Vojnics-Tunics v Jodack Pty Ltd trading as Snap Caulfield South
[2023] FedCFamC2G 715
•11 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Vojnics-Tunics v Jodack Pty Ltd trading as Snap Caulfield South [2023] FedCFamC2G 715
File number(s): MLG 1036 of 2021 Judgment of: JUDGE MANSINI Date of judgment: 11 August 2023 Catchwords: INDUSTRIAL LAW – FAIR WORK – underpayments, failures to give payslips and failures to make and keep records – findings that First Respondent contravened ss.44, 45, 323, 525 and 526 of the Fair Work Act – findings of breach of contract of employment – where Second Respondent was involved within the meaning of s.550 – declarations made, penalty and relief to be addressed separately. Legislation: Fair Work Act 2009 (Cth) ss.3(b), 44, 45, 47, 48, 87, 88, 90, 96, 323, 324, 535, 540, 546(3) 550, 557C, 566, 789GBC, 789GDC, 789GE, 789GF, 789GJA,789GJB, 789GM
Superannuation Guarantee (Administration) Act 1992 (Cth) s.16
Fair Work Regulations 2009 (Cth) regs.3.33, 3.36, 3.37
Graphic Arts, Printing and Publishing Award 2010 cls.29.1, 29.2, 37.5
Cases cited: Australian Building and Construction Commissioner v Hall [2018] FCAFC 83
Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130; (1988) 26 IR 411
Communications, Electrical, Electronic, Energy, Information, Plumbing and Allied Services Union of Australia v Qantas Airways Limited [2020] FCAFC 205
Fair Work Ombudsman v DTF World Square Pty Lty (in liq) (No 3) [2023] FCA 201
Gallagher v AAG LabourServices Pty Ltd [2020] FCA 1753
Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627; 290 IR 331
Mahmood v Chohan [2021] FCA 973
Palmer v Ayres [2017] HCA 5
Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39; (2022) 97 ALJR 40
Division: Division 2 General Federal Law Number of paragraphs: 190 Date of last submission/s: 17 October 2022 Date of hearing: 15 August 2022 & 14 November 2022 Place: Melbourne Counsel for the Applicant: Mr C Banasik Solicitor for the Applicant: Self-represented litigant Counsel for the Respondents: Mr C Pym Solicitor for the Respondents: Barry Nilsson Lawyers ORDERS
MLG 1036 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ZSOLT VOJNICS-TUNICS
Applicant
AND: JODACK PTY LTD T/A SNAP CAULFIELD SOUTH
First Respondent
DAVID KEITH CLARKE
Second Respondent
order made by:
JUDGE MANSINI
DATE OF ORDER:
11 August 2023
THE COURT DECLARES THAT:
1.In the period between 1 July 2018 and 30 June 2019 the First Respondent contravened s.323 of the Fair Work Act 2009 (Act) by failing to pay the Applicant in full the amounts payable to him in relation to the performance of work pursuant to his contract of employment, with the shortfall being $2,098.69 gross exclusive of superannuation.
2.In the period between 1 July 2019 and 30 June 2020 the First Respondent contravened s.323 of the Act by failing to pay the Applicant in full the amounts payable to him in relation to the performance of work pursuant to his contract of employment, with the shortfall being $5,799.31 gross exclusive of superannuation.
3.In the period between 1 July 2020 and 30 June 2021 the First Respondent contravened s.323 of the Act by failing to pay the Applicant in full the amounts payable to him in relation to the performance of work pursuant to his contract of employment, with the shortfall being $1,224.36 gross exclusive of superannuation.
4.In the period between 1 July 2017 and 31 December 2019 the First Respondent contravened s.45 of the Act by failing to make such superannuation contributions to a superannuation fund for the benefit of the Applicant as would avoid the First Respondent being required to pay the superannuation guarantee charge under the Superannuation Guarantee (Administration) Act 1992 (Cth) with respect to the Applicant contrary to cl.29.2 of the Graphic Arts, Printing and Publishing Award 2010.
5.The First Respondent contravened s.44 of the Act by failing to pay the Applicant, on the termination of his employment, the amount that would have been payable to him had he taken the leave, contrary to s.90 of the Act, with the shortfall being $2,582.75.
6.The First Respondent contravened s.536 of the Act by failing to provide the Applicant with pay slips within one working day of paying an amount to the Applicant in relation to the performance of work on the following occasions: 20 December 2017 to 2 January 2018; 28 November 2018 to 4 December 2018; 14 August 2019 to 20 August 2019; and 27 November 2019 to 17 December 2019; and 12 occasions between 29 January 2020 to 28 October 2020.
7.The First Respondent contravened s.535 of the Act by failing to make and keep records that set out the annual leave taken by the Applicant and the balance of the Applicant’s entitlement to annual leave from time to time contrary to reg.3.36(1) of the Regulations.
8.The First Respondent contravened s.535 of the Act by failing to make and keep a record that specified the superannuation contributions made for the benefit of the Applicant contrary to reg. 3.37(1) of the Regulations.
9.The Second Respondent was involved, within the meaning of s.550 of the Act, in each of the contraventions of the first respondent referred to in the paragraphs above.
THE COURTS ORDERS THAT:
1.The question of penalty and relief be reserved.
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).
IN SUMMARY
[1]
APPLICATION BEFORE THE COURT
[8]
LEGAL FRAMEWORK
[14]
PRELIMINARY MATTERS
[23]
UNDERPAYMENT CLAIMS
[25]
Base salary pay (s.323 and breach of contract)
[25]
Financial year ending 30 June 2019
[28]
Evidence
[32]
Consideration
[38]
Conclusion as to financial year ending 30 June 2019
[46]
Financial year ending 30 June 2020
[49]
Evidence
[52]
Consideration
[59]
Conclusion as to financial year ending 30 June 2020
[65]
Financial year ending 30 June 2021
[68]
Evidence
[71]
Consideration
[76]
Conclusion as to financial year ending 30 June 2021
[82]
Bonus pay (s.323 and breach of contract)
[85]
Evidence
[89]
Terms and conditions of employment
[89]
Salary increase
[98]
Other terms and conditions of the role
[100]
Consideration
[102]
Conclusion in relation to bonus pay
[112]
Superannuation payable pursuant to the Award (s.45)
[114]
Evidence
[116]
Consideration
[133]
Conclusion as to superannuation
[142]
Annual leave on cessation of employment (ss.44 and 45)
[145]
Evidence
[148]
Consideration
[155]
Conclusion as to annual leave
[160]
PAYSLIPS AND RECORDS
[163]
Failure to provide payslips within one day (s.536)
[163]
Evidence
[165]
Consideration
[170]
Conclusion in relation to payslips
[175]
Failure to make and keep records (s.535)
[178]
Evidence
[178]
Consideration
[179]
Conclusion
[181]
SECOND RESPONDENT’S INVOLVEMENT IN CONTRAVENTIONS
[183]
Consideration
[185]
Conclusion as to Second Respondent’s involvement
[187]
CONCLUSION
[189]
REASONS FOR JUDGMENT
JUDGE MANSINI
IN SUMMARY
Before the Court is a claim that the Applicant was not paid numerous entitlements and that certain records or payslips were not made, kept or given during the term of his employment.
