Sabapathy v Viveganantham
[2024] FedCFamC2G 666
•25 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sabapathy v Viveganantham [2024] FedCFamC2G 666
File number(s): MLG 1637 of 2022 Judgment of: JUDGE MANSINI Date of judgment: 25 July 2024 Catchwords: INDUSTRIAL LAW – FAIR WORK – application by a refugee immigrant for relief in relation to alleged contraventions of various minimum entitlements, regular payment and record-keeping obligations under the Fair Work Act 2009 (Cth) – where sole director of since deregistered company denied any employment relationship and therefore did not pay wages or keep any employment records – where the evidence established the existence of an oral and implied contract of employment – where the alleged contraventions were otherwise undefended – HELD that company contravened ss.45, 323 and 535 and respondent was involved within the meaning of s.550(2) – question of what (if any) relief to be heard separately. Legislation: Corporations Act 2001 (Cth)
Fair Work Act 2009 (Cth) ss. 3, 5, 12, 13, 14, 45, 323, 535, 545, 546, 550, 557, 793.
Fair Work Regulations 2009 (Cth) rr. 3.32, 3.33, 3.34.
Cases cited: Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1
Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 3) [2023] FCA 201
Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627
Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705
Workpac Pty Ltd v Skene [2018] FCAFC 131
ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2
Division: Division 2 General Federal Law Number of paragraphs: 104 Date of last submissions: 3 April 2024 Date of hearing: 31 January 2024 Place: Melbourne Counsel for the Applicant: Mr Merriman The Respondent: Appearing in person ORDERS
MLG 1637 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: PRABAKARAN SABAPATHY
Applicant
AND: SAJEEVAN VIVEGANANTHAM
Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
25 JULY 2024
THE COURT ORDERS THAT:
1.Further to the judgment in Sabapathy v Viveganantham [2024] FedCFamC2G 666, the matter be adjourned to 10.00am on 30 September 2024 for a further hearing in respect of the Applicant’s claims for compensation and pecuniary penalties pursuant to ss.545 and 546 of the Act for the Respondent’s contraventions of ss.45, 323 and 535 (by his involvement within the meaning of s.550(2)) of the Fair Work Act 2009 (Cth).
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 MANSINI
IN SUMMARY
This matter involves allegations by a refugee immigrant that the sole director of a since deregistered rubbish removal company was involved in contraventions of the fair work legislation – namely, of various minimum entitlements for work performed, regular payment and record keeping obligations.
The key issue is whether there was an employment relationship at all, there being no record of an employment agreement. The respondent contended that the connection was familial, any work was voluntary and therefore no employment obligations applied and no records were kept.
These reasons explain the findings made that there was an employment agreement, the company contravened ss.45, 323 and 535 of the Fair Work Act 2009 (Cth) (Act) and, by his involvement within the meaning of s.550(2), the sole director also contravened ss.45, 323 and 535 of the Act. The question of what (if any) penalty and relief is appropriate to order will be programmed for separate hearing.
APPLICATION BEFORE THE COURT
Procedural context
The matter has an unfortunate procedural history, the relevant aspects of which are outlined below.
Mr Sabapathy (the Applicant) commenced the proceedings by application and statement of claim filed 15 July 2022.
There was no appearance for or by Mr Viveganatham (the Respondent) at the initial mention on 13 February 2023 and so the matter was adjourned.
The Respondent entered an appearance, in person, at the next mention on 6 March 2023, on which occasion the Respondent indicated they had briefed a lawyer and programming orders were made including to fix the matter for hearing at 10.00am on 15 May 2023.
The Respondent did not file and serve a defence, affidavit evidence and submissions in defence of the claim by 4.00pm on 27 March 2023 (as required by the 6 March 2023 orders).
No lawyer that may have been engaged to act on behalf of the Respondent filed a notice of address for service by 4.00pm on 10 May 2023 (per the Court’s orders of 6 March 2023) or at any stage during the proceedings.
There was no appearance for or by the Respondent at the hearing at 10.00am on 15 May 2023 (pursuant to the 6 March 2023 orders). Further programming orders were made on that day to allow the Applicant to file and serve an amended statement of claim with accompanying affidavit evidence and an outline of submissions with proposed orders clearly set out; and a further opportunity for the Respondent to file a defence, any affidavit evidence and an outline of submissions. The matter was fixed for hearing at 10.00am on 10 August 2023.
On 22 May 2023, an amended statement of claim was filed with accompanying affidavit evidence and an outline of submissions.
The Respondent did not file and serve a defence, affidavit evidence and submissions in defence by 4.00pm on 19 June 2023 (as required by the 15 May 2023 orders).
The Respondent sought to enter an appearance, from his motor vehicle, at the hearing on 10 August 2023 and so it could not proceed. The Respondent was granted further opportunity to participate in the proceedings. On that day, orders were made fixing the matter for hearing at 10.00am on 28 August 2023 and requiring the Respondent to file an affidavit and any evidence he wished to rely on by 4.00pm on 17 August 2023.
On 8 August 2023, a court book was filed by the Applicant.
