Ruttley v Willis Brothers Installation (Qld) Pty Ltd
[2022] FedCFamC2G 919
2Federal Circuit and Family Court of Australia
(DIVISION 2)
Ruttley v Willis Brothers Installation (Qld) Pty Ltd [2022] FedCFamC2G 919
File number(s): BRG 479 of 2020 Judgment of: JUDGE TONKIN Date of judgment: 4 November 2022 Catchwords: INDUSTRIAL LAW - Appropriate civil penalties to be imposed on the respondent pursuant to section 546 of the Fair Work Act 2009 (Cth) – penalties to be paid to the applicant Legislation: Crimes Act1914 (Cth)
Fair Work Act2009 (Cth)
Federal Circuit Court of Australia Act 1999 (Cth)
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
CPSU, The Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228
Fair Work Ombudsman v NoBrace Centre Pty Ltd (In Liquidation) (ACN 121 556 447) & Ors (No.2) [2019] FCCA 2970
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4
Transport Workers’ Union of Australia v Registered Organisations Commissioner (No 2) (“TWU v ROC”) [2018] FCAFC 203
Division: Division 2 General Federal Law Number of paragraphs: 50 Date of last submission/s: 7 September 2022 Date of hearing: 3 August 2022 Place: Brisbane Counsel for the Applicant: Ms Blattman Solicitor for the Applicant: Shand Taylor Lawyers Counsel for the Respondent: Ms A-Khavari Counsel for the Respondent: K & L Gates ORDERS
BRG 479 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: TIMOTHY JOHN RUTTLY
Applicant
AND: WILLIS BROTHERS INSTALLATIONS (QLD) PTY LTD ACN 132 309 936
Respondent
order made by:
JUDGE TONKIN
DATE OF ORDER:
4 NOVEMBER 2022
THE COURT ORDERS THAT:
1.Pursuant to section 546 of the Fair Work Act 2009 (Cth) the respondent shall pay a pecuniary penalty of $44,100 for the first and second contraventions set out in the declarations made on 9 June 2022.
2.Pursuant to section 546 of the Fair Work Act 2009 (Cth) the respondent shall pay a pecuniary penalty of $31,500 for the third contravention set out in the declaration made on 9 June 2022
3.Both penalties being a total of $75,600 shall be paid directly to the applicant within 28 days of the date of these orders.
4.The respondent shall pay interest on any part of the $75,600 that remains outstanding after the expiration of 28 days from the date of these orders.
5.The application for costs is transferred to another judge of the Federal Circuit and Family Court of Australia (Division 2) (General Law) for determination.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE TONKIN
Introduction
On 9 June 2022 the Court delivered judgment[1] and found that the respondent Willis Bros Installations (Qld) Pty Ltd (Willis Bros) contravened the Fair Work Act 2009 (Cth) as follows:
(a)Section 351 (1) of the FW Act in that the respondent took adverse action against the applicant by terminating his employment because he was a person with a disability (first contravention);
(b)Section 340 of the FW Act in that the respondent took adverse action in injuring the applicant in his employment because the applicant exercised his workplace right by making a worker’s compensation claim under the Worker’s Compensation and Rehabilitation Act 2003 (Cth) (second contravention);
(c)Section 340 of the FW Act in that the respondent took adverse action against the applicant by terminating the applicant’s employment because he exercised a workplace right to make an inquiry in relation to his employment (third contravention).
[1] Ruttley v Willis Brothers Installation (Qld) Pty Ltd [2022] FedCFamC2G 430
The Court ordered that pursuant to section 545 of the FW Act the respondent pay the applicant compensation in the amount of $162,631 in addition to interest as calculated pursuant to section 76 (3) of the Federal Circuit Court of Australia Act 1999 (Cth) within 28 days of service of this order on Willis Bros Installations (Qld) Pty Ltd.
On 3 August 2022 the Court heard submissions with respect to the imposition of pecuniary penalties upon the respondent with respect to the abovementioned contraventions of the Fair Work Act 2009 (Cth).