The First Respondent was a franchisee in the Snap Printing Group - a printing business located in Caulfield South with 4 employees at around the time these proceedings commenced.
The Second Respondent had for some 20 years operated the printing business and was at all material times the sole director of the First Respondent. He was previously assisted by his late wife in the administration of the business and sought to outsource some functions to third parties.
On or about 28 June 2017, the Applicant commenced his employment with the First Respondent in the position of Centre Manager. Together the parties endured the circumstances of the global COVID-19 pandemic and related business restrictions in Victoria during the employment and the First Respondent experienced personal hardships in his immediate family. The employment ultimately came to an end on 14 December 2020 by reason of serious misconduct involving alleged misappropriation of funds.
The Respondents admitted to some identified underpayments and failures to give payslips but contended these issues had since been rectified. Otherwise, the main matters in contention related to whether there was an entitlement or obligation to pay any additional amounts as contended.
The Applicant sought declarations that the First Respondent contravened the Fair Work Act 2009 (Cth) (Act) and, as sole director, the Second Respondent was involved in each contravention. He also sought payment of compensation, common law damages for an alleged breach of contract and to be heard on interest and penalties.
For the reasons that follow, certain contraventions of the Act are established on the evidence and declarations will be made. The Court will be addressed separately about relief including appropriate penalty(ies) (if any).
APPLICATION BEFORE THE COURT
The Applicant’s claim and Respondents’ defence were articulated in the following pleadings:
(a)Applicant’s amended statement of claim filed on 17 December 2021; and
(b)Respondents’ (joint) amended defence filed on 7 March 2022.
The Applicant prepared a schedule of amended particulars which was handed up to the Court at the hearing. This document was understood to be a guide to the Applicant’s case and he did not seek to amend his pleadings to reflect its contents.
After the hearing, the parties were directed to prepare and file a table summarising their respective positions and the Applicant was to submit his proposed orders. The Applicant’s claims may readily be understood by reference to the relief sought in his proposed minute of orders provided to the Court on 24 November 2022.
For the alleged statutory contraventions, the Applicant sought the following declarations:
1.In the period between 1 July 2018 and 30 June 2019 the first respondent contravened s 323 of the Fair Work Act 2009 (the FW Act) by failing to pay the Applicant in full the amounts payable to him in relation to the performance of work pursuant to his contract of employment, with the shortfall being $2,098.69 gross exclusive of superannuation;
2.In the period between 1 July 2019 and 30 June 2020 the first respondent contravened s 323 of the FW Act by failing to pay the Applicant in full the amounts payable to him in relation to the performance of work pursuant to his contract of employment, with the shortfall being $5,799.31 gross exclusive of superannuation;
3.In the period between 1 July 2020 and 30 June 2021 the first respondent contravened s 323 of the FW Act by failing to pay the applicant in full the amounts payable to him in relation to the performance of work pursuant to his contract of employment, with the shortfall being $1,224.36 gross exclusive of superannuation;
4.In the period between 1 July 2017 and 31 December 2019 the first respondent contravened s 45 of the FW Act by failing to make such superannuation contributions to a superannuation fund for the benefit of the applicant as would avoid the first respondent being required to pay the superannuation guarantee charge under superannuation legislation with respect to the applicant contrary to the Graphic Arts, Printing and Publishing Award 2010 cl 29.2.
5.The first respondent contravened s 44 of the FW Act by failing to pay the applicant, on the termination of his employment, the amount that would have been payable to him had he taken the leave, contrary to s 90 of the FW Act, with the shortfall being $2,582.75.
6.The first respondent contravened s 536 of the FW Act by failing to provide the applicant with pay slips within one working day of paying an amount to the applicant in relation to the performance of work on the following occasions: 4 December 2019, 11 December 2019, 18 December 2019, 20 December 2019, 15 January 2020, 22 January 2020, 29 January 2020, 5 February 2020, 12 February 2020, 19 February 2020, 26 February 2020, 4 March 2020, 11 March 2020, 18 March 2020, 6 May 2020, 30 September 2020, 7 October 2020, 14 October 2020, 21 October 2020, 28 October 2020, 19 November 2020, 26 November 2020, 3 December 2020, and 10 December 2020.
7.The first respondent contravened s 535 of the FW Act by failing to make and keep a record that set out the details of the bonus contrary to the Fair Work Regulations 2009 (FW Regs) r 3.33(3)(b).
8.The first respondent contravened s 535 of the FW Act by failing to make and keep a record that set out the annual leave taken by the applicant and the balance of the applicant’s entitlement to annual leave from time to time contrary to the FW Regs r 3.36(1).
9.The first respondent contravened s 535 of the FW Act by failing to make and keep a record that specified the superannuation contributions made for the benefit of the applicant contrary to the FW Regs r 3.37(1).
10.The second respondent was involved, within the meaning of s 550 of the FW Act, in each of the contraventions of the first respondent referred to in the paragraphs above.
(referred to in these reasons as the first to tenth proposed declarations).
The Applicant also sought orders in terms that:
11.Pursuant to s 545 of the FW Act, the respondents (their liability being joint and several) pay compensation to the applicant in the amount of $11,705.11, comprising the amounts referred to at paragraphs 1, 2, 3 and 5 above.
12.Pursuant to s 545 of the Act, the respondents (their liability being joint and several) pay compensation into the applicant’s nominated superannuation account in the amount of $3,041.35, comprising:
12.1Superannuation of $1,111.99 on the amounts referred to at paragraph 11 above; and
12.2.The remaining shortfall of $1,929.36 of the amount referred to at paragraph 4 above.
13.The respondents (their liability being joint and several) pay common law damages to the applicant in the amount of $29,150 for the unpaid bonus.
14. The parties shall be heard as to interest and penalty.
15. Costs reserved.
(referred to in these reasons as proposed orders 11 to 15).
The Respondents plead that any contravention of the Act was rectified upon identification and that they are not liable to pay penalties. The Respondents asserted that even if they are liable to pay penalties, the Applicant is not entitled to compensation, damages or interest and these components are not payable to the Applicant pursuant to s.546(3) of the Act.
LEGAL FRAMEWORK
A principle purpose of the Act is to ensure a guaranteed safety net of fair, relevant and enforceable minimum standards for employees through the National Employment Standards (NES), modern awards and national minimum wage orders: s.3(b) of the Act.
