Thompson v Arbias Limited
[2020] FCCA 2829
•20 October 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| THOMPSON v ARBIAS LIMITED | [2020] FCCA 2829 |
| Catchwords: INDUSTRIAL LAW – Classification of employee’s position under Pre-modern award and Modern award – where Remuneration Order issued during period of employees absence on extended leave – where Pre-modern award applied within the State of Victoria – where Modern award and Remuneration Order applied to all employees throughout Australia whom it covered – where employer believed it had continued to pay employees under Pre-modern award – where issue arose as to application of Modern award and Remuneration Order – where employer undertook investigation and a process that it considered necessary to effect transition from Pre-modern award to Modern award – applicable principles – question of fact to be resolved including upon consideration of the position to which a person is appointed and work undertaken by them – principle of major and substantial employment – mutual understanding of the parties – quantity the time spent on particular duties – quality of the different types of work – evaluation of relevant factors to be undertaken by adopting a practical common sense approach – classification of applicant’s different roles. INDUSTRIAL LAW – Progression of employee’s position under Modern award between pay points within designated Levels of position – proper construction of Modern award – applicable principles – disputed clause governs eligibility for progression from pay point – question of entitlement provided for separately and governed by other provisions of award. INDUSTRIAL LAW – Adverse action – workplace right constituted by entitlement to benefits under remuneration order and right to make enquiry respecting employment – where remuneration order covers and applies to employee and employer – proscription from taking adverse action because employee has, or has exercised, workplace right – adverse action established – whether adverse action taken because employee had, or had exercised, such workplace rights – allegations made that invoke statutory onus – whether onus displaced by respondent’s evidence – applicable principles – whether substantial and operative reason for employers action was because employee had, or proposed to exercise, a workplace right – contravention not established. |
| INDUSTRIAL LAW – Payment obligations – obligation under remuneration order to pay entitlements weekly or fortnightly – whether obligation engaged by reference to the accrual of the entitlement or by reference to the calculation of the entitlement by the employer – obligation engaged upon accrual – where minimum wage entitlement revised annually by Fair Work Commission. INDUSTRIAL LAW – Employee records – Pay slips – obligation in s 535(1) to make and keep for seven years Employee records of the kind that are prescribed by the regulations – whether Pay slips are Employee records – proper construction of regulations – obligations carrying civil penalty consequences – Pay slips not Employee records – breach of reg 3.42 not established. |
| Legislation: Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), cl. 2, Sch, 4, 9, 10 Fair Work Act 2009 (Cth), ss. 12, 13, 14, 15, 43, 44, 45, 46, 47, 48, 303, 304, 305, 335, 336, 340, 341, 342, 360, 361, 535, 536, 539, 545, 546, 547, 557A, 557B, Privacy Act 1988 (Cth), s. 6 Social and Community Services - Victoria - award 2000, cll. 3, 4, 8, 10, 11, 12, 13, 14, 15, 16, 17, 17.5.3, 18, 20, 22, 26, 27, 32, 33, 34, 35, 35.5, 36 Social, Community and Disability Services Industry Equal Remuneration Order 2012, PR525485, cll. 2.1, 2.2, 3, 4.1, 5, 5.1, 5.3, 5.4, 5.5, 5.6, 6.1, 6.2, 7 |
| Cases cited: Amcor Limited v Construction, Forestry, Mining & Energy Union and Others(2005) 222 CLR 241 Federated Engine Drivers and Firemen’s Association of Australasia v Maffra Co-operative Milk Products Co Ltd (1940) 42 CAR 836 Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87 FWC Determination PR536765 |
| Applicant: | JEFFREY JOHN THOMPSON |
| Respondent: | ARBIAS LIMITED (ACN 114 914 804) |
| File Number: | MLG 783 of 2019 |
| Judgment of: | Judge A. Kelly |
| Hearing date: | 3-4 June 2020 |
| Date of Last Submissions: | 4 June 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 20 October 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr A. White |
| Solicitors for the Applicant: | Maurice Blackburn |
| Counsel for the Respondent: | Mr B.G.L. Shaw |
| Solicitors for the Respondent: | Dwyer & Co Legal |
ORDERS
The questions posed for determination be answered as follows:
Ques 1:What was the proper classification of the Community Support Worker position in which the applicant was employed by the respondent between 18 March 2013 and 12 January 2014?
Answer:Subject to the issue of progression as raised by Question 3, the Community Support Worker position in which the applicant was employed by the respondent in the period 18 March 2013 and 12 January 2014 was properly classified as falling within the position of a Social and community services employee, Level 4, pay point 1, as defined by Pt B.4 in schedule B to the Social, Community, Home Care and Disability Services Industry award 2010 (Modern award).
Ques 2:What was the proper classification of the Case Manager position in which the applicant was employed by the respondent between 13 January 2014 and 28 April 2017?
Answer:Subject to the issue of progression as raised by Question 3, the Case Manager position in which the applicant was employed by the respondent was properly classified as falling within the position of a Social and community services employee, as defined by Pt B.5 in Sch B to the Modern Award and was classified in the period:
(a)15 January 2014 to 14 January 2015, at Level 5, pay point 1;
(b)15 January 2015 to 28 April 2017, at Level 5, pay point 3.
Ques 3:What was the proper construction of cl 13.3(a) of the Modern award?
Answer:On its proper construction, cl 13.3(a) of the Modern award governs and provides criteria for the eligibility of employees to progression as that term is employed in the Modern award. The entitlement to progression between pay points is governed by cl 13.3(b) of the Modern award.
Ques 4:By purporting to classify the applicant’s position as Community Services Employee Level 4, pay point 2 under the Modern award in about March 2016, did the respondent take adverse action against the applicant?
Answer: Yes.
Ques 5:If the answer to 4 is ‘yes’, did the respondent take adverse action against the applicant for reasons that did not include because he:
(a)had an entitlement to remuneration under the Equal Remuneration Order (ERO);
(b)inquired or made a complaint about his entitlement to remuneration under the ERO?
Answer:Arbias did not take the action complained of by Mr Thompson because of the workplace rights which he had or proposed to exercise.
Ques 6:Does cl 7 of the ERO require an employer to pay entitlements under the ERO “weekly or fortnightly” by reference to the accrual of the entitlement or by reference to the calculation of the entitlement by the employer?
Answer: Clause 7 of the Remuneration Order obliges an employer to pay entitlements under that Order ‘weekly or fortnightly’ in the manner provided upon the accrual of the relevant entitlement.
Ques 7:Did the applicant request copies of his employee records on 3 February 2020 or 4 March 2020 in accordance with regulation 3.42 of the Fair Work Regulations 2009 (Cth)?
Answer: Yes, however, Pay slips are not Employee records within the meaning of regulation 3.42 of the Fair Work Regulations 2009 (Cth).
Ques 8:If the answer to 7 is yes, did the respondent satisfy the obligation to provide employee records in accordance with any request by providing pay summaries for the periods 10 January 2011 to 6 July 2016 and 4 July 2016 to 6 December 20I6 before March 2020?
Answer: It has not been established that the respondent failed to copy or make available Employee records in the manner provided by regulation 3.42 of the Fair Work Regulations 2009 (Cth).
The proceeding be listed for directions at 10.00am on Monday, 23 November 2020.
On or before 4:00pm on Monday, 16 November 2020, the parties confer and file a joint minute of:
(a)proposed orders and declarations giving effect to these reasons;
(b)proposed directions in relation to the future conduct of the proceeding, addressing all issues arising on the final determination of the proceeding;
(c)a timetable for the filing and service of any further evidence and submissions.
The proceeding be listed for further hearing at 10.00am on Tuesday, 9 February 2020 (on an estimate of not more than 3 days).
Costs reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 783 of 2019
| JEFFREY JOHN THOMPSON |
Applicant
And
| ARBIAS LIMITED (ACN 114 914 804) |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for judgment explain my conclusions respecting liability, including upon a series of questions agreed by the parties arising for determination from alleged contraventions of the Fair Work Act 2009 (Cth) (Act). Each of the parties provides service in a sector dedicated to supporting persons who are affected by acquired brain injuries.
The substantive issues raised in the proceeding involve the operation of the Social and Community Services - Victoria - award 2000 (Pre-modern award), the Social, Community, Home Care and Disability Services Industry award 2010 (Modern award) and an industrial instrument styled the Social, Community and Disability Services Industry Equal Remuneration Order 2012, PR525485, (Remuneration Order).
In the course of the proceeding, including the parties’ pleadings, evidence and submissions, the Pre-modern award was often referred to as the SACS award while the Modern award was referred to as the new modern award or SCHADS award (and SCHCADSIA award). In an attempt to retain a sense of consistency and for ease of reference, these reasons largely employ the terms, Pre-modern award and Modern award.
The parties are in contest in relation to the applicant’s (Mr Thompson) ordinary rates of pay which in turn involves issues of award classification together with his appointment to particular roles from time to time, and whether he was automatically entitled under the Modern award to progression to a new role and, in turn, to progress annually from what was described as one ‘pay point’ to another, higher, ‘pay point’. Mr Thompson alleges that the respondent (Arbias) has failed to pay him his proper entitlements and thereby contravened certain provisions of the Act. Related allegations are also made that Arbias contravened the Fair Work Regulations 2009 (Cth) (regulations).[1]
[1] It appears that the issues raised in this proceeding are also raised in other proceedings in this court; those other proceedings having been adjourned pending the hearing and determination of this matter.
By way of overview, it was common ground that Arbias[2] had neglected to apply the Remuneration Order to the proper calculation of certain employees’ wages in Victoria, including Mr Thompson, from its commencement on 1 July 2012 until March 2016. Mr Thompson’s case is that Arbias had, upon learning that its employees were entitled to the benefit of the Remuneration Order, retrospectively and improperly reclassified his position to a lower pay grade under the Modern award so as to avoid the full extent of its obligations to him.
[2] Arbias often referred to itself, including in internal and external documents, as ‘arbias’.
Arbias conceded that there had initially been error in the adoption of an erroneous assumption that the Remuneration Order did not apply in Victoria and contended that, once identified, the error had been immediately rectified, and any shortfall had been remedied by the retrospective payment of entitlements. Arbias contended that during the process of rectifying the error, Mr Thompson’s position had been correctly reclassified and that he had been paid in accordance with the applicable provisions of the awards and Remuneration Order.