Approach to penalty
Civil remedies may be sought in relation to a contravention of a civil remedy provision. The FW Act sets out the maximum penalties that may be imposed by the Court for each contravention.[2] Section 12 of the FW Act provides that “penalty unit” has the same meaning as section 4AA of the Crimes Act1914 (Cth).
[2] Section 546(2) of the FW Act limits the maximum penalty amounts to the penalty units referred to in section 539(2), and provides that the maximum penalty payable by a body corporate will be five times the number of penalty units prescribed for an individual.
In Fair Work Ombudsman v NoBrace Centre Pty Ltd (In Liquidation) (ACN 121 556 447) & Ors (No.2) [2019] FCCA 2970 (22 October 2019) Judge Kelly at [65] said:
[65] An important distinction should also be drawn between the basis on which penalties are imposed under the criminal law and those to be imposed by way of civil penalty. This is necessary because, the purpose of a civil penalty is primarily, if not wholly, that of promoting the public interest in compliance with the laws that have been contravened and does not engage principles of retribution or rehabilitation.
The Court has a broad discretion to assess the appropriate penalty. Subsection 546 (3) of the FW Act provides the Court with a discretion to pay any penalty or part thereof to the Commonwealth, a particular organisation or person including the applicant. The purpose of imposing a penalty is deterrence both specific to the contravenor and generally to others who may be tempted to contravene the FW Act not one of retribution, denunciation and/or rehabilitation.
In determining penalty the Court is required to identify the separate contraventions, consider whether any of the contraventions are a single course of conduct, consider whether there should be further adjustment to ensure that any overlap between separate contraventions is considered so there is no double penalty imposed and that the penalty is an appropriate response to the respondent’s conduct and then consider the appropriate penalty with respect to each final individual ground of contravention having regard to all the circumstances of the case and the maximum penalty available for each contravention. The Court is required to apply the totality principle to ensure the penalties are appropriate and proportionate to the conduct viewed as a whole.[3]
[3] Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301 at [36]
The maximum penalty that may be imposed on the respondent a body corporate for each contravention of sections 340 and 351(1) of the FW Act must not be more than 300 penalty units. All three contraventions concern matters that occurred on or prior to 14 May 2020 and the applicable penalty unit value at that time was $210 resulting in a maximum pecuniary penalty amount of $63,000 for each contravention.
The High Court recently considered the application of section 546 of the FW Act, in Australian Building and Construction Commissioner v Pattinson[4]. Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ held in a joint judgment that:
[10] The power conferred by s 546 of the Act is not subject to constraints drawn from the criminal law and there is no place for a "notion of proportionality", in the sense in which the Full Court used that term, in a civil penalty regime. Further, and relatedly, their Honours were misled by the view that the Act required that the maximum penalty be reserved for only the most serious examples of the offending comprehended by s 349(1), and that this principle could prevent the court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind. Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). What is required is that there be "some reasonable relationship between the theoretical maximum and the final penalty imposed". That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others.
[4]Pattison [2022] HCA 13 (13 April 2022)
As to the relevant factors that inform the exercise of discretion the Court in Pattison observed:
“[18] In Tr ade Practices Commission v CSR Ltd, French J listed several factors which informed the assessment under the Trade Practices Act 1974(Cth) of a penalty of appropriate deterrent value:
"The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1. The nature and extent of the contravening conduct.
2. The amount of loss or damage caused.
3. The circumstances in which the conduct took place.
4. The size of the contravening company.
5. The degree of power it has, as evidenced by its market share and ease of entry into the market.
6. The deliberateness of the contravention and the period over which it extended.
7. Whether the contravention arose out of the conduct of senior management or at a lower level.
8. Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9. Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention."
[19] It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a "rigid catalogue of matters for attention" as if it were a legal checklist. The court's task remains to determine what is an "appropriate" penalty in the circumstances of the particular case.”