The core provisions at Part 2-1 of the Act provide for compliance with and interaction between the sources of the main terms and conditions under the Act. There, the Act proscribes that an employer must not contravene a provision of the NES (s.44) and a person must not contravene an award (s.45). These are civil remedy provisions.
Part 2-9 provides for other terms and conditions of employment including the method and frequency of payment for performance of work which is to be in full (excepting permitted deductions per s.324 which is not presently of relevance) and at least monthly, inclusive of any incentive based payments and bonuses that become payable during the relevant period: s.323. This is also a civil remedy provision.
Part 3-6 sets out the other rights and responsibilities proscribed by the statute including employer obligations in relation to employee records and payslips. Pertinent to the present case is the obligation on an employer to make, and keep for 7 years, employee records of the kind prescribed by the Fair Work Regulations 2009 (Cth) (Regulations) in relation to each of its employees: s.535. Further, an employer must give a pay slip to each of its employees within 1 working day of paying them an amount in relation to the performance of work: s.536. These are also civil remedy provisions.
A person “involved in” a contravention of a civil remedy provision (including where found to have aided, abetted, counselled or procured the contravention or been in any direct or indirect way knowingly concerned in or party to the contravention) is taken to have contravened the provision: s.550.
Such cases may attract a reverse onus of proof. In Fair Work Ombudsman v DTF World Square Pty Lty (in liq) (No 3) [2023] FCA 201 at [91]:
Section 557C shifts the burden of proof to the employer in a proceeding relating to a contravention by an employer of certain civil remedy provisions of the Act in circumstances in which, relevantly, the employer was required to make and keep records or to give a pay slip and, absent a reasonable excuse, the employer failed to comply with the requirement. The provision reflects a legislative policy that an employer should not be able to take advantage of its failure to make or keep certain records to defeat a claim that it has underpaid its employees, see for example: Gallagher v AAG LabourServices Pty Ltd [2020] FCA 1753 at [18] (Jackson J).
Section 557C is concerned with the overall burden of proof – when engaged, it is both the legal and evidential burden that shift to the defaulting employer. If the evidence adduced by the employer is insufficient to disprove the allegation on the balance of probabilities, then the effect of s.557C is that the claim must be upheld: Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627; 290 IR 331 at [14].
If satisfied of a contravention of a civil remedy provision, the Court may make any order it considers appropriate: s.545.
This Court is also conferred with jurisdiction in relation to any civil “matter” arising under the Act: s.566. For the purposes of s.566, the identification of a “matter” proceeds by reference to principles upon which federal jurisdiction is engaged under the Constitution. The applicable principles were restated by the plurality in Palmer v Ayres [2017] HCA 5 at [26]-[27]. A claim for the underpayment of employee entitlements pursuant to s.323 of the Act will attract the accrued jurisdiction of this Court to hear and determine a breach of contract claim: Mahmood v Chohan [2021] FCA 973.
PRELIMINARY MATTERS
There was no issue between the parties and I find that:
(a)The Applicant was a “national system employee” as defined by s.13 of the Act;
(b)The First Respondent is and was a “constitutional corporation” within the meaning of s.12 and a “national system employer” as defined by s.14 of the Act;
(c)The Second Respondent is and was the sole director of the First Respondent.
The Applicant was employed as the Centre Manager of the First Respondent from on or about 28 June 2017 until his termination on 14 December 2020. On the evidence, I find that the Applicant’s terms and conditions of employment were derived from the written employment agreement that he signed on 20 June 2017 and the usual common law terms to be implied in that employment agreement: Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39; (2022) 97 ALJR 40 at [112]. It was not disputed and on the limited evidence on the point I accept that the Graphic Arts, Printing and Publishing Award 2010 as in force at the relevant times (Award) both covered and applied to the Applicant’s employment with the First Respondent. There are other statutory conditions that apply to all national system employees pursuant to the Act, the NES in the Act and the superannuation guarantee legislation - the application of which is considered further in relation to each claim below.
UNDERPAYMENT CLAIMS
Base salary pay (s.323 and breach of contract)
By the amended statement of claim and proposed minute of orders sought, the Applicant was understood to seek declarations that the First Respondent had separately contravened s.323 of the Act when it underpaid the Applicant in each of the financial years ending 30 June 2019, 30 June 2020 and 30 June 2021. The alleged underpayments arose in different circumstances in each case. By his alleged involvement within the meaning of s.550, the Second Respondent was also claimed to have contravened the Act.
The pleadings claimed the same conduct amounted to a breach of the employment agreement.
The pleadings and proposed minute of orders particularised the remedy of compensation.
Financial year ending 30 June 2019
The amended statement of claim identified this alleged underpayment as $2,098.69 in base salary plus $199.38 in superannuation.
The First Respondent said that there was no such underpayment and the shortfall was explained by the Applicant taking a period of leave in December 2018 and January 2019 for which absence he had not accrued sufficient annual leave. It said the Applicant had therefore agreed to take 2 weeks’ unpaid leave.
At the hearing, the Applicant said that the claimed $2,098.69 underpayment in base salary plus $199.38 in unpaid superannuation was made up of:
(a)$750.00 being for 3 days’ pay for work performed on 12, 13 and 14 December 2018;
(b)$750.00 being for 3 days’ pay for 25 December 2018, 26 December 2018 and 1 January 2019; and
(c)$598.69 being the remainder, which the Applicant calculated as equivalent to 18.2 hours’ work which he also attributed to the period of absence from work when he travelled to Budapest between 15 December 2018 and 19 January 2019.
The First Respondent took issue with the specificity of this claim not being provided until during the course of the hearing before the Court. Nonetheless, in relation to the substance of this component of the unpaid salary claim the First Respondent:
(a)Contended that the Applicant did not work and therefore was not entitled to payment of base salary or superannuation for any of 12, 13 and 14 December 2018;
(b)Admitted that the Applicant was entitled to payment for 3 public holidays on 25 and 26 December 2018 and 1 January 2019 and had not been paid for those days; and
(c)Accepted it may have made a mistake in relation to the residual amount of 18.2 hours but primarily contended that this was explained by the Applicant’s unpaid leave over this period.
Evidence
There was no dispute and the evidence before the Court established that, for the financial year 1 July 2018 to 30 June 2019:
(a)Pursuant to the written employment agreement signed by the Applicant on 20 June 2017, the Applicant’s base salary was $65,000 in exchange for 38 ordinary hours of work per week; and
(b)Pursuant to the Applicant’s evidence, he had a group certificate within his control for this period (which document was not in evidence) and in that period he was paid $62,901.31 in base salary.