On 17 August 2023, the Respondent emailed a 3-page document to chambers.
On 28 August 2023, both parties entered an appearance. The hearing was adjourned to 10.00am on 11 October 2023 because the Applicant could not read the English language affidavit filed on his behalf, and so that the Applicant could prepare, file and serve an appropriately certified translated version of his affidavit sworn 19 December 2022. The Court made orders on that day which included a notation in the following terms:
The self-represented Respondent has told the Court that he wishes to defend the claim and give oral evidence at the final hearing in relation to the threshold issue of whether there was an employment contract and/or employment relationship and, if unsuccessful in relation to that threshold issue, will not defend the balance of the claim. The Respondent was granted permission to proceed in this way which was not opposed by the Applicant.
On 2 October 2023, the Applicant sought to subpoena the production of documents from Allianz Australia – Workers Compensation Victoria. Subsequently, the following documents were produced and came to be included in the Court’s file:
(a)CGU Workers’ Compensation Report dated 29 July 2019;
(b)Annexure to the CGU Report – adopted statement of the Applicant taken at interview of 10 May 2019;
(c)Annexure to the CGU Report – signed statement of the Applicant dated 14 May 2019; and
(d)Annexure to the CGU Report – signed statement of the Respondent, taken at interview of 10 May 2019.
On 4 and 9 October 2023, the Applicant filed a translated version of the Applicant’s affidavit sworn 19 December 2022 and an affidavit of a professional translator in the English and Tamil languages deposing to their translation of same.
The hearing did not proceed at 10.00am on 11 October 2023 due to unavailability of a suitably qualified interpreter.
On 29 January 2024, a supplementary court book was filed by the Applicant in addition to translated versions of the annexed statements to the CGU Report (adopted statement of the Applicant and statement of the Respondent) and an affidavit of a professional translator in the English and Tamil languages deposing to their translation of same.
The hearing proceeded on 31 January 2024. The Applicant was represented by counsel and the Respondent appeared in person. At the hearing, the Applicant sought to rely on the materials contained within the court book filed 8 August 2023, the supplementary court book filed 29 January 2024 and their oral evidence given at hearing. The Respondent sought to rely on his 3-page document submitted 17 August 2023 and oral evidence given at hearing. During the course of giving his evidence, the Respondent said he could produce photographs from his phone and otherwise claimed that records from regulatory bodies such as Centrelink and VicRoads would prove his contentions, but did not have any photographs or records to produce at the hearing. Having regard to the history of the matter and absent any persuasive explanation, leave for filing further evidence on a later date was refused.
The Applicant gave evidence at the hearing with the assistance of an interpreter. The Respondent addressed the Court and gave evidence mostly in English, but at times in evidence at the hearing elected to have the assistance of an independent interpreter.
Pursuant to the invitation given at the conclusion of the hearing, the Applicant filed closing submissions on 22 February 2024. The Respondent did not file closing submissions by 3 April 2024 (as invited) or at all.
For completeness, on 3 April 2024, the Respondent submitted a series of some 14 screenshots by email to chambers including bank transactions and photographs. As will be apparent from the above, by the time of the hearing on 31 January 2024, the Respondent as an unrepresented litigant from a non-English speaking background had been afforded considerable opportunity to participate in the proceedings and substantial opportunity to understand the nature of the proceedings and what was required of him. The materials of 3 April 2024 were submitted without leave of the Court, without explanation following closure of the evidentiary case and have not been received.
THE EVIDENCE
The following is a summary of the written and oral evidence before the Court as relevant to the claim. Recitation of uncontentious facts constitute findings I have made.
About the parties
The Applicant and the Respondent were respectively born in Sri Lanka and came to Australia as refugees in 2012.
The Applicant was at all material times a permanent resident of Australia. He has 2 daughters.
The Respondent was in the business of rubbish removal and at all material times was the sole director and sole shareholder of the company, SK Removals Pty Ltd. It was not contentious that the Respondent was responsible for the overall direction, management and supervision of SK Removals Pty Ltd and for ensuring compliance with its legal obligations under the Act. The Respondent’s evidence was that he had struggled with gambling activity and depression at times.
SK Removals Pty Ltd was deregistered on 26 January 2020 but it is not disputed that, at all material times, it was:
(a)A body incorporated under the provisions of the Corporations Act 2001 (Cth);
(b)A “constitutional corporation” within the meaning of s.12 of the Act; and
(c)An entity operating a business as SK Removals Pty Ltd in the State of Victoria, trading as “SK Removals”.
The Applicant and the Respondent had lived together for 1 year in a share house in or around 2013. According to the Applicant’s evidence and the Respondent’s statement given to the workers’ compensation investigator in 2019, the pair had also lived together in another share house at the start of 2018 but the Respondent strongly disputed this second instance of shared living in his oral evidence given to the Court. With the benefit of a Tamil translation of his 2019 statement (prepared by the Applicant for purposes of these proceedings), the Respondent said in these proceedings that it was not true that they had been residing together and further that he had not been afforded an interpreter to prepare that 2019 statement so it was based on whatever English he knew at the time. In cross examination, the Respondent accepted that he had signed the 2019 statement but said VicRoads would have records to prove that he did not live with the Applicant in 2018.