The High Court in Pattison indicated further:
[46] It does not follow, as the Full Court suggested and as the CFMMEU argued in this Court, from the rejection of the Full Court's "notion of proportionality" that s 546 must be taken to require the imposition of a penalty approaching the maximum in relation to any and every contravention by a recidivist offender. It is important to recall that an "appropriate" penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a "one-off" result of inadvertence by the contravenor rather than the latest instance of the contravenor's pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law on the part of a union official, or where the official responsible for a deliberate breach has been disciplined by the union. In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.
[47] The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors of the kind adverted to by French J in CSR. For example, where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.
Applicant’s argument
The applicant argued that each contravention was a distinct contravention in nature and time and should not be grouped together. As such a high penalty was warranted to achieve both specific and general deterrence given the contraventions were deliberate, not inadvertent. The applicant contends that Duncan Willis over “a 6 to 9 month period (from July 2019 to September 2019 and until termination on 11 May 2022) engaged in conduct designed to drive the applicant from the business. Further the respondent showed no remorse but rather lied during the trial to avoid the consequences that flowed from its conduct [20].”
The applicant submitted that though he had been compensated by the Award made, the Court was nevertheless unable to quantify the accrued sick leave and annual leave owing to the applicant over the 20 years of his employment [54] due to the absence of records kept by the respondent. The applicant contends that the respondent’s conduct in failing to record the applicant’s leave accruals as obliged under statute resulted in the Court’s inability to precisely calculate the applicant’s outstanding entitlements compensating the applicant for failure to pay accrued leave entitlements in the sum of $14,972 equivalent to a mere 4 weeks’ pay and argued there is a significant likelihood that the applicant has been undercompensated. Thus a higher penalty is necessary so that the respondent does not see the penalty as being simply “the cost of doing business” but rather the penalty should be such to deter the respondent from failing to comply with its statutory obligations to record an employee’s entitlements.
In addition the applicant contends that the penalty should be sufficiently great to deter other employers from the type of conduct perpetrated by the respondent in circumstances where the applicant’s silicosis was sustained during and because of his work for the respondent for which the applicant was punished by his employer by terminating his employment.
The applicant submitted that an appropriate level of penalty would be close to the maximum and argued that the circumstances of this particular matter were more serious (in the sense relevant to penalty) than those in Roohizadegan v TechnologyOne Limited (No 2)[5], where a penalty of 74% of the maximum was awarded against the company in addition to a separate penalty against the company director. Similar to Roohizadegan, this matter involved a first offence for the respondent. Further like Roohizadegan, there was no evidence of any contrition, nor apology nor expression of regret by the respondent for engaging in conduct which contravened the FW Act.
[5] Roohizadegan v Technologyone Limited (No 2) [2020] FCA 1407 (2 October 2020)
The applicant submitted that a total penalty of $47,250.00, being 225 penalty units (or 75% of the maximum) was appropriate with respect to the contraventions of section 340 and 351 of the Act constituted by termination of his employment and that an additional penalty should be imposed with respect to each other contravention of section 340 namely injuring the applicant in his employment by disconnecting his mobile phone and cancelling his fuel card [60] suspending his QBCC allowance, failing to pay his personal leave entitlements. The applicant contends that each individual act on the part of the respondent had a material impact on him. Further the loss of the QBCC allowance resulted in a reduction of salary of $1243 per week and the failure to pay his leave entitlements left him with no income.
Regarding the respondent’s conduct that caused the applicant distress, hurt and humiliation distinct from that caused by the termination of his employment [107] the applicant contends that each act should be the subject of a penalty comprising 40 penalty units, or $8,400.00 ($33,600.00) in recognition that each contravention was individually significant, but also that the combined effect on the applicant was not so great as the termination of his employment. Having regard to the totality principle, the applicant submits that a total penalty of $80,850.00 should be imposed ($47,250.00 plus $33,600.00, without further reduction).
In accordance with the principles in Sayed v CFMEU[6] the applicant contends the Court should exercise its discretion pursuant to section 546(3) of the FW Act and order that the respondent pay the penalty to the applicant.
