Scotto v Scala Bros Pty Ltd

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FEDERAL CIRCUIT COURT OF AUSTRALIA

SCOTTO v SCALA BROS PTY LTD & ANOR [2014] FCCA 2374

Catchwords:
INDUSTRIAL LAW – Underpayment of wages and entitlements, compensation, pecuniary penalties, accessorial liability.

INDUSTRIAL LAW – Limitation period – whether events occurring outside the limitation period, which were part of a course of conduct concluding within the limitation period, ground a cause of action which is within time.

Legislation:
Workplace Relations Act 1996, ss.16, 171, 182, 208, 232, 717, 718, 719, 720, 722, 727, 728, 836, cls.15,31, 32, 34, 43 of sch.8
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, item 11 of sch.2, item 2, 29 of sch.3, item 6 of sch.4, item 2, 16 of sch.16
Fair Work Act 2009, ss.44, 45, 61, 87, 90, 139, 323, 535, 536, 539, 540, 542, 544, 545, 546, 547, 550, 557
Annual Holidays Act 1944 (NSW), s.3
Long Service Leave Act 1955 (NSW), ss.4, 10, 11, 12
Industrial Relations Act 1996 (NSW), ss.8, 123, 357, 358, 365, 368, 369, 372, 376, 400
Crimes Act 1914, s.4AA
Crimes (Sentencing Procedure) Act 1999 (NSW), s.17
Limitation Act 1969 (NSW), ss.14, 63
Conciliation and Arbitration Act 1904, s.119
Acts Interpretation Act 1901, ss.15AA, 46
Federal Circuit Court of Australia Act 1999, s.76

Workplace Relations Regulations 2006, ch.2, regs.1.2, 14.3, 19.9, 19.12, 19.20, 19.22, 19.24
Fair Work Regulations 2009, regs.3.34, 3.36, 3.46
Industrial Relations (General) Regulation 2001 (NSW), reg.7
Shops (Trading Hours) Regulation 1992 (NSW), reg.4, sch.1
Federal Circuit Court Rules 2001, r.26.01

Cases cited:
Browne v S Smith & Son Pty Ltd (1985) 8 FCR 206
Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276
Armory v Delamirie (1722) 93 ER 664
McCartney v Orica Investments Pty Ltd [2011] NSWCA 337
Printing Industry Employees Union of Australia v Besley & Pike Pty Ltd (1960) 4 FLR 169
NKS Enterprises Pty Ltd v Mekary (2004) 135 IR 301
Ansett Australia Ltd v Australian Licenced Aircraft Engineers’ Association [2003] FCAFC 209
Kucks v CSR Ltd (1996) 66 IR 182
United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 IR 106
Kenoss Contractors Pty Ltd v Warren (2005) 147 IR 390
Bell v Gillen Motors Pty Ltd (1989) 24 FCR 77
Warramunda Village Inc v Pryde (2002) 116 FCR 58
Byrne v Australian AirlinesLtd (1995) 185 CLR 410
Re Bank Officials’ (Federal) Award 1955 (1959) 1 FLR 305
Poletti v Ecob (No 2) (1989) 31 IR 321
Re Shipping Officers Award 1963 (1964) 8 FLR 262
Textile, Clothing & Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250
Printing & Kindred Industries Union v Vista Paper Products Pty Ltd (1994) 57 IR 414
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Commonwealth Bank of…

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Details
Case
[2014] FCCA 2374
Decision Date

CaseChat Overview and Summary

In *Scotto v Scala Bros Pty Ltd*, the applicant, Mr Scotto, brought proceedings against the respondent, Scala Bros Pty Ltd, alleging underpayment of wages and entitlements. The dispute concerned whether Mr Scotto was entitled to recover amounts that became due more than six years prior to the commencement of the proceedings, despite the conduct concluding within that six-year period. The matter was heard by Judge Cameron.

