SCULLIN v Coffey Projects (Australia) Pty Ltd (No.2)

[2015] FCCA 1602

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCULLIN v COFFEY PROJECTS (AUSTRALIA) PTY LTD (No.2) [2015] FCCA 1602

Catchwords:
INDUSTRIAL LAW – Penalty for contravening the National Employment Standards in the Fair Work Act 2009 – assessment of penalty – payable to applicant.

Legislation:

Fair Work Act 2009, ss.3(b), 546.

Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (No 2) [2011] FCA 394
Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59
Pasquale Barbaro v The Queen [2014] HCA 2

Applicant: PAUL SCULLIN

Respondent: COFFEY PROJECTS (AUSTRALIA) PTY LTD

File Number: MLG 1209 of 2013

Judgment of: Judge F. Turner

Hearing date: 11 June 2015

Date of Last Submission: 11 June 2015

Delivered at: Melbourne

Delivered on: 12 June 2015

REPRESENTATION

Counsel for the Applicant: Mr Galbraith

Solicitors for the Applicant: Nevett Ford Lawyers

Counsel for the Respondent: Mr Donaghey

Solicitors for the Respondent: Sean Melbourne Legal

ORDERS

1. The Court imposes a penalty of $8,250.00 on the respondent.

2. The respondent pay $8,250.00 to the applicant on or before 2 July 2015.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1209 of 2013

PAUL SCULLIN

Applicant

And

COFFEY PROJECTS (AUSTRALIA) PTY LTD

Respondent

REASONS FOR JUDGMENT

1. In its decision dated 4 June 2015, the Court found that Coffey Projects (Australia) Pty Ltd (the “respondent”) breached a provision of National Employment Standards (“NES”) in the Fair Work Act 2009 (the “FW Act”) by imposing a condition on taking unpaid parental leave, that was not in the NES. That condition was, that the applicant had to be the child’s primary carer.

2. This decision deals with the penalty to be imposed on the respondent for that breach.

3. Mr Galbraith of Counsel appeared for the applicant and Mr Donaghey of Counsel for the respondent.

4. As a result of the decisions in Pasquale Barbaro v The Queen [2014] HCA 2 and Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, it is impermissible for the parties to make submissions to the Court as to the amount of the appropriate penalty, or the range within which the penalty should fall. The parties therefore made no submissions on those issues, but agree that the maximum penalty that can be imposed pursuant to s.546 of the FW Act is $33,000.00; the Court agrees.

5. In Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (No 2) [2011] FCA 394, Barker J referred to a decision of Moore J as to matters that should be regarded in exercising the discretion to impose a pecuniary penalty at [13]-[14] as follows:

   As Moore J explained in Rojas v Esselte Australia Pty Limited (No 2) [2008] FCA 1585, the following matters, while not intended to be an exhaustive list of relevant matters, should be regarded in exercising the discretion to impose a pecuniary penalty:

   1.   the circumstances in which the relevant conduct took place, including whether it was undertaken in deliberate defiance or disregard of the Act;

   2.   whether the respondent has previously been found to have engaged in conduct in contravention of the particular part of the Act in question;

   3.   whether more than one contravention of the particular part of the Act is involved, and whether the contraventions are properly seen as distinct or arising out of the one course of conduct;

   4.   the consequences of the conduct found to be in contravention of the particular part of the Act;

   5.   the need, in the circumstances, for the protection of industrial freedom of association; and

   6.   the need for deterrents – both specific and general.

   Taking all of those factors into account and recognising that in imposing a pecuniary penalty in such circumstances the Court engages in a process which has been called “instinctive synthesis” (as to which see McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29 at [12], [50]), I turn to the circumstances of this case.

   (Numbers added by the Court).

6. Although the power to impose a pecuniary penalty under s.546 of the FW Act is discretionary, the Court finds that a pecuniary penalty should be imposed. The breach occurred through negligence, but the financial impact on the applicant has been very significant. The Court does not find negligence to be a sufficient excuse. As a result of the breach, the applicant lost his right to return to his position after his leave, or a similar position, with no loss of pay.

7. Addressing the matters in Rojas (supra):

   (1)Mr Galbraith submits that senior management employees were involved in the breach and that they should have ensured that the respondent’s policies were up to date. Mr Donaghey submits that the breach was an oversight and that it was not systematic; he admits that the breach was serious in nature. The Court finds that the breach was serious. As a result of the breach the total income into the applicant’s household for the period was reduced from $218,855.00 to $109,784.00.

   (2)No previous contravening conduct is alleged.

   (3)It is agreed that the conduct by the respondent formed one course of conduct; the Court agrees.

   (4)The consequences of the conduct on the applicant were serious (supra); the income into the applicant’s household was halved. The applicant has had to endure the stress and costs of pursuing his legal entitlements. Although a number of the claims pursued by the applicant have been dismissed, and the respondent has incurred the legal costs of defending the action, the applicant was justified in bringing the action.

   (5)Not relevant.

   (6)Mr Galbraith submits that there is a need for specific deterrence as:

   a)The respondent failed to acknowledge minimum statutory requirements;

   b)The respondent’s policy was incorrect for 18 months;

   c)The respondent has not displayed contrition; and

   d)There has been no rectification.

   Mr Galbraith submits that there is also a need for general deterrence as employers should be shown the need for strict compliance, and that negligence is not a defence. Mr Donaghey agreed that there is a need for general deterrence, but that specific deterrence is of limited utility. The Court finds a need for general deterrence and specific deterrence. The respondent, and employers in general need to be shown that denial of employee’s entitlements through negligence will not avoid liability for breach.

   As a general rule, employers must receive a message from the imposition of a pecuniary penalty, that much attention must be given to the entitlement of employees and the objectives of the FW Act, which includes the following in s.3(b):

   The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders.

8. The Court finds it relevant that a high maximum level of penalty was considered by Parliament to be appropriate at the time of the contravention (300pu x $110.00 = $33,000.00).

9. As the breach was not deliberate, but negligent at the most, having regard to all the factors in the case, the Court imposes a penalty of 25% of the maximum, being $8,250.00.

10. The Court finds it appropriate that the penalty be paid to the applicant pursuant to [s.546(3)], as sought by Mr Galbraith.

11. The Court orders that the respondent pay a penalty of $8,250.00 to be paid to the applicant on or before 2 July 2015.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Judge F. Turner

Date: 12 June 2015