[6] Sayed v Construction, Forestry, Mining And Energy Union [2016] FCAFC 4 (22 January 2016)
Respondent’s argument
The respondent conceded that section 557 of the FW Act which allows for multiple contraventions to be taken as a single contravention does not apply to the contravention under section 340 and the contravention under section 351 of the FW Act however the respondent contends that the contraventions constitute a single course of conduct at common law.
The respondent relied on the decision of the Full Court in Transport Workers’ Union of Australia v Registered Organisations Commissioner (No 2) (“TWU v ROC”) [2018] FCAFC 203 where the Court at [91] discussed the task of identifying whether there was a single course of conduct and in doing so was required to “evaluate the considerations informing the contraventions (factual and legal) in order to impose appropriate penal relief that does not punish twice for the same conduct….it is necessary (in the absence of a statutory enquiry such as in s 557(1)) to examine all the conduct and enquire how its course and its explanation factually and legally informs the imposition of penal orders, in particular to avoid double punishment…”
The respondent submits in the present case the Court’s reasons indicate that after the applicant was diagnosed with lymph node silicosis Duncan Willis formed the view that the applicant would not be able to continue as production and installation manager for the respondent due to his physical disability. Duncan Willis formed an intention to exit or remove the applicant from the business and acted upon that intention between September 2019 and 11 May 2020. The respondent argued that “bare identity of motive for the commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions” and submitted that the facts as found by the Court demonstrate more than simply a motive but conduct intended to exit the applicant from the respondent.
The respondent submits that Duncan Willis’ view that the applicant would not be able to continue in his role due to his silicosis diagnosis, in the absence of an independent medical assessment, was a ‘prohibited’ or ‘discriminatory’ view that was held to be at the centre of the acts leading to the injury of the applicant’s employment and the termination of the applicant’s employment. The respondent contends that on that basis the contraventions should be viewed as a continuous course of conduct.
With respect to the breach of section 351 (1) and breach of section 340 of the FW Act the respondent contends that both involve the same conduct namely the termination of the applicant’s employment. The respondent contends that if the contraventions are not held to be a single course of conduct there should be further adjustment of any penalties imposed to ensure that the respondent is not penalised twice for engaging in the same conduct being the termination of the applicant’s employment.
The respondent argued that the adverse action taken by the respondent was injuring him in his employment by removing his work vehicle, mobile phone and fuel card, suspending his QBCC allowance, failing to pay his personal leave entitlements from 16 March 2020 and subsequently terminating his employment. The respondent contends that when considering the circumstances in which that conduct took place the Court should take into account that the applicant and Duncan Willis worked together in the stone bench business for about 20 years. Duncan Willis and the applicant were both directors within the Willis Group and the applicant was and still is a shareholder of the respondent (17%) and not just an employee. When giving evidence the applicant conceded (as director) that he had concerns regarding the ramifications of the number of workers who were diagnosed and recognised there may be a significant financial impact on the business.
In relation to the circumstances of the Willis Group prior to the prohibited conduct occurring on 6 October 2017 Work Health and Safety Queensland issued a prohibition notice which stated that Group Manufacturing Pty Ltd was to stop cutting or grinding stone without adequate controls to protect workers from being exposed to respirable crystalline silica. WorkCover directed all workers with silicosis to refrain from performing work in an environment containing silica dust. By the end of 2018 some 48 workers were unable to attend work. The applicant agreed that when silicosis “hit the stone benchtop industry it had a significant and very disruptive effect on the industry and significant impact on the Willis Group and further that around this time there were a number of labour shortages as a result and many employees were unable to attend work. The respondent contends that the applicant was aware for the 2018/2019 financial year that Group Manufacturing Pty Ltd experienced a loss due to silicosis within the industry. He further agreed there were redundancies but was unaware of how many and that assets such as company vehicles (excluding his own vehicle) may need to be disposed of due to the financial pressure.
