Seaton v Chaopraya Thai Restaurant (Qld) Pty Ltd
[2018] FCCA 3494
•29 November 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SEATON v CHAOPRAYA THAI RESTAURANT (QLD) PTY LTD & ORS | [2018] FCCA 3494 |
| Catchwords: INDUSTRIAL LAW – Whether part time or casual. |
| Legislation: Fair Work Act 2009, ss.44, 45, 87, 90(2), 117(1), 117(2), 117(3), 125(1), 323, 535(1), 544, 545, 550(1), 557 Workplace Relations Act 1996 (Cth), regs.3.32, 3.33, 3.33(3)(c), 3.33(3)(d), 3.33(3)(e), 3.34, 3.44, 3.36, 3.36(1)(b), 3.37, Pt 4-1, Div 4 |
| Cases cited: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 5) [2013] FCA 1384 Dafallah v Fair Work Commission [2014] FCA 328 Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 Hamzy v Tricon International Restaurants [2001] FCA 1589 Kucks v CSR Limited (1996) 66 IR 182 Re Andrew John Short v FW Hercus Pty Ltd [1993] FCA 51 Reed v Blue Line Cruises Ltd (1996) 73 IR 420 Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 Workpac Pty Ltd v Skene [2018] FCAC 131 |
| Applicant: | SAIPHIN SEATON |
| First Respondent: | CHAOPRAYA THAI RESTAURANT (QLD) PTY LTD |
| Second Respondent: | KANOKWAN DHOMASARAOJ |
| Third Respondent: | ANANT BHODHISOOK |
| File Number: | BRG 617 of 2015 |
| Judgment of: | Judge Jarrett |
| Hearing dates: | 29 February 2016, 1 and 2 March 2016 |
| Date of Last Submission: | 4 April 2016 |
| Delivered at: | Brisbane |
| Delivered on: | 29 November 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Reidy |
| Solicitors for the Applicant: | Adams Wilson Lawyers |
| The Third Respondent appearing on behalf of the First Respondent |
| The Second Respondent appearing in person |
| The Third Respondent appearing in person |
ORDERS
The first respondent pay to the applicant:
(a)the sum of $45,676.28;
(b)the sum of $23,100 by way of pecuniary penalty.
The second respondent pay to the applicant the sum of $4,650 by way of pecuniary penalty.
The third respondent pay to the applicant the sum of $4,650 by way of pecuniary penalty.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 617 of 2015
| SAIPHIN SEATON |
Applicant
And
| CHAOPRAYA THAI RESTAURANT (QLD) PTY LTD |
First Respondent
| KANOKWAN DHOMASARAOJ |
Second Respondent
| ANANT BHODHISOOK |
Third Respondent
REASONS FOR JUDGMENT
The first respondent, Chaopraya Thai Restaurant (Qld) Pty Ltd, operated a Thai restaurant business in Ashmore, Queensland. The second respondent, Kanokwan Dhomasaraoj, was the sole director of the first respondent and its manager responsible for the day to day running of the restaurant. The third respondent, Anant Bhodhisook, is the second respondent’s husband and was a shareholder in the first respondent. He was also the head chef at the restaurant.
From 21 January, 2008 to 12 July, 2010 Saiphin Seaton was employed by the first respondent and worked in its restaurant in Ashmore. She worked in the kitchen.
Ms Seaton alleges that the first respondent contravened certain provisions of the Fair Work Act2009 (Cth) and the Workplace Relations Act 1996 (Cth) and that the second and third respondents were involved in such contraventions and are therefore also liable for the first respondent’s contraventions.
By these proceedings, Ms Seaton seeks:
a)the recovery of underpaid amounts to which she alleges she was entitled by reason of her employment;
b)the imposition of pecuniary penalties on the respondents for the contraventions alleged against them; and
c)compensation for the distress occasioned by the contraventions.
Ms Seaton was represented by counsel. The second and third respondents represented themselves. The third respondent, with leave, represented the first respondent.
Ms Seaton called three witnesses, Depton Tumma, Robert Gormly and Schonticha Tumma. She also gave evidence herself.
The second and third respondents gave evidence and they called three witnesses, Aminder Singh, Thamabadee Dhomasaroj and Worranit Bhodhisook.
The applicant, the third respondent, Depton Tumma and Worranit Bhodhisook gave their evidence through a Thai interpreter. So too, did the second respondent although to a lesser degree. The other witnesses gave their evidence in the English language.
The two primary issues in this case are:
a)whether Ms Seaton was employed on a part-time or casual basis. She contends that she was employed on a part-time basis and the respondents contend that she was a casual employee; and
b)the correct classification of her work for the purposes of the industrial instruments that covered her employment. Ms Seaton contends that she was properly classified as a cook under the relevant instruments and the respondents contend that she was a kitchen hand.
At the conclusion of the trial both parties wish to make written submissions in support of the cases. The respondents’ submissions however go beyond what might be properly regarded as submissions at the close of the trial because they seek to introduce a range of further evidence that was not led at the trial by the respondents. The applicant objects to the receipt of that additional material. Those objections are well taken. I have taken no account of the matters set out in paragraph 2 of the applicant submissions in response filed on 4 April, 2016.
The industrial framework
The alleged contraventions cover a period commencing 3 July, 2009 and ending at the termination of the applicant’s employment on 12 July, 2010. The commencing date is dictated by the time limitation of six years prescribed by s.544 of the Fair Work Act and where relevant s.719 of the Workplace Relations Act. There are three relevant time frames covered by two awards:
a)3 July to 31 December, 2009 covered by the Hospitality Industry Restaurant, Catering and Allied Establishments Award – South Eastern Division 2002 (Qld) (the “transitional instrument”);
b)1 January to 30 June, 2010 covered by the transitional instrument by reason of clause A.2.3, Schedule A of the Restaurant Industry Award 2010 (the “modern award”); and
c)1 July, 2010 to 12 July, 2010 covered by the modern award as amended by a Determination of the Commission of 18 June, 2010 PR998019.
The transitional instrument makes the following provisions for part-time and casual workers:
4.2 PART-TIME EMPLOYMENT
4.2.1 A part-time employee is an employee who:
(a) is employed for not less than 10 hours per week and for less than 38 ordinary hours per week; and
(b) has reasonably predictable hours of work; and
(c) receives, on a proportionate basis, equivalent pay and conditions to those of full-time employees.
4.2.2 At the time of engagement, the employer and the employee will agree in writing on the normal pattern of work required, including specifying the number of ordinary hours per week.
4.2.3 Any variation to the work pattern will be in accordance with methods of altering the ordinary hours of work as prescribed in clause 6.3, or a lesser period where mutually agreed.
4.2.4 The agreed number of ordinary hours per week will not be varied without the consent of the employee. Any such agreed variation to the number of weekly hours of work will be recorded in writing.
4.2.5 An employer is required to roster a part-time employee for a minimum of 2 consecutive hours on any day and no more than 10 hours on any one day.
4.2.6 All time worked outside the spread of ordinary working hours as provided for in clause 6.1 and all time worked in excess of the hours as mutually arranged in clause 4.2.1 or 4.2.2 or 4.2.3 will be overtime and paid for at the rates prescribed in clause 6.4.
4.2.7 A part-time employee employed under clause 4.2 must be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed.
4.2.8 Where a public holiday falls on a day upon which a part-time employee is normally employed, that employee shall be paid the appropriate rate for the number of hours normally worked on that day.
4.2.9 Where an employee and the employer agree, part-time employment may be converted to full-time, and vice-versa on a permanent basis or for a specified period of time. If such an employee transfers from full-time to part-time (or· vice-versa), all accrued award and legislative entitlements shall be maintained. Following transfer to part-time employment accrual will occur in accordance with the provisions relevant to part-time employment.
4.2.10 Any variation to the work pattern will be in accordance with methods of altering the ordinary hours of work for full-time employees as detailed in clause 6.3 of this Award, unless otherwise mutually agreed.
4.2.11 All other provisions of this Award relevant to full-time employees shall apply to part-time employees.
4.3 CASUAL EMPLOYMENT
4.3.1 A casual employee shall mean an employee who is engaged as such and who is employed by the hour.
4.3.2 The rate of pay for casual employees shall be 1/38th of the appropriate full-time rate prescribed in clause 5.2 with the addition of the appropriate loading, as prescribed in clause 4.3.3.
4.3.3 These loadings are payable separately and are not to be compounded:
(a)23% for all ordinary hours worked;
(b)73% where the rate of pay is prescribed as time and a-half (other than ordinary hours on a week-end);
(c) 123% where the rate of pay is prescribed as double time; and
(d) 173 % where the rate of pay is prescribed as double time and a-half.