Although the underlying issues were not immediately exposed, the essential factual issues that underpinned the parties’ dispute were whether Mr Thompson’s role had been properly classified and whether Arbias had in fact paid him his entitlements as prescribed by the Modern award (as opposed to the Pre-modern award), including whether he had been automatically entitled to a progression of his pay entitlements from any 12 month period to the next.
For the reasons that follow, I have concluded that Mr Thompson was properly classified and, until March 2016, paid, under the Modern award at the rates applicable to the position of an employee at Level 4, pay point 1, then at Level 5, pay point 1, and finally at pay point 3. Further, he was not entitled to progression to higher pay points in the manner for which he contended. At first sight, this suggests that, apart from the non-payment of entitlements under the Remuneration Order, there were no underpayments of award entitlements in the period prior to March 2016. However, the parties submitted that they were agreed as to the applicable remuneration and these are issues which remain for them to explore. Relatedly, I conclude that under cl 7 of the Remuneration Order, Arbias was obliged to pay Mr Thompson weekly or fortnightly upon the accrual of his entitlements under that Order. As to adverse action, which essentially turned upon the manner in which Arbias conducted an investigation and at that time determined Mr Thompson’s role was properly classified under the Modern award at Level 4, not Level 5, I have concluded that the claim is not made out. Finally, I have found that the claim respecting production of payment records was not made out.
Background
The parties were agreed upon much of the background.
Mr Thompson was employed by Arbias to provide support by way of community services to persons affected by alcohol, drug related and/or mental health issues. Arbias is in the business of providing specialised services for people with alcohol and substance-related acquired brain injuries. A notable feature of the proceeding is that from the evidence given before me it was plain the parties held one another in relatively high regard. Both in its pleadings, evidence and submissions, Arbias adopted the consistent position that Mr Thompson was very good at his job and demonstrated competence and satisfactory performance by virtue of which he progressed from the position of Community Support Worker to the position of Case Manager.
On 10 January 2011, Mr Thompson commenced his employment with Arbias in the position of a Community Support Worker. Upon the terms contained in an offer dated 6 January 2011, upon commencement, Mr Thompson was to be paid an annual salary of $41,456.48 said to be “SACS award Level 4, Year 1”. The terms and conditions of employment were said to be “in accordance with the Social and Community Services-Victoria-award 2000”. It was not in any real dispute that the acronym SACS was a reference to the Pre-modern award.
The Community Support Worker position was the subject of a written position description. Although Mr Thompson considered this position description lacked detail, he accepted that it was otherwise accurate. Arbias provided its clients with three streams of community support: (1) outreach, which provided flexible support; (2) accommodation services for those living at Arbias’ supported living accommodation; and, (3) a community programs service. From at least as early as 2013, Mr Thompson worked exclusively as an outreach worker with clients living in the community who were affected by alcohol or drug related brain injuries, including those who had been imprisoned or were facing prosecution and possible terms of imprisonment. As an outreach worker, Mr Thompson assisted clients with daily living by monitoring their needs and connecting them with relevant services as required.
From about June 2012, Mr Thompson took unpaid leave of absence from employment with Arbias until he resumed that employ in March 2013.
On 1 July 2012, while Mr Thompson was on leave, the Remuneration Order came into operation. Its effect was to increase the minimum wage entitlements for employees of certain classifications under the Modern award, doing so by increasing the base rate and including annual increments over a period of nine years.
Arbias’ case was that at this time, it was acting on the advice of its then Chief Financial Officer, Mr West. It had applied the Remuneration Order requirements in New South Wales, but not Victoria, and that it had done so on the basis of advice given by that Chief Financial Officer to Arbias’ management that the Remuneration Order did not apply in Victoria.
On 18 March 2013, Mr Thompson returned to full-time employment with Arbias. As he contends, the alleged underpayments under the Remuneration Order can be traced to this date.
In about December 2013, Mr Thompson was approved for promotion from the position of Community Support Worker to the position of Case Manager. He commenced work in his new position on 13 January 2014, on a starting salary of $49,878.40 per annum, which was precisely the remuneration payable to a Community Services employee Level 5, pay point 1, under the Modern award.
The Case Manager position was also the subject of a written position description and again, while Mr Thompson considered that this position description also lacked detail, he accepted that it was otherwise accurate. In general terms, Case Managers at Arbias were responsible for clients with more acute and complex needs, often having to provide services in a time of crisis such as homelessness, heavy substance abuse and/or risk of death. The goal of the Case Manager was to help a client reach a stage of independence where they no longer required case management. At that point, the client could be transferred to an outreach worker.
By reason of annual determinations of the Fair Work Commission which varied the minimum wage tables in the Modern award, Mr Thompson’s rate of pay increased in each year of his employment with Arbias.
Additionally, in January 2015, Mr Thompson’s received a salary increase in the Case Manager position to $53,700.40. This was precisely the remuneration payable under the Modern award to a Community Services Employee, Level 5, pay point 3.
It was common ground that throughout his employment with Arbias, Mr Thompson demonstrated competence and satisfactory performance in relation to his duties in both the Community Support Worker position and the Case Manager position. It is also common ground that Arbias did not set formal performance objectives or conduct systematic performance reviews of its employees’ performance.
Late in 2015, Arbias’ workforce questioned whether they were being paid in accordance with the Remuneration Order and, with the support of the Australian Municipal, Administrative, Clerical and Services Union (ASU), pressed for their entitlements under that Remuneration Order.
By emails sent in late December 2015, Arbias advised Mr Thompson of its understanding that, under the Modern award, his Case Manager position was classified as a Community Services Employee Level 5, pay point 3. Contextually, the job descriptions under the Pre-modern award and the Modern award were not identical and employed fundamentally different modes of employee entitlements. In general, the Pre-modern award entitlements were framed upon years of service, while the Modern award shifted to entitlements based upon recognised skill.
It was Arbias’ case that in about November 2015, it began investigating its obligations under the Remuneration Order and as a consequence of that investigation it implemented a process which it described as not being “a reclassification but a transition from the classification” under the Pre-modern award to the Modern award, a process which it had also described at that time as being one of ‘alignment’. Arbias contended that at the time of transition from the Pre-modern award to the Modern award, it had reviewed pay levels for all staff and then applied two increments or “pay points” above the direct comparison transfer and that it did so, so as to ensure that its staff were not disadvantaged.
Arbias contended that in early 2016, it became aware that it should have applied the Remuneration Order to its employees in Victoria. This came about in essentially three stages: (1) as a result of queries from staff; (2) this caused Arbias’ management to enquire of the office of the Fair Work Ombudsman; and; (3) Arbias’ management then enquired of its external industrial relations adviser and counsel, as to the correct legal situation in respect of the Remuneration Order. On being advised that the Remuneration Order should have been applied to its Victorian employees, Arbias immediately notified its employees of this and that it would promptly take steps to implement the Remuneration Order.
Arbias also undertook a process of effecting retrospective payments to employees which it considered to be payable, including to Mr Thompson, with back pay, based upon its reconciliation of the difference in their entitlements, calculated as being the difference between such entitlements under the Pre-modern award and the Modern award.
On 27 March 2016, Arbias paid Mr Thompson a sum of $823.38 said to represent his entitlement to back pay arising out of its reconciliation of those entitlements. From a document entitled “Remuneration Order back payment reconciliation”, it appeared that Arbias had calculated the back payment on the basis that Mr Thompson’s Case Manager position had been classified as Level 4, pay point 2. Further, consistently with that reconciliation, from 13 March 2016, Mr Thompson was paid under the Modern award at a rate commensurate with a Community Services employee Level 4, pay point 2.
Mr Thompson claimed that in purporting to reclassify the Case Manager position to a Level 4, pay point 2, Arbias did not meet or consult with him. Accepting that to be so, the non-occurrence of consultation is to be seen in the context that Arbias made an open offer to consult with each and any employee who sought to be consulted during this process.
Mr Thompson continued to be paid under the Modern award at a rate commensurate with Level 4, pay point 2 until his employment with Arbias ended on 28 April 2017.
Mr Thompson’s case was that however it might be described, the process as undertaken by Arbias in early 2016 had the net effect of him being re-classified as a “Social and community services employee”, when he had been promoted to the role of Case Manager and which, as he contends, carried an entitlement to remuneration, under the Modern award, not at the rate for Level 4, pay point 2 but at the rate for Level 5, pay point 3.
Arbias submits that it paid Mr Thompson above the Modern award rate of Level 4 pay point 3 but not as a Level 5 employee. It submitted that whilst there had been an error in its application of the Remuneration Order, such error had been rectified with the result that Mr Thompson was correctly classified and paid in accordance with the Act, both on an ongoing basis during his employment and that appropriate back pay was made to ensure that there was no underpayment that remained at the time of the cessation of his employment. In this context, it was Arbias’ position that Mr Thompson’s competence and performance were key reasons why he was paid at a rate above the exact rate for his position initially as set out in the Pre-modern award and the Modern award.
Procedural history
On 19 March 2019, Mr Thompson commenced this proceeding by filing in the Court’s Fair Work Division an application, Form 4 and statement of claim, seeking declaratory relief, compensation, interest and penalties.
By order made on 3 May 2019, the parties were agreed in directions which provided for a trial, the interlocutory steps required for the matter to be made ready for trial and a mediation. On 20 August 2019, a further order was made, by consent, extending the parties’ agreed timetable for the completion of interlocutory steps before trial.
Although the parties’ exchanged pleadings, each of them made decisions seeking to amend those documents shortly before trial. Regrettably, it was necessary to adjourn the final hearing so that each of them was then afforded an adequate opportunity to reflect upon the position being adopted by the other in relation to all issues. In terms of proportionality, it was somewhat surprising that one reason for that adjournment was that a claim was introduced respecting an alleged failure to provide pay records. As I understood it, these allegations were pursued so as to sound in the imposition of a penalty, and for which an order is, it seems, to be sought to be paid to Mr Thompson.
The applicant also filed detailed particulars of loss and damage being for a total sum of $28,551.66 made up of: alleged underpayments of salary ($23,517.48); redundancy, annual leave ($2,583.53); superannuation ($2,450.65). Commendably, in the parties’ openings, it was said to have been agreed (somewhat elliptically), that depending upon the findings of fact, quantum was not disputed.