The respondent argued that throughout 2018 and 2019, the respondent and the Willis Group continued to experience consecutive losses and reduced production activity.
The respondent contends that the loss or damage sustained by the applicant in relation to the contraventions was minimal. The applicant conceded that he had received money from Q Leave, a scheme within the building industry that pays long service leave entitlements and agreed that he had not lodged a tax return for the 2019/2020 financial year or the 2020/2021 financial year evidencing his wages between 11 May 2019 and 30 June 2020 nor for the period 1 July 2020 to 30 June 2021, but had provided payslips. The applicant secured new employment with Dream Benchtops from 26 August 2020, where he did not seek employment anywhere other than with his brother, three or four weeks before he commenced. The applicant conceded that due to his silicosis diagnosis he would not have been in a position to work for the respondent past 5 May 2021 when the applicant made a workers’ compensation claim and WorkCover accepted the claim.
With respect to the size of the business the respondent concedes that Willis Bros and the Willis Group is not a small business employer for the purposes of s 23 of the FW Act, but is in fact a relatively small business, where at the time of the proceedings, Group Manufacturing Pty Ltd employed 22 employees and Willis Bros employed 16 employees. Further the business has suffered financially due to the impact of silicosis. The applicant was formerly a director of the respondent and entities within the Willis Group between 6 October 2008 and 30 April 2020 and was a director of Willis Bros from 12 January 2016 until 30 April 2020 when he was removed as a director. He remains a shareholder of the Willis Group and holds a 17% interest.
The respondent acknowledged that deterrence (both specific and general) is the principle or only purpose of imposing a penalty arguing that the need to deter the respondent was low given the respondent was held to have contravened the FW Act for the first time.
The respondent submitted that, if the Court finds that the contraventions constitute a single course of conduct, and taking into account all of the circumstances of the case, an appropriate penalty is 40% of the maximum penalty, or $25,200.
In the alternative if no single course of conduct is held, the respondent submits that the First and Third Contravention involve the same prohibited conduct, termination of the applicant’s employment and only one penalty should be imposed. As such an appropriate penalty for the First and Third Contravention is 40% of the maximum or $25,200 and an appropriate penalty for the Second Contravention is 30% of the maximum, or $18,900. Having regard to the totality principle if two penalties are imposed the amount of $44,100 is appropriate for the whole of the respondent’s contravening conduct.
Consideration
I have carefully considered the submissions of both parties. I accept and take into account that the respondent’s stone bench top business suffered financially as a result of numerous employees being diagnosed with silicosis. The applicant had worked in the business for some 20 years from a very young age (as had other family members) and through his skill as production and installation manager of stone bench tops had developed the business with Duncan Willis. Notwithstanding his loyalty and commitment to the business following the applicant’s silicosis diagnosis in November 2018 the respondent through Duncan Willis engaged in a course of conduct over the ensuing period treating the applicant less favourably than other employees because he suffered from a physical disability. Duncan determined that the applicant would not be able to continue to work as production and installation manager for the business and set out on a course to remove him from the business notwithstanding that at the time of diagnosis there was no evidence that the applicant was unable to perform the work required of him.
In my reasons I found that Duncan Willis as the majority shareholder of Willis Bros and director of six of the companies of the Willis Group was the controlling mind of the respondent. His conduct towards the applicant was both egregious and unjust with little to no regard to the impact on the applicant of the diagnosis of silicosis which had been caused by working in the stone bench top business through exposure to silica dust over a 20 year period. In September 2019 Duncan attempted to obtain a QBCC nominee supervisor licence which was rejected. He then became increasingly aggressive and intimidating towards the applicant. In November 2019 he requested Justin (his brother) to return to work for Willis Bros as he had the requisite stone masonry qualifications to obtain a QBCC nominee supervisor licence. Justin was appointed a director of Willis Bros on 16 December 2019 in circumstances where the applicant (who remained a director) refused to provide his consent.