There was also a dispute about whether the Respondent was ever in a relationship with one of the Applicant’s daughters. The Respondent told the Court in his written statement it was the case that he had a love affair with the Applicant’s daughter Keertana in early 2018 and in oral evidence insisted that he had photographs on his phone to prove it. Previously, the Respondent had signed a statement for the workers’ compensation investigation that the Applicant had asked him to marry his daughter in Sri Lanka so she could obtain residency in Australia – when taken to this in cross examination at the hearing, the Respondent said he recalled saying this but that he did not say it with this meaning – he did not elaborate about the intended meaning and did not accept the proposition that he would give whatever explanation he feels is most favourable to him. He further elaborated in cross examination to say: it was true that he was to marry the Applicant’s daughter; he had assumed the Applicant was working for free because of that relationship; but then the Applicant made the workers’ compensation claim; and so the Respondent saw things differently.
Whereas the Applicant denied any relationship between the Respondent and his daughter and said Keertana (or Kethina as her name was transcribed) was married in 2016 and could have obtained Australia residency through the Applicant’s own sponsorship.
The alleged employment agreement
It was common ground that there was no documentation of any employment offer, acceptance or agreement as between the Applicant and SK Removals Pty Ltd.
It was also common ground that the Applicant had accompanied the Respondent, in his truck in going about waste removal for customers of SK Removals Pty Ltd.
The Applicant’s account
The Applicant deposed that, on or about 3 January 2018, he had a verbal conversation with the Respondent at the Dandenong Plaza in Melbourne, to the following effect:
Applicant: Do you have any work for me?
Respondent: Yes, actually, I was looking for you because I know you are a hard worker. I am waiting for my contract to come out. Once it comes out, I will need people to work in my company.
Applicant:I am only interested if it is a full time job. How much can you pay me?
Respondent: I will have work for you 7 days a week. I have to see how you work and only then will I be able to tell you how much I can pay you.
According to the Applicant, the conversation on 3 January 2018 ended when the Applicant gave the Respondent his phone number and they both walked away.
On 5 January 2018, the Applicant was contacted by the Respondent who confirmed he had work for him and would pick him up on 7 January 2018 at around 4.00am. The Applicant recalled that the Respondent instructed him to have his phone and things ready and that he responded to say words to the effect of: “Ok, I will do it”.
The Applicant’s evidence was that there was never any discussion about days or times of work but the Applicant was under the impression that he was hired as a full time employee and, as such, in January 2018 had advised Centrelink that he had obtained full time employment with SK Removals Pty Ltd.
In his written affidavit, the Applicant recalled that he gave the Respondent his bank account details and tax file number. At the hearing, he told the Court in evidence that it was 14 January 2018 that he gave those details to the Respondent and did so by hand.
The Applicant recounted to the Court that the relationship between them came to an end when the Applicant became injured and brought a workers’ compensation claim against SK Removals Pty Ltd.
The Respondent’s account
The Respondent’s statement to the Court in these proceedings included that the Respondent had met with the Applicant at the Dandenong Plaza in 2018 (he did not know the exact day) and told the Applicant about a break up with a former girlfriend and then the Applicant called through facebook messenger to introduce the Respondent to his daughter, which relationship developed into a love affair.
The Respondent also said in his statement to the Court that it was during visits to the Applicant’s house (because the Applicant was his lover’s dad) that the Applicant had asked to come to work with him because it was boring to stay in his house while not working and in receipt of Centrelink (unemployment benefits). The Respondent maintained that the Applicant had come on his truck of his own free will “for time pass”, strongly denied in oral evidence having ever asked the Applicant to come to work and insisted his phone records could be checked.
The Respondent’s previously signed 2019 witness statement (for purposes of the workers’ compensation investigation) included a statement that the Applicant agreed to work part time for him in return for sending money to his family in Sri Lanka.
When the Respondent was asked in cross examination about the apparent inconsistency between his statements that the Applicant was coming of his own will on the one hand and on the other hand working part time in exchange for money sent to the Applicant’s family in Sri Lanka, the Respondent sought to explain but accepted they were inconsistent.
The Respondent also told the Court in his written statement that the relationship between them broke down when he broke up with the Applicant’s daughter in around August 2018 and the Applicant became angry and filed fake claim(s) out of revenge.
Hours and nature of the work allegedly performed
The Applicant’s account
The Applicant gave evidence that his first day of work for SK Removals Pty Ltd was 7 January 2018. The Applicant said he was collected by the Respondent in the Respondent’s truck on that day and the pair attended to collection and disposal of waste, by loading and unloading the truck.
The Applicant gave evidence that he then continued to work 7 days a week until 11 July 2018, including weekends and public holidays.
In support of his account, the Applicant produced evidence from his personal notebook. He gave some written and some oral evidence to explain those entries including notations in the Tamil language. In summary:
(a)For the period 7 January to 28 February 2018, the Applicant recorded the start and finish times for his hours worked which entries he had completed on each occasion when he started and finished work. The hand written record reflected that during this period there was weekend work, early morning starts (sometimes as early as 4.00am, sometimes at 9.00am) and evening finishes (sometimes at 3.00pm, sometimes as late as 11.00pm.).