As a consequence of the adjournment of the trial, the parties were encouraged to try narrow the issues for determination. The parties proposed that certain questions of liability be determined separately and in advance of questions of compensation and any penalties. Only issues of quantum and penalty were deferred. In general terms, the questions sought: (a) to identify Mr Thompson’s proper classification as a Community Support Worker and Case Manager; (b) elucidation of the proper construction of a term of the Modern award which was said to govern an entitlement to increased remuneration on the basis of ‘progression’ in a person’s employment; (c) determination of whether: (i) Mr Thompson had been the subject of adverse action within the meaning of the Act; (ii) the Remuneration Order obliged Arbias to pay entitlements to an employee on a weekly or fortnightly basis; (iii) Arbias had failed to retain and provide copies of employee records in accordance with the regulations. Consequently, the parties agreed upon a series of eight questions which they contended arose for determination upon issues of liability. To describe the matter in that way cannot be allowed to obscure that all issues of liability were being addressed at this hearing. The framing of those questions was not suggested as having raised questions of discrete issues for separate and preliminary determination.[3] These reasons for judgment address all issues save those arising in relation to any question of penalty.
[3] Construction Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCAFC 149, [63] (Jessup, Rangiah and White JJ).
Pleaded issues
Upon their amended points of claim and defence, the parties had achieved substantial agreement upon a range of matters. Having regard to the number of questions that are raised for determination, it is necessary to set those matters out in some detail. However, it is also convenient to locate the consideration of several points of claim and defence in later parts of this judgment so as to provide particular context to the issues raised for determination.
The summary of pleadings is drawn from the parties’ amended pleadings and, unless stated to the contrary, the matters set out were admitted.
By way of overview, Mr Thompson raised allegations as to: his employment; applicable award entitlements; his roles and duties; the application of the Pre-Modern award, the Modern award and the Remuneration Order; his purported reclassification; his entitlement to progression payments and minimum wage entitlements.
Upon those allegations, Mr Thompson’s causes of action were for relief in respect of: underpayment of wages; related underpayments; adverse action and penalties. Arbias’ overall position has been described above. It is convenient to summarise the pleaded background including those related to Mr Thompson’s employment, his duties and entitlements, the awards and causes of action alleged.
Employment
Mr Thompson was both an employee and national system employee of Arbias within the meaning of ss 13 and 335 of the Act respectively and was covered by the Modern award. His qualifications were not in issue.
Arbias, a duly incorporated corporation which is in the business of providing specialised services for people with alcohol or substance-related acquired brain injuries, was both an employer and national system employer of Mr Thompson within the meaning of ss 13 and 335 of the Act respectively and was covered by the Modern award.
Arbias accepts that at the times which are material to the issues in this proceeding, its chief executive officer was Mr Edward John Eyre, and that its company secretary and manager, finance facilities and human resources, were Mr Denis West, and subsequently Mr Nic La Rosa (who succeeded Mr West after his departure in mid-2016).
Although his employment was interrupted by a period of leave of absence, Mr Thompson was, for the most part, employed by Arbias between 10 January 2011 until 28 April 2017 as follows:
a)when he commenced employment with Arbias on 10 January 2011, Mr Thompson worked as a Community Support Worker for the period 10 January 2011 to 14 January 2014 (save for a period of leave of absence without pay between June 2012 and March 2013);
b)from 15 January 2014 to 28 April 2017, he was promoted to, and worked in the position of, Case Manager.
The applicant was ultimately terminated from his employment with Arbias on 28 April 2017. It was Arbias’ contention that Mr Thompson’s position was made redundant at that time. As pleaded by Mr Thompson his “employment was terminated on the basis that Arbias no longer required the Case Manager position to be done by anyone.”
Requirements, entitlements & duties of roles
Putting aside his absence from employment on leave without pay, for the period 10 January 2011 to 14 January 2014, Mr Thompson’s position of a Community Support Worker required him to work a 38 hour week and was to be remunerated at a rate “said by Arbias” to be commensurate with Level 4 under the Modern award. In this respect, Arbias acknowledged that those matters were expressed in both: (a) the Employment Schedule to the letter of offer dated 6 January 2011; and, (b) pay advice slips issued by Arbias to Mr Thompson from time to time.
In the position of Case Manager, from 15 January 2014 to 28 April 2017, Mr Thompson’s role required him to work a 38 hour week and was to be remunerated at a rate “said by Arbias” to be commensurate with Level 5 under the Modern award. In this respect, Arbias acknowledged that those matters were expressed in both: (a) payroll adjustment requests dated 18 December 2013 and 2 January 2015; and, (b) an email from the company secretary, Mr West, dated 23 December 2015.
When working in his role as Community Support Worker, Mr Thompson’s duties included the following: (a) providing support to people using Arbias’ services (clients); (b) monitoring and reporting on client wellbeing; (c) developing client support plans; (d) assisting clients with skills of daily living and recreational activities; (e) conducting administrative tasks such as maintaining client files and engaging in staff meetings. It was also agreed that those duties were detailed in a position description of the Community Support Worker position for the role to which Mr Thompson had applied for employment and was employed.
In his role as Case Manager, Mr Thompson alleged that his duties included the following: (a) managing his own caseload and applying interventions for clients based on his own observations and judgment; (b) monitoring caseload funding through monthly budget reports and applying for additional funding where required; (c) applying to and appearing at the Victorian Civil and Administrative Tribunal (VCAT) for guardianship and/or financial administration orders in respect of clients; (d) preparing child protection reports, including reports to the Department of Health and Human Services (Vic) and to Victoria Police; (e) preparing reports and letters, appearing and giving expert evidence in the Magistrates Court of Victoria; (f) participating in team-based review of team policies, including risk assessments, funding and file closure procedures; (g) supervising and providing expert advice to volunteers, students and members of Arbias’ flexible outreach team; (h) working with and providing expert advice to multi-disciplinary teams, including from external organisations; (i) receiving and applying specialist training in acquired brain injury and substance related acquired brain injury; (j) representing Arbias on a steering group committee for a project titled the “Williamstown Road project” (also as “Willie Road”).
Arbias generally agreed in the description of duties assigned to the role of Case Manager but contended as follows: (a) the role of budget management was the responsibility of the Finance Manager, not Case Managers; (b) the preparation of child protection reports was not his responsibility and that he was not qualified to perform it; (c) Mr Thompson was not qualified to give expert evidence in courts but accepted that he gave evidence in cases in which clients were involved (such expert evidence being given by neuropsychologists); (d) denied that there were team based policies and said that policy was determined by the Director, Operations; (e) denied that Mr Thompson supervised or provided expert advice to volunteers, students or members of its flexible outreach team and maintained that Mr Thompson was not classified as an expert within Arbias and that he did not supervise staff; (f) did not admit that Mr Thompson worked with or provided expert advice to multi-disciplinary teams, including from external organisations, and maintained that support of the kind alleged by Mr Thompson was provided on a collegiate basis by a number of persons.
2000 & 2010 Awards and Remuneration order (2012)
Two issues arising in the proceeding stem from:
a)the operation of the Pre-modern award and the Modern award respectively, and the arrangements which applied for the transition from the earlier to the later of those awards. In this context, it is agreed that in respect of Mr Thompson’s employment, the Pre-modern award was the “relevant award-based transitional instrument” for the purposes of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth); and
b)the introduction by Fair Work Australia on 22 June 2012, of a Remuneration Order operative with effect from 1 July 2012, styled the Social, Community and Disability Services Industry Equal Remuneration Order 2012, PR525485. (ERO)
Clause 5 of the Remuneration Order is entitled ‘Transitional Rates’. It was agreed that by force of the Remuneration Order, an employee covered by that instrument was entitled to be paid by the employer:
a)a transitional minimum wage (Minimum Wage) in accordance with cl 5.3 of the Remuneration Order, which obliged the employer, in effect, to pay as a ‘Minimum Wage’, the higher of the minimum wage as specified in the Pre-modern award or the Modern award, as varied from time to time; and
b)a transitional equal remuneration payment (Equal Remuneration Payment) in accordance with cl 5.5 of the ERO, which required that such payment was to be calculated in accordance with that clause and would increase on 1 December of each year during the relevant period;
c)the payments payable by an employer under the Remuneration Order, weekly or fortnightly, whether by cash, cheque or electronic funds transfer: Remuneration Order, cl 7.
Equal Remuneration Payment entitlements arose from a determination by Fair Work Australia which recognised a significant disparity in the remuneration payable to persons who worked in this sector.
Causes of action advanced
Upon those matters, Mr Thompson raised the following claims:
(1) Underpayment of wages
First, it was alleged that between 18 March 2013 and about 27 March 2016, in contravention of cl 7 of the Remuneration Order, Arbias failed to pay Mr Thompson payments in accordance with that Order, weekly or monthly by cash, cheque or electronic funds transfer.
The confined scope of this allegation may in part be understood as reflecting that by March 2016, responding to employees’ complaints respecting their entitlements, Arbias had made a back payment to Mr Thompson and purported to reclassify his Case Manager position to “Social and community services employee – Level 4, pay point 2” under the Modern award.
Secondly, it was alleged that Mr Thompson was entitled to be remunerated, but that Arbias failed to remunerate him at the Ordinary Rate prescribed by the Remuneration Order in the periods between:
a)18 March 2013 and 14 January 2014, for the Community Support Worker position as varied from time to time;
b)15 January 2014 and 28 April 2017, for the Case Manager position.
Arbias, while accepting that Mr Thompson was entitled to be paid at the Ordinary Rate prescribed by the Remuneration Order, otherwise denied those allegations, contending that during the course of his employment, Mr Thompson was paid every amount to which he was entitled and as required by the Remuneration Order. Contextually, part of this defence included that, upon investigating the question whether employees had been paid in accordance with the Remuneration Order, Arbias had not ‘re-classified’ Mr Thompson but rather had undertaken a ‘transition’ process from the Pre-modern award (2000) to the Modern award (2010), which it described as one of alignment, not re-classification. Arbias contended that the ‘alignment’ of Mr Thompson’s role within the scope of the two awards was such that it had been appropriate to align his responsibilities as Case Manager under the Pre-modern award to the position, in March 2016, of “Social and community services employee – Level 4, pay point 2” under the Modern award.
Thirdly, each of those alleged failures to pay remuneration, including at the intervals prescribed by the Remuneration Order, were relied upon as constituting contraventions of s 305 of the Act.
The relief sought in respect of these claims was for declarations that Arbias had thereby contravened s 305 of the Act together with orders pursuant to ss 535 and 547 of the Act for compensation and interest.