In December 2019 Duncan offered to buy out the applicant’s interest in Willis Bros which was not accepted. On 14 January 2020 Duncan recalled the applicant’s two vehicles used by both the applicant and his wife, re-diverted his mobile phone used by the applicant for business and for personal use and cancelled his fuel card (all aspects of the applicant’s salary package).
On 14 January 2020 the applicant forwarded a medical certificate certifying his was unfit for work. While on personal or sick leave on 21 February 2020 Duncan ceased paying the applicant his QBCC allowance reducing the applicant’s income significantly. On 16 March 2020 Duncan ceased paying the applicant his wages (or personal leave entitlements) notwithstanding the applicant’s medical certificate stated that he was unfit to work until 20 May 2020.
On 6 April 2020 Duncan moved a resolution to remove the applicant as director of Willis Bros. On 28 April 2020 the applicant forwarded a medical certificate stating that he continued to be unfit for work. On 30 April 2020 the applicant was removed as a director of Willis Bros and his employment with the respondent was unlawfully terminated on 11 May 2020 on the basis that the applicant had “exhausted his leave entitlements.” The respondent took adverse action against the applicant in unlawfully terminating his employment and breached section 351 (1) of the FW Act the maximum penalty for the breach being $63,500. I am satisfied that a significant penalty ought to be imposed for the contravention. Duncan’s conduct was deliberate not inadvertent. The applicant was required to commence proceedings to obtain his proper termination and leave entitlements. Duncan should no contrition or remorse throughout the proceedings and maintained he was justified in terminating the applicant’s employment on the basis that he had exhausted his leave entitlements when no records of any leave entitlements had been kept contrary to the statutory requirements.
I take into account that the respondent has paid the compensation awarded to the applicant and the fact that the applicant continues to hold a 17% interest in the business. I take into account that the respondent has not previously breached the FW Act. I reject the respondent’s submission that the loss to the applicant was minimal though I accept he found work with his brother in August 2020. The applicant had worked in the business from a young age over a 20 year period. The respondent’s conduct was deliberate in unlawfully terminating the applicant’s employment.
With respect to the respondent’s breach of section 340 of the FW Act the applicant had a workplace right under a workplace law to make a complaint or inquiry in relation to his employment. I found that the respondent contravened section 340 of the FW Act and took adverse action against the applicant in terminating his employment because the applicant exercised a workplace rights by making a worker’s compensation claim under the Worker’s Compensation and Rehabilitation Act 2003 (Cth) for an injury sustained in the course of his employment which was accepted by WorkCover. Following the lodgement of that claim and acceptance by WorkCover in January 2019 the respondent formed an intention to remove the applicant from the business and acted upon that intention in the manner discussed above. I accept the respondent’s submission that there is some overlap between the two contraventions and a single penalty ought to be imposed. With respect to the first and second contraventions I am satisfied that that the appropriate penalty is 65% of the maximum penalty or the sum of $44,100
Regarding the third contravention the applicant was entitled to the benefit of a workplace law namely the right to make a complaint or inquiry about the failure to pay his leave entitlements under Part 2 – 2 of the FW Act. In late November 2019 the applicant requested information regarding his accrued leave entitlements from Lisa Wilson. On 3 April 2020 the applicant made an inquiry regarding non - payment of his accrued leave entitlements. On 6 April 2020 the applicant made an inquiry requesting details of his accrued leave entitlements. On 9 April 2020 the applicant made an inquiry requesting details of his accrued leave entitlements and on 21 April 2020 the applicant requested the respondent provide details of his leave entitlements. At no time was the applicant provided with any information in relation to his inquiry. No records were kept with respect to employees leave entitlements.