4.3.4 The minimum period of engagement for a casual employee shall be 2 hours or payment in lieu.
4.3.5 Casual employees may, by mutual agreement, be paid in the same manner as full-time employees or, in the absence of such agreement, at the termination of each engagement.
Similarly, the Restaurant Industry Modern Award 2010 makes the following provisions:
12. Part-time employment
12.1 An employer may employ part-time employees in any classification in this award.
12.2 A part-time employee is an employee who:
(a) works less than full-time hours of 38 per week;
(b) has reasonably predictable hours of work; and
(c) receives, on a pro rata basis, equivalent pay and conditions to those of full-time employees who do the same kind of work.
12.3 At the time of engagement the employer and the part-time employee will agree in writing on a regular pattern of work, specifying at least the hours worked each day, which days of the week the employee will work and the actual starting and finishing times each day.
12.4 Any agreed variation to the hours of work will be recorded in writing.
12.5 An employer is required to roster a part-time employee for a minimum of three consecutive hours on any shift.
12.6 An employee who does not meet the definition of a part-time employee and who is not a full-time employee will be paid as a casual employee in accordance with clause 13-Casual employment.
12.7 All time worked in excess of the hours as agreed under clause 12.3 or varied under clause 12.4 will be overtime and paid for at the rates prescribed in clause 33- Overtime.
12.8 A part-time employee employed under the provisions of this clause must be paid for ordinary hours worked at the rate of l /38th of the weekly rate prescribed in clause 20-Minimum wages, for the work performed.
13. Casual employment
13.1 A casual employee is an employee engaged as such and must be paid a casual loading of 25%. The casual loading is paid as compensation for annual leave, unpaid personal/carer’s leave, notice of termination, redundancy benefits and the other entitlements of full-time or part-time employment.
13.2 On each occasion a casual employee is required to attend work they are entitled to a minimum payment for two hours’ work.
13.3 A casual employee must be paid at the termination of each engagement, but may agree to be paid weekly or fortnightly.
The facts
Ms Seaton moved to Australia from Thailand in December, 2007. She met the second and third respondents, who are also from Thailand, through her late husband. She did not speak any, or at least very little, English when she met the respondents.
It is uncontroversial that:
a)on or about 16 January, 2008 Ms Seaton agreed with the third respondent that she would work in the first respondent’s restaurant;
b)she would initially be paid $50.00 per shift;
c)that would increase to $60.00 per shift after a short while;
d)the restaurant opened at 5:00pm each day and remained open “until late”;
e)during the week the restaurant would close around 10.00pm or sometimes a little later depending upon when the last customer left;
f)on the weekends it would close around 11:00pm or sometimes later depending upon when the last customer left;
g)when Ms Seaton commenced her employment, the third respondent gave her training in the kitchen and taught her to cook curries.
Ms Seaton says that her shifts were from 4:30pm until 10:30pm on the weekdays that she worked and from 4:30pm until 11:30pm on the weekends. The respondents dispute that she was required to start at 4.30pm and say that her shifts were almost always from 6:00pm until 9:00pm. That is to say, they were three hours long. Ms Seaton says that she would work 15 to 20 hours per week.
The respondents’ case is that Ms Seaton was to work three-hour shifts three or four days per week. That is to say, 9 to 12 hours per week. The third respondent swore to that at paragraph 9 of his trial affidavit. However, he later swore in paragraph 55 of the same affidavit that Ms Seaton was to work between 15 hours to 20 hours per week. The “tip envelopes” and “pay slips” in evidence are consistent with her working 15 to 20 hours per week. I accept Ms Seaton’s evidence on this point. I accept that she worked and was paid for 15 to 20 hours of work per week on a regular basis.
The evidence of Ms Seaton, Depton Tumma, and Schonticha Tumma was that the employees were directed by the third respondent to commence their shift at 4:30pm. The employees were sometimes given something to eat before the restaurant opened. I accept the evidence of these witnesses that the third respondent directed all employees to start at 4:30pm. I found the evidence of Schonticha Tumma the most impressive in this respect. It was also consistent with the evidence of Aminder Singh who was called by the respondents.
The third respondent gave evidence that the first respondent’s employees would sometimes gather before they commenced work and shared a meal with the second and third respondents and any other employees who were there. The impression he wished to give, I think, was that the exercise was optional. If staff wished to attend the restaurant before they commenced work to partake of a meal they were welcome to do so, but not obliged to do so. The third respondent described the employees of the restaurant as part of the family. He also gave evidence that staff would stay after work to eat more food and have a drink before going home. Some of the other witnesses confirmed that.
However, I accept Ms Seaton’s evidence that she was required to start work each shift at 4:30pm so as to prepare for the evening’s business. But I do not think that it indicates that the third respondent did not require Ms Seaton to be present from 4:30pm onwards with the rest of the staff.
The respondents operated a roster system. It consisted of a sheet of paper that had the employees’ names in a column down the left hand side and the days of the week across the top. The resulting matrix consisted of squares that were marked so as to signify to any particular employee if they were working on any particular day. The documents annexed to the second respondent’s second affidavit at pages 7 to 14 and 119 to 133 are said to be the rosters recording the nights on which the applicant worked. The second and third respondents gave evidence that the start time was inserted on the day a particular employee was to commence work and the finish time was left blank so that the employee could write in their finish times and sign the entry.
Some of the rosters showing such entries were put to Ms Seaton, but she denied that she had written on the rosters at all. Her evidence was that the roster contained the word “ON” if a particular employee was working on a particular day and either “off” or nothing if the employee was not working. Ms Seaton’s evidence about this was unwavering. So too, was the evidence of Depton Tumma and Schonticha Tumma. I caused the rosters that the third respondent had cross-examined Ms Seaton on and which he suggested were some of the rosters that were stuck up in the restaurant to be shown to Depton Tumma. His evidence was that he had not seen them before and that they were different to the rosters that he had seen in the restaurant.
Ultimately, the evidence of the second and third respondents on this point shifted and was unconvincing. They both agreed that an employee would find out about the days he or she was to work in the upcoming week was to consult the posted roster. But was difficult to understand the position that they ultimately arrived at concerning the way in which the rosters would be noted so as to notify staff of the days of the week they were to work and when they were to start their shifts. The cross-examination about the Christmas and New Year period in 2009 – 2010 is a good example. So too, was the cross-examination about the week commencing 19 July, 2010. The respondents’ case was that Ms Seaton had abandoned her employment by not turning up for work on Wednesday 21 July, Friday 23 July and Saturday 24 July, 2010. Yet the document said to be the authentic roster that Ms Seaton was expected to consult to find out her rostered days did not have any entry for her on those days. Neither of the second or third respondents could explain the omission.
The effect of the evidence of Ms Seaton, Mr Tumma and Ms Tumma is that the rosters notifying work was a different document to that which the respondents produced in these proceedings.
I accept Ms Seaton’s evidence that on the days she was rostered to work, she commenced her shift at 4:30pm. I find that when she had a shift to work for the first respondent, she invariably commenced at 4:30pm. I find that the days that she was rostered to work were notified on a paper roster stuck up in the restaurant and which contained the notation “ON” on the days Ms Seaton was to work. In cross-examination, the third respondent agreed that the entry “ON” meant that the person to whom it was assigned started before opening time, i.e., before 5:00pm.
There is no accurate evidence of Ms Seaton’s finish times. However, I do not accept that she would finish at 9:00pm on each shift that she would work as the respondents contend. The respondents did not keep any records of the time at which Ms Seaton finished her shift. Her finish times varied. Depton Tumma’s evidence was that he worked in the front part of the restaurant while his mother, Ms Seaton, worked in the kitchen. He said that she usually finished before he did because he could not finish until the last customer had left, but she could finish earlier.
That the respondents did not keep any records of Ms Seaton’s finish times is entirely consistent with the agreement that they had with her that she would be paid a flat $60.00 per shift. Given that it was a flat rate per shift, when she finished was not of any particular importance. I accept Ms Seaton’s submission that the whole purpose of the agreement, was for the respondents to cap the liability for payment for wages. The third respondent seemed to accept this when it was put to him that the $60 was not calculated on hours worked and he said “no”.
Each week, Ms Seaton received what was described in the evidence as a “tip envelope”. Within it was what purported to be a “pay slip” and cash that represented Ms Seaton’s share of the tips for that week. The evidence revealed that the respondents retained a copy of the “pay slips” issued to Ms Seaton. Generally speaking, Ms Seaton’s pay slips did not contain any employee classification on them. There are three that do contain an employee classification but two of them are clearly wrong because she is described as a “construction worker level 2”. On the third, the very last pay slip she received on 19 July, 2010 she is described as “kitchen, level 2”. When asked about this, the third respondent agreed with counsel that Ms Seaton was a “cook”.