(2) Consequential underpayments
Fourthly, it was alleged that in consequence of the combined effect of: Arbias’ acknowledgement in February 2016, that it had not applied the Remuneration Order to Victorian employees; the sum which had been paid to Mr Thompson as back pay in March 2016, payable under the Remuneration Order; the manner in which the back pay had been calculated; the basis on which Mr Thompson’s Ordinary Rate of pay was to be properly calculated; and, the alleged failure to pay him his Ordinary Rate of pay (either as Community Support Worker or Case Manager), in the period between 18 March 2013 and 28 April 2017, Arbias had failed:
a)to remunerate Mr Thompson at the Ordinary Rate as prescribed by the Remuneration Order in accordance with the Act;
b)to make superannuation contributions for his benefit, calculated at the Ordinary Rate prescribed by Remuneration Order and in accordance with cl 23.2 of the Modern award.
Mr Thompson alleged that the failures to pay him his Ordinary Rate of pay over the period of his employment resulted in the following consequential underpayments: annual leave; personal carer’s leave; payment in lieu of notice on termination of employment; redundancy pay; and, superannuation contributions. He further alleged that the non-payment of those entitlements had caused him to suffer loss and damage in the total sum of $28,551.66.
Relying upon those allegations, Mr Thompson further alleged that:
a)in failing to pay him the remuneration to which he was due, Arbias had contravened s 44 of the Act; and
b)in failing to make superannuation contributions to which he was entitled, Arbias had contravened s 45 of the Act.
Arbias denied each of those allegations.
The relief sought in respect of these consequential claims was for a declaration that Arbias had thereby contravened ss 44-45 of the Act together with orders pursuant to ss 535 and 547 of the Act for compensation and interest.
(3) Adverse action
Fifthly, it was alleged that the entitlements to be paid at the Ordinary Rate of pay for that payable to a Community Support Worker and Case Manager respectively during the periods in issue, constituted entitlements to a benefit under an order made by an industrial body and thus a workplace right within the meaning of s 341(1)(a) of the Act (workplace right). Arbias admitted those allegations.
It was further alleged that Arbias’ conduct in about February or March 2016 in purporting to reclassify Mr Thompson’s Case Manager position to “Social and community services employee – Level 4, pay point 2” under the Modern award, separately and together, constituted adverse action within the meaning of s 342(1), item 1(b) and/or s 342(1), item 1(c) of the Act in that Mr Thompson had thereby:
a)been subjected to improper conduct that caused him fear, distress, anxiety and worry;
b)been wrongfully denied a benefit, being remuneration at the Ordinary Rate under the Remuneration Order in accordance with his proper classification and pay level; and
c)suffered a reduction in his status and position within Arbias and wrongfully denied the promotion and career advancement which he had earned in January 2014.
Arbias responded that these allegations were, in effect, embarrassing but contended that if they were intended to mean that the transition process which it had engaged in by classifying Mr Thompson’s role and position from the Pre-modern award to the Modern award constituted adverse action, they were denied. Arbias further denied that it had engaged in any improper conduct and contended that the transition process in which it had engaged, constituted a proper application of the Modern award and the Remuneration Order. It further denied that Mr Thompson had been denied promotion and career advancement in 2014 and relied upon its later conduct in the transition process undertaken in March 2016.
Mr Thompson then alleged that the adverse action as pleaded had been engaged in because of the reason, or because of reasons, including the reason that: (a) he had and/or proposed to exercise the workplace right; (b) he had made the complaints or enquiries in December 2015 whether Arbias was complying with the Remuneration Order; and, (c) the ASU had made the complaints or enquiries as pleaded for the benefit of a class of persons which included Mr Thompson.
Arbias contended that its application of the Modern award and transition to the Remuneration Order was taken as an independent action and not related to any action, comment or request made by Mr Thompson. It advanced a plea that, while it had been acting in the erroneous belief that the Remuneration Order did not apply to its operations in Victoria, when it became aware that it might be wrong it sought independent legal advice and upon being told that it had been acting in breach of the Remuneration Order, it took steps of its own volition to correct the situation under which it had been acting.
Mr Thompson’s allegations of adverse action were alleged to constitute contraventions of s 340 of the Act.
Arbias denied each of those allegations.
The relief sought in respect of these consequential claims was for a declaration that Arbias had thereby contravened s 340 of the Act together with orders pursuant to ss 545 of the Act for compensation.
(4) Penalties
Finally, Mr Thompson sought the imposition of a penalty for a pecuniary penalty for each contravention of the Act and an order pursuant to s 546(3)(c) of the Act that any pecuniary penalty ordered to be paid by Arbias be paid to him.
Evidence
Two witnesses – Mr Thompson and Mr Edward Eyre – gave evidence. Mr Eyre held, and continues to hold the position of Chief Executive Officer at Arbias. Relevantly, other officers of Arbias, in particular its company secretaries, Mr Denis West and later, Mr Nic La Rosa, and Ms Jo Wilson, Arbias’ then Manager, Client Services (and later, National Director, Operations), were not called to give evidence. In each case, it was generally accepted that those persons would have been available to do so. An affidavit made by the applicant’s solicitor, who was not required for cross-examination, was tendered. The parties filed a consolidated court book which was augmented by further documents.
Overall, each witness impressed me as being forthright and candid, making concessions against their interests where the necessity arose. I regarded Mr Thompson and Mr Eyre as essentially truthful witnesses. Mr Thompson’s evidence seemed in part to be tailored to the terms of the Modern award and in a manner that was somewhat rehearsed. An aspect of Mr Eyre’s evidence was that it had something of a ‘confess and avoid’ quality for at least three reasons. First was that a central plank in Arbias’ defence was that it accepted it had misunderstood that the Remuneration Order applied to all of its Victorian employees who were covered by the Modern award. Secondly, insofar as the process of ‘aligning’ or reclassifying its employees in March 2016, Mr Eyre’s evidence was that he believed Arbias had complied with its statutory obligations but appeared to accept that if it had not done so; there had been no consciousness of error at the time it had occurred. Thirdly, there seemed to be no doubt that Mr Eyre’s position was that if there had been error he was prepared to take responsibility that it had occurred.
I incorporate the matters addressed above in relation to the background as findings that are made in the proceeding. The following findings are made upon their evidence and the documents which were tendered.
Service providing to persons with brain acquired injuries
Arbias is a public company limited by guarantee which has charitable status and has been in existence for nearly three decades. It is wholly dependent upon funding for its activities and obtains such funding from various departments of the NSW and Victorian governments. Ninety percent of funding is applied toward the costs of direct support, of which the majority is applied to salary, related costs and superannuation. The remaining ten percent is applied to administrative costs. As was stated in an Arbias document on funding arrangements:
. . . we are a ‘hand to mouth’ agency; that is, what we receive we are required to spend and do not generate additional cash annually.
Mr Eyre said that 96% of Arbias’ funding, including all wage costs, was directed to providing support to clients and that the remaining 4% was to “back of house, administrative costs”.
Arbias’ sole activity is the provision of specialised services for people with alcohol and substance-related acquired brain injuries. Services of this kind are also provided by a range of government and non-government organisations. It appears that the employees who provide the services to persons affected by such injuries have been covered by a variety of awards throughout Australia and relevantly, in NSW and Victoria. Arbias has about 90 employees including clinical neuropsychologists who hold PhD or Masters qualifications and provide expert assistance. They also employ other staff with diploma qualifications in psychology or social work. Arbias’ employee obligations are not covered by an enterprise agreement.
Two of the positions occupied by certain Arbias’ employees are that of Community Support Workers and Case Managers. The Community Support Workers employed by Arbias work within any one of three streams: accommodation; community programs; and, flexible outreach.
The applicant’s employment
Mr Thompson obtained certain tertiary qualifications in 2005 and later, in 2017. In June 2005, he obtained a diploma in Broadcasting-Television in Toronto, Canada, and on 30 January 2017 he obtained a Diploma of Community Services (Alcohol, Other Drugs and Mental Health), from Odyssey House, Victoria. As is apparent, Mr Thompson’s formal qualification in community services was obtained a matter of months before his employment with Arbias was terminated. Mr Thompson gave no evidence of any prior experience in the relevant field and I find that, when Mr Thompson began his employment with Arbias, he was then underqualified for work which he began. I also infer that in the period 2011 – 2017, and as a result of his employment with Arbias, Mr Thompson progressively acquired his experience as a Community Support Worker. He is currently employed as an Advanced Case Manager with the Department of Justice and Community Corrections.
By letter dated 6 January 2011, Arbias offered Mr Thompson a position of Community Support Worker. The details of his new position, remuneration and terms and conditions were detailed in an enclosed Employment Schedule which provided, relevantly, as follows:
Position Title: Community Support Worker
Salary: $41,456.48 ($20.98 p/hr)
(SACS Award Level 4, Year 1)
Employment Conditions: unless otherwise specified, your terms and conditions are in accordance with the [Pre-modern award].
You will be able to access the full range of policies during your orientation and induction.
Arbias also provided to Mr Thompson a document entitled, Client Services Product Description Community Support Worker, which provided that the person who would occupy this role was directly accountable to the Manager, Client Services, and under the guidance and with the support of the Co-ordinator, Accommodation and Flexible Services and/or the Co-ordinator, Community Programs. The position description identified the responsibilities under five headings: (1) operations; (2) support to people in the flexible support and outreach services; (3) support to people living in Arbias’ Accommodation Services; (4) support to people accessing the Community Programs (HACC) service; (5) other, including duties as required by the Arbias’ coordinators. Essential selection criteria stipulated in the Position Description included that the person fulfilling the role would have tertiary qualifications and relevant experience/strong interest in disability and other disciplines including a demonstrated understanding of cognitive impairment caused by alcohol and other substance abuse and the consequent social, legal, health and mental health implications, together with a demonstrated knowledge in working with people with multiple and complex needs/dual diagnosis, and the ability to engage a range of community services and linkages, and the ability to work independently and cooperatively.
Insofar as the Position Description containing reference to professional development appointments, Mr Thompson said that this was a reference to the appointments with his supervisors.
On 11 January 2011, Mr Thompson executed an employee declaration and acceptance of offer of employment.
Mr Thompson described meeting a State Manager at a café where his role was discussed. His evidence was that there was no discussion that the position to which he was appointed was to be paid above award rates.