On 11 May 2020 the applicant received an email from Justin attaching a letter terminating his employment “because he had taken excessive leave and because his absence was not based on the Worker’s Compensation and Rehabilitation Act.” I found that the decision to terminate the applicant was made by Duncan. Of concern was the reason provided by the respondent for terminating the applicant that he had exhausted his leave entitlements for which there was no evidence supporting that contention by virtue of the fact that the respondent failed to comply with its statutory obligations to maintain employee business records including the applicant’s leave entitlements. I found that the respondent contravened the FW Act in taking adverse action against the applicant because he exercised a workplace right in making inquiries about his leave entitlements.
This is also as a significant breach of the FW Act in my view having far reaching consequences for employees generally and requires a penalty that addresses both specific and general deterrence. The respondent continues to operate the stone bench top business and in those circumstances there is a need to ensure that the respondent cannot simply ignore its statutory obligations to maintain employee business records and then rely on that failure to unlawfully terminate an employee’s employment. In the event that other employees working in the business are diagnosed with silicosis (notwithstanding the protections available to employees (present and future)) the penalty imposed should be one that deters the respondent from engaging in the type of conduct experienced by the applicant.
The respondent’s failure to maintain a record of the applicant’s leave entitlements also prevented the Court from accurately calculating the precise leave entitlements owing to the applicant with the Court having to assess those entitlements against other available evidence. I accept the applicant’s submission that the respondent took the approach in failing to keep accurate employee business records as simply “the cost of doing business.” I am satisfied that the appropriate penalty to be imposed should be 50% of the maximum or $31,500.
Conclusion
In Fair Work Ombudsman v Jetstar Airways Ltd at [28] Buchanan J said “ultimately the Court’s task is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.” Having regard to totality I am satisfied the appropriate penalty to be paid with respect to the three contraventions is $75,600.
Payment to a person
The applicant submits that in accordance with the principles in Sayed v CFMEU[7] the Court should exercise its discretion pursuant to section 546(3) of the FW Act and order that the respondent pay the penalty to the applicant. In Sayed v CFMEU the Full Court said:
[104] In our view the legislative history of s 546(3), older authority and the terms of the Explanatory Memorandum show that no immediate or obvious connection was intended to be drawn between the exercise of the s 546(3) power and the exercise of the power under s 545 of the FW Act to order compensation.
[105] Moreover, s 546(5) makes it plain the Court may make a pecuniary penalty order in addition to a s 545 order. The fact that a compensation order has also been made should not control the exercise of the s 546(3) power with respect to the payment of the penalty.
[106] There is no necessary tension, as the primary judge put it, between the application of the “usual order”, where a person affected by the contravention succeeds in a court proceeding and a penalty is imposed, and the separate entitlement of that person to be compensated under s 545. Nor is there any necessary relationship between the s 570 limitation on the recovery of legal costs in proceedings under the FW Act, except in prescribed circumstances, and the application of the “usual order”.
[107] Rather, s 546(3) has a long and well-understood operation. The FW Act enables, amongst others, a person affected by a contravention to initiate an enforcement proceeding and to receive the penalty, where one is imposed.
[7] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4 (22 January 2016)
Further in Sayed (supra) the Full Court observed:
[113] The decision of Jessup J in Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118; [2013] FCA 1146 also generally supports the approach we have identified above. Referring to Plancor, Jessup J made the following points in relation to the case before him, at [116].
First, the case did not call for a consideration of the situation in which a registered organisation is the applicant.
Secondly, in the words of Branson and Lander JJ in Plancor, the applicant was “the individual affected by the conduct so penalised”, so the circumstance that she may, in some instances, have been compensated for some of the loss which she had sustained would not necessarily stand in the way of her receiving all or some of the penalties to be imposed.
Thirdly, their Honours’ treatment of the “windfall” point was consistent with it being appropriate to take into account the costs and expenses to which the applicant, as applicant, had obviously been exposed in the assertion of her contractual and statutory rights in the proceeding. That was not to suggest that the s 546(3) discretion should be exercised in a way that provides a substitute for costs which are unavailable under s 570 of the FW Act, but, where there have clearly been such costs and expenses, it may serve to counter any suggestion that the applicant would walk away from the case with a “windfall” or “profit”.