The copies of the pay slips retained by the respondents are annexed to the second respondent’s first affidavit. Those copies suggest they are of a printout of the documents made on 12 July, 2010. They include a classification for Ms Seaton as “kitchen level 2”. When cross-examined about this, the second respondent agreed that she had added the information to the pay slips. She was then asked about a meeting she had with a Fair Work Inspector on 19 July, 2010 and it was suggested that she added the classification to the documents for the purpose of that meeting. She denied the suggestion. But she then withdrew from her evidence that she had changed the documents at all. She agreed they had been changed, that they could not change themselves and that she was the person who maintained the records, but she could not offer an explanation as to how they came to be changed. When I offered her the opportunity to clarify her evidence after her cross-examination finished, she suggested that the bookkeeper must have changed them.
The third respondent could not offer any explanation about the changes to the documents and referred counsel to the second respondent.
In July, 2010 Ms Seaton’s husband was agitating with the respondents on Ms Seaton’s behalf her underpayment claims. She had made a complaint to the Fair Work Ombudsman and that was under investigation.
There is evidence that at the meeting with the Fair Work Inspector, the second and third respondents asked the Inspector how they could sack Ms Seaton. In cross-examination the second respondent agreed that the Inspector said that they did not have to give any notice if Ms Seaton was a casual.
Soon after the meeting with the Fair Work Inspector on 19 July, 2010 Ms Seaton’s employment came to an end.
Part-time or Casual?
There is no dispute that Ms Seaton was an employee of the first respondent. The issue to be determined is the nature of her employment and the entitlements that might accrue to her once the true nature of her employment by the first respondent is determined.
The evidence of the verbal agreement entered into by Ms Seaton and the third respondent reveals no specification of whether she was to be employed on a casual or part-time basis. The focus must therefore turn to what occurred throughout Ms Seaton’s employment as reflecting the respondents’ intention at the time of employment.
There is no doubt on the facts as I have found them to be that Ms Seaton was employed for not less than 10 hours per week and for less than 38 ordinary hours per week. She had reasonably predictable hours of work. The rosters relied upon by the respondents show regular employment in a pattern of Monday, Tuesday, Thursday, Friday and Saturday with very little variation: see the documents in the second respondent’s second affidavit, Exhibit KWl at pages 7 to 14 and KW2 at pages 119 to 133. The third respondent ultimately accepted that Ms Seaton generally “most of the time” worked the regular pattern of days.
She did not receive on a proportionate basis, equivalent pay and conditions to those of full-time employees because she was paid a flat rate per shift.
She was not, on the evidence, engaged as a casual. There is no evidence that suggests that there was any discussion between Ms Seaton or the second or third respondents that she was to be engaged as a casual worker.
Ms Seaton’s evidence was that she did not know whether she was employed on a casual basis or part-time basis, but that she would work five to six days per week, she assumed she was part-time.
The third respondent gave evidence in cross-examination that he initially employed Ms Seaton on a part-time basis while she undertook training but once the training had been completed, he changed her employment to casual. But there was no evidence that he discussed the change in Ms Seaton’s employment status – that is to say her employment contract, with her or that she agreed to a change in her status. Her agreement is necessary if employment status is to be changed. The third respondent’s assessment that Ms Seaton was employed on a part-time basis is consistent with the regular and predictable hours that she worked. The subsequent treatment of her as a casual employee is explained by the third respondent’s understanding that he had changed her employment status. I am satisfied that he did not know he could not do that without her agreement.
In support of their contention that Ms Seaton was a casual employee, the respondents relied on a Tax File Number Declaration signed by Ms Seaton which was supposedly marked “casual” in the employment status section. During cross-examination Ms Seaton denied the signature on that document was hers. The third respondent’s admission that Ms Seaton was initially employed on a part-time basis is inconsistent with the Tax File Number Declaration being marked as “casual”. Tax File Declarations are usually completed when an employee commences work.
The document at the second respondent’s second affidavit (page 61) records the applicant as part time (with a tick) but this entry is scratched over and the box for casual is crossed. The document supports the view that the initial basis of the employment was part-time, in conformity with the evidence of the third respondent. He gave evidence that he “changed” her position and initially said it was from “training” to “casual”. He conceded, ultimately, that her employment status had been part-time.
The second respondent agreed that she ticked the part-time box on the time wages records document then marked over that entry and substituted the casual entry. She could not remember when she did it or why it might have been done.
The description “casual worker” is not one of precision. It is a colloquial expression, and where, upon all the facts, there is a reasonably debatable question whether the work is casual or regular, the question is one of fact: Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 per Starke J.
In Reed v Blue Line Cruises Ltd (1996) 73 IR 420 Moore J observed at [425]:
What then, is likely to have been the feature of the employment at the time of the engagement that would characterise it as an engagement on a casual basis? Plainly it involves a notion of informality or flexibility in the employment following the engagement…
A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.
On both parties’ evidence Ms Seaton worked more than 10 but less than 38 hours per week.
Neither 4.2.2 of the transitional instrument and 12.3 of the 2010 modern award were satisfied. There was no written agreement between Ms Seaton and the first respondent setting out a regular work pattern. In fact, there was nothing in writing at all. This points towards Ms Seaton not being a part-time employee.
In her affidavit filed 3 July, 2015 Ms Seaton gives evidence that when she commenced the terms of her employment were as follows:
a)the third respondent would contact her by mobile phone when she was required to work;
b)she would work shifts as directed by the second respondent; and
c)she would follow the directions of the third respondent.
However, the evidence at trial was that she worked out when she was working by looking at the rosters. That too, was the evidence of the second and third respondents. They did not suggest that Ms Seaton was notified of her shifts by mobile telephone or any other way. That is not to say there were not telephone calls between Ms Seaton and the second or third respondents, but having regard to the evidence, I am satisfied that it was not the case that Ms Seaton would telephone the second or third respondents to find out if and when she was working.
The second respondent has annexed to her affidavit filed 23 February, 2016 a number of rosters purportedly containing the shifts Ms Seaton worked during her employment with the first respondent. According to those rosters, the days which Ms Seaton worked, as well as her starting and finishing times, would sometimes vary. In cross-examination the third respondent agreed that most of the time Ms Seaton would work Monday, Tuesday, Thursday, Friday and Saturday.
In Hamzy v Tricon International Restaurants [2001] FCA 1589 the Full Court of the Federal Court said at [38]:
The essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work. But that is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
Here there is no evidence that there was a firm advance commitment as to the duration of Ms Seaton’s employment or the days she would work. As it turned out, it was regular and reasonably predictable.
If I accept that the rosters annexed to the second respondent’s affidavit are accurate, Ms Seaton could not have reasonably predicted whether she would start work at 4:30pm, 6:00pm or 6:30pm. In the alternative, if I were to accept Ms Seaton’s evidence that she would start work at 4:30pm and finish at 10:45pm or 11:30pm then she knew when her shifts started, but there was some variability about when she would finish work.
Recently, in Workpac Pty Ltd v Skene [2018] FCAC 131 the Full Federal Court observed in connection with the approach to be taken to the determination of nature of employment:
180. The 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. This is now the settled approach to the question of whether a person is an employee: see Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [2015] FCAFC 37 at [142] (North and Bromberg JJ) citing R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138, at 151 and 155 (Dixon, Fullagar and Kitto JJ); Vabu at [24], [47], [57], [58] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 232 ALR 69 at [25] and [31] (Wilcox, Conti and Stone JJ); Damevski v Giudice (2003) 133 FCR 438 at [77]-[78] (Marshall J, with whom Wilcox J agreed) and [144], [172] (Merkel J); Dalgety Farmers Ltd t/as Grazcos v Bruce (1995) 12 NSWCCR 36 at 46-48 (Kirby ACJ, with whom Clarke and Cole JJA agreed); Autoclenz Ltd v Belcher [2011] 4 All ER 745 at [22], [25]-[26], [29]-[32] (Lord Clarke SCJ, with whom Lord Hope DP, Lord Walker, Lord Collins and Lord Wilson SCJJ agreed). See also ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532 at [29] (Perram J); and on appeal ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 at [93] and [102] (Buchanan J, with whom Lander and Robertson JJ agreed). In such an assessment “the nature of the relationship may be legitimately examined by reference to the actual way in which the work was carried out”: Ace Insurance at [91]. The same approach is appropriate to adopt in determining the nature of the employment relationship. It is the approach adopted in MacMahon (at [38]) and apparent from the reasoning in Reed (at 424), Hamzy (at [38]), Melrose Farm (at [101]-[105]), Bernardino ([18]-[23]), Ledger (at [62] and [65]) and South Jin (at [138]-[152]) discussed above and also CPSU, Community & Public Sector Union v State of Victoria (2000) 95 IR 54 at [10] (Marshall J). In Reed, Moore J at 424 said this:
The characterisation of Reed’s employment by either Reed and/or representatives of the Company generally or in a document, and the provisions of the Award, are simply matters to be taken into account in determining the true character of the employment.