Mr Thompson also said that when working for Arbias, he did not see any published policies, whether by way of best practice or induction at Arbias. However, he agreed that Arbias maintained an electronic filing system named SharePoint upon which its records were retained in soft copy and to which he had access. He said he was never directed to this resource and seemed unwilling to accept that he was encouraged to use it. While Mr Eyre’s evidence was that there were in the order of 60 policies on SharePoint to which Mr Thompson had access. These issues were not explored in cross-examination with Mr Thompson.
Mr Eyre further stated that the maintenance of such policies, which were reviewed externally at three yearly intervals and rigorously audited, was a condition of both its funding and service agreements. He stated that the audit process included interviews of employees to ensure staff could be open and honest in their views about operations and how they were treated, and that Arbias had received exemplary ratings in the past two such audits. Again, Mr Thompson was not cross-examined as to this. However, Mr Eyre agreed that Arbias had not produced any operational policy in the proceeding which related to either the role of a Community Support Worker or a Case Manager and accepted that there may be no such policy. Mr Eyre said that he did not conduct any performance reviews, but he assumed that Mr Thompson would have had them.
Mr Thompson commenced his role almost immediately. He described the induction process as being fairly limited and said that he met the State Manager and “shadowed a few people on a few shifts and then I was given my list of clients.” He was also able to read a few files and case notes and then effectively began the work in flexible outreach and support in providing services to clients.
In terms of structural organisation, Mr Thompson said that Arbias had an outreach worker coordinator who oversaw the services provided across the three streams of accommodation; community programs; and, flexible outreach. There was also a coordinator dedicated to supervision of the flexible outreach stream to whom Mr Thompson reported directly. I am satisfied that Mr Thompson had such a responsibility and that he made such reports. I am satisfied that there was a level of communication between him and the person to whom he was responsible to report. Viewed in the context of the evidence given by Mr Eyre, I am also satisfied that the level of communication varied inasmuch as it seemed to be common ground that Arbias’ more senior personnel focussed their attention on the more junior and less experienced employees, leaving it to employees who had more experience to take the initiative to make contact to discuss more involved cases as the need arose.
Mr Thompson described the work required in the flexible outreach stream as involving the one-to-one support of clients for whom he would provide a support plan and attend appointments of usually 2-3 hours duration with the object of lending support in order that they would attend appointments and otherwise build their capacity and skills. In cases where the client also had a Case Manager (who Mr Thompson described as performing more complex duties), he would be directed as to who would support that manager and the client as required.
By his estimate, 30% of his clients had Case Managers and he had sole responsibility for the remaining 70% of clients. In more concrete terms, he described that if he had a caseload of perhaps “15 or so clients, you know, maybe 6 or 7 didn’t have a Case Manager.” He accepted that in those cases where the clients had Case Managers, he would work alongside them and under their directions and said that this was necessary because clients of this kind had “higher complex needs” and “were much more complex, much more at risk of homelessness, or drug issues, of coming into contact with the criminal justice system.” Examples that he provided of such complex cases involved working at the direction of a Case Manager to support a client by ensuring they attended a doctor’s appointment, Centrelink or at ‘corrections’.
Mr Thompson said that in cases where there was no Case Manager it was generally left up to him to manage his own clients and that there was fairly limited supervision, which included catching up on a monthly basis unless a serious issue arose (such as the death of a client). Otherwise, his day-to-day routine involved minimal supervision or reporting. Equally, Mr Thompson accepted that, on occasion, he would be asked to lend assistance, adding that on an ad hoc basis he would meet up to talk about difficult cases or about “a general checking on your mental health” and “how you’re travelling?” and whether he intended to pursue further study. Arbias tendered a staff record relating to Mr Thompson which indicated that, in the period January 2014 to December 2015, contact had been made with him on 17 occasions for the specific purpose of supervision.
In terms of support, Mr Thompson candidly acknowledged that the Case Managers were “the real client-facing workers. They’re the experts. They’re the ones that have the experience in dealing with the complex cases. So you know, you could go and talk to them, and especially, if you had mutual, well, they were kind of directing your flexible support anyway. But even if not, you could get some ad hoc support and some kind of tips and stuff from that – from the case management team.” As discussed above I am satisfied that the level of support accommodated the needs of Mr Thompson’s growing experience from time to time.
In cases where the client had no Case Manager, Mr Thompson said that he had a high degree of autonomy in terms of writing the support plan, deciding what supports and related appointments they needed. His evidence tended to emphasis his level of autonomy in a manner which seemed to reflect the classifications definitions in the Modern award.
By contrast, Mr Eyre, who accepted that Mr Thompson was reliable and could be trusted to use his experience to provide clients the best positive outcome, did not accept that Case Managers, or the CEO for that matter, had complete autonomy in the way being suggested, adding that Mr Thompson did not have responsibility for staff. He agreed that Arbias culture was essentially one in which more experienced staff who had been employed for some time needed less supervision and that its available resources were focused on the less experienced staff.
There were basically two types of support plan provided by Arbias to its clients and which were described as an individual support package (ISP) and an assisted community living support package (ACL), the latter involving a one-off grant of ~$5000. The ACL packages were provided annually and renewed until the client attained the age of 65. For those reasons, it was necessary to write applications for the grant and renewal of an ACL, such applications being made to the Department of Health and Human Services (DHHS). In addition, applications could also be made to panels having particular responsibility for various geographical locations in Victoria and to which “if you were clever enough to hit the right panels at the right time”, additional funding for a Community Support Worker could be secured.
In all cases, part of Mr Thompson’s responsibility involved the writing and administration of funding applications and the funds received. However, he accepted that where a Case Manager was involved, that manager took control of those responsibilities. The importance of the administration role was essentially to monitor the available funds and to ensure that applications for further funding were made so that Arbias’ budget was managed and support could be provided. On some occasions, difficulties were encountered in managing the budget. It seemed to be accepted that budgets were set by others within Arbias and that Mr Thompson’s responsibility was focussed on managing the spending.
Mr Thompson said his role was essentially about building the clients capacity, ensuring they had funding working “alongside external stakeholders” which involved “attending multi-disciplinary meetings.” In describing the nature of the role, Mr Thompson said that:
a)a lot of the clients had insecure accommodation, were in and out of alcohol and drug treatment and had “significant contact with the forensic system”, each of which factors necessitated liaison with external agencies. To this end, Mr Thompson attended the multi-disciplinary meetings to ensure that clients received the types of support which they required;
b)his reference to the “forensic system” was a shorthand to describe the clients involvement in the criminal justice system as well as VCAT, where applications were made for the appointment of guardians or financial administrators.
Before taking leave from his employment and his appointment as Case Manager, Mr Thompson’s role as Community Support Worker had also included providing support in VCAT applications. Initially, his role involved a high volume of this work but at some point it ceased and his duties were dedicated to other aspects of providing flexible support.
Where no Case Manager was involved, Mr Thompson had direct responsibility for making appointments which were essentially based upon the decisions he made when preparing the client’s support plan. He said that the time available to provide flexible support was limited whereas the complex needs of clients to whom a Case Manager had been assigned may require the manager to spend upwards of six hours in lending support when needed. By contrast, “flexible support was funded for maybe only three hours, six hours a week, depending on the funding package which I would have written and gotten approved.” For those reasons, flexible support was considered to be valuable.
Where he worked in collaboration with a Case Manager, Mr Thompson said that he worked under the supervision of that person who would, for example, direct him to attend particular appointments.
Mr Thompson also said that students or volunteers would attend to gain experience of the work undertaken at Arbias and who worked under his direct supervision including, for example, by travelling out to clients, writing case notes and rewriting risk assessments. The types of students who would attend Arbias included those studying neuro-psychology and social work and that they were, on occasion, doing a placement as a part of their study. Mr Thompson said that such students were variously working under the supervision of a Case Manager or, when he was a Community Services Worker, under his supervision during the times that they accompanied him on his work. He accepted that these students were not case managing clients. Mr Eyre’s evidence was that Arbias provided students with the learning opportunity to observe the types of support provided by Community Support Workers and others by offering them placements. He agreed that these students did not have a formal role and had no entitlement, in effect, to step into the role being performed by the Arbias’ employee, but were there to observe and learn. Mr Eyre identified a correlative advantage to Arbias in being able to spot talented students and to invite them to apply for a role as and when one became available.
Appointment as Case Manager
In December 2013, Mr Thompson was appointed by Arbias as one of its Case Managers for a term of 12 months. The initial appointment was later extended for an indefinite term. Mr Thompson said that his appointment in January 2015 to a permanent role of Case Manager represented the only review which he had obtained.
Also produced in evidence was an Arbias document entitled, Client Services Position Description Case Manager, which had been signed on 18 December 2013 by Mr Thompson and Ms Jo Wilson, Arbias’ then Manager, Client Services. The position description identified that a key objective of its service was to work with people in crisis who were at risk of alienating their support networks and becoming isolated in the community or homeless and identified a Case Manager’s responsibilities under the following headings: Case management; intake and response; monitoring and referral; information and file management; relationship development and management; and, Other, which included participation in training and professional development, organisational meetings, strategic planning (in each case, as requested). Mr Thompson said that the position description of the Case Manager’s role in this document was essentially accurate.
Mr Thompson said that he attended Ms Wilson’s office where he was told that he was being promoted to the role of Case Manager for a 12 month position and that he “would be a Level 5”. He described this as being quite an increase from his prior role but said that by 2014 he had acquired significant experience as an outreach worker and that Ms Wilson said that the appointment was the next logical step for a person of his experience. Mr Eyre agreed he was not at this meeting and could not contradict Mr Thompson’s evidence as to the conversation.
Mr Thompson also gave evidence of attending a meeting in January 2015 with Ms Wilson when he was appointed on a permanent basis as Case Manager and given an incremental increase to “Level 5.3”. Again, Mr Eyre accepted that he had not been present at that meeting. This appointment was confirmed by letter dated 14 January 2015 signed by Arbias’ then national director of operations, Ms Wilson, whose letter stated in part “due to changes in program structure and your excellent and consistent performance in the role of Service Coordinator (previously Case Manager) over the past 12 months, your tenure in this role has been made permanent.” No evidence was given to explain Arbias’ program restructure as referred to in this letter.
Arbias’ internal records, each entitled Payroll Adjustment Request, were tendered and related to Mr Thompson’s appointment as Case Manager:
a)the first, dated 18 December 2013, signed by each of Mr Thompson and Ms Wilson identified that his appointment was for the period 13 January 2014 to 16 January 2015 and described the appointment as “Higher duties secondment into position of Case Manager – 12 months”.
b)the second, dated 2 January 2015, also signed by Mr Thompson and Ms Wilson identified that the appointment was for the period 5 January 2015 “ONGOING” and described the appointment as “Case Management”.
