Shop, Distributive and Allied Employees Association v Haridemos
[2021] FCCA 283
•24 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Shop, Distributive and Allied Employees Association v Haridemos [2021] FCCA 283
File number(s): SYG 1960 of 2020 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 24 February 2021 Catchwords: PRACTICE AND PROCEDURE – Industrial Law – application for default judgment based on statement of claim alleging contraventions of provisions of Fair Work Act2009 (Cth) – whether on the face of statement of claim applicant has established an entitlement for declaratory relief and relief for penalties – default judgment ordered. Legislation: Bankruptcy Act 1966 (Cth), s 153(1)
Fair Work Act 2009 (Cth), ss 44(1), 90(2), 119, 311, 323(1), 345, 535, 536, 539(2), Pts 2-8, 2-9, 4-1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch 3, Items 2, 3(1), Sch 11, Items 7(3), 8, Sch 16, Items 2, 16(1)
Federal Circuit Court Rules 2001 (Cth), rr 1.05, 13.03A(2)(b), 13.03B(2)
Federal Court Rules 1979 (Cth), O 35A, r 3(2)(c)
Franklins National Retail Enterprise Agreement 2008
Workplace Relations Act 1996 (Cth)
Long Service Leave Act 1955 (NSW)
Cases cited: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427
Australian Securities Commission v MacLeod & Ors (1994) 130 ALR 717
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Macquarie Bank Limited v Seagle [2005] FCA 1239
Macquarie Bank Limited v Seagle [2008] FCA 1417
Phonographic Performance Ltd v Maitra (1998) 41 IPR 225
Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626
Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227
Number of paragraphs: 44 Date of hearing: 11 February 2021 Place: Sydney Counsel for the Applicant: Mr D O’Sullivan, by telephone Solicitor for the Applicant: Taylor & Scott Lawyers The Respondent: No appearance by or on behalf of the respondent ORDERS
SYG 1960 of 2020 BETWEEN: SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES ASSOCIATION
Applicant
AND: ANDREW HARIDEMOS
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
24 FEBRUARY 2021
THE COURT DECLARES THAT:
1.The respondent was involved, within the meaning of s 550 of the Fair Work Act 2009 (Cth), in contraventions by Maitae Pty Ltd of Item 2(2) of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth):
(a)on 47 occasions by failing to pay superannuation contributions to “REST” on behalf of the following employees, in contravention of cl 3.10 of the Franklins National Retail Enterprise Agreement 2008:
(i)Cheryl Attard;
(ii)Shirley Ann Deane;
(iii)Leonie Elizabeth Degeus;
(iv)Marie Habib;
(v)Peter Harrop;
(vi)Deborah Lee Lasek; and
(vii)Tina Maree Martin
(b)on 5 occasions by failing to pay the following employees their accrued but untaken long service leave upon termination of their employment, in contravention of cl 6.11 of the Franklins National Retail Enterprise Agreement 2008:
(i)Cheryl Attard;
(ii)Marie Habib;
(iii)Tina Maree Martin
(iv)Leonie Elizabeth Degeus; and
(v)Deborah Lee Lasek
(c)on 2 occasions by failing to pay the following employees their accrued but untaken annual leave and annual leave loading upon termination of their employment, in contravention of cl 6.l(g) of the Franklins National Retail Enterprise Agreement 2008:
(i)Cheryl Attard; and
(ii)Marie Habib
(d)by failing to give Marie Habib either the Minimum Period of Notice of termination of her employment or pay her an amount in lieu of the Minimum Period of Notice, in contravention of cl 7.1 of the Franklins National Retail Enterprise Agreement 2008;
(e)by failing to pay Deborah Lee Lasek her wages for the period 18 to 24 April 2016, in contravention of cl 3.9 of the Franklins National Retail Enterprise Agreement 2008.