(b)For the period 29 February to 11 July 2018, following a discussion with the Respondent wherein the Applicant was told it was unnecessary to record his hours worked because he was going to be paid a daily rate, the Applicant had recorded only the days not worked. During this period, the Applicant’s evidence was that his hours increased and he often worked more than 12 hours per day on 5 days of each week plus maybe 7 or 8 hours on the other 2 days of each week, from 4.00am anywhere up to 11.00pm or 12.00am.
In terms of the nature of the duties, the Applicant said the work he performed usually consisted of loading rubbish and less frequently moving furniture and residential cutting of trees. The rubbish and debris was taken from construction sites and residential properties and loaded into a tip truck and transported to council tips where it was dumped. The Applicant’s evidence was that he always attended job sites with the Respondent and the Respondent determined what sites they would go to and visit, sometimes up to 6 sites per day – and he had seen the Respondent paid money by his clients, sometimes in cash and sometimes transferred into his account. At times they would sort the rubbish at their home and load it into different trucks.
The Respondent’s account
As earlier referenced, the Respondent denied ever asking the Applicant to come to work and said the Applicant had accompanied him on the truck of his own free will. Further, the Respondent told the Court that he was just taking the Applicant along in the truck with him and never assigned any hard work or anything like that to him.
In oral evidence before the Court, the Respondent strongly denied that there was any activity at all extending between the hours of 4.00am until 11.00pm. He said that it would be illegal to do so in Australia.
In his written statement to the Court, the Respondent said that his truck is a “tipper” and needed no assistance unloading. He also described the incident that led to the Applicant’s claimed injury as having involved the Applicant claiming to have fallen from height off the truck but that an inspection could be arranged as the truck was only 1 metre high.
The Respondent’s previously signed 2019 witness statement (for purposes of the workers’ compensation investigation) included the statement that the Applicant had only worked for him 2 to 3 days a week, for a few hours a day. The Respondent confirmed this statement when taken to it in cross examination.
Payment for work allegedly performed
It was not contentious that the Respondent made the following payments:
(a)In or around June 2018, in the amount of $528.00 paid direct to the Applicant’s family in Sri Lanka;
(b)In or around July 2018, in the amount of $858.00 paid direct to the Applicant’s family in Sri Lanka;
(c)In or around August 2018, in the amount of $250.00 paid direct to the Applicant in cash; and
(d)In or around September 2018, in the amount of $300.00 paid direct to the Applicant in 3 instalments of $100.00.
The purpose of the above payments was disputed to the extent that the Applicant contended this was (part) payment for services performed pursuant to the alleged employment contract, which allegation the Respondent denied. Instead, the Respondent said that the payments were to assist his girlfriend’s family with the cost of living at home in Sri Lanka.
The Applicant also alleged to have agreed a daily rate of pay which was never paid. The Applicant said that this occurred in or around late January 2018, in response to the Applicant having shown his record of hours worked to the Respondent, to which he was told it was unnecessary to record his hours because he would be paid a daily rate of $180.00 plus 2 meals per day.
It did not appear to be contentious that such a day rate was not paid for the numerous days the Applicant contended to have worked or that no other payments were made at all. The Applicant gave evidence that he confronted the Respondent about payment up to 10 times. He recalled that the Respondent responded with reference to cash flow issues and was waiting for his boss to pay, but would pay the Applicant when the situation was resolved. Indeed, the Respondent’s previously signed 2019 witness statement (for purposes of the workers’ compensation investigation) included the following statements that the Respondent verified when taken to them in cross-examination:
(a)When contacted by a case manager of Springvale Legal Service in October 2018, the Respondent said he would pay outstanding wages for the Applicant but would not be paying for any injuries that the Applicant was (falsely) claiming were his fault;
(b)The Respondent had told a mutual friend that the Respondent would pay the Applicant’s unpaid wages if he agreed not to lodge a WorkCover claim; and
(c)The Respondent had asked the Applicant for his ABN but the Applicant never gave it to him.
When taken in cross examination to the apparent inconsistency between his statements that the Applicant was coming on the truck of his own free will on the one hand and on the other hand that he had told Springvale Legal Service that he would pay outstanding wages of the Applicant, the Respondent accepted these were inconsistent.
Also in cross-examination, the Respondent further clarified the above statements made in 2019, in terms that: he had treated the Applicant as family and it was only after a quarrel between them that he had requested the Applicant’s ABN; and he had offered to remunerate the Applicant for the 2 to 3 hours he had accompanied the Respondent as wage for the work but was not salary or anything like that and not from 4.00am to 11.00pm and for the time period May to August because before May 2018 he had no contact since 2003.
When being asked to explain the statement given to the workers’ compensation investigator in 2019, the following exchange occurred:
COUNSEL:And you said that to [investigator] because you knew you owed him outstanding wages; isn’t that right?