Of the payslips in evidence, the following was relevant:
(a)On 13 December 2018, a payslip for the period 5 to 11 December 2018 was issued to the Applicant. The payslip reflected that the Applicant was paid his ordinary weekly salary of $1,250 gross ($32.8947 x 38 hours) and an additional amount of $4,901.31 which was described on the payslip as annual leave ($32.8947 x 149 hours).
(b)On 24 January 2019, a payslip for the period 16 to 22 January 2019 was issued to the Applicant. The payslip reflected that the Applicant was paid $500.00 gross which was described on the payslip as personal leave ($32.8947 x 15.2 hours).
(c)A bundle of prior payslips were produced but did not record leave accruals.
There was no other record before the Court of leave accrued, sought or taken since commencement of employment.
The Second Respondent accepted in cross-examination that he did not recall the Applicant’s last day of work. The Applicant’s evidence was that he worked until and inclusive of 14 December 2018. That account was supported by evidence of a flight itinerary which established purchase of a flight to Budapest departing Australia on 15 December 2018 and returning on 19 January 2019.
In the period between 11 December 2018 and 22 January 2019, it was agreed that there were 3 gazetted public holidays. The public holidays fell on 25 December 2018, 26 December 2018 and 1 January 2019.
There was no apparent dispute that the Applicant was sick on his first day back at work after the holiday and was paid personal leave for 21 and 22 January 2019 after which time he resumed normal duties.
Consideration
As the issue arises throughout these reasons it is important to note at the outset that precision of pleadings is a necessary and important requirement of an applicant in a case of this nature. That is, a respondent subject of a claim for declaration of contravention of the Act and civil penalties is entitled to be told clearly and precisely in the statement of claim of the case they had to meet and, unless they deliberately chose to allow the case to be conducted on a different basis, to direct their evidence and arguments to that case and that case alone: Australian Building and Construction Commissioner v Hall [2018] FCAFC 83 at [50].
The Respondents’ criticism in terms of the Applicant’s late specificity of the first component of the underpayment claim does not assist in terms of the (im-)precision of pleadings or whether the reverse onus at s.557C was engaged. In the amended statement of claim, the Applicant made an allegation of underpayment relative to the financial year ending 30 June 2019 and precisely specified the quantum of the claim and its nature as unpaid base salary plus superannuation. It was the Respondents who answered that allegation with the defence that the reduced base salary payment in the financial year ending 30 June 2019 was adequately explained by the Applicant’s December 2018/January 2019 leave. The First Respondent was required to make and keep records of remuneration and leave: s.535 and regs.3.33 and 3.36. On the materials before the Court, the First Respondent failed to comply with those record-keeping requirements - having only prepared payslips of the employer’s account of payments made in December 2018 and January 2019 as distinct from records of remuneration and leave accrued and taken. In relation to this component of the claim, the reverse onus at s.557C is engaged therefore the legal and evidentiary burden rests with the First Respondent. Were that conclusion incorrect, the Respondents have chosen to pursue the argument with a defence that they are to prove on the balance of probabilities.
Section 323 of the Act provides (and provided) that an employer must pay an employee amounts payable to the employee in relation to the performance of work in full and at least monthly. That is, excepting an authorised deduction, which exception is not presently applicable.
Over the period December 2018 to January 2019, the Applicant took a period of leave to travel to Budapest. The precise dates that the Applicant was not at work were not agreed. The Second Respondent accepted in cross-examination that he did not recall the Applicant’s last day of work. In the absence of a record of leave requested or approved or a timesheet or other record of time worked, the First Respondent has not disproved the allegation. I prefer the Applicant’s account that he worked to and including 14 December 2018 which was supported by evidence of a flight itinerary. There was no apparent dispute that the Applicant was paid personal leave for 21 and 22 January 2019 after which time he resumed normal duties. Accordingly, I find that the disputed absence from work whilst the Applicant travelled to Budapest was the period 17 December 2018 to 18 January 2019 (inclusive).
The Applicant was therefore entitled to his ordinary base pay for time worked on 12, 13 and 14 December 2018 but, by the payslip issued on 13 December 2018, was not paid for those days. On the evidence I find that the Applicant was entitled to ordinary base pay in the amount of $750.00 for those days and was not so paid.
During the period of his absence, there was a total of 22 working days and 3 public holidays. As a full time employee, the Applicant was entitled to be absent from work and paid at his base rate of pay for his ordinary hours of work on the public holidays: ss.114 and 116 of the NES in the Act. The Respondents conceded and on the evidence I find that the Applicant was entitled to ordinary base pay in the amount of $750.00 despite his absence from work on those public holidays and was not so paid.
The Applicant was entitled to accrue 4 weeks’ paid annual leave for each year of service to be taken for a period agreed with his employer: ss.87 and 88 of the NES in the Act. As at 12 December 2018, the Applicant had completed around 1.5 years’ service. Of the identified residual or remaining shortfall in pay for this absence, the Respondents had treated this as unpaid leave. In cross-examination the Second Respondent conceded that an error may have been made in this respect. To the extent that the Respondents pressed the contention that the Applicant had not accrued sufficient annual leave to cover the remaining 18.2 hours and notwithstanding the record-keeping requirements at reg.3.36, the Respondents did not produce any employment record of leave taken, the balance of the Applicant’s leave entitlement prior to the period in question or a record of agreement to “cash out” or take annual leave in advance. For completeness, the payslips in evidence are essentially a report of how payment was calculated by the First Respondent but do not take the matter further: Fair Work Ombudsman v DTF World Square Pty Lty (in liq) (No 3) [2023] FCA 201. With around 1.5 years’ service, it is at least conceivable that the Applicant had accrued sufficient paid annual leave to cover the duration of this absence. On the evidence before the Court, the First Respondent has not disproved the allegation that he had accrued sufficient annual leave to cover the duration of his absence from 17 December 2018 to 18 January 2019 and was entitled to the shortfall of 18.2 hours’ pay which was not paid.
There being no dispute about the express term of the Applicant’s written employment agreement as to his base salary pay, on the above findings it follows that there was a breach of that contractual term in this period.
Conclusion as to financial year ending 30 June 2019
For the above reasons, the First Respondent is found to have contravened s.323 of the Act by:
(a)Not paying the Applicant for ordinary hours worked at his base salary rate for 12, 13 and 14 December 2018 (which constituted an underpayment of $750.00 in base salary pay) plus superannuation. There is nothing before the Court to suggest that underpayment was rectified as at the time of hearing.
(b)Not paying the Applicant in the amount of $750.00 in base salary pay plus superannuation for public holidays on 25, 26, 27 December 2018 to which he was entitled to ordinary pay and not to work. There is nothing before the Court to suggest that underpayment was rectified as at the time of hearing.