181. Whether the requisite firm advance commitment to continuing and indefinite work (subject to rights of termination) is absent or present must be objectively assessed including by reference to the surrounding circumstances created by both the contractual terms and the regulatory regime (including the FW Act, awards and enterprise agreements) applicable to the employment.
Here, there was no contractual terms agreed between the parties beyond, it seems, the mere fact of employment and the rates that might be paid from time to time. The Awards referred to above both contained a requirement that if an employee’s status was that of a part-time employee, the employer and the employee must agree in writing on the normal pattern of work required, including specifying the number of ordinary hours per week. There was no such agreement in this case. Nor was there any suggestion that Ms Seaton was a casual “employed as such”. The terms of any industrial awards or instruments, however, are but a factor to be taken into account.
Whilst the third respondent admitted that the applicant was initially employed on a part-time basis, this too, is simply a matter to be taken into account as are other various references scattered throughout the documents to the status of Ms Seaton’s employment.
The most significant aspect of the matter, in my view, that leads to the conclusion that Ms Seaton was a part-time employee is her regular and predictable hours of work. I reject the respondents’ case that Ms Seaton worked three hour shifts. I am satisfied that she commenced her shifts at 4:30pm on the days that she worked in accordance with a direction from the third respondent. She had regular days of work namely, Monday, Tuesday, Thursday, Friday and Saturday.
On a consideration of all of the above factors, and looking at the relationship in its totality, I am satisfied that Ms Seaton’s employment was sufficiently regular and certain so as to amount to part-time employment. That accords with the third respondent’s view when he first hired Ms Seaton.
Classification
The second issue for determination is whether Ms Seaton was employed as a “Cook” or “Kitchen Attendant” as defined by the transitional instrument and the modern award. According to Ms Seaton, she was engaged on a part-time basis in the classification of Level 3, Cook Grade 2 under the transitional instrument and the classification of Cook Grade 2 under the modern award.
There are a number of pay slips annexed to both the second respondent’s affidavit filed 23 February, 2016 and Ms Seaton’s affidavit filed on 3 July, 2015. Each pay slip contained in the annexures to the second respondent’s affidavit records Ms Seaton’s employment classification as “Kitchen Level 2.” However, a majority of the pay slips annexed to Ms Seaton’s affidavit, which relate to the same payment periods as those annexed to the second respondent’s affidavit, do not record any employment classification whatsoever. Those that do record her employment classification as “Construction Worker Level 2” or “Kitchen Level 2.” I have set out this evidence above. As I have earlier said, the inconsistency was raised with the second and third respondents during cross-examination. They conceded that the documents were different but offered no explanation as to why that may be the case. Both the second and third respondents denied changing the records for the purposes of the Fair Work Ombudsman’s audit.
In their written submissions, the respondents submit that the absence of an employment classification on Ms Seaton’s pay slips was a result of the transition from paper records to the MYOB program they used for the purposes of the business. They maintain that no errors were made in relation to Ms Seaton’s wages or payment rates. But they gave no cogent evidence to suggest that was so.
In any event, a determination of employment classification must be made having regard to the tasks that were undertaken by Ms Seaton throughout her employment.
Counsel for the applicant directed my attention to the principles for interpreting award provisions. They are captured in the approach articulated by Madgwick J in Kucks v CSR Limited (1996) 66 IR 182, an approach that is universally accepted:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind; they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean pa1ticular things may sensibly and properly be held to mean something else in the document at hand. But the task remains on of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.
In Re Andrew John Short v FW Hercus Pty Ltd [1993] FCA 51 Burchett J said:
Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language. “Sometimes”, McHugh J. said in Saraswati v. R [1991] HCA 21; (1991) 172 CLR 1 at 21, the purpose of legislation “can be discerned only by reference to the history of the legislation and the state of the law when it was enacted”. Awards must be in the same position.
Under both the transitional instrument and the modern award, a “cook grade 2” refers to an employee who has the appropriate level of training and who is engaged in cooking duties including baking, pastry cooking or butchering.
Under the transitional instrument “kitchen attendant grade 1” refers to an employee who is engaged in any of the following:
a)general cleaning duties within a kitchen or food preparation area and scullery, including the cleaning of cooking and general utensils used in a kitchen and restaurant;
b)assisting employees who are cooking;
c)assembly and preparation of ingredients for cooking;
d)preparation of salad ingredients and/or distribution to a salad bar;
e)general pantry duties.
Under the modern award “kitchen attendant grade 2” refers to an employee who has the appropriate level of training, and who is engaged in specialised non-cooking duties in a kitchen or food preparation area, or supervision of kitchen attendants.
The instruments define “appropriate level of training” as an employee that:
a)has completed an appropriate training program that meets the training and assessment requirements of a qualification or one or more designated units of competency from a Training Package;
b)has been assessed by a qualified skills assessor to have skills at least equivalent to those attained in an appropriate training course; and/or
c)at 31 December, 2009 (except for a Food and beverage attendant grade 2 as defined in Schedule B-Classification Structure and Definitions) has been doing the work of a particular classification for a period of at least three months.
The total of the evidence that Ms Seaton gave about what work she performed is as follows:
a)her first affidavit filed on 3 July, 2015:
8.In my role as a cook I performed food preparation, cooking and cleaning duties for the First Respondent as directed by Bob.
...
11.I primarily worked in the kitchen under the direct supervision of Bob. Bob taught me how to cook and trained me at work. He was in charge in the kitchen.
b)her affidavit filed on 27 August, 2015:
(c)I would start work at 4:30pm and assist in the kitchen with taking out of the cool rooms all the different types of vegetables, meats and rice for take away orders that came in by phone anytime after 4:30pm. Many customers came in to pick up their take away orders from 5:00pm.
She was asked about her work by the third respondent when she was cross-examined. Her evidence was:
THE INTERPRETER (THIRD RESPONDENT): So you stated in your affidavit that you are a cook, level III? Sorry. So there is very important matter that every chef, every cook has to know. I want to actually ask you what the temperature the bacteria will grow?
THE INTERPRETER: Just a minute, your Honour, because I don’t understand her. Okay.
THE INTERPRETER (WITNESS): So yes. They taught me how to cook curries.
THE INTERPRETER (THIRD RESPONDENT): So just answer the question, please.
THE INTERPRETER (WITNESS): So they did not tell me or teach me what the temperature the bacteria will grow.
In re-examination she said:
MR REIDY: That was my next question. What was your work as a cook? What did - - -
THE INTERPRETER (WITNESS): My curry. Yes. I make all the curries. Chopping vegetables, work in the kitchen, cook rice. Just almost everything. Everything that I was told.
According to the second and third respondents, Ms Seaton was employed on a casual basis as a Kitchen Attendant Grade 1 under the Hospitality Industry/Restaurant, Catering and Allied Establishment Award – South-Eastern Division 2002 for the period 8 February, 2010 to 30 June, 2010 and as a Kitchen Attendant Level 2 Grade 2 under the Restaurant Industry Modern Award 2010 for the period 1 July, 2010 to 15 July, 2010. They argue that her duties were commensurate with that. The respondents maintain that Ms Seaton was a kitchen hand. In his affidavit filed 29 July, 2015 the third respondent admits teaching Ms Seaton to cook curries but says that she would not do so unsupervised. According to the third respondent it was in fact him, his wife and his nephew that were primarily responsible for the preparation of ingredients and such preparation would occur at lunch time, before Ms Seaton would start her shifts.
Ms Seaton’s evidence is that the third respondent trained her and taught her how to cook. However, when asked plainly in cross examination “She (referring to Ms Seaton) was a cook wasn’t she?” the third respondent replied “yes”.
On balance, I am satisfied that Ms Seaton’s duties amounted to that of a cook as defined by the relevant instruments. I accept that the third respondent provided training to Ms Seaton in cooking curries and that she would cook curries under the supervision of the third respondent. Her duties described in the evidence are more closely aligned with that of a cook grade 2 than a kitchen hand, the duty description of which does not include cooking, only assisting others who are cooking.
