United Voice v Berkeley Challenge Pty Limited (No 2)

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FEDERAL COURT OF AUSTRALIA

United Voice v Berkeley Challenge Pty Limited (No 2) [2018] FCA 1189

File number: QUD 217 of 2016
Judge: REEVES J
Date of judgment: 10 August 2018
Catchwords: INDUSTRIAL LAW – consideration of the appropriate pecuniary penalties to be imposed under s 546 of the Fair Work Act 2009 (Cth) (FWA) for contraventions of ss 44(1), 117 and 119 of the FWA – the relevant principles for imposing civil remedy penalties – whether the successful party should receive the penalty – the significance of maximum penalties – the grouping of contraventions – the concept of deliberateness – whether specific and general deterrence are appropriate in the circumstances
Legislation: Fair Work Act 2009 (Cth)
Cases cited:

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181

Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205

Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corporation Ltd (2007) 168 IR 368; [2007] FCA 1607

Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39

Construction, Forestry, Mining and Energy Union v Decmil Engineering Pty Ltd (No 2) [2017] FCA 1237

Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480

Director of The Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353

Kelly v Fitzpatrick [2007] FCA 1080

Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25

Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170

Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4

Trade Practices Commissionv CSR Limited (1991) ATPR ¶41-076

United Voice v Berkeley Challenge Pty Limited [2018] FCA 224

Date of hearing: 7 June 2018
Registry: Queensland
Division: General Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 42
Counsel for the Applicant: CW Dowling SC with TC Borgeest
Solicitor for the Applicant: Hall Payne Lawyers
Counsel for the Respondent: F Parry QC with A Galbraith
Solicitor for the Respondent: Rigby Cook Lawyers

ORDERS

QUD 217 of 2016
BETWEEN:

UNITED VOICE

Applicant
AND:

BERKELEY CHALLENGE PTY LIMITED

Respondent

JUDGE:

REEVES J

DATE OF ORDER:

10 AUGUST 2018

THE COURT ORDERS THAT:

1.The respondent is to pay the applicant:

(a)$9,000 for its contraventions of ss 44(1) and 117 of the Fair Work Act 2009 (Cth); and

(b)$4,500 for its contraventions of ss 44(1) and 119 of the Fair Work Act 2009 (Cth).

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

REEVES J:

INTRODUCTION

  1. In March 2018, I delivered my judgment in relation to the liability aspects of this matter: United Voice v Berkeley Challenge Pty Limited [2018] FCA…

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Details
Case
[2018] FCA 1189
Decision Date

CaseChat Overview and Summary

In United Voice v Berkeley Challenge Pty Limited (No 2), the Fair Work Commission (FWC) sought to determine the appropriate pecuniary penalties for Berkeley Challenge Pty Limited's contraventions of the Fair Work Act 2009 (Cth) (FWA). The matter concerned the termination of employment of workers engaged to provide services to Lend Lease Property Management Pty Ltd at the Sunshine Coast Plaza Shopping Centre. The dispute centred on whether Berkeley had provided valid termination notices and paid redundancy payments to the affected employees. The FWC had previously ruled that Berkeley had contravened sections 117 and 119 of the FWA by failing to provide valid termination notices and by not paying redundancy entitlements, respectively.

The court had to decide the appropriate pecuniary penalties to be imposed under section 546 of the FWA for the contraventions of sections 44(1), 117, and 119. The court also needed to determine whether the successful party should receive the penalty. The relevant principles for imposing civil remedy penalties, the significance of maximum penalties, the grouping of contraventions, and the concept of deliberateness were considered. Additionally, the court assessed whether specific and general deterrence were appropriate in the circumstances.

In its decision, the FWC considered the nature and seriousness of the contraventions, the extent of Berkeley's deliberateness, and the maximum penalties prescribed under section 546 of the FWA. The court noted that the contraventions were serious and deliberate, warranting significant penalties. However, the court also took into account the financial situation of Berkeley. The court ultimately decided to impose a penalty of $9,000 for the notice contraventions and $4,500 for the redundancy contraventions. The court did not order Berkeley to pay the penalties to United Voice.

The FWC issued orders that Berkeley Challenge Pty Limited is to pay United Voice $9,000 for the contraventions of sections 44(1) and 117 of the FWA and $4,500 for the contraventions of sections 44(1) and 119 of the FWA. Entry of orders was governed by Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The respondent is to pay the applicant:

(a) $9,000 for its contraventions of ss 44(1) and 117 of the Fair Work Act 2009 (Cth); and

(b) $4,500 for its contraventions of ss 44(1) and 119 of the Fair Work Act 2009 (Cth).