RESPONDENT: Yes. He only joined me on a friendly basis. He did not join me as a worker. But that is why I told them that he’s – I’m agreeable to pay him some money – money, but not as a wage for the work, and the claim that he makes that he fell from the truck, that is also a lie.
COUNSEL:That’s not what you told [investigator], is it?
RESPONDENT: So the outstanding amount means that I was trying to pay him for the two or three hours that he was accompanying me, not as the salary or anything like that.
COUNSEL:So you do you accept…
RESPONDENT: But I wanted to compensate him for that time he was accompanying me. And I also specifically told him that I was not going to pay any claim towards injury, and I had no connection with an injury claim, and I told him he must settle that injury claim first, and then talk about the .....
The Respondent denied that the Applicant had called him to follow up about his unpaid wages some 10 times.
Further, the Applicant’s evidence to the Court was that, as he was not able to provide Centrelink with a payslip, he remained in receipt of unemployment benefits for the entire time that he had worked for SK Removals Pty Ltd. He recalled that the Respondent had (or had sometimes) taken him to Centrelink every 2 weeks to sign there and was aware of the reason he was taking the Applicant there. In relation to Centrelink, the Respondent said this was false but Centrelink would have records to disprove the Applicant’s claim.
STATUTORY FRAMEWORK
The fair work legislation has the main object of providing a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by, among other things, ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards and modern awards: s.3 of the Act.
Chapter 2 provides for terms and conditions of employment for “national system employees”, defined as an individual employed or usually employed by a “national system employer”: ss.5, 13 and 14 of the Act. Within it, Part 2-3 provides for the making of “modern awards” which establish minimum terms and conditions for national system employees and obligations for national system employers in particular industries and occupations.
A person must not contravene a modern award: s.45 of the Act. This is a civil remedy provision.
Part 2-9 contains other terms and conditions of employment including about payment of wages. Relevant to the present case, about method and frequency of payment: s.323 of the Act. This is also a civil remedy provision.
Part 3-6 of the Act sets out other rights and responsibilities proscribed by the statute including employer obligations in relation to employee records and payslips. Pertinent to the present case is the obligation on an employer to make, and keep for 7 years, employee records of the kind and in a form prescribed by the Regulations: s.535 of the Act. This is also a civil remedy provision.
A person “involved in” a contravention of a civil remedy provision is taken to have contravened the provision: s.550. Involvement includes if the person is found to have been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention.
Such cases may attract a reverse onus of proof. In Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 3) [2023] FCA 201 (Katzmann J) at [91]:
Section 557C shifts the burden of proof to the employer in a proceeding relating to a contravention by an employer of certain civil remedy provisions of the Act in circumstances in which, relevantly, the employer was required to make and keep records or to give a pay slip and, absent a reasonable excuse, the employer failed to comply with the requirement. The provision reflects a legislative policy that an employer should not be able to take advantage of its failure to make or keep certain records to defeat a claim that it has underpaid its employees, see for example: Gallagher v AAG LabourServices Pty Ltd [2020] FCA 1753 at [18] (Jackson J).
Section 557C is concerned with the overall burden of proof – when engaged, it is both the legal and evidential burden that shift to the defaulting employer. If the evidence adduced by the employer is insufficient to disprove the allegation on the balance of probabilities, then the effect of s.557C is that the claim must be upheld: Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627 (Colvin J) at [14].
If satisfied of a contravention of a civil remedy provision, the Court may make any order it considers appropriate: s.545. The Court may also order a person to pay pecuniary penalties if considered appropriate and the Court is satisfied that the person has contravened civil remedy provisions: s.546 of the Act.
Any conduct engaged in on behalf of a body corporate, by an officer of the body within the scope of his or her actual or apparent authority, is taken for the purposes of the Act and the procedural rules to have been engaged in by the body: s.793 of the Act.
CONSIDERATION
Did the entitlements and obligations of the Fair Work Act apply?
I am satisfied that the facts alleged in the amended statement of claim and the evidence of the Applicant and Respondent establish that SK Removals Pty Ltd was, at all relevant times, a “constitutional corporation” and a “national system employer” as defined in the Act: ss.12 and 14 of the Act.
It falls then to determine whether the Applicant was a “national system employee” as to attract the claimed entitlements to modern award coverage, modern award terms and conditions, payment and record keeping obligations under the Act: s.13. The essential inquiry is whether the Applicant was employed, or usually employed, by SK Removals Pty Ltd.
In the present case, there was no employment agreement, offer or acceptance of employment reduced to writing. The Court was taken to the authority in Workpac Pty Ltd v Skene [2018] FCAFC 131 (Tracey, Bromberg and Rangiah JJ) (Skene) at [180] for the proposition that, absent a written agreement:
…conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship will need to be assessed.