The court was required to determine two primary legal issues. Firstly, it needed to ascertain whether events occurring outside the six-year limitation period, but which were part of a continuous course of conduct that concluded within the limitation period, could form the basis of a cause of action that was within time. Secondly, the court had to consider the application of the relevant provisions of the *Workplace Relations Act 1996* (Cth) (WR Act) and the *Fair Work Act 2009* (Cth) (IR Act) to the claims, particularly in light of the repeal of the WR Act and the transitional provisions.

Judge Cameron reasoned that the limitation period for applications for orders for the payment of money under the IR Act, as stipulated in s 369(3), refers to when the money became due. However, s 357(3) of the IR Act provides a six-year limitation period for instituting proceedings for a civil penalty. The court found that where a contravention constitutes a course of conduct, and that course of conduct concludes within the limitation period, then the entire course of conduct can be the subject of proceedings, even if parts of it occurred outside the limitation period. This principle was applied to allow claims for underpayments that occurred outside the six-year period, provided they were part of a continuous course of conduct that extended into the limitation period. The court also confirmed that the WR Act continued to apply to causes of action arising before its repeal due to transitional provisions, and that the IR Act was preserved to the extent it was relevant to the proceedings.

The court made orders for the payment of money to the applicant, Mr Scotto, representing underpayments of wages and annual leave entitlements, and awarded interest on those sums.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Section 358 of the IR Act relevantly provides:358 Related proceedings for recovery of remuneration and other money (1)An industrial court dealing with proceedings for a civil penalty under this Part that relate to the failure of the defendant to pay any money that may be recovered under Part 2 [ss.364-380] may, in the same proceedings, also make under that Part any order for the payment of money that it is authorised to make in proceedings under that Part. Section 357 of the IR Act relevantly provides:(3)Proceedings for a civil penalty may be instituted within 6 years after the contravention. Section 369 of the IR Act relevantly provides:369 Application for order(1)An application for an order under this Part for the payment of money may be made:(a) by the person to whom the money is payable …(3)An application for an order may only be made if the money became due within the period of 6 years immediately before the application was made. Section 372 of the IR Act provides that interest up to judgment may be awarded on sums for which an order is made or judgment given under that Act. The provisions of the WR Act relevant to these proceedings were repealed by sch.1 to the FW (TPCA) Act effective 1 July 2009. Nevertheless, item 11 of sch.2 to the FW (TPCA) Act provides that the WR Act continues to apply on and after its repeal in relation to conduct which occurred before the repeal. Consequently, the WR Act continues to apply to the causes of action arising under that Act alleged in these proceedings. It also operates to preserve the operation of the IR Act to the extent that that Act is relevant to this proceeding. Clause 31 of sch.8 to the WR Act preserved the Shop Award as the Shop NAPSA. Clause 32 of sch.8 to the WR Act had the effect that Scala Bros was bound to observe the terms of the Shop NAPSA. To the extent that the Shop NAPSA provided for wage rates, by virtue of s.208 of the WR Act, it was also a preserved APCS (“Shop APCS”). At the relevant time s.182(1) of the WR Act provided:(1) If:(a)the employment of an employee is covered by an APCS; and(b)the employee is not an APCS piece rate employee;the employee must be paid a basic periodic rate of pay for each of the employee’s guaranteed hours (pro-rated for part hours) that is at least equal to the basic periodic rate of pay (the guaranteed basic periodic rate of pay) that is payable to the employee under the APCS. The Shop APCS was part of the AFPCS: s.171(3) of the WR Act. Sub-division B of div.4 of pt.7 of the WR Act, which was entitled “Guarantee of annual leave”, was part of the AFPCS. It contained s.232 which relevantly provided:(2)An employee is entitled to accrue an amount of paid annual leave, for each completed 4 week period of continuous service with an employer, of 1/13 of the number of nominal hours worked by the employee for the employer during that 4 week period. Clause 15E(1) of sch.8 to the WR Act provided:15E Relationship between preserved State agreements and Australian Fair Pay and Conditions Standard(1)The Australian Fair Pay and Conditions Standard does not apply to an employee in relation to a matter if the employee’s employment is subject to a preserved State agreement that deals with that matter in relation to the employee