(c)Not paying his entitlement to leave payments in the amount of $598.69 (shortfall amount) plus superannuation for the 18.2 hours. There is nothing before the Court to suggest that underpayment was rectified as at the time of hearing.
I will make a declaration in the terms sought by the first proposed declaration.
The question of penalty and any other relief will be addressed separately.
Financial year ending 30 June 2020
The amended statement of claim identified this alleged underpayment as the shortfall of $5,799.31 plus superannuation of $550.93.
The First Respondent said that there was no such underpayment and the shortfall was explained by the circumstances of the global COVID-19 pandemic and reduction in hours of work and ordinary pay as authorised by the “JobKeeper enabling directions” in the Act. More specifically, the First Respondent alleged it gave a lawful JobKeeper enabling direction and engaged in the necessary consultation by text message (in particular reliance on that sent on 24 and 30 March 2020) as well as frequent communication between all staff. Indeed, the First Respondent submitted that by virtue of its “top up” payments the Applicant was paid $5,760.63 in excess of his lawful entitlements and during the pandemic had worked significantly reduced hours.
The Applicant accepted he had understood that he was to be nominated for the JobKeeper scheme and signed a JobKeeper Employee Nomination Notice. But he disputed the validity of the JobKeeper enabling direction as not having met the requirements of the Act (with particular reference to the consultation requirements at s.789GM). Essentially the argument was that the First Respondent could not rely on the JobKeeper provisions to justify the shortfall in the Applicant’s annual base salary because the direction(s) given were invalid.
Evidence
On or around 16 March 2020, and in response to the global COVID-19 pandemic, a state of emergency was declared in the state of Victoria. Businesses impacted to a certain degree were entitled to Federal Government support by what became known as “JobKeeper payments”.
The Second Respondent gave evidence of the impact on his printing business which included forced closure of the store. Some printing work was able to continue but employee hours were reduced in response to the decrease in work and what he described as a “drastic” decrease in revenue. He accepted in cross-examination that there were also decreased costs during this period mainly due to Government-funded relief but maintained there was a serious impact on overall profitability.
The Second Respondent also gave evidence that his communications with the Applicant about reduced hours of work and JobKeeper payments occurred by text message and email. The Second Respondent annexed records of the following communications as exhibits to his affidavit:
(a)Two text messages of 24 March 2020 which said:
Hi all
I think it looks like we will have to reduce hours worked so we can all survive this.
There is support from the government and its important that you all be prepared by setting yourselves up on the myGov site and access Centrelink
When needed.
This is a heads up for all of us.
and:
The following is the plan for the future until further notice:
John
You will be on call and be paid for your hours worked. I expect that to be approx. 50% of normal hours. Please give me a time sheet by cob Monday each week.
Roger and Zsolt to start at 8.30 and work through to 12.30.
Jay and Kerry to start at 12.30 and work through to 4.30.
I understand that you will be able to get Centrelink to subsidise your lost hours and also you can draw down super up to $10,000.00 tax free.
I’m doing all I can to reduced outgoings and cash will be tough particularly in next 30 to 45 days.
(b)A text message of 30 March 2020 which said there was “great relief today from the government” and that the Second Respondent was consulting his advisors and would fill employees in once he knew more detail.
(c)A text message of 2 April 2020 which was to inform employees that the Second Respondent had that day made applications for support packages which:
..will mean that you will all qualify to receive the job keeper support funding which will commence 1st week in May.
(d)An email of 7 April 2020 which said:
The following is the plan for the future until further notice:
Roger and Zsolt to start at 8.30 and work through to 12.30
Jay and Kerry to start at 12.30 and work through to 4.30
I’m doing all I can to reduce our outgoings and cash will be tough particularly in the next 30 to 45 days.
Thank you all for your understanding and support.
We will come out on the other side of this and usually things recover and boom after this kind of event.
Keep safe everybody and make sure you continue hygiene and social distancing process.
Regards and keep safe
David
At the hearing, the Second Respondent attempted to give evidence about other modes of communication with employees which evidence was opposed on grounds it was not included in filed affidavit material.
On 24 April 2020, the Applicant completed and signed a JobKeeper nomination form, a copy of which was in evidence.
The Second Respondent’s evidence was that, during this period, the Applicant worked reduced hours and was paid for the work completed which was supplemented by JobKeeper.
On 12 May 2020, the Applicant sent an email to the Second Respondent with the subject line “salary”. By that email, the Applicant queried his payment of $750 for “JobKeeper” and an additional payment at his hourly rate. The Second Respondent replied that same day in which he stated that the Applicant “should be receiving Job Keeper of $750.00 plus a top up to bring your hourly rate up to $40.40 per hour for 25 hours – I’ll check it.”.
Consideration
Under the since repealed provisions at Part 6-4C of the Act, employers that qualified for the JobKeeper scheme could give “JobKeeper enabling directions” to employees that were otherwise inconsistent with certain conditions in the Act, an award or a contract of employment - such as reduced hours of work or duties to be performed: ss.789GDC, 789GJA, 789GE, 789GJB, 789GF or 789GBC. If authorised by the JobKeeper amendments, the s.323 obligation to pay the contracted base salary amount in full at least monthly may not have been enforced.
To be authorised by the Act, a JobKeeper enabling direction could not be made retrospectively (ie. before 9 April 2020) (ss.789GDC(1)(a), 789GE(1)(a) and 789GF(1)(a)) and was to be preceded by:
(a)at least 3 days’ written notice of the employer’s intention to give the direction (s.789GM(1)(b)(i)); and
(b)consultation, including certain prescribed steps and of which a record was required to be kept (s.789GM),
(among other conditions specified in the legislation not presently of relevance).
This is not a case in which a contravention of the JobKeeper provisions is alleged. However, the First Respondent sought to rely on the JobKeeper scheme as justification for having complied with its payment obligations under s.323 in the financial year ending 30 June 2020. Accordingly and regardless of whether the reverse onus at s.557C is engaged by reason of statutory requirements to keep records of remuneration and payments, the First Respondent nonetheless bears the onus of establishing the facts on which its defence is based, on the balance of probabilities.
There was no dispute and the evidence established that the Applicant’s base salary for the period 1 July 2019 to 30 June 2020:
(a)By oral agreement with the Second Respondent, on and from 21 August 2019 was increased to $80,000 per annum and therefore would have been $77,881.68 in this period; and
(b)By the Applicant’s evidence he was in possession of a group certificate (which record was not in evidence) and in the relevant period was paid $72,082.37 in salary for this period.