2.The respondent was involved, within the meaning of s 550 of the Fair Work Act 2009 (Cth):
(a)in contraventions by Maitae Pty Ltd of Item 2(2) of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) on 47 occasions between August 2015 and April 2016 by failing to pay superannuation contributions to “REST” on behalf of the following employees, in contravention of cl 3.10 of the Franklins National Retail Enterprise Agreement 2008:
(i)Cheryl Attard;
(ii)Shirley Ann Deane;
(iii)Leonie Elizabeth Degeus;
(iv)Marie Habib;
(v)Peter Harrop;
(vi)Deborah Lee Lasek; and
(vii)Tina Maree Martin
(b)in contraventions by Maitae Pty Ltd of s 323(1) of the Fair Work Act 2009 (Cth) on at least 47 occasions between December 2015 and April 2016, by failing to forward authorised payroll deductions for membership fees to the respective branch of the applicant on behalf of the following employees:
(i)Cheryl Attard;
(ii)Shirley Ann Deane;
(iii)Leonie Elizabeth Degeus;
(iv)Marie Habib;
(v)Peter Harrop;
(vi)Deborah Lee Lasek; and
(vii)Tina Maree Martin
(c)in contraventions by Maitae Pty Ltd of Item 2(2) of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), by failing to pay Deborah Lee Lasek her wages for the period 18 to 24 April 2016.
3.The respondent was involved, within the meaning of s 550 of the Fair Work Act 2009 (Cth), in contraventions by Maitae Pty Ltd of s 345 of the Fair Work Act 2009 (Cth) on more than 100 occasions between December 2015 and April 2016 by knowingly making false or misleading representations about the effect of the exercise of a workplace right by other persons, by documenting on the payslips of each of the employees that union fees were being remitted to the applicant, in circumstances where the fees were not being remitted to the applicant.
4.The respondent was involved, within the meaning of s 550 of the Fair Work Act 2009 (Cth), in contraventions by Maitae Pty Ltd of s 535(4) of the Fair Work Act 2009 (Cth) on 219 occasions by making employee records between August 2015 and April 2016 which he knew were false or misleading.
5.The respondent was involved, within the meaning of s 550 of the Fair Work Act 2009 (Cth), in contraventions by Maitae Pty Ltd of s 536(3) of the Fair Work Act 2009 (Cth) on 219 occasions between August 2015 and April 2016 by giving payslips which he knew were false or misleading.
6.The respondent was involved, within the meaning of s 550 of the Fair Work Act 2009 (Cth), in contraventions by Maitae Pty Ltd of s 90(2) of the Fair Work Act 2009 (Cth), and therefore of s 44(1) of that Act, twice by failing to pay the following employees their accrued but untaken annual leave and annual leave loading upon termination of their employment:
(a)Cheryl Attard; and
(b)Marie Habib.
THE COURT ORDERS THAT:
7.The respondent file and serve any affidavit evidence and/or submissions on the issue of penalty on which the respondent wishes to rely on or before 24 March 2021.
8.The applicant file and serve any submissions on the issue of penalty on which the applicant wishes to rely on or before 21 April 2021.
9.The matter is fixed for hearing for the determination of penalty at 2:15 pm on 27 April 2021.
10.The applicant serve a copy of these orders on the respondent within 7 days.
11.The parties have liberty to apply on 3 days’ notice.
REASONS FOR JUDGMENT
INTRODUCTION
The applicant (the Association) applies under r 13.03B(2) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) for default judgment against the respondent, Mr Haridemos, in a proceeding the Association has brought under the Fair Work Act 2009 (Cth) (FW Act). The Association claims a company of which Mr Haridemos was the controller (Maitae) contravened provisions of the Franklins National Retail Enterprise Agreement 2008 (Franklins Agreement), and that Mr Haridemos was involved in those contraventions.
Before I consider the application for default judgment, it will be useful to say something about how a contravention of a provision of the Franklins Agreement is capable of being remedied by action under the FW Act.