Since Skene, the principles for identification of an employment or independent contracting agreement absent written agreement have been considered by the High Court of Australia in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ) (Jamsek); helpfully summarised in Chiodo v Silk Contract Logistics [2023] FCA 1047 (Kennett J) at [8] and [9] as follows:
Where there is not a written contract, the identification of the parties’ contractual rights must proceed somewhat differently but the fundamental task is the same: the parties’ contractual rights and obligations are to be ascertained and characterised. The question remains what the parties’ legal rights and obligations were, rather than how they behaved in the performance of their contract (Secretary, Attorney-General’s Department v O’Dwyer [2022] FCA 1183; 318 IR 216 at [29]–[33] (Goodman J)). However, that distinction obviously becomes more complicated where the contract is not written and its terms are to be inferred in whole or in part from the parties’ conduct. The terms of an oral contract may not be limited to express terms; terms may be inferred from the circumstances, including a course of dealing between the parties, or implied where necessary for business efficacy: Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39; 406 ALR 678 at [21]–[22] (Kiefel CJ and Gageler J).
Where there is no written contract and no evidence of a particular conversation in which a contract was formed orally, evidence of the parties’ conduct must necessarily be considered in order to draw inferences as to whether the meeting of minds necessary to create a contract has occurred and what obligations they have thereby undertaken (see Personnel Contracting at [177] (Gordon J, Steward J agreeing)).
Assessment of the evidence
In respect of this threshold question, the Applicant’s evidence is preferred because it was consistent (including throughout the course of these proceedings, in his filed and oral evidence, and in his written statement adopted in the course of the 2019 workers’ compensation investigation). Notwithstanding that English is not his first language and his heavy reliance on an interpreter, the Applicant’s evidence was also unwavering when challenged by the Respondent in cross examination, cogent and clear throughout these proceedings.
That English was not the Respondent’s first language is similarly relevant to an assessment of his evidence. However, he was observed to have a good ability to comprehend and communicate in English and was also afforded opportunities to utilise assistance of an interpreter and ample time to prepare written materials in advance of Court proceedings. He firstly accepted and then was invited to explain, with the assistance of an interpreter and the benefit of a translated version of his previously signed 2019 statement, the vast inconsistencies in his statements made to this Court with that previously made to the workers’ compensation investigator in 2019. The inconsistencies are not adequately explained by language difficulties or challenges.
Notwithstanding ample opportunities afforded to do so prior to and at the hearing, the Respondent’s numerous protestations that there were records to demonstrate the Applicant’s claims were false were not followed through with evidence to disprove the Applicant’s claims. Accordingly, while those protestations have been considered as the Respondent’s oral disagreement, they rise no higher in terms of the Court’s task.
Moreover, the Applicant’s account was supported by the Respondent’s evidence in some important respects, as outlined below.
Was there a contract of employment?
The Applicant’s evidence of 2 oral discussions with the Respondent, on or around 3 and 5 January 2018, supports a finding of an offer of employment made to the Applicant by the Respondent on 5 January 2018. The express terms of that oral offer were for the Applicant to work with the Respondent, as a labourer in domestic and commercial waste removals, in exchange for payment at a rate to be determined. As sole director and shareholder of SK Removals Pty Ltd, the Respondent plainly had authority to make the offer of employment. The Applicant accepted that offer of employment during the 5 January 2018 discussion. In that same discussion, the Respondent directed the Applicant to be ready with his phone and his things on 7 January 2018.
The Applicant’s evidence further supports a finding of consideration to conclude the contract in that, on or around 7 January 2018, the Respondent collected the Applicant in his truck and they set about attending to collection and disposal of waste for customers of SK Removals Pty Ltd.
By the evidence of their subsequent conduct, it may be implied that the Applicant and the Respondent agreed to a casual employment arrangement which (on the Applicant’s unchallenged account) involved confirmation by the Respondent, usually the day prior, of start time. That is why the Applicant initially kept a record of his days and hours worked (that is, until directed by the Respondent that it was unnecessary to record his hours worked – a direction the Applicant took quite literally as from then he recorded only the days not worked). And that is why the Applicant informed Centrelink that he had obtained employment.
The evidence of the Applicant and the Respondent also supported a finding that the Respondent was the sole contact point for customers of SK Removals Pty Ltd and therefore was solely responsible for the structure and direction of jobs to be performed. In his role, the Respondent also plainly had authority to direct the performance of work including start and finish times. The Respondent received payment from customers for the waste removals work performed by the Applicant and Respondent.
Although the Respondent did not agree the precise dates or the time worked, the Respondent importantly conceded that the Applicant had come to work in his truck with him, that he had promised to make payment to the Applicant and that the Applicant was entitled to payment for the duties that he had performed.
On the totality of the evidence, I am satisfied that the Applicant entered a part oral, part implied employment contract with the Respondent on behalf of and with authority of SK Removals Pty Ltd on or about 7 January 2018, pursuant to which the Applicant served as a labourer on a casual basis until the relationship came to an end.
The Applicant’s evidence that the relationship came to an end on 11 July 2018 when he was injured and brought a workers’ compensation claim was in one respect supported by the Respondent, who acknowledged theirs was a friendly relationship but he saw things differently after the Applicant sought to bring that “false claim”. In any event, on the Respondent’s account it was not long after (August 2018) that the Respondent said the relationship had ended (when he broke up with the Applicant’s daughter).
