United Voice v Serco Group Pty Ltd (No.2)
[2018] FCCA 3680
•12 December 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| UNITED VOICE v SERCO GROUP PTY LTD (No.2) | [2018] FCCA 3680 |
| Catchwords: INDUSTRIAL LAW – Fair work – failure to pay remote district allowance – contravention of National Employment Standards in respect of 13 known employees – unknown number of other employees affected by the contravention – applicant entitled to represent the interests of other employees – audit order in respect of other employees. |
| Legislation: Fair Work Act 2009 (Cth), ss.44, 540(2), 545(1), 713(1) Fair Work (Registered Organisations) Act 2009 (Cth), s.161 Evidence Act 1996 (Cth), ss.128, 187 |
| Cases cited: Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCAC 1290 Fair Work Ombudsman v Grouped Property Services [2016] FCA 1034 |
| Applicant: | UNITED VOICE |
| Respondent: | SERCO GROUP PTY LTD |
| File Number: | DNG 6 of 2017 |
| Judgment of: | Judge Young |
| Hearing date: | 14 March 2018 |
| Date of Last Submission: | 21 November 2018 |
| Delivered at: | Darwin |
| Delivered on: | 12 December 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bull |
| Solicitors for the Applicant: | United Voice |
| Counsel for the Respondent: | Mr Fernon SC |
| Solicitors for the Respondent: | Baker McKenzie |
ORDERS
An order pursuant to section 545(1) of the Fair Work Act that the Respondent, at its expense, engage a third-party with qualifications in accounting or workplace relations to undertake an audit of the Respondent’s compliance with clause 19(c) of the Serco Immigration Services Agreement 2015 (“the Agreement”) in relation to payment of Remote District Allowance (“the Allowance”) on the following terms:
(a)the audit period will be the period commencing on 13 May 2016 and ending on 31 October 2016 (“audit period”);
(b)the audit is to be completed within 90 days (“audit completion date”);
(c)the audit will apply to all employees of the Respondent in the following classifications: accredited detention service officer (DSO2), detention service manager (DSM), catering assistant, chef, head chef, cleaning service employee level 1, and cleaning service employee level 2, who performed work at the Wickham Point for the Respondent during the audit period;
(d)the audit will assess whether the Respondent has paid the Allowance to each employee on termination of their employment in accordance with clause 19(c) of the Agreement;
(e)within 30 days of the audit completion date the Respondent is to provide to the Applicant:
(f)a copy of the audit report which will include a statement of the methodology used in the audit;
(g)a copy of the source materials and records used to conduct the audit;
(h)written details of any failure to pay the Allowance, the steps the Respondent will take to rectify any such failure and by when the rectification will occur.
The matter is adjourned for further consideration to 2 April 2019 at 2.15 pm.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DARWIN |
DNG 6 of 2017
| UNITED VOICE |
Applicant
And
| SERCO GROUP PTY LTD |
Respondent
REASONS FOR JUDGMENT
These are further reasons for judgment in the continuation of the hearing of an application about the respondent’s failure to pay remote district allowance under an enterprise agreement. I made a declaration on 10 August 2018 that the respondent’s failure to pay the allowance to thirteen identified employees contravened a provision of the National Employment Standards contrary to section 44 of the Fair Work Act (“the Act”). The hearing in relation to other unidentified employees was adjourned for further evidence and submissions.
The unresolved part of the hearing relates to the applicant's claim in respect of an unknown number of unidentified employees of the respondent whose employment was terminated at about the same time as the identified employees and in the same circumstances: the closure of the Wickham Point Immigration Detention Centre and an associated facility (“Wickham Point”) in 2016. The applicant alleges that the respondent employer has committed the same contravention in respect of those employees. In its amended statement of claim the applicant alleged that it was entitled to make an application of behalf of the other employees affected by the contravention and sought orders, should the contravention be found proved in relation to the identified members, for the respondent to provide "a schedule of all employees terminated at Wickham point after 13 May 2016 other than the [identified] members with a statement of the termination entitlements paid to each employee."
I sought further submissions about whether the applicant was "entitled to represent the industrial interests" of those other employees under subsection 540(2) of the Act. After an adjournment for the applicant to provide an admissible copy of its rules under section 161 of the Fair Work (Registered Organisations) Act I was satisfied that, under Part 26 of clause 3 of the rules, the applicant is entitled to represent the industrial interests of the other employees. The relevant part of the applicant’s rules say:
Notwithstanding any provision of this rule to the contrary, the union shall have the eligibility to cover persons employed by employers contracted by the Commonwealth Government to operate or manage immigration detention centres, other than persons employed as managers, medical practitioners, teachers, nurses and persons employed in administrative, clerical and social and/or welfare positions.
The respondent made a number of submissions in opposition to the further order or orders sought by the applicant.
First, it submitted that the applicant needed leave to reopen its case and had sought a remedy that was not included in the amended statement of claim. I accept that the applicant needed to reopen its case to tender its rules in an admissible form. However, as its failure was the result of oversight, it would appear, due to not giving thought to how it would prove its entitlement to represent the industrial interests of the employees other than the identified members and the respondent did not claim any prejudice I permitted the applicant to reopen its case. In relation to the submission that it sought a remedy not included in its original amended statement of claim I reject that submission. The nature of the present claim by the applicant was, in my view, indicated in the amended statement of claim.
The second point taken by the respondent was that the power of the court to make an order under section 545(1) of the Act, that is, "any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision” is conditioned or limited by section 540(2).
Section 540(2) provides as follows:
An employee organisation or a registered employee association may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision in relation to an employee, only if:
(a) the employee is affected by the contravention, or will be affected by the proposed contravention; and
(b) the organisation or association is entitled to represent the industrial interest of the employee.