ENFORCEMENT OF FRANKLINS AGREEMENT UNDER FW ACT
The Franklins Agreement is a “workplace agreement”, and, more particularly, a “collective agreement”, that was made under the Workplace Relations Act 1996 (Cth) (WR Act). Under Item 2(3) of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (FW Transitional Act), a “workplace agreement” made under the WR Act is a “transitional instrument” and, under Item 2(5)(c) of Schedule 3 to the FW Transitional Act, a “collective agreement” that was made under the WR Act is a “collective agreement-based transitional instrument”. The consequences of the Franklins Agreement being a “collective agreement-based transitional instrument” include the following:
(a)The Franklins Agreement covers the same employees, employers, and any other persons that it would have covered if the WR Act had continued in operation.[1]
(b)If there is a transfer of a business from one employer to another employer as described in s 311(1) of the FW Act after the day on which the WR Act was repealed, and a connection between the old employer and the new employer to the effect referred to in s 311(1)(d) of the FW Act occurs, Pt 2-8 of the FW Act, as modified by Item 8 of Schedule 11 to the FW Transitional Act, applies in relation to the transfer.[2]
(c)Division 2 of Pt 2‑9 of the FW Act (which deals with payment of wages) applies, on and after the WR Act repeal day applies to the Franklins Agreement as if, among other things, a reference to an “enterprise agreement” included a reference to “an agreement‑based transitional instrument”.
(d)Under Item 2(2) of Schedule 16 to the FW Transitional Act, a person must not contravene a term of the Franklins Agreement that applies to that person.
(e)Part 4-1 of the FW Act (which deals with enforcement and compliance) applies as if, among other things, Item 2 of Schedule 16 to the FW Transitional Act were a provision of the FW Act, and the table in s 539(2) of the FW Act included the table that is specified in Item 16(1) of Schedule 16 to the FW Transitional Act.[3]
[1] FW Transitional Act, Schedule 3, Item 3(1)
[2] FW Transitional Act, Schedule 11, Item 7(3)
[3] FW Transitional Act, Schedule 16, Item 16(1)
RULE 13.03B(2)
Sub-rule 13.03B(2) of the FCC Rules applies to a respondent who “is in default”. Under r 13.03A(2) a respondent is in default if the respondent has not satisfied the applicant’s claims, and the respondent has failed to do one or more of the things identified in r 13.03A(2)(b) of the FCC Rules. The things identified in r 13.03A(2)(b) that are relevant to the application before me are the failure to give an address for service before the time for doing so has expired, the failure to file a response or defence before the time for doing so has expired, and the failure to defend the proceedings with due diligence. Also relevant is r 13.03C(2) of the FCC Rules which provides that the Court may make an order of the kind mentioned in r 13.03B(1), (2) or (4), if a party to a proceeding is absent from a hearing.
When a respondent is in default, or when a respondent is absent from a hearing, the Court may make one of the orders set out in r 13.03B(2) of the FCC Rules. Relevant to the application before me is r 13.03B(2)(c) which provides that the Court may:
if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings – give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant . . .
IS MR HARIDEMOS IN DEFAULT?
The Association commenced this proceeding on 19 August 2020 by filing an application and a statement of claim. The application stated that the matter was returnable at 9:30 am on 19 October 2020. The application and statement of claim were personally served on Mr Haridemos on 15 October 2020.[4] The matter came for directions before Judge Altobelli (as his Honour then was) on 19 October 2020, but Mr Haridemos did not appear. His Honour adjourned the matter for further directions at 9:30 am on 16 November 2020, but Mr Haridemos also did not appear at that time. On that day, Judge Altobelli set the matter down for hearing on 11 February 2021. By that time his Honour was appointed a justice of the Family Court of Australia so the matter was listed before me. Mr Haridemos did not appear.
[4] Affidavit of P Noonan 16.10.2020, [3]-[5]
The Association has filed evidence that satisfies me Mr Haridemos was notified of each of the listings on 19 October 2020, 16 November 2020, 4 February 2021, and 11 February 2021. Mr Haridemos has not filed any notice of address for service, nor has he filed any defence or response to the statement of claim. I am therefore satisfied Mr Haridemos is in default within the meaning of r 13.03A(2)(b) of the FCC Rules.
PRINCIPLES[5]
[5] I repeat here with substantial omissions what I said in Australasian Performing Right Association Limited v Escape Bar & Night Club Pty Limited & Anor [2017] FCCA 2690, at [13]-[23]
Rules 13.03A and 13.03B of the FCC Rules were adapted from, and are substantially similar to, the rules contained in O 35A of the now repealed Federal Court Rules 1979 (Cth) (old FC Rules); and r 13.03B(2)(c) of the FCC Rules is almost identical to O 35A r 3(2)(c).