And fourthly, provisions of the kind now found in s 546(3)(b) and (c) of the FW Act — in the case of (c), to the extent that it refers to an applicant — have a considerable history in federal industrial legislation, and have for many years been recognised as setting up a presumptive entitlement in the nature of that of a common informer.
[114] At [118][119], Jessup J further noted that:
First, there were some areas of the case before his Honour in which the applicant would receive compensation (or damages). There were, however, areas in which she would not.
Secondly, the case before him was not a case in which non-economic loss had been either alleged or proven. But that was not to say that the applicant should not be regarded as a victim of the respondents’ contraventions whose position was affected for the worse by their conduct.
Thirdly, his Honour had upheld the applicant’s claims for costs in some areas. While a payment under s 546(3)(c) should not be regarded as a back-door method of securing costs, nonetheless the recovery of costs to some extent has the potential to bear upon any consideration of whether such a payment would deliver a “windfall” to the applicant.
Fourthly, the “common informer” policy considerations which are ingrained into s 546(3)(c) and its statutory predecessors were said to “speak loudly” in the circumstances of the case before his Honour. For the applicant — an individual employee in a responsible position in a non-industrialised workplace — to have advanced, and persisted with, claims which the Court had held to be legitimate, and to have done so in the face of the deferrals and procrastinations of the respondents, could only have constituted a substantial, continuing, burden for her. In a forensic and evidentiary environment which would have tested the most seasoned of litigators, the applicant maintained her focus and, ultimately, achieved the success which was always her due. His Honour considered it to be “four-square” within the policy of s 546(3)(c) that an employee in the position of the applicant should be encouraged to proceed as she had done, thereby making it the more likely that the applicable provisions of the FW Act will be more than mere words on the statute book.
…….
[116] ……. the policy considerations of s 546(3) “speak loudly” in the circumstances to justify the payment of the penalty imposed to the individual affected by the contravention who, under the authority of the FW Act, commenced and maintained this enforcement proceeding. If Mr Sayed had not pursued the action, it is unlikely that it would have been pursued. He took on the proceeding at obvious cost to himself.”
I respectfully adopt what was said in Sayed (supra) that policy considerations speak loudly in the current case to justify the payment of the penalty to the individual affected by the contraventions who commenced and maintained the current proceedings. Had he not pursued the matter is it unlikely that the respondent would have been pursued. The respondent would have escaped sanctions for deliberately contravening the FW Act the outcome of which sends a message to other employers who chose to contravene the Act. Further the applicant would not have received compensation for the unlawful termination of his employment and distress caused to the applicant by the respondent’s conduct in removing him from the business.
The imposition of a penalty under the FW Act is designed fundamentally to serve the public interest in acting as a deterrent to employers such as the respondent from engaging in conduct of the kind subject to my findings.
48. Finkelstein J in CPSU, The Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 at [25]- [28] said:
it cannot be doubted that employer and employee organisations play a legitimate and important role in seeing that there is compliance with the provisions of the Workplace Relations Act…an individual employee will rarely have the ability to fund a proceeding for a contravention. If unions do not bring such proceedings, contraventions will go unpunished.
I am satisfied that it was in the public interest for the applicant to bring these proceedings for contravention of the FW Act to protect the legitimate interests of individual employees and to ensure employers such as the respondent comply with the legislative requirements designed to ensure employees receive their rightful entitlements under the FW Act. Further had the applicant not brought these proceedings he would not have received his proper entitlements having devoted himself to the development of the business over a 20 year period. I am satisfied that the applicant represented by a solicitor and Counsel has incurred significant expense in bringing these proceedings. I am satisfied that it is appropriate to make an order that the penalty imposed on the respondent of $75,600 should be paid directly to the applicant.
Costs
With respect to the application for costs Judge Tonkin recuses herself from determining that matter and transfers the costs application to another judge of the Federal Circuit and Family Law of Australia (Division 2) (General Law).
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Tonkin. Associate:
Dated: 4 November 2022
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