The evidence before the Court established that, in the period 24 March to 2 April 2020, the Second Respondent communicated with the Applicant by text message: about the fact of possible and impending introduction of Federal Government “relief” and also directed the Applicant to work reduced hours. The Applicant signed a JobKeeper Nomination Notice which was in effect a declaration that he was eligible to be nominated for the scheme and was not otherwise receiving payments which would have rendered him ineligible. None of this evidence constituted written notice of the proposed changes or an invitation to the Applicant or his representative to provide views. There was no record of a consultation with the Applicant or his representative. Accordingly, the First Respondent’s alleged “consultation” did not meet the specific requirements of s.789GM. In any event, to the extent that the communications on which the First Respondent relied pre-dated the commencement of the JobKeeper provisions of the Act on 9 April 2020, they were not authorised “JobKeeper enabling directions”. The Respondents have not disproved the allegation that they were not entitled to rely on the JobKeeper enabling direction provisions as justifying payment less than the Applicant’s agreed base salary plus superannuation during this period.
There being no dispute about the Applicant’s base salary pay pursuant to the express term of the Applicant’s written employment agreement as orally varied on 21 August 2019, on the above findings it follows that there was a breach of that contractual term in this period. For completeness, it may be accepted that the Applicant was aware that the First Respondent had obtained JobKeeper support in order to make payments but could not be said to have impliedly agreed with a variation to the remuneration condition of the employment agreement, having queried the payment amounts in various contemporaneous email communications and subsequently commenced these proceedings.
Conclusion as to financial year ending 30 June 2020
For the above reasons, the First Respondent is found to have contravened s.323 of the Act by underpaying the Applicant in the amount of $5,799.31. There is nothing before the Court to suggest that underpayment was rectified as at the time of hearing.
I will make a declaration in the terms sought by the second proposed declaration.
The question of penalty and any other relief will be addressed separately.
Financial year ending 30 June 2021
By the amended statement of claim, the Applicant identified this underpayment as $3,597.75 plus superannuation. During the course of the proceedings, he came to moderate the quantum to a lower figure of $1,224.36 although he maintained the correct amount was $1,466.40.
The First Respondent said that there was no such underpayment and the shortfall was also explained by the circumstances of the global COVID-19 pandemic and the JobKeeper enabling direction that continued to be in place. In this respect, it accepted that the Court’s conclusion in relation to this component of the claim would follow its conclusion for the previous financial year (albeit that it urged for the opposite outcome and maintained that personal leave was not required to be paid at the Applicant’s pre-pandemic rate of pay).
Consistent with the previous financial year, the Applicant contended that he ought to be paid his full pre-pandemic salary, for the duration of the JobKeeper period on the basis of the alleged invalidity of the JobKeeper enabling direction. More specifically, in relation to this period of personal leave, the Applicant maintained there was no “stand down” (under s.524 or the JobKeeper amendments to the Act) as the Applicant continued to perform work for the duration of the pandemic period and therefore the authority in Communications, Electrical, Electronic, Energy, Information, Plumbing and Allied Services Union of Australia v Qantas Airways Limited [2020] FCAFC 205 did not assist the Respondents’ defence.
Evidence
The circumstances of the global COVID-19 pandemic had continued during the relevant period and the Applicant continued to work reduced hours.
There was no dispute and the evidence established that for the financial year ending 30 June 2021:
(a)Pursuant to the oral variation to the written employment agreement, the Applicant’s base salary was $80,000 per annum;
(b)By termination letter of same date, the Applicant’s employment ceased on and effective 14 December 2020 and therefore worked just short of 24 weeks and was entitled to be paid a total of $36,615.38;
(c)Pursuant to the Applicant’s evidence he was in possession of a group certificate (which record was not in evidence) and in this period was paid $33,017.63 gross.
The Applicant took personal leave, the legitimacy of which was not challenged, in December 2020 being the final 2 weeks of his employment with the First Respondent.
Of the payslips in evidence, the following was relevant:
(a)On 3 December 2020, a payslip for the period 25 November to 1 December 2020 was issued to the Applicant. The payslip reflected that the Applicant was paid $802.00 gross which was described on the payslip as 5x hours “normal” in the amount of $202.00 gross and a flat amount of $600.00 gross for “Jobkeeper-topup”.
(b)On 10 December 2020, a payslip for the period 2 to 8 December 2020 was issued to the Applicant. The payslip reflected that the Applicant was paid $802.00 gross which was described on the payslip as 5x hours “normal” in the amount of $202.00 gross and a flat amount of $600.00 gross for “Jobkeeper-topup”.
On 5 and 7 December 2020, the Applicant sent emails to the Second Respondent with the subject lines “salary”. In those emails (among other things), the Applicant queried his rate of pay for the personal leave taken. In their exchange of emails, the Second Respondent maintained that the Applicant was being paid correctly because he was “on JobKeeper” and would not receive the extra “top up” pay whilst absent on personal leave because the First Respondent was having to pay other employees to cover.
Consideration
As will be apparent, this particular component of the claim was not precisely pleaded. Specifically, the quantum of the alleged underpayment evolved and continued to evolve after the amended pleadings were exchanged and filed. The amended schedule of particulars was handed up to the Court during the course of the hearing but no amendment of the pleadings was expressly sought or granted. This document contained the first expression that the Applicant alleged the 2 weeks’ personal leave in December 2020 was the source of his claim which was pursued in the amount of $1,224.36 plus superannuation (not $3,597.75 plus superannuation as the amended statement of claim said or $1,466.40 as was the correct calculation according to the final written submission).
Notwithstanding that the Respondents were entitled to press the imprecision of pleadings as an issue, they again relied on the JobKeeper amendments as having enabled payment of the Applicant at less than the full amount that would otherwise have been owed for this financial year ending 30 June 2021 and invited the Court to follow its conclusion in that respect. On such defence, I consider it open to determine the claim despite the imprecision of pleadings but observe that the Applicant’s conduct of the proceedings may be a matter which is relevant to an assessment of penalty. Further, the Respondents bore the onus of establishing the relevant facts on the balance of probabilities.
For the above reasons, there was no authorised JobKeeper enabling direction and the obligation to pay the Applicant’s contracted base salary in full and at least monthly under s.323 continued to apply for the duration of the Applicant’s employment in the financial year ending 30 June 2021.
The Applicant was entitled to paid personal leave under the NES: s.96 of the NES in the Act. There was no dispute that the Applicant continued to perform work on reduced hours for the duration of the pandemic period or as to the legitimacy of the personal leave taken in December 2020 or that he had sufficiently accrued personal leave. In circumstances of employer-authorised personal leave, the Act provided that even a valid JobKeeper enabling direction would not apply (with the apparent consequence that the employee was to be paid their accrued leave in the usual way): s.789GDC(3). However, as reasoned above, any purported JobKeeper enabling direction was not authorised.
Accordingly, I find that the Applicant was entitled to the claimed shortfall of $1,224.36 plus superannuation.
