United Workers' Union v Victorian Protection Security Services Pty Ltd
[2022] FedCFamC2G 584
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
United Workers’ Union v Victorian Protection Security Services Pty Ltd [2022] FedCFamC2G 584
File number(s): MLG 1636 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 25 July 2022 Catchwords: INDUSTRIAL LAW – Practice and procedure – application for default judgment – declarations and orders made. Legislation: Fair Work Act 2009 (Cth) ss 44, 45, 90(2), 357(1), 540, 545(1), 546(1), 547(2)
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 211(3)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.06(2), 13.04, 13.05, 13.06(2), Sch 1
Federal Court Rules 1979 (Cth) Or 35A r 3(2)(c)
Federal Court Rules 2011 (Cth) r 5.23(2)(c)
Security Services Industry Award 2010 cls 14, 20.2, 22.3
Security Services Industry Award 2020 cls 15, 18.2, 20.2
Cases cited: Macquarie Bank Limited v Seagle [2005] FCA 1239
Macquarie Bank Limited v Seagle [2008] FCA 1417
Phonographic Performance Ltd v Maitra (1998) 41 IPR 225
Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626
Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227
Division: Fair Work Number of paragraphs: 18 Date of hearing: 18 July 2022 Place: Heard in Melbourne, delivered in Sydney For the Applicant: Mr L McDonald The Respondent: No appearance by, or on behalf of, the respondent ORDERS
MLG 1636 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: UNITED WORKERS' UNION
Applicant
AND: VICTORIAN PROTECTION SECURITY SERVICES PTY LTD ABN 093 606 378
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
25 JULY 2022
THE COURT DECLARES THAT:
1.The respondent contravened s 44(1) of the Fair Work Act 2009 (Cth) (FW Act) by failing, contrary to s 90(2) of the FW Act, to pay to Mr Saim Sahi at the time he ceased his employment with the respondent on 17 January 2020, an amount for annual leave that Mr Saim Sahi had accrued but had not taken.
2.The respondent contravened s 45 of the FW Act by failing to pay to Mr Saim Sahi the minimum rates of pay for an adult employee:
(a)for the period from 22 June 2015 to 31 December 2019, as prescribed by cl 14 of the Security Services Industry Award 2010 (2010 Award); and
(b)for the period from 1 January to 17 January 2020, as prescribed by cl 15 of the Security Services Industry Award 2020 (2020 Award).
3.The respondent contravened s 45 of the FW Act by failing to make superannuation contributions to a superannuation fund for the benefit of Mr Saim Sahi:
(a)for the period from 22 June 2015 to 31 December 2019, as prescribed by cl 20.2 of the 2010 Award; and
(b)for the period from 1 January to 17 January 2020, as prescribed by cl 18.2 of the 2020 Award.
4.The respondent contravened s 45 of the FW Act by failing to pay to Mr Saim Sahi the required weekend penalty rates:
(a)for the period from 22 June 2015 to 31 December 2019, as prescribed by cl 22.3 of the 2010 Award; and
(b)for the period from 1 January to 17 January 2020, as prescribed by cl 20.2 of the 2020 Award.
5.The respondent contravened s 357(1) of the FW Act by misrepresenting to Mr Saim Sahi that the contract of employment under which he was, or would be, employed by the respondent, was a contract for services under which Mr Saim Sahi performed, or would perform, work as an independent contractor.
THE COURT ORDERS THAT:
6.Pursuant to s 545(2) of the FW Act the respondent pay to Mr Saim Sahi $109,523.45 as compensation for the loss Mr Saim Sahi suffered because of the respondent’s contraventions identified in declarations 1, 2, and 4.
7.Pursuant to s 545(2) of the FW Act the respondent pay $31,874.76 to Mr Saim Sahi’s nominated superannuation fund as compensation for the loss Mr Saim Sahi suffered because of the respondent’s contravention identified in declaration 3.
8.Pursuant to s 211(3) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) the respondent pay interest of:
(a)$11,594.48 on the amount referred to in order 6; and
(b)$3,374.36 on the amount referred to in order 7.