The transitional instrument contains different levels of wage rate for various classifications. Ms Seaton contends that she is a Level 3 for that purpose. The transitional instrument contains a number of indications in respect of an employee’s activities and the level of responsibility for each wage level. For Level 2 they are as follows:
Wage Level 2 shall mean an employee who is engaged in activities such as:
• selling, supplying (not serving), dispensing or mixing of a range of alcoholic and non-alcoholic beverages, liquor store activities including the sale of specialised stock lines and/or takeaway liquor from a bottle shop or other liquor outlet consistent with the Liquor Act 1992 and/or employer policy;
• assisting in the cellar,
• receiving and storing general and perishable goods;
• receipt of monies;
• attending a snack bar, coffee shop or other food and beverage outlet including taking orders and/or serving food and beverages;
• personalised guest services;
• taking reservations, greeting and seating guests, transferring guests’ baggage and or property including delivery duties;
• operation of coin dispensing machine;
• payment of authorised jackpots, not requiring attendance at the device nor maintenance of detailed records;
• undertaking general waiting and butler duties including basic food and beverage services with led records;
• cooking of breakfasts, snacks and other basic meals and food items requiring regular supervision and limited experience;
• specialised non-cooking duties associated with a kitchen or food preparation area;
• servicing accommodation areas and cleaning thereof including assisting with dry cleaning processes;
• driving a passenger or courtesy vehicle;
• cleaning duties using specialised equipment and chemicals;
• undertaking routine repair work and maintenance not generally performed by a tradesperson;
• an employee engaged in activities such as internal promotions, and set ups for functions, basic merchandising for promotional activities, door and other minor security duties, bingo or other leisure activities and ushering for shows;
• acting as an assistant instructor or pool attendant including testing pools and spas, setting up equipment, distribution and care of equipment and the taking of bookings, power boat observer; and
• assisting with the maintenance of dress standards and good order in the establishment.
…
(iii) Indicative level of responsibility
An employee at this Wage Level would require general supervision and who:
• receives general instructions usually covering the broader technical aspects of the work; and
• are subject to progress checks, but such checks are usually confined to ensuring in broad terms, satisfactory progress is being made; and
• has their assignments and work reviewed on completion; and
• although technically competent and well experienced, there may be occasions on which the employee will receive more detailed instructions; and
• usually operates in a work team but may have specified areas of autonomy to perform a range of allocated activities and functions.
For Level 3, they are as follows:
(i) Indicative duties
Wage Level 3 shall mean an employee who is engaged in activities such as:
• supplying (not serving) dispensing or mixing of liquor including a range of sophisticated drinks;
• full control of a cellar or liquor store or outlet including the receipt, delivery and recording of goods within such areas;
• cooking a range of meals requiring general supervision including a la carte cooking, grill cooking, deep frying and other cooking activities assigned by a higher level employee including setting up of an on-site kitchen;
• receipt of monies and cash handling;
• attending a wagering terminal (TAB, Keno) or similar electronic gaming terminal (poker machine), holding the appropriate license and who performs duties such as floor payouts, correction of minor gaming device faults and general machine maintenance;
• receiving, storing and distributing goods including the operation of mechanical lifting devices such as forklifts;
• major repair of linen and/or clothing;
• dry cleaning;
• supervision of laundry services;
• taking/directing of classes, tours and leisure activities associated with sporting areas, health and fitness activities and swimming pools; and
• timekeeping of staff, general security including security of keys and supervision of dress standard maintenance and good order in the establishment.
…
(iii) Indicative level of responsibility
An employee at this Wage Level would require general supervision and who:
• receives general instructions usually covering the broader technical aspects of the work; and
• are subject to progress checks, but such checks are usually confined to ensuring in broad terms, satisfactory progress is being made; and
• has their assignments and work reviewed on completion; and
• although technically competent and well experienced, there may be occasions on which the employee will receive more detailed instructions; and
• usually operates in a work team but may have specified areas of autonomy to perform a range of allocated activities and functions.
I am satisfied that Ms Seaton is a Level 3 for the purposes of the classification. The indicative duties for a person on wage Level 3 are include cooking meals requiring general supervision. That accords with Ms Seaton’s evidence.
I find that the applicant was employed in the classification of Level 3, Cook Grade 2 under the transitional instrument and in the classification of Cook Grade 2 under the modern award.
She claimed she would regularly work six to seven hour shifts between 4:30pm and 10:45pm or 4:30pm and 11:30pm and would work on average six shifts per week. I find that they are the hours that Ms Seaton usually worked.
Ms Seaton claims, as a part-time employee in the relevant classifications, she was entitled to the following rates of pay over the course of her employment with the first respondent:
a)Minimum Wage:
i)$15.34 per hour in the period 3 July, 2009 and 31 December, 2009 pursuant to the transitional instrument;
ii)$15.89 per hour in the period 1 January, 2010 and 30 June, 2010 pursuant to the modern award; and
iii)$16.13 per hour in the period 1 July, 2010 and 12 July, 2010 pursuant to the modern award.
b)Penalty Rates for work on weekends:
i)$23.01 per hour in the period 3 July, 2009 and 31 December, 2009 pursuant to the transitional instrument;
ii)$23.83 per hour in the period 1 January, 2010 and 30 June, 2010 pursuant to the modern award; and
iii)$23.40 per hour in the period 1 July, 2010 and 12 July, 2010 pursuant to the modern award.
c)Penalty rates for work on public holidays:
i)$38.35 per hour in the period 3 July, 2009 and 31 December, 2009 pursuant to the transitional instrument;
ii)$39.73 per hour in the period 1 January, 2010 and 30 June, 2010 pursuant to the modern award; and
iii)$38.35 per hour in the period 1 July, 2010 and 12 July, 2010 pursuant to the modern award.
d)Penalty Rates for working more than six hours without a break:
i)$30.68 per hour in the period 3 July, 2009 to 31 December, 2009 pursuant to the transitional instrument;
ii)$31.78 per hour in the period 1 January, 2010 to 30 June, 2010 pursuant to the modern award; and
iii)$24.20 per hour in the period 1 July, 2010 to 12 July, 2010 pursuant to the modern award.
e)Late night work allowance for hours worked between 10:00pm and 7:00am:
i)an additional amount of $1.3455 per hour in the period 3 July, 2009 and 31 December, 2009 pursuant to the transitional instrument;
ii)an additional amount of $1.3455 per hour in the period 1 January, 2010 and 30 June, 2010 pursuant to the modern award; and
iii)$17.56 per hour in the period 1 July, 2010 and 12 July, 2010 pursuant to the modern award.
Ms Seaton argues that she was also entitled to annual leave, leave loading and superannuation contributions in accordance with the transitional instrument and the modern award.
The evidence establishes that she was not paid the rates to which she was entitled. Rather, she was paid:
a)in the period 21 January, 2008 and 16 February, 2008, a fixed amount of $50.00 net per shift;
b)in the period 18 February, 2008 and 23 February, 2008, a fixed amount of $55.00 net per shift;
c)in the period 24 February, 2008 and 19 July, 2008, a fixed amount of $57.00 net per shift; and
d)in the period 21 July, 2008 and 12 July, 2010, a fixed amount of $60.00 net per shift,
notwithstanding how many hours she worked per shift.
She was not paid penalty rates on weekends, public holidays or days where she worked more than six hours without a break and was not paid a late night work allowance. Although the respondents claim that Ms Seaton was paid penalty rates on weekends and that the reason she was not paid penalty rates on public holidays or shifts where she worked more than six hours without a break was because she did not work any shifts of that kind throughout the course of her employment, I do not accept their claims in that regard. The respondents submit that, as Ms Seaton was a casual employee, she was not entitled to overtime pay, meal break allowances, additional pay for hours worked between 10:00pm and 7:00am or annual leave and leave loading. But I have found that she was in fact a part-time employee and was entitled to those allowances.
Ms Seaton was not paid any amount for the 134.5 hours of annual leave she had accrued over the course of her employment or any leave loading and she was only paid superannuation contributions for 22 weeks out of the 52 weeks she worked for the first respondent. The respondents claim that the true process in which superannuation was paid to their employees was by the accumulative earning of the employee. The first respondent was required to make a superannuation contribution each week the employee earned $450 or greater. As Ms Seaton’s weekly earnings often fell short of the $450 threshold, the respondents claim they were not obliged to make superannuation contributions for those weeks.
Ms Seaton submits that the first respondent terminated her employment by the mechanism of not rostering her for any further shifts. Her last day of employment was 13 July, 2010. On the second and third respondent’s evidence, Ms Seaton’s employment was not terminated, rather she stopped showing up for her rostered shifts. In any event, they argue, they were not required to give her a notice of termination pursuant to s.117(3) of the Act because she was a casual employee.