Before O 35A was introduced into the old FC Rules in 2004, [6] the Federal Court could enter default judgment against a respondent only if an application for default judgment was supported by admissible evidence that proved the applicant’s claims for relief.[7] In Australian Securities Commission v MacLeod & Ors Drummond J described this limitation in the old FC Rules by reference to the rules of other courts which had as their source the rules of court of the English High Court after the passing of the Judicature Acts:[8]
This rule[[9]] (and other Federal Court Rules which permit the making of the same orders where a respondent is in default in complying with other procedural requirements, eg, O 11, r 23; O 15, r 16 and O 16, r 9) differs from provisions found in the rules of other courts which are derived from the post-Judicature Act rules of the English High Court. In certain classes of action, eg, where the plaintiff's claim was for a liquidated demand, the rules of other courts allowed the plaintiff to enter judgment by the ministerial act of a court official and without the intervention of the court; but the general rule empowered the entry of such judgment in default as the plaintiff appeared entitled to on his statement of claim. Initially there was some uncertainty as to whether on an application under English O 27, r 11 (the rule permitting judgment in default of defence), proof of the facts alleged in the statement of claim was required. It appears that late in the 1880s, a meeting of the judges resolved that, on such an application, the court should not receive evidence but should give judgment on the statement of claim alone: see Smith v Buchan (1888) 58 LT 710. From this time, it was firmly established that, on a motion for judgment in default, the plaintiff was not required (or entitled) to produce any evidence in support of the allegations in the statement of claim: see Young v Thomas [1892] 2 Ch 134, where Bowen LJ identified the justification for the practice: the defendant's failure to plead amounted to an admission of the facts in the statement of claim. The English practice thus proceeded on the basis that evidence was required on a motion for judgment in default of defence, but that that evidence was to be found, and found only, in the defendant's admission of the facts alleged in the statement of claim constituted by his failure to plead to them.
[6] By the Federal Court Amendment Rules 2004 (Cth) (No 4) – see Australian Competition and Consumer Commission v Dataline.Net.Au Pty Limited [2006] FCA 1427 at [40] (Kiefel J, as her Honour then was).
[7] Australian Securities Commission v MacLeod & Ors (1994) 130 ALR 717, at page 721: “An application for “judgment”, rather than for “an order”, pursuant to O 10, r 7(1)(b) is an application for final rather than interlocutory relief. It is therefore a proceeding which constitutes a “trial” within the meaning of that term in O 1, r 4. It follows that all facts must be proved by direct, as opposed to hearsay, evidence.”
[8] Australian Securities Commission v MacLeod & Ors (1994) 130 ALR 717, at pages 719-720
[9] O 10, r 7(1)(b) which provided that, where a respondent failed to comply with a court direction, any other party could move the Court on notice for judgment or an order against that party.
The purpose of the addition to the FC Rules of O 35A r 3(2)(c), therefore, was to include in the old FC Rules a rule to the effect that had been used in State and Territory courts for years that authorised the entry of default judgment on the assumption that the defaulting respondent has admitted the allegations of fact made in the statement of claim.[10]
[10] “Paragraph 3 (2) (c) is a new rule that has been used in State and Territory Supreme Courts for many years. . . . The relief that may be granted under the rule is not limited to a judgment for a debt of liquidated damages.” (Explanatory memorandum to Federal Court Amendment Rules 2004 (Cth) (No. 4))
There are a number of matters to note about r 13.03B(2)(c) of the FCC Rules.
