in a position to satisfy Mr Reurich’s entitlements but that is not to say that Mr Hancock could not at least have presented himself to the Court or given an explanation of the assets and liabilities of the company and the likelihood of any recovery by Mr Reurich of his entitlements. Nor has Mr Hancock taken any steps to put before the Court any evidence from the liquidator which would suggest that corrective action might be taken by the respondents.
The need for specific and general deterrence
It is unclear to me whether Mr Hancock remains in business but his behaviour in this case satisfies me that the civil penalties which would be imposed upon him should take account of his failure to engage with Mr Reurich in the pursuit of his legitimate entitlements and his failure to participate in these proceedings. A person in Mr Hancock’s position vis-à-vis Mr Reurich should not be encouraged to think that the insolvency of an employing company will, in circumstances where the individual in question has been significantly involved in the actions of a company to deny an employee their statutory rights, escape sanction as a consequence of that insolvency.
Similar considerations apply in relation to the question of general deterrence. The Court should impose a penalty which will discourage other employers from acting in a way which is similar to the conduct of the second and third respondents in these proceedings.
Conclusion
Taking all those matters into account, I consider that the contraventions by the respondents in this case to have been at the serious end of the moderate scale. In relation to the first contravention, the penalty will be $4,000 and in relation to the second and third contraventions the total penalty will be $5,000. That provides a total penalty of $9,000. I consider that in the circumstances of this case a cumulative penalty of $9,000 is appropriate to the conduct.
I have calculated the interest on the compensation to which Mr Reurich is entitled to be $3,333.62. Consequently, there will be judgment in favour of Mr Reurich against Mr Hancock in the total amount of $46,178.81 in relation to the claim for compensation. There will be judgment accordingly and orders for civil penalties.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Cameron FM
Date: 7 November 2012
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