Ms Seaton was entitled to notice because she was a part-time employee. She was not given notice. I am satisfied that the respondent’s terminated her employment because she had taken steps to involve the Fair Work Ombudsman in her employment matters with them. Their questions of the Fair Work Inspector bear that out.
Having regard to those matters, it is apparent that Ms Seaton’s entitlements were not fully paid to her. The focus of the respondents’ challenge to the applicant’s claim was upon the status of her employment and her classification. They took no issue with the submissions made on behalf of Ms Seaton about the way in which her claim was calculated in the event that she was found to be a part-time employee and of a classification Level III Cook grade 2. Accordingly, having regard to counsel’s submissions on the evidence I find that Ms Seaton is entitled to the following.
Minimum wage entitlement underpayment
The first respondent did not pay the minimum wage entitlement for the number of hours worked (clause 5.2.l of the transitional instrument and, from 1 July 2010, clause 20 of the modern award) as follows:
a)for the period 3 July, 2009 to 31 December, 2009 the amount of $8,062.60;
b)for the period 1 January, 2010 to 30 June, 2010 the amount of $12,503.12;
c)for the period 1 July, 2010 to 13 July, 2010, the amount of $526.22.
These amounts were calculated by multiplying the number of hours worked by the applicant, by the applicable minimum wage specified in the transitional instrument and the modern award (including any penalty rates and allowances) and then deducting any amounts that were paid by the First Respondent.
Work on weekends underpayment
The First Respondent did not pay penalty rates for work on weekends (clause 6.5 of the transitional instrument and clause 34.1 of the modern award) as follows:
a)for the period 3 July, 2009 to 31 December, 2009 the amount of $3,451.50;
b)for the period 1 January, 2010 to 30 June, 2010 the amount of $3,574.50;
c)for the period 1 July, 2010 to 13 July, 2010 the amount of $280.00.
These amounts were calculated by multiplying the number of hours worked by the applicant on a weekend, by the penalty rates specified in the transitional instrument and the modern award and then deducting any amounts that were paid by the first respondent.
Public holidays underpayment
The first respondent did not pay for work performed on public holidays (clause 7.6.1 of the transitional instrument and clause 34.1 of the modern award) as follows:
a)for the period 3 July, 2009 to 31 December, 2009 the amount of $460.20;
b)For the period 1 January, 2010 to 30 June, 2010 the amount of $1,668.24;
c)the applicant did not work on any public holidays for the period 1 July, 2010 to 13 July, 2010.
These amounts were calculated by multiplying the number of hours worked by the applicant on a public holiday, by the penalty rates specified in the transitional instrument and the modern award and then deducting any amounts that were paid by the first respondent.
Overtime underpayment
The first respondent did not pay for overtime entitlements (clause 6.4.1 of the transitional instrument and clause 33.2 of the modern award) as follows:
a)for the period 3 July 2009 to 31 December, 2009 the amount of $345.15;
b)for the period 1 January, 2010 to 30 June, 2010 the amount of $2,979.36;
c)the applicant did not work any overtime hours for the period 1 July, 2010 to 13 July, 2010.
These amounts were calculated by multiplying the overtime hours worked by the applicant (which were on a rostered day off including any hours worked on a Wednesday or a Sunday), by the penalty rates specified in the transitional instrument and the modern award and then deducting any amounts that were paid by the first respondent.
Meal break allowance underpayment
The first respondent did not pay for meal break allowance (clauses 6.2.l(b) of the transitional instrument and clause 32.4 of the modern award) as follows:
a)for the period 3 July 2009 to 31 December 2009, the amount of $2,561.78;
b)for the period 1 January 2010 to 30 June 2010, the amount of $3,662.70;
c)for the period 1 July 2010 to 13 July 2010, the amount of $131.90.
These amounts were calculated by multiplying any hours worked in excess of six hours (without a meal break), by the penalty rates specified in the transitional instrument and the modern award and then deducting any amounts that were paid by the first respondent.
Work done after 10:00pm underpayment
The first respondent did not pay the rate for work done after 10:00pm (clause 5.4.1 of the transitional instrument and clause 34.2 of the modern award) as follows:
a)for the period 3 July, 2009 to 31 December, 2009, the amount of $168.53;
b)for the period 1 January 2010 to 30 June 2010, the amount of $211.70;
c)for the period 1 July 2010 to 13 July 2010, the amount of $12.84.
These amounts were calculated by adding the additional allowance specified in the transitional instrument and the modern award to the applicant’s hourly rate for any hours worked after 10:00pm.
Accrued annual leave underpayment
The first respondent did not pay for accrued annual leave (clause 7.1 of the transitional instrument and clause 35 of the modern award) as follows:
a)for the period 3 July 2009 to 31 December 2009, the amount of $997.10;
b)for the period 1 January 2010 to 30 June 2010, the amount of $1,032.85;
c)for the period 1 July 2010 to 13 July 2010, the amount of $72.59.
These amounts were calculated by multiplying the applicable minimum wage specified in the transitional instrument and the modern award, by the annual leave hours that had been accrued by the applicant.
Leave loading underpayment
The first respondent did not pay for leave loading (clause 7.1.6 of the transitional instrument and clause 35.2(b) of the modern award as follows:
a)for the period 3 July 2009 to 31 December 2009, the amount of $174.49;
b)for the period 1January2010 to 30 June 2010, the amount of $180.75;
c)for the period 1July2010 to 13 July 2010, the amount of $12.70.
These amounts were calculated by multiplying the accrual leave entitlement of the applicant, by the 17.5% leave loading requirement specified in the transitional instrument and the modern award.
Superannuation underpayments
The first respondent did not pay or remit superannuation amounts (clause 5.6 of the transitional instrument and clause 30 of the modern award) as follows:
a)for the period 3 July 2009 to 31 December 2009, the amount of $1,089.53;
b)for the period 1 January 2010 to 30 June 2010, the amount of $1,478.54;
c)for the period 1 July 2010 to 13 July 2010, the amount of $37.39.
These amounts were calculated by determining the superannuation payable according to the wages that should have been paid to the applicant and then deducting any superannuation amounts remitted by the First Respondent.
I find that Ms Seaton was underpaid the following amounts:
| Period | 3 July, 2009 – 31 December, 2009 | 1 January, 2010 – 30 June, 2010 | 1 July, 2010 – 13 July, 2010 | Total |
| Minimum Wage | $8,062.60 | $12,503.12 | $526.22 | $21,091.94 |
| Weekend Penalty Rates | $3,451.50 | $3,574.50 | $280.00 | $7,306.00 |
| Public holiday rates | $460.20 | $1,668.24 | N/A | $2,128.44 |
| Overtime | $345.15 | $2,979.36 | N/A | $3,324.51 |
| Meal Break Allowance | $2,561.78 | $3,662.70 | $131.90 | $6,356.38 |
| After 10:00pm | $168.53 | $211.70 | $12.84 | $393.07 |
| Annual Leave | $997.10 | $1,032.85 | $72.59 | $2,102.54 |
| Leave Loading | $174.49 | $180.75 | $12.70 | $37.39 |
| Superannuation | $1,089.53 | $1,478.54 | $37.39 | $2,605.46 |
| Total | $45,676.28 | |||
Ms Seaton is entitled to judgment for those amounts.
The contraventions
The facts as I have found them to be establish a number of contraventions of the Fair Work Act. They are:
a)the underpayment contraventions:
i)not paying the minimum wage entitlement for the number of hours actually worked (clause 5.2.1 of the transitional instrument and clause 20 of the Modern award);
ii)not paying weekend penalty rates (clause 6.5 of the transitional instrument and clause 34.1 of the modern award);
iii)not paying public holidays penalty rates (clause 7.6.1 of the transitional instrument and clause 34.1 of the modern award);
iv)not paying overtime entitlements (clause 6.4.1 of the transitional instrument and clause 33.2 of the modern award);
v)not paying meal break allowance (clauses 6.2.1(b) of the transitional instrument and clause 32.4 of the modern award);
vi)not paying the additional payment due for work done after 10:00pm (clause 5.4.1 of the transitional instrument and clause 34.2 of the modern award);
vii)not making payment for accrued annual leave (clause 7.1 of the transitional instrument and clause 35 of the modern award);
viii)not making payment for leave loading (clause 7.1.6 of the transitional instrument and clause 35.2(b) of the modern award;
ix)not remitting superannuation entitlements (clause 5.6 of the transitional instrument and clause 30 of the modern award);
b)contraventions of the National Employment Standard (NES) Contraventions:
i)failure to give the applicant a Fair Work Information Statement as soon as practicable (ss.125(1) and 44);
ii)failure to give the applicant written notice of the day of termination of her employment (ss.117(1) and 44);
iii)failure to give the applicant the minimum period of notice of two weeks required by the Act (ss.117(2) and (3) and 44);
iv)the following NES contraventions in respect of annual leave:
(1)failure to pay the entitlement to annual leave (provided for under ss.87 and 44(1));
(2)failure to pay the period of untaken paid annual leave at the end of employment (ss.90(2) and 44(1)).