(a)First, and consistently with the purpose for which O 35A r 3(2)(c) was introduced into the old FC Rules, r 13.03B(2)(c) “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[11]
(b)Second, before the Court may make an order under r 13.03B(2)(c) of the FCC Rules it must be satisfied that the document which the applicant has filed with the application is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.[12]
(c)Third, it follows from (b) that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[13]
(d)Fourth, although r 13.03B(2)(c) of the FCC Rules does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought. That point was made by Lord Woolf MR in Phonographic Performance Ltd v Maitra.[14]
(e)Finally, the Court retains a discretion not to make an order under r 13.03B(2)(c) of the FCC Rules even if the preconditions for making an order are satisfied.[15]
[11] Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626, at [9] (Gordon J)
[12] Under r 1.05 of the FCC Rules, the rules of the Federal Court Rules 2011 (Cth) (FC Rules) identified in Pt 2 of Schedule 3 to the FCC Rules apply, with necessary changes, to general federal law proceedings. The FC Rules there identified include the rules of pleading.
[13] Macquarie Bank Limited v Seagle [2005] FCA 1239, at [24] (Conti J); Macquarie Bank Limited v Seagle [2008] FCA 1417, at [20] (Jagot J)
[14] Phonographic Performance Ltd v Maitra (1998) 41 IPR 225, at page 230
[15] See the authorities decided under the old FC Rules referred to by Flick J in Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227, at [20]
THE ASSOCIATION’S PLEADED CASE AND CLAIM FOR RELIEF
In its statement of claim the Association alleges the following.
Application of Franklins Agreement or Maitae
The Association is an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth), an “industrial association” within the meaning of the FW Act, and an employee organisation covered by the Franklins Agreement.
The Franklins Agreement is a “collective agreement-based transitional instrument” within the meaning of Item 2 of Schedule 3 to the FW Transitional Act and, therefore, operates “as an Enterprise Agreement for the purposes of the FW Act”.[16]
[16] Statement of claim, [2]
Until about 5 August 2012 Franklins Pty Ltd (Franklins) operated a supermarket at Wetherill Park (Supermarket business) where it employed persons that included Ms Attard, Ms Deane, Ms Degeus, Ms Habib, Mr Harrop, Ms Lasek, and Ms Martin (Employees).[17]
[17] Statement of claim, [14]
On about 5 August 2012 there was a transfer of the Supermarket business, within the meaning of s 311 of the FW Act, from Franklins to Maitae, as a consequence of which the Employees’ entitlements under the Franklins Agreement were transferred to Maitae such that each had continuous service with Maitae from the time they commenced employment with Franklins until the termination of their employment with Maitae.[18]
[18] Statement of claim, [4]
Position and role of Mr Haridemos
At all material times Mr Haridemos was the sole director and secretary of Maitae. He was responsible for the overall management and operation of Maitae, including setting and paying wages to its employees, and the keeping of records in relation to Maitae’s employment of persons and payment of wages.[19]
[19] Statement of claim, [9]
Employment of Employees
Ms Attard commenced her employment with Franklins on about 11 January 1995. Ms Attard was a “Grade 2 Team Member” pursuant to cl 3.2 of the Franklins Agreement. She resigned from her employment with Maitae on about 15 April 2016. At the time she resigned Ms Attard was a “Part Time Employee” pursuant to cl 2.4 of the Franklins Agreement working 13 hours per week.[20]
[20] Statement of claim, [21]-[24]
Ms Deane commenced her employment with Franklins in about 1993. Ms Deane was a “Grade 3 Team Member” pursuant to cl 3.3 of the Franklins Agreement. She resigned from her employment with Maitae in about February 2016. At the time she resigned Ms Deane was a “Full Time Employee” pursuant to cl 2.3 of the Franklins Agreement working 38 hours per week.[21]
[21] Statement of claim, [25]-[28]
Ms Degeus commenced her employment with Franklins in about May 2008. Ms Degeus was a “Grade 2 Team Member” pursuant to cl 3.2 of the Franklins Agreement. Her employment with Maitae was terminated on about 23 April 2016. At the time of her termination Ms Degeus was a “Casual Employee” pursuant to cl 2.5 of the Franklins Agreement working 27.5 hours per week.[22]
[22] Statement of claim, [29]-[31]