There being no dispute about the Applicant’s base salary pay pursuant to the express term of the Applicant’s written employment agreement as orally varied on 21 August 2019, on the above findings it follows that there was a breach of that contractual term in this period. For completeness, it may be accepted that the Applicant was aware that the First Respondent had obtained JobKeeper support in order to make payments but could not be said to have impliedly agreed with a variation to the remuneration condition of the employment agreement, having queried the payment amounts in various contemporaneous email communications and subsequently commenced these proceedings.
Conclusion as to financial year ending 30 June 2021
For the above reasons, the First Respondent is found to have contravened s.323 of the Act by not paying the Applicant his full entitlement to personal leave in the financial year ending 30 June 2021. There is nothing before the Court to suggest that this underpayment was rectified as at the time of hearing.
I will make a declaration in the terms sought by the third proposed declaration.
The question of penalty and any other relief will be addressed separately.
Bonus pay (s.323 and breach of contract)
By the particulars in the amended statement of claim, this may be understood to be an alleged single contravention of s.323 of the Act for failure to pay a monthly bonus in the amount of $1,000 over the duration of the Applicant’s employment which he quantified as totalling $41,000 for 41 months’ employment less the single occasion of a $1,000 bonus paid on or around 2 November 2017. Although the pleadings were not formally amended, the claim was later revised to a total quantum of $39,400 taking into account a further $600 bonus paid on 21 September 2017.
Further, and in the alternative, an alleged breach of the employment agreement by the First Respondent over the same period for failure: to pay the bonus; to agree the sales and profit targets; to cooperate with the Applicant with respect to the negotiation of the sales and profit targets; and to negotiate with the Applicant in good faith in respect of the sales and profit targets.
By the pleadings and proposed minute of orders, the Applicant sought a declaration as to s.323 and claimed damages.
For its part, the First Respondent accepted that a bonus of $1,000 was payable when sales (excluding non-profit revenue items) were in excess of $110,000 in each month which was the “sales and profit targets” verbally agreed between the Applicant and the Second Respondent shortly after the employment commenced and by August 2017.
Evidence
Terms and conditions of employment
On 30 May 2017, the Applicant was sent an email from the Second Respondent with the subject line “OFFER OF EMPLOYMENT”. In that email, the remuneration for the role of Centre Manager was described as total remuneration of $65,000 per annum plus a monthly bonus of “approximately +/- $1,000.00 per month based on mutually agreed sales and profit targets” and described as comprising “Salary including incentives bonus of AUD $77,000 p.a. on target earnings” and “SGC superannuation of AUD $$7315.00 p.a. on target earnings” (sic.).
On 2 June 2017, the Applicant responded to confirm his acceptance and in which he also stated “The deal is 65,000 per year plus bonus which is around $1,000 per month and plus super as start and we will make snap that much bigger :)” (sic.).
On 20 June 2017, the Applicant sent the Second Respondent an email with the subject line “contract” and attached the offer letter which he had signed on same date. Relevantly, by the express terms of the signed offer letter:
Your total remuneration will be AUD 65,000.00 per annum plus a monthly bonus of approximately +/_ $1000.00 per month based on achievement of mutually agreed sales and profit targets. The remuneration package includes all the financial benefits to which you are entitled, and comprises the following components:
•Salary including incentives bonus of AUD $77,000 p.a. on target earnings
•SGC superannuation of AUD $7315.00 p.a. on target earnings
Although he was unsure whether it was June, July or August 2017, the Second Respondent was unwavering in his evidence that the performance condition of the Applicant’s bonus was agreed shortly after the Applicant commenced employment. Specifically, that the Applicant’s eligibility for a bonus was conditional on the First Respondent’s sales being equal to or exceeding $110,000 per month after excluding non-profit items such as postage. The Second Respondent recalled that, as part of this discussion, he had shown the Applicant a spreadsheet with forecast earnings (based on the previous years’ performance). He considered that, as manager, the Second Respondent was appropriately responsible for improving and influencing sales performance of the business.
The Applicant’s evidence was that there was never any agreement reached as to the sales and profit targets and the Respondents refused to cooperate with him to negotiate despite his requests. He also said he was not hired as a salesperson and instead had limited control over sales and greatest ability to have impact by increasing production capacity and reducing expenditure.
On one occasion during the employment, in November 2017, the Applicant was paid a bonus of $1,000. On another occasion, in September 2017, the Applicant was paid a bonus of $600. The Applicant was understood to dispute that he was also reimbursed an amount of $400 at the time of the September 2017 payment.
On or around mid-2019, a particular employee departure meant that the Applicant was asked to take on additional duties. The Applicant’s evidence was that he raised with the Second Respondent renegotiating his salary and they had a very brief conversation at the shop counter. The Applicant alleged there was also a discussion about bonus and that the Second Respondent showed him some calculations which were not consistent with the Applicant’s understanding of the original offer of employment and this did not include the detail of the spreadsheet to which the Second Respondent had referred.
The following records were included as exhibits to the Applicant’s written evidence:
(a)On 17 October 2018, the Applicant sent an email to the Second Respondent with no subject line in which he sought clarification of his job description and expressed his belief that he was hired to “have bonuses and talk on track about equity” and among other things said “If you think we follow our agreement let’s do it and put on paper and change things and improve things”.
(b)On 15 July 2019, the Applicant sent an email to the Second Respondent with the subject line “concerns and uncertainties”. In that email, the Applicant stated that he had declined another job offer on the basis of “the deal what was my salary and bonuses and later equity” and outlined concerns about setting up a calculation for bonuses and not having got any bonuses.
The Second Respondent gave evidence that the business was losing a lot of money by 2019 and he was trying to get things back on track. He did not think that the Applicant was performing particularly well but to resolve the Applicant’s issues (about job clarity and bonus pay) he ultimately agreed to increase the Applicant’s salary (addressed below).
Salary increase
On or around 21 August 2019, there was an oral agreement that the Applicant’s base salary be increased to $80,000. It is uncontroversial that the superannuation guarantee would be applied accordingly but the application of the incentive payment or bonus remained disputed before the Court as related to this period. The documentary records in evidence of the context to the salary increase included:
(a)A document marked “DRAFT” and dated 5 August 2019, which the Second Respondent annexed to his affidavit as evidence of a communication he sent to the Applicant. That document commenced with an invitation that the Applicant manage Snap Caulfield South and stated that the Second Respondent wished to review his remuneration and provide him with incentives which were plainly connected to performance and the Second Respondent’s expectation as to how the business was to run. The document went on to outline responsibilities and expectations in some detail and concluded with the following:
Remuneration
I Will make the following adjustment to your Salary.
Annual increase $6500.00 pa.