c)the Wage Payment Timing Contraventions as to the manner and timing of payment of wages by reason of the failure to pay the full amounts due at least monthly in the manner required by the Fair Work Act (s.323);
d)the Record Keeping Contraventions by failing to keep the records required by the regulations (see s.535)(1)) as follows:
i)failing (under reg.3.32) to keep a record containing the specified content as follows:
(1)the employer’s name;
(2)the employee’s name;
(3)whether the employee’s employment is full-time or part-time;
(4)whether the employee’s employment is permanent, temporary or casual;
(5)the date on which the employee’s employment began;
(6)on or after January 2010, the ABN of the employer.
ii)failing to keep compliant pay records (reg.3.33) specifying:
(1)the rate of remuneration paid to the employee;
(2)the gross and net amounts paid to the employee;
(3)any deductions made from the gross amount paid to the employee;
(4)the loading due to the employee (reg.3.33(3)(c));
(5)the penalty rates due to the employee (reg.3.33(3)(d));
(6)monetary allowances are separately identifiable entitlements (reg.3.33(3)(e));
iii)failing to keep records of overtime for the number of overtime hours worked each day and when the employee started and ceased working overtime hours (reg.3.34);
iv)failing to keep leave records (reg.3.36) of the balance of the employee’s leave from time to time (reg.3.36(1)(b));
v)failing to keep records of superannuation contributions required under reg.3.37 as follows:
(1)the amount of the contributions made;
(2)the period over which the contributions were made;
(3)the date on which each contribution was made;
(4)the name of any fund to which the contribution was made;
(5)the basis on which the employer became liable to make a contribution including:
(a)a record of election made by the employee as to the fund to which the contributions are to be made;
(b)the date of any relevant election;
vi)failing to keep the record required under reg.3.40 setting out:
(1)whether the employment was terminated by consent, notice, summarily or in some other manner;
(2)name of the person who acted to terminate the employment;
vii)failing to keep accurate records in that the records were false and misleading to the employer’s knowledge (reg.3.44, Part 4-1 Division 4 for dealing with infringement notices).
Those contraventions and the maximum penalties that might be imposed upon the respondents in respect of them are set out in the following table:
| Contravention | CIVIL PENALTIES PAYABLE | ||
| First Respondent | Second Respondent | Third Respondent | |
| Failure to pay basic periodic rates of pay as per the APCS (s.182 of WR Act) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay annual leave (s.232 WR Act) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay minimum award rate (s.45 FW Act re clause 20 Award) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay weekend penalty rates (s.45 FW Act re clause 34.1 Award) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay penalty rates for work on public holidays (s.45 FW Act re clause 20 Award) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay overtime entitlements (s.45 FW Act re clause 33.2 Award) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay meal break allowance (s.45 Act re clause 32.4 Award) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay annual leave and leave loading (s.45 FW Act re clause 35.2(b) Award) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay amounts payable in full relating to performance of work (s.323(1) FW Act) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to pay annual leave entitlements as per National Employment standards (s.44(1) FW Act re s 87 FW Act) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to make payment in lieu of notice of termination (s.44(1) FW Act re s 117 FW Act) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to provide Fair Work Information Statement (s.44(1) FW Act re s 125 FW Act) | $33,000.00 | $6,600.00 | $6,600.00 |
| Failure to keep employee records (form) (s.535 FW Act re reg 3.31 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (content) (s.535 FW Act re reg 3.32 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (pay) (s.535 FW Act re reg 3.33 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (overtime) (s.535 FW Act re reg 3.34 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (leave) (s.535 FW Act re reg 3.36 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (superannuation contributions) (s.535 FW Act re reg 3.37 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (termination of employment) (s.535 FW Act re reg 3.40 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep employee records (accuracy) (s.535 FW Act re reg 3.44 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| Failure to keep and provide accurate payslips (content) (s.536 FW Act re reg 3.46 FW Regs) | $16,500.00 | $3,300.00 | $3,300.00 |
| TOTAL | $544,500.00 | $108,900.00 | $108,900.00 |
Here the contraventions involve the failure by the first respondent to pay to Ms Seaton her entitlements pursuant to the industrial instruments that governed her employment. The breaches are numerous because each time she was entitled to be paid the basic rate of pay or one of the relevant loadings identified above, there was a contravention of the Act. Each breach of an obligation provided for in an industrial instrument is a separate contravention of that industrial instrument and consequently s.45 of the Fair Work Act. Accordingly, there are many contraventions involved in this case. However, s.557 of the Fair Work Act relevantly provides:
557. Course of Conduct
(1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b) the contraventions arose out of a course of conduct by the person.
Section 557(1) is engaged in this case. Each of the numerous contraventions of the two industrial instruments concerned is a contravention of s.45 of the Act. There are multiple record keeping contraventions. The contraventions were committed by the same person. If they arose out of the same course of conduct, they must be taken to constitute a single contravention. That is the legislatively mandated outcome. However, as the decision in Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 directs, s.557(1) operates on contraventions which occur when a term of an Award is contravened through the operation of s.45 of the Act. The contravention occurs when a term of a modern award is contravened. The effect of s.557(1) in relation to contraventions of s.45 is that two or more contraventions of a term of a modern award are taken to constitute a single contravention, but contraventions of disparate provisions of the Award are not to be treated as a single contravention of s.45 of the Act. That approach is reflected in the table set out above.
Further, where separate contraventions exhibit common elements or arise out of the same course of conduct, it is open to the Court to impose a penalty in respect of some, but not all of the contraventions that exhibit those common elements. The task is to avoid punishing an offender for the same conduct more than once.
The conduct by the respondents arose out of a single decision to pay the applicant a flat rate of pay per shift. They also arose from the third respondent’s mistaken belief that he could simply change the applicant’s employment status from part-time to casual without her consent. No doubt these matters were reinforced to him when the Fair Work Ombudsman undertook its audit of the first respondent and the applicant was found to have been owed very little.
The contraventions relating to:
a)the underpayment of minimum wages;
b)failing to pay penalties for weekend penalty rates, public holidays, over-time, meal breaks and work done after 10 pm and superannuation;
c)failing to pay accrued annual leave and leave loading;
d)the NES contravention relating to notice of the termination of Ms Seaton’s employment;
e)what Ms Seaton describes as the “wage payment timing contraventions”
should all be dealt with on the basis that they arise from the single decision to pay Ms Seaton a single rate of pay and from the respondents’ mistaken belief that soon after her commencement, Ms Seaton’s employment was changed to casual status. That belief was no doubt reinforced by the FWO audit and its outcome.
The contraventions relating to record keeping should also be dealt with as involving a common element or course of conduct. They are:
a)those concerning specified content, compliant pay records and overtime records;
b)the leave record contraventions;
c)the superannuation records;
d)the termination records; and
i)the failure to keep accurate records.
By and large, these contraventions have come about again because of the way in which the respondent perceived Ms Seaton’s employment and that their perceptions were confirmed by the FWO audit.
The NES Fair Work Information Statement contravention stands on its own.
Whilst the applicant argues that she was in an unequal bargaining position with no language skills and very little prospect of other work, I do not accept that submission. Her language skills were commensurate with those of the second and third respondents in that she spoke Thai as her first language.
The extent of the underpayment is considerable as I have set out above.
I accept that the respondents have exhibited no contrition. Although that is, no doubt, explained by the fact that they underwent an audit conducted by the Fair Work Ombudsman and were found not to have underpaid Ms Seaton, except by a very small amount. That finding is explicable, however, on the basis that the FWO calculated Ms Seaton’s entitlements based upon Ms Seaton’s status as a casual employee, and a classification of kitchen hand.
The applicant submits that the respondents were involved in a system under which the payslips issued by them “provided a veneer of compliance”. The recording of the true transactions on a handwritten envelope of which no copy was kept is a system, except, that is inimical to the capacity of employees to understand the amounts of the wages they have been paid and is designed to defeat investigation and enforcement. In part, that is what has occurred here.
The respondents have not taken any corrective action, but that is because, having been audited by the FWO nothing, other than a very small amount, was found to have been owed.
To the extent that the respondents point out that they had provided their employees with meals before and after work that does not mitigate their failure to comply with the law.