The submission, as I understood it, was that the court has made no finding of contravention in respect of any employee other than the thirteen identified employees and, accordingly, the applicant is not entitled to make any application in respect of those other employees.
I do not accept that submission. Section 540(2) certainly uses the definite article in identifying "the employee” affected by the contravention but the section uses language of wide meaning and permits an employee organisation to apply for an order “in relation to a contravention … in relation to an employee" and, further, if “the employee is affected by the contravention”. In my view, this does not require the applicant to identify, in the sense of naming, an employee or establishing that there has been a contravention in relation to a named employee. It does require, however, the applicant to establish that, on the balance of probabilities, an employee, capable of identification some way, is affected by the contravention.
The statement of agreed facts included the following facts:
Approximately 300-400 staff worked at the Wickham Point Facility.
From 18 September 2015 onwards [the relevant enterprise agreement] covered employees of the respondent located at Wickham Point.
The Wickham Point Facility closed on 31 October 2016.
I am satisfied that, having found a contravention of the enterprise agreement in relation to thirteen identified employees, it is likely that some or all of the other employees referred to in the statement of agreed facts were affected by the contravention in the same way as the thirteen identified employees, that is, in breach of the enterprise agreement the remote district allowance was not paid to them on termination of their employment. The respondent did not adduce any evidence to the contrary.
I am satisfied that the applicant may apply for an order in relation to the other employees affected by the contravention and is entitled to represent the industrial interests of those employees including, specifically, the categories of employees referred to in the order I will make. I am satisfied that the applicant may apply to have orders made under section 545(1) of the Act.
The applicant, after hearing further submissions from the respondent about what information was likely to be disclosed pursuant to the order sought in its amended statement of claim, sought a more extensive and detailed order of the kind usually referred to as an “audit order”. Examples of such orders may be seen in Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290 and Fair Work Ombudsman v Grouped Property Services [2016] FCA 1034. The respondent submitted that these cases were distinguishable or wrongly decided. In Yogurberry orders were made by consent. In Grouped Property Services the proposed audit order was not contested because the respondent did not appear. The respondent also submitted that the orders were made on the application of the Fair Work Ombudsman whose functions under the Act are more extensive than the applicant’s. I acknowledge that the audit orders in both cases were made by consent or after non-appearance and that the Fair Work Ombudsman was the applicant in both cases. However, in each case the orders were made under section 545(1) and that section makes no distinction between an application made by the Fair Work Ombudsman and anyone else entitled to seek an order. I do not accept that the decisions are distinguishable and it is not for this court to decide whether they were wrongly decided (even if there were some indication of that).
The applicant also said that the nature of the order ultimately sought by the applicant was inquisitorial and suggested that the section did not permit an order going beyond something in the nature of discovery or disclosure. The respondent pointed out that section 713(1) of the Act expressly removed the privilege against self-incrimination in the case of an inspector requiring production of documents or records. While that may be so, the privilege against self-incrimination in section 128 of the Evidence Act would still apply to evidence showing commission of an offence or liability for a civil penalty arising from an order of the court in the case of a natural person. However, the privilege against self-incrimination is abolished for bodies corporate under section 187 of the Evidence Act. There is nothing in this issue to prevent the making of an audit order against a body corporate such as the respondent.
The terms of section 545(1) are expressed widely: the court "may make any order the court considers appropriate if the court is satisfied that a person has contravened… a civil remedy provision”. As noted, the provision seems to require that the court be satisfied that there has been a contravention in relation to some identifiable employee but that is all.
If a court was satisfied there had been a contravention of a civil remedy provision in relation to one or more employees I see no reason why the court could not make orders that would permit the identification of other employees who had been affected by the same or similar contravention. Such an interpretation is consistent with the object of the Act set out in section 3 “to provide a balanced framework for co-operation and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians”.
Relevantly for this case, the means by which that object is to be achieved include:
(a) providing workplace relation laws that are fair to working Australians, …
(b) 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; and …
…
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action.
It is consistent with the object of the Act that the court is able, on the application of a person with appropriate standing, to make orders in support of that object. Further, the Fair Work Act emphasises good faith in conduct between employers and employees. In my view, these matters support the existence of the court’s power to make an order in the nature of the audit order sought by the applicant.
During final submissions the respondent offered an undertaking, if the court was satisfied that a power existed to make orders against it under section 545(1), in the following terms:
to disclose to the applicant the documents showing termination payments to the employees (as defined in the order proposed by the applicant) whose employment at Wickham Point was terminated during the period 7 June 2016 to 31 October 2016 as a consequence of the closure of the facility.
Mr Fernon, senior counsel for the respondent, candidly conceded that the documents that would be provided pursuant to this undertaking would not break down the payments made to the employees in a way that would easily enable the identification of whether or not remote district allowance had been paid to them. As I understood him, the information would show the amount paid for accrued annual leave, but not a specific item for remote district allowance, and would still require a working back from the annual leave entitlement and the amount actually paid to arrive at a conclusion as to whether or not the remote district allowance had been included in the final payment and, if so, how much.
In my view, that would be unsatisfactory because it would require the applicant to go to the trouble and expense of making the calculation. I am not satisfied, further, that such a calculation is likely to be easy or accurate or even possible. For this reason, I consider the offered undertaking to be inadequate and the audit order sought by the applicant to be necessary and proportionate.
The issue of the pecuniary penalty sought by the applicant is still not resolved. I do not propose to decide that question until I know the extent of the respondent's contravention and the number of employees affected by it.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Young
Date: 12 December 2018
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