Ms Habib commenced her employment with Franklins in about February 1986. Ms Habib was a “Grade 3 Team Member” pursuant to cl 3.3 of the Franklins Agreement. Her employment with Maitae was terminated on about 23 April 2016. At the time of her termination Ms Habib was a “Part Time Employee” pursuant to cl 2.4 of the Franklins Agreement working 28 hours per week.[23]
[23] Statement of claim, [32]-[34]
Mr Harrop commenced his employment with Franklins in about June 2007. Mr Harrop was a “Grade 2 Team Member” pursuant to cl 3.2 of the Franklins Agreement. He resigned from his employment with Maitae on about 3 April 2016. At the time he resigned Mr Harrop was a “Casual Employee” pursuant to cl 2.5 of the Franklins Agreement.[24]
[24] Statement of claim, [35]-[38]
Ms Lasek commenced her employment with Franklins on about 31 May 2000. Ms Lasek was as a “Grade 2 Team Member” pursuant to cl 3.2 of the Franklins Agreement. Her employment with Maitae was terminated on about 23 April 2016. At the time of her termination Ms Lasek was a “Casual Employee” pursuant to cl 2.5 of the Franklins Agreement.[25]
[25] Statement of claim, [39]-[41]
Ms Martin commenced her employment with Franklins in about May 2008. Ms Martin was as a “Grade 2 Team Member” pursuant to cl 3.2 of the Franklins Agreement. Her employment with Maitae was terminated on about 23 April 2016. At the time of her termination Ms Lasek was a “Casual Employee” pursuant to cl 2.5 of the Franklins Agreement.[26]
[26] Statement of claim, [42]-[44]
Failure to pay superannuation
Paragraph (c) of cl 3.10 of the Franklins Agreement provided that Franklins would contribute monthly to “REST” on behalf of each “eligible team member” at 9% (or any higher amount that may be legislated) of the “Team Member’s ordinary time earnings (and any hours worked as Flex Up and Approved Additional Hours”.[27]
[27] Statement of claim, [60]
Maitae failed to make superannuation contributions to each of the Employees during the period and in the amounts identified in the following table:[28]
[28] Statement of claim, [61]-[67]
Employee Period not paid Payments not made Amount Ms Attard 31.08.2015-15.04.2016 7 $799.59 Ms Deane 31.08.2015-16.02.2016 5 $1,725.12 Ms Degeus 31.08.2015-23.04.2016 28 $2,143.30 Ms Habib 31.08.2015-23.04.2016 28 $1,800.64 Mr Harrop 31.08.2015-3.04.2016 7 $1,346.36 Ms Lasek 31.08.2015-23.04.2016 28 $1,206.56 Ms Martin 31.08.2015-23.04.2016 28 $2,139.86
By reason of these matters Maitae “contravened section 323(1) of the FW Act and item 34 of Schedule 3 of” the FW Transitional Act “on at least 47 occasions”.[29]
[29] Statement of claim, [68]
Keeping records and providing payslips containing false information
During the period in which Maitae failed to make the superannuation payments, Maitae issued to each of the Employees payslips that represented that Maitae had made superannuation payments to “REST”. Those representations were false or misleading to the knowledge of Maitae and, by issuing each payslip with such information, Maitae:
(a)made or kept a record for the purposes of s 535 of the FW Act which it knew was false or misleading, thus contravening s 535(4) of the FW Act on at least 219 occasions; and
(b)gave a payslip for the purposes of s 536 of the FW Act which it knew was false or misleading, thus contravening s 536(3) of the FW Act on at least 219 occasions.[30]
[30] Statement of claim, [69]-[74]
Failure to pay union fees
Each of the Employees authorised Maitae to deduct from his or her wages an amount to pay union fees associated with his or her membership of the Association. For the periods stated in the following table, Maitae issued weekly payslips that represented that deductions had been made from wages to pay union fees each Employee owed the Association in the amounts stated in the table:[31]
[31] Statement of claim, [75]-[89]
Employee Period payslips issued Amount Ms Attard 28.12.2015-15.04.2016 $108.80 Ms Deane 28.12.2015-16.02.2016 $66.50 Ms Degeus 28.12.2015-23.04.2016 $161.50 Ms Habib 28.12.2015-23.04.2016 $161.50 Mr Harrop 28.12.2015-3.04.2016 $84.30 Ms Lasek 28.12.2015-23.04.2016 $97.60 Ms Martin 28.12.2015-23.04.2016 $139.80 TOTAL $820.00
Maitae, however, did not pay to the Association any of the amounts it represented in the payslips it issued to the Employees as deductions for union fees.[32] Those representations, therefore, were false or misleading to the knowledge of Maitae and, by issuing each payslip conveying such representation, Maitae:
(a)made or kept a record for the purposes of s 535 of the FW Act which it knew was false or misleading, thus contravening s 535(4), or in the alternative, s 345, of the FW Act on at least 219 occasions; and