9.The applicant have liberty to apply for an order or orders under s 546(1) of the FW Act in relation to the contraventions identified in declarations 1, 2, 3, 4, and 5.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
The applicant (UWU) applies under r 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules) for default judgment against the respondent (VPSS) in a proceeding UWU has brought under s 540 of the Fair Work Act 2009 (Cth) (FW Act) on behalf of one of its members, Mr Sahi.
UWU claims VPSS contravened s 45 of the FW Act by failing, for the period from 22 June 2015 to 31 December 2019, to make payments it was obliged to make under the Security Services Industry Award 2010 (2010 Award), and, for the period from 1 January to 17 January 2020, to make payments it was required to make under the Security Services Industry Award 2020 (2020 Award). UWU also claims VPSS contravened s 44(1) of the FW Act by not complying with s 90(2), and that it contravened s 357(1) of the FW Act by misrepresenting to Mr Sahi during his period of employment with VPSS that the contract of employment under which VPSS employed Mr Sahi was a contract for services.
PROCEDURAL HISTORY
UWU commenced the proceeding on 13 July 2021 by filing an application and a statement of claim. The matter came before Judge Davis for a directions hearing on 15 September 2021, but VPSS did not appear at the directions hearing. The proceeding was adjourned for a further directions hearing on 28 September 2021, but VPSS again did not appear. On that day Judge Davis ordered that VPSS file and serve a response and defence by 26 October 2021. VPSS failed to do so.
On 11 January 2022 UWU filed an application in a proceeding for default judgment. That application came before a Registrar on 21 January 2022 but, again, VPSS did not appear. On that day the application in a proceeding was listed for hearing before Judge Davis on 25 May 2022. That hearing was later vacated, and relisted before me on 18 July 2022. VPSS did not appear at the hearing.[1]
[1] VPSS was given notice of the hearing of 18 July 2022 – see affidavit of L J McDonald 13.07.2022
PARAGRAPH 13.05(2)(c) OF GFL RULES
Subrule 13.05(2) of the GFL Rules applies to a respondent who “is in default”. Under r 13.04(2) of the GFL Rules a respondent is in default if the respondent has not satisfied the applicant’s claims, and the respondent has failed to do one or more of the things identified in r 13.04(2)(b) of the GFL Rules. The things identified in r 13.04(2)(b) that are relevant to the application before me are the failure to give an address for service before the time for doing so has expired, the failure to file a response or defence before the time for doing so has expired, the failure to comply with an order of the Court in the proceeding, and the failure to defend the proceeding with due diligence. Also relevant is r 13.06(2) of the GFL Rules which provides that the Court may make an order of the kind mentioned in r 13.05(1), (2) or (4) if a party to a proceeding is absent from a hearing.
When a respondent is in default, or when a respondent is absent from a hearing, the Court may make one of the orders set out in r 13.05(2) of the GFL Rules. Relevant to the application before me is r 13.05(2)(c) which provides that the Court may:
if the proceeding was started by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings – give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant . . .
IS VPSS IN DEFAULT?
VPSS has not filed a notice of address for service. Nor has it filed a reply or defence. By not filing any defence VPSS failed to comply with the orders of 28 September 2021. I am therefore satisfied VPSS is in default within the meaning of r 13.04(2) of the GFL Rules.