Penalties
In respect of the first group, I propose to impose a penalty of 40% of the maximum available for the contravention constituted by the underpayment of the basic rate (for which the maximum is $33,000). The penalty for that I fix at $13,200. I do not intend to impose a penalty for the other contraventions in this group given the common elements across those contraventions.
In respect of the second main group of contraventions I impose a penalty of 40% of the maximum available for the contravention concerning compliant pay records (for which the maximum is $16,500). The penalty for that I fix at $6,600. I do not intend to impose a penalty for the other contraventions in this group given the common elements across those contraventions
For the final contravention, the maximum penalty for which is $33,000, I impose a penalty of 10% of the maximum, or $3,300.
I accept the applicant’s submission that the second and third respondents should not be differentiated. I accept that they are equally culpable in the contraventions and the penalties should be commensurate with those of the first respondent. Thus, in respect of the first group I fix the penalty at $2,640 each, for the second $1,320 each and for the last, $660 each.
The resulting penalties are:
a)for the first respondent: $23,100;
b)for the second respondent: $4,650; and
c)for the third respondent: $4,650.
I need to consider whether penalties on the above amounts are an appropriate response to the conduct concerned. For the applicant, this was serious conduct by reason of the underpayment amount and the period over which it occurred. But there is no evidence that the respondents have been repeat offenders and there is evidence of a Fair Work Ombudsman audit that was fairly unremarkable. These contraventions do not involve multiple employees. I have set out the explanations as to how they might have come about above.
I need to consider whether the penalties are likely to be oppressive or crushing. The respondents have not sought to place any evidence before the Court about their financial circumstances. As the applicant points out, whilst there is no financial information, there is no suggestion that their business is in difficulty. It appears to be a successful business that has been in the same location for a number of years. It employs quite a lot of staff.
In my view, the penalties as assessed are an appropriate response to the contraventions.
The applicant seeks an order that the penalties be paid to her. The Court has power to make that order if it is appropriate. As the applicant points out, penalties may be paid to an applicant to reflect the time, expense (apart from legal costs) and trouble that must have been incurred in pursuing the application.
In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 5) [2013] FCA 1384 Collier J observed at [25]:
There is extensive authority supporting the proposition that, in circumstances where penalty proceedings in an industrial context were commenced by a party other than an enforcement agency, any pecuniary penalties ordered payable by the Court are ordinarily be paid to the party prosecuting the proceedings. Such an order has been referred to as the “usual” order: Woodside Burrup Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FCA 949 at [148], Gibbs v The Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216 at 223, Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (No 2) (2001) 110 IR 372; [2001] FCA 672 at [8], and Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [44], [65].
The order sought by the applicant is appropriate.
The applicant seeks compensation for the distress occasioned by the contraventions. Her application also seeks future economic loss but she does not press that. She gives very general evidence about hurt, humiliation and distress. As the applicant submits, in Dafallah v Fair Work Commission [2014] FCA 328 Mortimer J set out the applicable principles and approach to an amount of compensation pursuant to s.545 of the Fair Work Act:
148. The language of s 545 is broad, allowing the Court to provide remedies which meet the circumstances of any given contravention, taking into account the range of patties who may have brought proceedings in relation to the contravention, and the actions which might in any given circumstance be required to remedy the contravention, or to ensure it does not occur again. Awarding compensation for loss is but one example and may not be appropriate, depending on what other action has been taken in respect of any losses. Each case will turn on its facts in that sense.
149. Fixing compensation under s 545 is a statutory task, and the Court must not substitute that task with approaches derived from the general law: Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [20014] HCA 3 at [44]; Qantas Airways Ltd v Gama (2008) 167 FCR 537; [2008] FCAFC 69 at [94] per French and Jacobson JJ.
150. In my opinion, the following features of s 545(1) and its place in the scheme of the FW Act are relevant.
151. The purpose of identifying obligations in the FW Act as civil remedy provisions, and thus enabling penalties to be imposed for conduct contravening those obligations, is to establish norms of conduct across the activities covered by those provisions - minimum wages, equal remuneration, industrial action, right of entry, the general protections regime, and the requirements of enterprise agreements. Subjecting conduct contravening these provisions to the imposition of civil penalties is intended to serve the aims of deterrence (both specific and general) as part of a legislative aim to reduce or eliminate such conduct.
152. In some circumstances, compensation for loss because of the contravention may relate to loss suffered by more than one employee, or by an employee organisation or an industrial association.
…
155. A contravention of orders made by the FWC relating to unfair dismissal is, by s 405, a civil remedy provision. Otherwise, the provisions relating to unfair dismissal are not, in contrast for example to the general protection provisions, civil remedy provisions.
156. Where the subject matter of the contravention is a breach of an agreement closely connected to the termination of a person’s employment for poor performance, as is the case here, the Court must, in exercising power under s 545(1), be careful not to undermine the operation of the unfair dismissal provisions, and the limits Parliament has placed on them. That is especially so in circumstances where unfair dismissal proceedings have been unsuccessfully pursued, as is the case here. An order for compensation which has such an effect may not, in my opinion, be an “appropriate” order for the purposes of s.545(1).
157. Further, the width of the power conferred by s 545(1) also allows for compensation which may not fully compensate a person for the loss suffered: see Gama (2008) 167 FCR 537; [2008] FCAFC 69 at [94] per French and Jacobson JJ, where their Honours were considering similar statuto1y compensation provisions under s 46PO(4) of the Human Rights and Equal Opportunity Act 1986 (Cth). In my opinion, that approach is available under s 545(1) because, as their Honours pointed out in Gama at [94], an award of compensation is discretionary. Ins 545(1), the governing consideration is what the Court considers “appropriate”, and this in my opinion leaves room for a Court to find in a given case that less than full compensation might be appropriate.
158. While by no means operating as a mandatory approach to a discretion such as that conferred by s 545(1), with respect I adopt the remarks of Lee J in Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia- Westerm Australia,, Branch (1995) 63 IR 1, considering factors relevant to an award of compensation under s 170EE of the then Industrial Relations Act 1988 (Cth.). His Honour said (at 9), that the Court will “have regard to what is reasonable in the circumstances and will look at what would have been likely to occur had the Act not been contravened ... The Court will consider the detriment occasioned to the employee by the employer’s contravention of the Act, and the extent to which it is reasonable to compensate the employee for such consequences.”
159. One of the principal tasks, if compensation is to be awarded, is to ensure that there is the appropriate causal connection between the contravention and the loss claimed: Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526; (2011] FCA 333 at [ 423] per Barker J.
160. The Full Court in Burazin (1996] IRCA 371; 142 ALR at 155 approved this approach. Some of the matters referred to by Lee J are similar to those set out as considerations ins 392(2). Although the power under s 545(1) is separate and independent, in my opinion, since the same stah1tory concept of compensation is involved, it is appropriate to consider factors similar to those set out in s 392(2).
161. In considering causation, in the circumstances of a clearly fraught employment relationship as was the case between Ms Dafallah and Melbourne Health, it is appropriate in my opinion to consider that the employer would have in any event been entitled to exercise any power it had to bring the employment contract lawfully to an end in a way most beneficial to itself. The likelihood of an employer taking such a step will be fact dependent but, in contractual terms, it has been held to be relevant to the assessment of damages: see Bostik (Australia) Pty Ltd v Gorgevski [1992] FCA 209; (1992) 36 FCR 20 at 32. In my opinion, it is a factor which can also be taken into account for the purposes of determining what compensation is appropriate under s 545(1), where compensation is limited to the loss caused by the contravention.
Whilst the applicant’s evidence is that she felt defeated and humiliated particularly in relation to working long hours and not getting properly paid, it is apparent from her evidence that she did not become aware of the underpayments until close to the end of her employment. Moreover, she was aware of the Fair Work Ombudsman’s audit and the result of that audit.
Bearing in mind the warning posed by Mortimer J in Dafallah that the Court should be careful not to undermine the operation of the unfair dismissal provisions and the limits Parliament has placed on them, in my view an order for compensation is not appropriate in this case.
Conclusion
For the reasons set out above, I will make orders that the first respondent pay to the applicant the sum of $45,676.28 in relation to the underpayments.
The first respondent is also ordered to pay to the applicant by way of pecuniary penalty the sum of $23,100 for the contraventions identified above.
By reason of her involvement in the contraventions pursuant to s.550(1) of the Fair Work Act, the second respondent is ordered to pay to the applicant by way of pecuniary penalty the sum of $4,650.
By reason of his involvement in the contraventions pursuant to s.550(1) of the Fair Work Act, the third respondent is ordered to pay to the applicant by way of pecuniary penalty the sum of $4,650.
I certify that the preceding one hundred and forty-one (141) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 29 November, 2018.
Date: 29 November, 2018
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