(b)gave a payslip for the purposes of s 536 of the FW Act which it knew was false or misleading, thus contravening s 536(3), or in the alternative, of the FW Act on at least 219 occasions.[33]
[32] Statement of claim, [84]
[33] Statement of claim, [85]-[86]
Further, by deducting the amounts purportedly for union fees, but not paying the Association the amounts it deducted, Maitae contravened s 323(1) of the FW Act on at least 47 occasions.[34]
[34] Statement of claim, [90]
Failure to pay long service leave on termination
Pursuant to cl 6.11(a) of the Franklins Agreement each of Ms Attard, Ms Habib, Ms Martin, Ms Degeus, and Ms Lasek (LSL Employees), were entitled to be paid their accrued long service leave subject to, and in accordance with, relevant State legislation.[35] The relevant State legislation was the Long Service Leave Act 1955 (NSW) (LSL Act); and pursuant to s 4 of the LSL Act each of the LSL Employees, having completed more than five years’ service, was entitled to be paid accrued long service leave on the termination of their employment with Maitae as follows: [36]
Employee Amount
Ms Attard $4,651.54
Ms Habib $10,035.40
Ms Martin $4,341.06
Ms Degeus $4,588.13
Ms Lasek $4,547.49
[35] Statement of claim, [92]
[36] Statement of claim, [93]-[99]
On the termination of their employment Maitae did not pay to any of the LSL Employees any amount in relation to the long service leave they had accrued by the time their employment was terminated. Maitae, therefore, contravened Item 2 of Schedule 16 to the FW Transitional Act.[37]
[37] Statement of claim, [102]
Failure to pay annual leave on termination of employment
Under s 90(2) of the FW Act, Maitae was required to pay Ms Attard and Ms Habib accrued but untaken annual leave at the time their employment was terminated; and under cl 6.1(f) and (g) of the Franklins Agreement Maitae was required to pay to each of Ms Attard and Ms Habib an annual leave loading of 17.5% that had accrued up to each of Ms Attard’s and Ms Habib’s last anniversary of employment. At the day Ms Attard’s employment with Maitae was terminated, she had accrued annual leave, including the 17.5% loading, of $1,157.70, but Maitae has not paid this amount to Ms Attar; and at the time Ms Habib’s employment with Maitae was terminated, she had accrued annual leave, including the 17.5% loading, of $2,275.96 but Maitae has not paid this amount to Ms Habib. By failing to make these payments, Maitae contravened s 44 of the FW Act and Item 2 of Schedule 16 to the FW Transitional Act.[38]
[38] Statement of claim, [103]-[113]
Failure to provide payment in lieu of notice
Pursuant to cl 7.1 of the Franklins Agreement Maitae was required to provide to Ms Habib either five weeks’ notice of the termination of her employment or payment in lieu of notice. On termination of Ms Habib’s employment, Maitae did not give written notice to Ms Habib and it did not pay to her money in lieu, such amount being $2,787.52. By failing to give notice or to pay $2,787.52 to Ms Habib, Maitae contravened Item 2 of Schedule 16 to the FW Transitional Act.[39]
[39] Statement of claim, [114]-[118]
Failure to pay redundancy
On 23 April 2016 Ms Habib “was made redundant for the purposes of Clause 7.5(a) of the Franklins Agreement”, and for the purposes of s 119 of the FW Act. As a consequence Ms Habib was entitled to be paid $11,150.38 on termination of her employment but, in contravention of Item 2 of Schedule 16 to the FW Transitional Act, Maitae did not do so.[40]
[40] Statement of claim, [119]-[124]
Failure to pay wages
Ms Lasek worked 14 hours in the final week of her employment with Maitae for which, under cl 3.9 of the Franklins Agreement, she became entitled to be page wages of $337.81. In contravention of Item 2 of Schedule 16 to the FW Transitional Act Maitae failed to pay Ms Lasek her wages of $337.81.[41]
[41] Statement of claim, [125]-[130]
Mr Haridemos’ involvement in contraventions
Mr Haridemos was responsible for:
(a)regularly attending the Supermarket business and providing instructions to, and training, Maitae’s employees;
(b)the overall management and supervision of Maitae’s operations in relation to setting pay rates, wages, and conditions of Maitae’s employees;
(c)making decisions on behalf of Maitae about the terms and conditions on which persons would be employed by Maitae, the work to be performed, and the time, method, and manner of payment to employees;
(d)ensuring Maitae complied with relevant legislation and industrial instruments; and
(e)making and keeping employment records on behalf of Maitae.