PRINCIPLES
Rules 13.04 and 13.05 of the GFL Rules were adapted from, and are substantially similar to, the rules contained in O 35A of the now repealed Federal Court Rules 1979 (Cth);[2] and r 13.05(2)(c) of the GFL Rules is almost identical to O 35A r 3(2)(c). There are a number of principles that have been formulated in relation to O 35A r 3(2)(c) which apply to r 13.05 of the GFL Rules. These include the following:
(a)First r 13.05(2)(c) of the GFL Rules “does not require proof of the claim by evidence, but only requires that – on the face of the statement of claim – there is a claim for the relief sought”.[3]
(b)Second, before the Court may make an order under r 13.05(2)(c) of the GFL Rules it must be satisfied that the document, which the applicant has filed with the application, is in fact a “statement of claim”. A statement of claim is a pleading, which means it must comply with the rules of pleading.[4]
(c)Third, it follows from (b) that the statement of claim must plead at least one reasonable cause of action that supports the granting of the relief the applicant seeks in the application. More particularly, “each element of the relevant civil wrong” of which the applicant complains must be “properly and discretely pleaded in the statement of claim”.[5]
(d)Fourth, although r 13.05(2)(c) of the GFL Rules does not require proof of the claim by evidence, it is permissible for the applicant to adduce evidence that is relevant to the relief sought.[6]
(e)Finally, the Court retains a discretion not to make an order under r 13.05(2)(c) of the GFL Rules, even if the preconditions for making an order are satisfied.[7]
[2] The equivalent current rule is r 5.23(2)(c) of the Federal Court Rules 2011 (Cth)
[3] Rathner, in the matter of Mildura Grand Pty Ltd (in liq) v Bendigo Skyrider Pty Ltd [2011] FCA 626, at [9] (Gordon J)
[4] Under r 1.06(2) of the GFL Rules, the rules of the Federal Court Rules 2011 (Cth) (FC Rules) identified in Schedule 1 to the GFL Rules apply, with necessary changes, to general federal law proceedings. The FC Rules there identified include the rules of pleading.
[5] Macquarie Bank Limited v Seagle [2005] FCA 1239, at [24] (Conti J); Macquarie Bank Limited v Seagle [2008] FCA 1417, at [20] (Jagot J)
[6] Phonographic Performance Ltd v Maitra (1998) 41 IPR 225, at page 230
[7] See the authorities decided under O 35A of the Federal Court Rules 1979 (Cth) referred to by Flick J in Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227, at [23]
UWU’S PLEADED CASE AND CLAIMS FOR RELIEF
From 22 June 2015 to 17 January 2020 Mr Sahi was an employee of VPSS.[8] As an employee Mr Sahi performed security services, such as patrolling sites, controlling access to sites, monitoring and responding to alarms systems and chillers, and inducting employees, contractors and visitors to site specific safety procedures of various sites.[9]
[8] Statement of claim, [6]
[9] Statement of claim, [10]
Mr Sahi’s employment with VPSS was covered by the 2010 Award and, from 1 January 2020, by the 2020 Award. Notwithstanding that, VPSS misrepresented to Mr Sahi during his period of employment that VPSS engaged him to perform work as an independent contractor.[10]
[10] Statement of claim, [7]
Underpayment under 2010 Award and 2020 Award
The 2010 Award provided, and, from 1 January 2020, the 2020 Award provided, among other things that:[11]
(a)employees are entitled to minimum hourly rates of pay, as prescribed by cl 14 of the 2010 Award and, from 1 January 2020, as prescribed by cl 15 of the 2020 Award; and
(b)employers must pay shift penalty rates in accordance with cl 22.3 of the 2010 Award and, from 1 January 2020, in accordance with cl 20.2 of the 2020 Award, when employees work a shift that attracts a shift penalty rate.
[11] Statement of claim, [13]
Under the 2010 Award and the 2020 Award, VPSS was required to pay to Mr Sahi from 22 June 2015 to 17 January 2020 the sum of $335,523.82, but VPSS only paid Mr Sahi $248,954.10, being $86,569.72 less than the amounts VPSS was required to pay Mr Sahi. VPSS, therefore, did not pay Mr Sahi wages in accordance with cl 14 and cl 22.3 of the 2010 Award and cl 15 and cl 20.2 of the 2020 Award and, consequently, engaged in two separate contraventions of s 45 of the FW Act.[12]
[12] Statement of claim¸ [14]-[16]; Schedule A
Payment of annual leave upon cessation of employment
Pursuant to s 90(2) of the FW Act VPSS was required to pay Mr Sahi his accrued but untaken annual leave of $22,953.73 when he ceased his employment with VPSS on 17 January 2020. VPSS failed to do so and, for that reason, VPSS contravened s 90(2) of the FW Act and, consequently, s 44(1) of the FW Act.[13]
[13] Statement of claim, [17]-[20]
Superannuation contributions
Pursuant to cl 20.2 of the 2010 Award and, from 1 January 2020, cl 18.2 of the 2020 Award, VPSS was required to make superannuation contributions to Mr Sahi’s superannuation fund for his benefit to avoid being required to pay the superannuation guarantee charge under the superannuation legislation with respect to Mr Sahi. From 22 June 2015 to 17 January 2020, VPSS was required to make superannuation contributions in the sum of $31,874.76 to a superannuation fund for the benefit of Mr Sahi, but it failed to do so. VPSS, therefore, breached cl 20.2 of the 2010 Award and cl 18.2 of the 2020 Award and, consequently, contravened s 45 of the FW Act.[14]
[14] Statement of claim, [21]-[24]
SHOULD ORDERS BE MADE?