The status of any relationship between the Respondent and the Applicant’s daughter at or around the relevant times was hotly disputed. In my view, even if a relationship between the Respondent and the Applicant’s daughter were conclusively proved, it would not alter the conclusion that there was an employment agreement struck between SK Removals Pty Ltd and the Applicant, and that work was offered and performed pursuant to it.
For completeness, proof of such relationship might explain the reason for the payments made to the Applicant’s family in Sri Lanka and even why the Applicant persisted in attending for work for SK Removals Pty Ltd for many months without payment. However, this would neither alter my conclusion about the employment relationship nor justify the conduct of the Respondent in the present case.
Resolution
For the above reasons, the Applicant was a “national system employee” and SK Removals Pty Ltd was a “national system employer” to whom the obligations and entitlements of the Act applied.
Did the Respondent contravene the Fair Work Act?
By the amended statement of claim on which the Applicant relied, the alleged contraventions of the Act were as follows (particularised further therein):
(a)That SK Removals Pty Ltd failed to pay the Applicant wages totalling around $101,290.04 in contravention of various Award provisions (specified in the pleading as: casual loading – cl.14.1, minimum wages, adult rates – cl.19.1, payment of wages – cl.24.2, overtime – cl.30, Saturday and Sunday work – cl.31 and public holiday work – cl.32) and therefore contravened s.45 of the Act, calculated as:
·$27,791.63 based on the Applicant’s actual hours of work recorded between 7 January and 28 February 2018 (annexed to the Applicant’s affidavit); plus
·$73,498.41 based on estimated hours worked by the Applicant between 1 March and 11 July 2018 less the payments made by the Respondent (particularised in the pleading), which estimated hours were based on an average of the Applicant’s actual hours worked between 7 January and 28 February 2018.
(b)That the Applicant was, at all relevant times during the employment, entitled to be paid all earnings within 3 days of the end of the week in which those earnings accrued pursuant to cl.24.2 of the Award and, in the premises of or connected with the contraventions summarised at (a) above, SK Removals Pty Ltd had also contravened, and continues to contravene, s.323 of the Act.
(c)That SK Removals Pty Ltd failed to make contributions or payments of any superannuation totalling around $2,789.72 in contravention of cl.18 and 25.2 of the Award and therefore contravened s.45 of the Act, calculated as:
·$780.33 of accrued superannuation entitlement for the Applicant’s ordinary hours of work recorded between 7 January and 28 February 2018; plus
·$2,009.39 of accrued superannuation entitlement for the estimated ordinary hours worked by the Applicant between 1 March and 11 July 2018, which estimated hours were based on an average of the Applicant’s actual hours worked between 7 January and 28 February 2018.
(d)That SK Removals Pty Ltd failed at all material times to make and keep employee records of the kind prescribed by the Fair Work Regulations 2009 (Cth) (Regulations) in contravention of regs.3.32, 3.33 and 3.34 (particularised further in the pleading) and therefore also contravened ss.535(1) and (2) of the Act.
As was apparent on the face of the Respondent’s 3-page document filed 17 August 2023 and he confirmed in submissions at the hearing on 28 August 2023, should the Court find against him on the threshold question of whether there was an employment contract and/or employment relationship, then the balance of the claim was not opposed. The Respondent was understood to generally disagree with the precise hours and days worked by the Applicant but was not otherwise understood to alter his position in not opposing the claim at any later stage in the proceedings, nor did he put on any materials (written or oral) to adequately engage with and defend the alleged contraventions.
Indeed, the Respondent conceded that he did not make or keep any records of the Applicant’s employment at the relevant times because he did not consider there was an employment relationship at all. Accordingly, the Applicant asked the Court to find that, absent any making or keeping of records of employment as required by s.535 of the Act, the reverse onus at s.557C was engaged and the Respondent had not discharged the burden of disproving the allegations that SK Removals Pty Ltd had contravened and the Respondent had, by involvement pursuant to s.550(2), had contravened the Act as plead.
In circumstances where SK Removals Pty Ltd was deregistered prior to commencement of the proceedings and was not a named party to the proceedings, I am not minded to consider the reverse onus at s.557C as engaged or, put another way, to find that the employer has the burden of disproving the allegation.
However, as has already been established, the Respondent was the sole director and officer of SK Removals Pty Ltd with authority and responsibility for employment matters including the company’s compliance with workplace laws. By operation of s.793 of the Act, conduct engaged in by the Respondent on behalf of SK Removals Pty Ltd is taken to have been conduct of the company.
By the Respondent’s concession, SK Removals Pty Ltd and the Respondent contravened s.535(1) and (2) of the Act by failing to make and keep any records of employment as prescribed by the Regulations.
Further, the Respondent has not opposed or otherwise adequately defended the Applicant’s claim that s.45 was contravened. The Respondent accepted that no payment was made in respect of wages or salary. I am satisfied that the amended statement of claim filed in this matter on which the Applicant relies and the evidence before the Court as summarised above establish, and I find, as follows:
(a)The Applicant was employed to work as a casual labourer for SK Removals Pty Ltd from on or around 7 January 2018 until he became injured and stopped work on or around 11 July 2018 (the Employment).