Mr Eyre agreed that each of these payroll adjustment requests had been signed by Ms Wilson, Arbias’ manager of Clients Services (until 2014, and from that time, its director of National Operations), and initialled by Mr West, then manager of finance and human resources and company secretary. He could not explain why Ms Wilson was not being called but had no idea as to Mr West’s whereabouts.
Notably, each Payroll Adjustment Request, contained provision for a “Full Description of adjustment include any change to pay rate – duties – hours per week, etc” and provided respectively in the case of:
a)the 2014 – 2015 appointment: “Pay Rate: SC 5-1 – $25.24 p/hr or $49,878.40 p/annum.”
b)the 2015 and ongoing appointment: “Increment increase to SC 5-3 ($53,700.40 p/annum) or $27.1763 p/hr.”
Mr Thompson’s evidence was that the references in those documents to SC-1 referred to the Modern award “SCHADS level 5, 5-1”. He also said that the reference to SC 5-3 was again a reference to the Modern award and that, on the occasion he was given a permanent appointment in January 2015, Ms Wilson had told him that he was being increased from Level 5, pay point 1, to Level 5, pay point 3 “on the new modern award”. However, in one part of his evidence, when asked to name the award, apart from a reference to “Social” he was unable to recall the proper name of the award and hesitatingly described it as “the Modern award”.
Mr Thompson reiterated that the Case Manager’s role dealt with more complex clients and was more involved as it included clients with a high risk of homelessness, drug and alcohol issues, criminal issues, death and accordingly, immediate intervention was often required and with a higher level of support of the kind that was otherwise provided by a Community Support Worker. He described how the cognitive impairment of some alcohol or drug affected clients meant they had difficulties in relation to the management of their finances and related issues such as paying rent, the failure to do so resulting in a high risk of homelessness. He also illustrated that, both before VCAT and in the criminal justice system he would prepare a report for the client (apart from any psychologist’s report), for the purpose of providing an understanding of the impact which the clients cognitive impairment had upon their day-to-day life in such basic issues as the payment of rent, attending medical or other appointments.
As concerned the preparation of case plans, it seemed that in more complex cases, a neuropsychologist would provide a report upon the level of a client’s cognitive impairment and that such a report would be used in part in the preparation of the case plan. Mr Thompson said the neuropsychologist would observe the client for perhaps three hours but that in the role of Case Manager he would get to know the client over a longer period and so develop an understanding of how the clients impairment would have an impact upon their day-to-day life and upon the types of support that a person with an acquired brain injury would need. He accepted the neuropsychologist report was used to inform, but did not dictate, the case management strategies that he prepared.
Mr Thompson said that a big part of case management was responsibility for budgets so as to ensure that ISP and ACL packages were sufficiently funded and that renewal applications were made in a timely way. In this context, Mr Thompson explained that the funding provided to Arbias was received in two distinct ways, in that: (1) the funding for ACL packages generally included payment for the flexible outreach workers (i.e. Community Support Workers); (2) the costs of employing Case Managers was provided in Victoria by DHHS by means of “block funding”. He added that such funding issues had all changed since the introduction of the National Disability Insurance Scheme (NDIS) but that this was “very clunky”. While it was not clear whether the introduction of NDIS funding was relevant in this case, Mr Thompson suggested that it had been “rolled out” perhaps 18 months earlier but then suggested it may have started from 2014-2015.
At all events, Mr Thompson said that the funding model provided under DHHS allowed for a greater capacity to work longer hours. He also described that with the introduction of NDIS, the Case Manager had a higher level of involvement, in particular with external stakeholders, than did a Community Support Worker, in securing funding.
Taken to the responsibilities of an Arbias’ Case Manager as described in the position description, Mr Thompson described in some detail the nature of his responsibilities including: assessing cognitive capacity and ability to deal with day-to-day matters; whether the client had stable accommodation; particular medical needs or an involvement in the criminal justice system. He described it as essentially a triage function of giving priority to the needs of the individual client.
Mr Thompson also gave evidence of his involvement or initiative in particular projects including: (1) a reconciliation and action committee, the object of which was to support an Arbias business plan to work towards national reconciliation; and, (2) the “Willie Road” project, being a social welfare and social health project in Port Melbourne to provide social housing for clients with a high risk of drug or alcohol use. In the latter case, Mr Thompson would attend this accommodation for an entire day (which he did over a period of two years), to provide services (for example, podiatry), activities (barbecues) and projects (building a community vegetable garden), and for which Mr Thompson seconded the support of Monash University’s architecture department. He said that he had been the chair of this program over a period of perhaps five or six months. Mr Eyre confirmed that Mr Thompson was Arbias’ representative on this project and that he, together with the director of operations, had agreed Mr Thompson was the right choice for the role. Mr Eyre volunteered that Mr Thompson had received an annual CEO’s high achievement award and financial bonus but said that in the nature of its funding “We don’t have money left over to do additional things. We’re not funded to give ungazetted, incremental increases to [particular] groups. We would become insolvent.”
Mr Thompson accepted that in the role of Case Manager he was subject to the direction of a coordinator. He also agreed that for the purposes of formulating management plans, he would have access to the reports of neuropsychologists who would provide some direction and strategies which were considered. Mr Thompson did not entirely agree that his management plans were based solely upon those reports.
Payslips & records
A series of Arbias’ pay advice summaries for the period January 2009 to July 2016, identified Mr Thompson’s gross pay, tax, the period for which the pay advice related and a record of the “Award Rate”. When he commenced employment, for the fortnight ended 23 January 2011, he was paid at an award rate of $20.98 per hour.
The award classification under which Mr Thompson was covered, was identified and described in his employee pay advice slips as follows:
a)from April 2013: “S4-1.”
b)from March 2014: “S5-1.”
c)from January 2015: “S5-3.”
Mr Thompson suggested in evidence that the acronyms S4-1, S5-1 and S5-3 were references to the Modern award, Levels 4 or 5 and pay points 1 and 3, respectively. I accept that evidence.
Performance reviews & underpayment
Performance reviews had relevance to the progression claims.
Mr Thompson’s evidence was that the only performance review in which he participated occurred in January 2015. On that occasion, Ms Wilson, in her capacity as Arbias’ director, operations, wrote stating “due to changes in program structure and your excellent and consistent performance in the role of Service Coordinator (previously Case Manager) over the past 12 months, your tenure in this role has been made permanent. Your conditions with Arbias remain unchanged.”
Mr Thompson said that Arbias had no scheme for performance appraisal and that he had one performance review in the entirety of his employment with Arbias and that there were no ‘goal plans’, no ‘work plan’ and that he certainly was not told of any requirements to acquire or use new skills. Mr Eyre accepted there was no documentary evidence of regular annual performance reviews but said that, while he could not guarantee it, there was an expectation that each staff member would have a performance review. He stated that there was a standing instruction to the senior management team to do so but accepted that neither that instruction nor any policy underlying it was before the court. He also stated that Arbias had a practice to obtain feedback from clients in the nature of satisfaction surveys which were undertaken by external independent consultants and that such surveys were conducted in relation to the service provided by Mr Thompson and were positive.
Asked whether Arbias had any requirements for staff to acquire new skills, Mr Eyre said that it did and provided examples relating to new employees who were required to be competent in first-aid and to complete training modules, such as handling of complex clients. Mr Eyre also said that Arbias provided professional development programs called professional development and support (PDS) but felt that the provision of PDS was not an award requirement.
It was Mr Eyre’s evidence that this type of development had been used to replace the term ‘supervision’ which he considered now held a negative connotation. In addition, he identified a trainee development plan which was the subject of regular review and provided mandatory training to improve skills and non-mandatory training of other kinds which he insisted various employees should undertake. Mr Eyre also stated that he had supported Mr Thompson’s application to take leave without pay from mid-2012 until early 2013 so that he could travel overseas to undertake what he described as a tertiary course. Otherwise, he would not agree that Arbias did not require employees to acquire new skills and referred to the PDS program which provided a range of matters including nursing procedures, working with persons with physical disabilities, upgrading first aid, OH&S training and the like.
As a result of the alignment or transition process undertaken in March 2016, Mr Thompson was classified by Mr Eyre at Level 4, pay point 2. As a consequence, and as Mr Eyre stated in cross-examination, the back pay that was paid to Mr Thompson was calculated on that basis. I accept Mr Eyre’s evidence that he considered the whole transition process as being a necessary aspect in order that Arbias could determine the amounts that were payable from the time the Remuneration Order became operative and that it was also necessary for the purpose of determining Mr Thompson’s entitlements for the period 2013-2016 and for the period that he continued to work as a Case Manager until April 2017. Whether or not that was a correct view of the legal position, I am in no doubt that it was Mr Eyre’s view. I am also in no doubt that until December 2015, his belief was that the Pre-modern award was the award which applied to the determination of the minimum entitlements of those employees.
As Mr Thompson emphasised, at no time had Arbias consulted with him before concluding its alignment and transition process. By extension, at no time had Mr Thompson raised with Arbias a contention that he was properly classified under the Modern award at Level 5, pay point 3. It was his case that until he received a pay slip following the completion of this process he had no inkling that he was to be re-classified at Level 4, pay point 2. Given the steps that were taken in the course of the alignment and transition process, I am prepared to infer that Mr Eyre knew Mr Thompson had been classified at Level 5, pay point 3, a view he did not share. However, to say as much serves only to recognise that that fact was a matter of which he was aware. It is akin to the situation recognised in Bowling that the decision-maker cannot be expected to leave out of his or her mind that a person may be a shop assistant or member of an industrial organisation. Arbias’ onus of displacing the statutory presumption is not to be made heavier by the fact it happened to be the case that Mr Thompson was then being paid on the basis that he was entitled to the minimum wage applicable to a Level 5, pay point 3, employee. Viewed from this perspective, as I accept Mr Eyre was firmly of the view that the entitlements of Victorian employees were fixed by the Pre-modern award, to foreclose Arbias from the ability to investigate the matter including by undertaking the alignment process would be to deny it the ability to rectify a mistake as the price of avoiding exposure to liability for a contravention of s 340 of the Act.