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In March 2018, I delivered my judgment in relation to the liability aspects of this matter: United Voice v Berkeley Challenge Pty Limited [2018] FCA 224 (the liability judgment). These reasons concern the remaining penalty issues as follows: (a) the appropriate pecuniary penalties to be imposed on Berkeley Challenge Pty Limited for its contraventions of the Fair Work Act 2009 (Cth) (the FWA); and (b) whether an order should be made that any pecuniary penalties imposed be paid to United Voice.THE FACTUAL BACKGROUND The following is a brief review of the factual background to this matter taken largely from the liability judgment. In 1994, Berkeley began to provide various services (the contract services) to Lend Lease Property Management Pty Ltd at the Sunshine Coast Plaza Shopping Centre (Sunshine Plaza) on the Sunshine Coast in Queensland. In 1999, Berkeley was acquired by the Spotless Group of Companies, the ultimate holding company of which is Spotless Group Holdings Ltd. From about that point forward, a company within that Group became the party that contracted with Lend Lease to provide the contract services. Nonetheless, Berkeley continued to employ the staff necessary to provide those services. In or about January 2014, Lend Lease invited tenders for a new contract to provide the contract services. Spotless submitted a tender, however, it was unsuccessful. As a consequence, on or about 29 August 2014, Lend Lease gave notice to Spotless that it was required to exit the Sunshine Plaza by the close of business on 30 September 2014. This date was later extended to close of business on 7 October 2014. In early October 2014, Berkeley terminated the employment of most of the employees it employed to provide the contract services (the affected employees). United Voice commenced this proceeding on behalf of the affected employees, claiming that Berkeley did not provide valid notices of termination to them and that some of them were entitled to redundancy payments which Berkeley did not pay them.THE LIABILITY JUDGMENT In the liability judgment, I found, in summary:(a)at [33], that the notices of termination Berkeley gave to the affected employees were not valid notices under s 117(1) of the FWA and Berkeley had therefore contravened ss 117 and 44(1) of the FWA (the notice contraventions);(b)at [81]–[82], that Berkeley had failed to discharge its onus to establish that the exception in s 119(1)(a) of the FWA applied in the circumstances and it had therefore breached ss 119 and 44(1) of the FWA by not paying the affected employees their redundancy pay entitlements (the redundancy contraventions); and(c)at [34] and [82], that the affected employees were entitled to compensation under s 545(2) of the FWA. Orders were made by myself on 13 April 2018 (and amended by Collier J on 18 May 2018) with respect to the issue of compensation for the affected employees. As noted above, two penalty issues remain to be resolved in this judgment.SOME EVIDENTIARY ISSUES

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

United Voice commenced this proceeding on behalf of the affected employees, claiming that Berkeley did not provide valid notices of termination to them and that some of them were entitled to redundancy payments which Berkeley did not pay them.THE LIABILITY JUDGMENT In the liability judgment, I found, in summary:(a)at [33], that the notices of termination Berkeley gave to the affected employees were not valid notices under s 117(1) of the FWA and Berkeley had therefore contravened ss 117 and 44(1) of the FWA (the notice contraventions);(b)at [81]–[82], that Berkeley had failed to discharge its onus to establish that the exception in s 119(1)(a) of the FWA applied in the circumstances and it had therefore breached ss 119 and 44(1) of the FWA by not paying the affected employees their redundancy pay entitlements (the redundancy contraventions); and(c)at [34] and [82], that the affected employees were entitled to compensation under s 545(2) of the FWA. Orders were made by myself on 13 April 2018 (and amended by Collier J on 18 May 2018) with respect to the issue of compensation for the affected employees. As noted above, two penalty issues remain to be resolved in this judgment.SOME EVIDENTIARY ISSUES It is convenient, first, to deal with some evidentiary issues that arose during the penalty hearing. They arose out of the finding at [7(b)] above concerning the redundancy contravention. As I stated in the liability judgment, that finding was largely based upon my conclusion that, while Spotless had adduced extensive evidence about its business activities and practices relating to job redundancies, there was very little evidence about how Berkeley approached such matters (see at [78]–[79] of the liability judgment). I considered that was critical because Berkeley was the particular employer that made the decision to make the jobs of the affected employees redundant. Having regard to that conclusion, I made rulings excluding as irrelevant certain affidavit evidence that both parties sought to tender in the penalty hearing. In broad terms, that evidence related to Spotless’ business activities, including:(a)its role in the public debate surrounding the alleged exploitation of workers by labour hire companies;(b)the size and scope of its business activities, as distinct from those of Berkeley, the actual respondent in this matter;(c)whether it, or any of its subsidiaries, as distinct from Berkeley, had previously contravened the FWA;(d)any steps it, as distinct from Berkeley, had taken to address the rulings in the liability judgment; and(e)the reason why it, as distinct from Berkeley, had adopted a policy not to pay redundancy payments to its employees. Consistent with these rulings, throughout these reasons I have focused on the size and scope of Berkeley’s, not Spotless’, business activities, relevant past history and conduct.THE RELEVANT LEGISLATIVE PROVISIONS AND APPLICABLE PRINCIPLES Sections 117 and 119 of the FWA form part of the National Employment Standards. The role and importance of those Standards is described in the liability judgment (at [15]–[17]). In summary, those Standards are:… intended to advance one of the main objects of the FWA … [of] “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders” … Accordingly, they set the “minimum standards that apply to the employment of employees which cannot be displaced” …

Ratio Decidendi

Legal Principle Established

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