Further, in relation to each Employee, Mr Haridemos engaged him or her, made decisions about his or her pay, the duties he or she would perform, and produced and issued payslips, Mr Haridemos also knew that each Employee was an employee of Maitae, knew the hours each Employee worked, the duties each Employee performed, and the amounts paid to each Employee. Further, Mr Haridemos knew that the Franklins Agreement covered and applied to Maitae and the Employees. Because of these matters, Mr Haridemos was involved in each of Maitae’s contraventions of Item 2 of Schedule 16 to the FW Transitional Act, and of s 44(1), s 90(2), s 323(1), s 345, s 535(4), and s 536(3) of the FW Act.
Relief sought
In its statement of claim the Association seeks declarations recording the contravening conduct alleged in the statement of claim and that such conduct constituted contraventions of Item 2 of Schedule 16 to the FW Transitional Act, and of s 44(1), s 90(2), s 323(1), s 345, s 535(4), and s 536(3) of the FW Act, orders for compensation, and the payment of pecuniary penalties. The Association, however, no longer seeks orders for compensation.
SHOULD RELIEF BE GRANTED?
Before I consider this question, it is necessary to consider the significance, if any, of Mr Haridemos having been made bankrupt on 20 December 2016, and his having been discharged from bankruptcy on 21 December 2019.[42] More particularly, it is necessary to consider whether s 153(1) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) is a bar to the Association seeking orders for the payment of pecuniary penalties.
[42] Affidavit of T McCauley 16.10.2020, annexure TM2
Sub-section 153(1) of the Bankruptcy Act provides that where a bankrupt is discharged from bankruptcy, the discharge operates to discharge the bankrupt “from all debts . . . provable in the bankruptcy”. The debts that are provable in bankruptcy are those identified in s 82(1) of the Bankruptcy Act. That sub-section, however, is subject to exceptions. Relevant to the proceeding before me is s 82(3) which provides that “[p]enalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy”. As correctly submitted by the Association, it has been held that a pecuniary penalty imposed under s 546 of the FW Act falls within s 82(3) of the Bankruptcy Act.[43] Thus, Mr Haridemos’ bankruptcy, and his discharge from bankruptcy, does not prevent my making the orders the Association seeks.
[43] See, for example, Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557, at [386]: “The Court is not precluded from making an order against Rosario for the payment of a pecuniary penalty as penalties or fines imposed by courts are not provable debts in bankruptcy: Bankruptcy Act, s 82(3).”
Save for one alleged contravention, I am satisfied the statement of claim pleads facts that, if established at trial, would demonstrate that:
(a)Maitae contravened the provisions of the Franklins Agreement the statement of claim alleges it contravened, and, consequently, contravened Item 2 of Schedule 16 to the FW Transitional Act;
(b)Maitae has contravened s 44(1), s 90(2), s 323(1), s 345, s 535(4), and s 536(3) of the FW Act; and
(c)Mr Haridemos was involved in each of Maitae’s contraventions in (a) and (b).
The exception relates to the allegation that Ms Habib had been made redundant. I am not satisfied the statement of claim pleads facts that show Ms Habib had been made redundant.
DISPOSITION
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 24 February 2021
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