UWU seeks the following orders:
(a)declarations that VPSS:
(i)contravened s 44(1) of the FW Act by failing to pay Mr Sahi his untaken annual leave when his employment ceased on 17 January 2020 as prescribed by s 90(2) of the FW Act;
(ii)contravened s 45 of the FW Act by failing to pay Mr Sahi the minimum rates of pay for an adult employee as prescribed by cl 14 of the 2010 Award and, from 1 January 2020, cl 15 of the 2020 Award;
(iii)contravened s 45 of the FW Act by failing to make superannuation contributions to a superannuation fund for the benefit of Mr Sahi as prescribed by cl 20.2 of the 2010 Award and, from 1 January 2020, cl 18.2 of the 2020 Award;
(iv)contravened s 45 of the FW Act by failing to pay Mr Sahi the required weekend penalty rates as prescribed by cl 22.3 of the 2010 Award and, from 1 January 2020, cl 20.2 of the 2020 Award; and
(v)contravened s 357(1) of the FW Act by misrepresenting to Mr Sahi that the contract of employment under which he was, or would be, employed by VPSS, was a contract for services under which he performed, or would perform, work as an independent contractor;
(b)orders pursuant to s 545(2) of the FW Act that:
(i)VPSS pay compensation to Mr Sahi in the amount of $109,523.45; and
(ii)VPSS pay compensation of $31,874.76 to Mr Sahi’s nominated superannuation fund; and
(c)an order pursuant to s 547(2) of the FW Act that VPSS pay interest on the amounts referred to in (b).
I am satisfied that, on the basis of the facts and matters alleged in the statement of claim, UWU is entitled to the declarations and orders it seeks, and I will make declarations and orders substantially to the effect UWU claims. I also propose to order under s 211(3) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) that interest be paid on the amounts VPSS ought to have paid, but did not pay to Mr Sahi.[15] I propose to calculate interest by applying the rates prescribed by the Interest on Judgments Practice Note (GPN-INT) issued by the Federal Court of Australia. That practice note provides for an interest rate of 4% above the cash rate last published by the Reserve Bank of Australia. I propose to apply a rate of interest of 4.2% over the period 18 January 2020 to 25 July 2022, which is 4% above what I have roughly estimated to be the average cash rate for this period. On these assumptions I have calculated interest on the sum of $109,523.45 for the 920 day period from 18 January 2020 to 25 July 2022 to be $11,594.48,[16] and interest on the sum of $31,874.76 for the same period to be $3,374.36.[17]
[15] Subsection 547(2) of the FW Act provides that in making an order in relation to an amount that a person was required to pay to another person under the FW Act or a fair work instrument, the Court must, on application, include an amount of interest. This provision appears to be restricted to amounts the Court finds a person was required to pay under the FW Act or a fair work instrument, and does not include amounts the Court may order to pay by way of compensation.
[16] (4.2% x $109,523.45)/365 x 920 = $11,594.48
[17] (4.2% x $31,874.76)/365 x 920 = $3,374.36
UWU initially also applied for orders for the payment of pecuniary penalty, but it does not, at this stage, propose to apply for such orders.
DISPOSITION
I will make the declarations and orders substantially to the effect sought by UWU. I will also reserve liberty to apply should UWU intend to apply for the payment of pecuniary penalties.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 25 July 2022
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