(b)Throughout the Employment, the Waste Management Award 2010 (Award) applied to the Applicant’s employment, the relevant classification was that of Level 2 Labourer and therefore he was entitled to a casual hourly rate of $27.75 inclusive of a 25% casual loading (cl.14.4) and industry allowance (cl.20.6) (which increased to a casual hourly rate of $28.71 on 1 July 2018) plus applicable overtime, weekend and public holiday penalties. Specifically, during the Employment until 1 July 2018, the Applicant was entitled to the following overtime and penalty rates under cl.30, 31 and 32 of the Award:
(i)$35.52 per hour for the first two hours of overtime worked Monday to Friday;
(ii)$46.62 per hour after the first two hours of overtime worked Monday to Friday;
(iii)$35.52 per hour for the first two hours of overtime worked on Saturday;
(iv)$46.62 per hour after the first two hours of overtime worked on Saturday;
(v)$46.62 per hour for overtime worked on Sunday; and
(vi)$61.05 per hour for work on a public holiday.
(c)At all relevant times during the Employment and pursuant to cl.24.2 of the Award, the Applicant was entitled to be paid all earnings within 3 days of the end of the week in which those earnings accrued.
(d)In contravention of cl.14.4 (casual loading), 19.1 (minimum wages – adult rates), 20.6 (industry allowance), 24.2 (payment of wages), 30 (overtime), 31 (Saturday and Sunday work) and 32 (public holiday work) of the Award and therefore s.45 of the Act, SK Removals Pty Ltd failed to pay the Applicant wages totalling around $101,290.04 during the Employment.
(e)At all material times, SK Removals Pty Ltd was required under the Award to contribute an amount equivalent to the superannuation guarantee charge rate at 9.5% to avoid a charge equivalent to any shortfall in superannuation contributions in respect of the Applicant’s earnings. And, at all material times, SK Removals Pty Ltd failed to make any superannuation payment in respect of the Applicant as to avoid liability for a superannuation guarantee charge under the relevant superannuation legislation and in contravention of cl.25.2 (employer contributions) of the Award and therefore s.45 of the Act, totalling around $2,789.72.
In relation to the alleged contravention of s.323 of the Act, the Applicant was understood to claim that a failure to pay minimum entitlements due under the Award (pursuant to the contravention found at 97(d) above) must “in the premises” also constitute a contravention of the s.323 obligation on an employer to pay an employee in relation to their work “in full” and “at least monthly”. Again the Respondent did not oppose and so the Court did not have the benefit of argument on the point. When regard is had to the context of the provision, a finding of contravention of s.323 will not always follow a finding of underpayment. Whilst the Court was not adequately addressed about the point, I am prepared to accept that the circumstances of this case fall within the category of “conceivable” cases described in Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705 (Colvin J) at [105]. That is, where SK Removals Pty Ltd has wilfully ignored or failed to give genuine consideration to whether there was a payment obligation to the Applicant and/or the amounts due, and otherwise deferred identifying what the amount to be paid was and, by that conduct, failed to pay as required by s.323 of the Act.
Resolution
For the above reasons, SK Removals Pty Ltd is found to have contravened ss.45, 323 and 535 of the Act. I rely on the earlier findings which were not opposed regarding the Respondent’s role, responsibility and authority and find that the Respondent was involved, within the meaning of s.550(2), in those contraventions of SK Removals Pty Ltd.
APPLICATION FOR RELIEF
By the amended statement of claim, the Applicant asked the Court to make a declaration to reflect the findings I have made, specifically, that the Respondent was involved in SK Removals Pty Ltd’s contraventions of ss.45, 323 and 535 of the Act. This particular form of order was not pressed in closing submissions. In any event, I am not presently persuaded that there is presently any utility in the grant of such declaratory relief.
By the amended statement of claim and closing submissions, the Applicant pressed for relief in the form of:
(a)an order of compensation in the amount of $104,079.76 (being the sum of wages and superannuation not paid to the Applicant by SK Removals Pty Ltd); and
(b)orders that the Respondent pay pecuniary penalties for the contraventions and the Applicant’s costs (but sought to address the Court further about the specific quantum sought).
The Respondent was afforded opportunities to engage in the questions of what, if any, relief ought be granted were the Applicant to succeed in establishing the alleged contravention(s) and barely addressed the relevant considerations. Having regard to the seriousness of the matter and in all of the circumstances, it is appropriate that the Respondent be afforded further opportunity (with the benefit of these reasons) to consider, prepare and file written evidence and submissions as to the questions of what, if any, compensation and pecuniary penalty(ies) ought be imposed for the contraventions pursuant to ss.545 and 546 of the Act.
CONCLUSION
For the above reasons, by his involvement within the meaning of s.550(2)) of the Act, the Respondent is found to have contravened ss.45, 323 and 535 of the Act.
A program will be ordered so that the parties may have further opportunity to address the Court about the Applicant’s claims for compensation and pecuniary penalty pursuant to ss.545 and 546 of the Act.
I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 25 July 2024
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