In my view, the principles considered above require the court to focus upon what Mr Eyre’s actual reasons were for taking the action that he did. I am satisfied in all the circumstances that Mr Eyre’s actual reason for taking the action which he did was to rectify a historical error which had been committed in relation to the proper classification of its Victorian employees and to ensure that employees, past and present, who had been underpaid would receive their proper legal entitlements including by his dealings with the Australian Taxation Office to ensure that they were not prejudiced by what he considered to be Arbias’ error. For the most part, this is precisely what Mr Eyre had told the extraordinary staff meeting in February 2016 that Arbias would do, and that is what it proceeded to do. Nothing in the manner of Mr Eyre’s conduct persuades me that he had taken adverse action against Mr Thompson because of his admitted workplace rights or as a result of the inquires which he made or those which were made by the ASU.
In particular, Mr Eyre’s evidence was that irrespective of the conclusions reached as a result of the alignment process, he was resolved that no employee would be disadvantaged. What he wanted to do was undertake a comprehensive evaluation of the proper classification of the positions occupied by employees under the Modern award. An inherent aspect of that process involved consideration of the very different classification definitions in Sch B of the Modern award in contrast with those under the Pre-modern award. I am accordingly satisfied that, as the decision-maker acting on behalf of Arbias, none of Mr Eyre’s reasons for undertaking the action which he did, included as a substantial and operative factor, any reason or intent that the Act proscribed him from having. Mr Eyre’s only substantial and operative reasons for acting in the manner which he did was to rectify what he saw to be an error. Thus, I am not persuaded that a contravention of s 340(1) is made out.
While Questions 5(a)-(b) might have been framed in terms which would more directly answer the questions that are to be addressed by s 340(1) of the Act, they should be answered as follows:
Ques 5: If the answer to 4 is ‘yes’, did the respondent take adverse action against the applicant for reasons that did not include because he:
(a) had an entitlement to remuneration under the Equal Remuneration Order (ERO)?
(b)inquired or made a complaint about his entitlement to remuneration under the ERO?
Answer: Arbias did not take the action complained of by Mr Thompson because of the workplace rights which he had or proposed to exercise.
For the avoidance of doubt, I have concluded that this is the preferable answer to be given to Question 5 as the ‘Yes’ or ‘No’ would, in each case, be ambiguous.
Question 6: Payment obligations
Question 6, which concerns the nature of payment obligations reads:
Does cl 7 of the ERO require an employer to pay entitlements under the ERO ‘weekly or fortnightly’ by reference to the accrual of the entitlement or by reference to the calculation of the entitlement by the employer?
Clause 7 of the Remuneration Order reads:
Payment
Payments made by an employer in accordance with this Order must be paid weekly or fortnightly by cash, cheque or electronic transfer into the bank of financial institution account nominated by the employee, unless other arrangements are made in an enterprise agreement approved under the Act.
Pleadings
It was common ground that by cl 7 of the Remuneration Order, payments made by an employer under that instrument must be paid weekly or fortnightly by cash, cheque or electronic funds transfer.[122] From that perspective, the question was focussed upon whether the obligation crystallised, by reference to the accrual of the entitlement or by reference to the calculation of the entitlement by Arbias.
[122] Remuneration Order, cl 7.
Mr Thompson alleged, and Arbias denied, that between 18 March 2013 and 27 March 2016, in contravention of cl 7 of the Remuneration Order, Arbias failed to pay Mr Thompson payments in accordance with that instrument, either weekly or monthly by cash, cheque or electronic funds transfer. The implicit basis on which this claim was advanced was that the failure to properly classify Mr Thompson’s role carried the consequence that he had been underpaid and so, as he claimed, had not been paid the sums due to him in a timely way in accordance with cl 7.
The failure to pay in accordance with cl 7 of the Remuneration Order was relied upon as constituting a contravention of s 305 of the Act. In light of the matters addressed in relation to Questions 1-3, however, Mr Thompson was paid under the Modern award at the rates applicable to the position of an employee at Level 4, pay point 1 and later at Level 5, pay point 1 then pay point 3. Further, he was not entitled to progression in the manner for which he contended. At first sight, this suggests that, apart from the payment of entitlements under the Remuneration Order, there may have been no underpayments.
Submissions
Mr Thompson also submitted that Arbias had also contravened the Remuneration Order regardless of whether he had been underpaid.
It was submitted that whether or not Arbias’ reclassification of Mr Thompson in March 2016 was correct, it had not made payments under the Remuneration Order to Mr Thompson on a weekly or fortnightly basis. Reliance was placed upon at [16], [54] of the amended points of defence and contemporaneous emails from Arbias to its workforce which acknowledged that, before 2016, Arbias had not been making payments in accordance with the Remuneration Order.
Mr Thompson submitted that on its own admissions the court had a sufficient basis to find that Arbias contravened cl 7 of the Remuneration Order in failing to make payments in accordance with the Remuneration Order and that it thereby contravened s 305 of the Act. However, Question 6 is concerned only with identifying whether Arbias was obliged to make payments under the Remuneration Order in the manner provided for by cl 7 above. Question 6 was focussed upon when the payment obligation was engaged.
Arbias submitted that since 2016, all staff had been paid Remuneration Order increments on time, twice annually, in July and December in accordance with the Order and pay scale since the error was corrected in March 2016. Arbias candidly accepted that the fact of the error in failing to implement the terms of the Remuneration Order in Victoria with effect from 2012 inevitably engaged cl 7 of the Remuneration Order. Counsel observed that the way in which cl 7 was framed and the absence of any mechanism to rectify errors, retrospectively, had been productive of much litigation which could otherwise be avoided. As I understood the submission, it was said that once a breach had occurred it was incapable of being remedied without activating civil remedy provisions but that Arbias had acted promptly in investigating and rectifying the consequences of the breach by the payment of back pay and by ensuring proper procedures were in place to avoid any recurrence.
Resolution
In dealing with Questions 2-3, I have referred to the applicable principles.
I was referred to no authority which might inform the consideration of the issue presented by Question 6. I consider that the payment obligation must arise upon accrual. The contrary conclusion – that it does not arise until the calculation of the entitlement by the employer – would be contrary to the ordinary meaning of the words employed in cl 7. The text of the clause is cast in imperative terms and expresses the obligation as one which must be performed weekly or fortnightly. Contextually, the conclusion that the entitlements under the Remuneration Order must be paid on accrual accords with the payment obligations in the Act.[123]
[123] Act, s 323.
In the absence of submissions, and evidence, I cannot determine the embedded question on liability whether Arbias in fact failed to pay Mr Thompson entitlements under the Remuneration Order as they accrued to him from time to time. In particular, I was not assisted in relation to the issue of when the entitlements accrued in the sense that the Remuneration Order revised minimum entitlements annually.
Question 6 should be answered:
Clause 7 of the Remuneration Order obliges an employer to pay entitlements under that Order ‘weekly or fortnightly’ in the manner provided upon the accrual of the relevant entitlement.
Questions 7-8: Employee records
Questions 7 and 8, which relate to demands for employee records, read:
7. Did the applicant request copies of his employee records on 3 February 2020 or 4 March 2020 in accordance with regulation 3.42 of the Fair Work Regulations 2009 (Cth)?
8. If the answer to 7 is yes, did the respondent satisfy the obligation to provide employee records in accordance with any request by providing pay summaries for the periods 10 January 2011 to 6 July 2016 and 4 July 2016 to 6 December 2016 before March 2020?
The claims from which these questions emerged were introduced by a late amendment to the points of claim.
Pleadings
Mr Thompson introduced claims for alleged contraventions of reg 3.42 of the regulations grounded upon an alleged failure to provide ‘employment records’ upon request. On the pleaded case, as amended, the applicant relied upon a series of four communications from his solicitors made in the period between February-March 2020.
Arbias, while denying that it had received one of the four letters referred to, contended that the requests as otherwise particularised were for the production of pay slips which it maintained were not records required by s 535(1) of the Act or reg 3.33 of the regulations to be kept by an employer. It further contended that it provided such records as were required to be made and kept by the Act and regulations.
The relief sought in respect of the record keeping claims was for a declaration that Arbias had contravened reg 3.42 of the regulations.
Evidence
The applicant relied upon an affidavit made by his solicitor on
2 June 2020 (being some two days before the adjourned commencement date of the original final hearing). The deponent gave evidence as to events occurring in the period February 2019 – April 2020. Why the affidavit had not been filed or served at an earlier date was not explained. The evidence contained in the affidavit, which was not the subject of any objection or request for cross examination, was as follows.
In February 2019, Mr Thompson’s lawyers obtained from the ASU a copy of the Arbias’ pay advice summaries issued in relation to the payment of Mr Thompson’s remuneration in the period 1 January 2009 to 4 July 2016. I note that from those summaries it appears Arbias paid Mr Thompson’s remuneration at fortnightly intervals.
Thereafter, on 12 August 2019, Mr Thompson’s lawyers made a request for the pay advice summaries relating to Mr Thompson’s remuneration as paid by Arbias in the period from 4 July 2016 until the date upon which Mr Thompson’s employment was terminated (18 April 2017). A copy of those pay records were also supplied, albeit somewhat belatedly, for the period July 2016 – 4 December 2016.
On 3 February, and again on 4 March, 2020, Mr Thompson’s solicitors made a request for discovery of certain additional classes of documents. In the first request, made on 3 February 2020, the request was for all of Mr Thompson’s payslips for the period of his employment; that is, from 10 January 2011 to 18 April 2017. In the second request, made on 4 March 2020, the request was expanded to include all of those payslips and what was described in the affidavit as all of Mr Thompson’s “other employment records.” However, the request needs to be understood in the wider context of what was being sought by those letters.
In particular, each of the letters made requests for particular classes of documents by reference to issues that were joined on the pleadings. The first reference to reg 3.42 of the regulations was made on
4 March 2020 and was made in the context of the failure to provide payslips. The demand then made was for production of those payslips and all other employee records in its possession and to do so within 9 days. No attempt was made to define the employee records for which production was sought and this was perhaps the more notable in the context that, by 4 March 2020 (being imminently before the initial trial date), Arbias had already made discovery of other documents in issue in the proceeding and had answered the ASU’s demand for records in 2016. There is a point at which a greater level of precision is to be expected, particularly, on the eve of trial. Contextually, it was not suggested in either item of correspondence that any such ill-defined request had been made atany earlier time. Further, it is apparent that in the period from early 2016 to 4 March 2020, Arbias had supplied, either to the ASU or to the applicant’s solicitors, all of the pay advice summaries referred to above.
On 11 March 2020, Arbias’ lawyers replied to the most recent request, advising that payslips would not be provided. Responding to that advice, in the period 24 March 2020 to 8 April 2020 respectively, Mr Thompson’s lawyers variously: advised that they held instructions to amend the points of claim to allege a contravention of reg 3.42 of the regulations; issued a subpoena seeking to compel production of the payslips; and, served proposed amended points of claim. The amended points of claim alleged a contravention of reg 3.42, grounded upon a failure to provide the payslips and all employment records as sought.
On one view, a trial which had been set down for final hearing in mid-April 2020 was adjourned, in part, because of a decision to amend the points of claim to introduce the claims referred to above. Accepting that other amendments were also proposed to be made, in my view the other amendments would not have required an adjournment of the trial. Now is not the occasion to address whether this belated amendment to the points of claim was warranted or an appropriate step to be taken in the resolution of the issues which truly warrant final determination.
Submissions
The applicant submitted that there was, once again, no decision whether the failure to produce payslips fell within the ambit of reg 3.42. While so much was common ground, the absence of an authority which confirmed the viability of this added cause of action might have been one factor which informed consideration whether to introduce a further claim and whether an adjournment of the final hearing was a desirable step to have taken at such a late stage. Equally, Arbias itself may have contributed to the need for an adjournment. But the viability of the claim and whether its pursuit was truly warranted should have been considered.
The applicant relied upon reg 3.42(1) which provides, that for s 535(3) of the Act, “an employer must make a copy of an employee record available for inspection and copying on request by the employee or former employee to whom the record relates.” It was submitted that the failure to make Mr Thompson’s payslips available on request constituted a failure to comply with reg 3.42 and that a declaration to that effect should be granted. While reliance was also placed upon an alleged failure to produce all other employment records, this was not proved.
Counsel for Mr Thompson quite properly acknowledged that, before the demand made on 4 March 2020, the focus of the demands had been upon the production of payslips. However, it was further submitted that after the date fixed for responding to the demand, there had been no substantive response but that ultimately some other records were only produced after the issue of a subpoena. The evidence did not descend to establish what other employment records had been produced. Taken at its highest, the complaint seemed to be that compliance had not been effected in the timely manner prescribed by the regulations.
The applicant also accepted that Arbias had produced some documents before the demands were made in 2020 and the subpoena was issued. In particular, it was accepted that Arbias had promptly supplied other pay records in response to the demand made by ASU in 2016. How the matter had progressed in the intervening period was not explored.
Counsel for Arbias submitted in reply that on the evidence, Arbias had supplied records in response to the demands made in 2020 but had said that it could not supply pay slips. In fact it said that it would not do so.
Resolution
Having regard to the ambit of the request made for production of records, I am satisfied that the answer to Question 7 is ‘Yes’. However, that answer does not meet the substantive question posed by the parties which related to the complaint of an alleged failure to make and keep for a period of seven years, and to allow inspection and copying of, Pay slips, in alleged contravention of reg 3.42(1) of the Regulations.
In my view, there was no substance in the complaints made in relation to Pay slips. Within Ch 3 of the regulations, Div 3, which is entitled Employer obligations in relation to Employee records and Pay slips, comprises regs 3.31 – 3.46, and is arranged in two sub-divisions:
a)Sub-div 1, Employee records, and comprises regs 3.31 – 3.44;
b)Sub-div 2, Pay slips, and comprises regs 3.35 – 3.46.
Thus, within Div 3 of Ch 3 of the regulations, a distinction is maintained between obligations respecting Employee records and Payslips.
In particular, insofar as Div 3 of the regulations imposes obligations to provide access to, inspection and copying of Records, it draws a clear distinction between Employee records and Pay slips.
The regulation upon which Mr Thompson relies (reg 3.42) addresses the subject matter, Records – inspection and copying of a record. It is of no little importance to recognise that the obligation created by reg 3.42 is located within sub-div 1 of Ch 3, Div 3, of the regulations (Employee records), and not sub-div 2 of Ch 3, Div 3 (Pay slips).
A proper understanding of the scope of the obligation imposed by 3.42 in particular and the record related obligations in Div 3 of the regulations is informed by Ch 3, Pt 3-6 of the Act, Other rights and responsibilities. The introduction to Pt 3-6 makes clear that Div 3 of that part is about obligations of national system employers to make and keep Employee records in relation to each of their employees and to give Pay slips to each of their employees: Act, s 528. The distinction between making and keeping Employee records and giving Pay slips is thus made an immediate feature in Pt 3-6 of Ch 3 of the Act.
The term Employee record, is defined by s 12 of the Act as meaning, relevantly, something that is an Employee record, in relation to an employee for the purposes of the Privacy Act 1988 (Cth). Within the Privacy Act 1988, the term is defined by s 6 as meaning a record of personal information relating to the employment of the employee, however, the section provides extensive examples of employee records and includes “salary or wages.” The definitions provided by s 6(1) of the Privacy Act, are framed in terms as being “unless a contrary intention appears.” The Act contains no definition of the term Pay slips.
In Ch 3, Div 3 of Pt 3-6 of the Act concerns the subjects, Employer obligations in relation to employee records and payslips, and comprises ss 535-536. Once again, the distinction between an employer’s obligations respecting employee records and payslips is maintained.
Sections 535-536 of the Act concern distinct subject matter. The first provision relates to Employer obligations in relation to employee records while the second provision relates to Employer obligations in relation to pay slips. Each of those provisions is a civil remedy provision: Act s 539(1), Table, Items 28-29. The failure to comply with those provisions carries a potential penalty of 30 Penalty Units. Additional liability is imposed for serious contraventions by ss 557A-557B of the Act. In addition, by s 557C(b) of the Act, a reverse onus is imposed upon an employer who fails to comply with the requirements of ss 535 or 536 of the Act. Quasi-penal provisions should be construed as such.
Section 535(1) of the Act obliges an employer, in imperative terms, “to make and keep for 7 years, employee records of the kind prescribed by the regulations in relation to each of its employees”. Contrastingly, s 536(1), which is also expressed in imperative terms, obliges an employer to “give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.” Had the Parliament intended to impose an obligation on employers to make and keep Pay slips for a period of seven years it would have been a very simple matter to have said so. It did not.
In my view, since those drafting the Act chose to incorporate the defined meaning of Employee record as provided by the Privacy Act, they should also be presumed to have accepted that the defined meaning was subject to a contrary intention appearing in the Act itself. Having regard to the way in which ss 535-536 of the Act impose separate obligations respecting the making and keeping of Employee records for a period of seven years and the giving of Pay slips to employees within one day of the performance of his or work, I consider that those provisions indicate a contrary intention that, for the purposes of ss 535 and 536 of the Act and Reg 3.42 of the Regulations, a Pay slip is not an Employee record. Given the bare submissions, I was referred to no contrary authority.
Further, reg 3.33, which relates to Records – pay, provides that for sub-s 535(1) of the Act, a kind of record that an employer must make and keep, is a record that specifies: the rate of remuneration paid to the employee; the gross and net amounts paid to the employee and any deductions made from the gross amount paid to the employee. Nothing in reg 3.33 prescribes that one of the types of record which an employer must make and keep for seven years is a Pay slip.
Relatedly, reg 3.46, which relates to Pay slips – content, provides that for the purposes of sub-s 536(2)(b) of the Act, the matters which a Pay slip must specify. Nothing in this regulation contains any suggestion that such Pay slips must be retained for a period of seven years. It would seem somewhat surprising that the regulations should be construed as creating a civil liability on an employer for failure to make and keep Pay slips for a period of seven years when nothing in the regulations contains an express suggestion of that kind and in particular, where the express object of the regulations is to specify the content of the Pay slip which must be created and given to an employee within one working day of paying the employee in relation to the performance of his or her work.
It was not suggested that these regulations created obligations carrying civil penalty consequences wider in scope than those imposed by the Act itself and in particular, the obligation created by s 535(1) to make and keep for seven years Employee records of the kind that are prescribed by the regulations.
Further, in terms of an alleged failure to provide all other employee records, I am not satisfied that the applicant has discharged the onus of proof by establishing any relevant failure on this account. The applicant framed Question 8 in terms which, in effect, sought to supply an answer by identifying the documents which had been supplied – pay advice summaries – for the period of the employment. To have advanced the case in that way did not, however, address the question upon which he bore the onus; that is, to identify the employee records which it was said had not been copied or made available. The demand made of Arbias was for production of the Employee records and Pay slips that were in its possession. It was not established that it contravened reg 3.42.
Nothing said above should be seen as in any way subverting the evident and important nature of an employer’s record related obligations.
Questions 7 and 8 should be answered:
7.Yes, however, Pay slips are not Employee records within the meaning of regulation 3.42 of the Fair Work Regulations 2009 (Cth).
8.It has not been established that the respondent failed to copy or make available Employee records in the manner provided by regulation 3.42 of the Fair Work Regulations 2009 (Cth).
Conclusion
In light of the answers to the parties’ agreed questions, it will be necessary for them to confer and produce a joint minute as to the most appropriate means of concluding the proceeding.
In this context, while I note that the court has already afforded them an opportunity to explore resolution of the matter by mediation, there is every reason why they might revisit means of achieving resolution of their outstanding disputes. The foregoing observation is made with three particular considerations in mind.
First is that the parties are agreed upon the relevant rates of remuneration applicable to the particular employee classification levels and appear to accept that the quantum should be capable of resolution. Secondly, while the amended points of claim seek orders for the imposition of penalties and that such penalties be paid to Mr Thompson, the prayer for relief implicitly recognised that the court may, in the exercise of its discretion, order that the penalty be paid to the Commonwealth, a particular organisation or person. The assumption that a penalty would be imposed or that it would be ordered to be payable to a person other than the Commonwealth is a matter which would need to be made good by cogent submissions in the circumstances of this case. Thirdly, it appeared to be uncontroversial that Arbias was solely dependent for revenue upon government grants. In those circumstances, an order for the imposition of penalties could on one view entail a degree of circularity. Fourthly, the combined weight of those matters may bring into sharp focus whether the finite and scarce resources of each of the parties, and the court, are not applied more appropriately to dispute resolution by other means.
I certify that the preceding four hundred and sixty (460) paragraphs are a true copy of the reasons for judgment of Judge A. Kelly
Associate:
Date: 20 October 2020
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