Bonus for achievement of sales budget (attached) $250.00 ($3000.00 pa) (attached)
Housekeeping bonus – retaining systems and general tidiness of the centre. $420.00 pm ($5040.00 pa)
I will review performance of this arrangement on a quarterly basis. It will be on a trial basis until 30th of December 2019 at which point we will review the success and take appropriate action. A further review of your salary structure will be made at this time.
(b)On 7 August 2019, the Applicant and the Second Respondent had a telephone discussion which was recorded and subsequently transcribed. There is reference to a discussion paper, which would appear to be the 5 August 2019 record referred to at (a) above. The transcript also reflected that the Applicant raised role clarification and his incentive payment and the Second Respondent raised performance concerns. In relation to the new offer, the Applicant appeared to reject “that few grand additional” and preferred to stick to the previous arrangement unless the Second Respondent was willing to talk about the incentives. There is no clear resolution recorded on transcript.
(c)An email of 14 August 2019, which the Applicant sent to the Second Respondent with the subject line “OFFER OF EMPLOYMENT” and was sent in response to the email of 30 May 2017. In that email, the Applicant referred to an offer that the Second Respondent had given him the week prior but noted they had not yet discussed the salary, incentives and description in detail before setting out alternative options including:
for this, I would like to have $80,000 + super and plus the bonuses as was discussed and promised at the start. You have said at 110,000 monthly income its $1000 and every 5000$ minus in income its $100 minus in bonus until down to 85,000$ (the original offer was from 80k but I do understand if it’s pushed up) and we review in half-year
I have already saved close to 800-900$ a month with some adjustment to the business so I believe this is really a modest salary for the job need to be done
or
another option that I stay on my current salary and I stop digital print and need to hire someone for it..
we have agreed we will make a weekdecision by end of this week so you choose whichever you prefer and from next week we start either of one
(sic.)
After the increased salary to $80,000 plus superannuation was agreed around one week after this 14 August 2019 email, the Applicant recalled there was no discussion about how the bonus would be calculated. Whereas the Second Respondent’s oral evidence was that the 14 August 2019 email represented what the Applicant wanted (or asked for) but then:
We had a lengthy exchange and could not agree on his base pay and bonus structure. So as a compromise, I agreed that I would pay him a base salary of $80,000.00 but that we would do away with the bonus scheme. I note that the final agreement on doing away with the bonus scheme was not set out in writing.
Other terms and conditions of the role
As earlier referenced, the Award covered and applied to the Applicant’s employment.
It was agreed that there were also terms to be implied in the employment agreement. The Applicant contended that those implied terms were:
(a)The First Respondent would cooperate with the Applicant to enable the Applicant to have the benefit of agreement;
(b)The First Respondent would act in good faith in that it would:
(i)Act honestly and with fidelity to the bargain;
(ii)Not to undermine the bargain or the substance of the contractual benefit bargained for; and
(iii)Act reasonably and with fair dealing having regard to the interests of the parties, and to the provisions and objectives of the employment agreement.
Consideration
On the evidence before the Court, is not controversial that:
(a)the contract of employment between the parties was recorded in writing by the First Respondent and signed by the Applicant on 20 July 2017 (written employment agreement); and
(b)the written employment agreement was orally varied by the parties’ agreement to an increase to the base salary plus superannuation on 21 August 2019 (oral variation).
There was then a dispute about the meaning of the bonus term in the written employment agreement and whether there were any additional variations by the oral variation.
The orthodox approach to ascertaining the true meaning of the contract between the parties is usefully set out in Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130; (1988) 26 IR 411 at 134-136.
Commencing with the plain words of the written employment agreement, it was an express term that the Applicant was entitled to a bonus or incentive payment of “approximately + / _ $1000.00 per month” which was plainly conditional upon “achievement of mutually agreed sales and profit targets”. On a proper construction, this was an agreement to mutually agree the sales and profit targets on which the Applicant’s bonus pay was to be based. On the face of the written employment agreement, the parties did not include provision for how such mutual agreement was to be reached or a dispute about that matter was to be resolved, other than to the extent that the Award was incorporated and included a mechanism to which either of the parties may have (but did not) resort in circumstances of a dispute relating to the employment relationship.
The additional words in the written employment agreement operate to clarify that the “remuneration package” was the base salary of $65,000 plus the opportunity to earn a further $12,000 per annum (at $1,000 per month) = $77,000. These additional words do not shed any light on the meaning of the condition on which the bonus payment was based.
Extrinsic evidence may in some cases be of assistance in upholding the validity of the agreement. An objective assessment is required. Here, the evidence of pre-employment communications does not objectively assist in attributing any alternate meaning to the express words of the parties or establish anything other than differing offers made or bargaining positions put prior to offer and acceptance of the written employment agreement. Indeed, evidence of the post-employment communications supported the finding that both parties understood and accepted that the “sales and profits targets” was a matter yet to be mutually agreed after the written employment agreement was offered and signed.
The evidence otherwise established that no such mutual agreement was reached. The Second Respondent’s evidence was that the bonus was agreed as $1,000 per month when the business reached $110,000 per month in sales – and this was agreed in a discussion with the Applicant, in which he had tabled a spreadsheet of prior business sales and profits, shortly after the commencement of employment and by August 2017. Whereas the Applicant was adamant in his evidence that there was no such agreement reached in July or August 2017, he had never seen the said spreadsheet and that he and the First Respondent had always disagreed about the bonus. The Applicant sought to justify why a purely sales based target would not have been anything he would agree to given the nature of his role and limited ability to influence sales. The evidence of the oral variation was that the variation was limited to salary plus superannuation and there remained no agreement as to the bonus.
In the circumstances, it is not for the Court to fill the gaps that the parties themselves did not fill by determining the meaning of the bonus scheme.
As to the implied conditions that the Applicant contended for as applicable (and in relation to which application the Respondents were not understood to seriously argue), I accept the Second Respondent’s evidence of the efforts taken to discuss the bonus with the Applicant shortly after the commencement of employment and again in August 2019. Having regard also to the evidence of the state of the business, which I also accept, and the Applicant’s role as Centre Manager, I do not discern any reason why the First Respondent’s proposed bonus structure was unreasonable or fanciful or otherwise not in good faith or appropriate. I also accept the Applicant’s evidence that he had advocated for a cascading bonus structure and perhaps also a bonus condition with greater certainty of payment.
Having regard to the evidence before the Court and the findings I have made, there was no contractual provision (express or implied) that required the First Respondent to pay the Applicant a bonus of $1,000 per month for the duration of his employment or at any time during the employment unless the mutually agreed condition of sales and profit targets was met. The agreement to mutually agree the sales and profit targets was an obligation that applied equally to both the employer and employee. Accepting that the implied obligations also applied, the evidence established that both parties attempted to agree at various intervals during the course of the employment and, as of August 2019, discussed alternative arrangements. Despite those efforts, the evidence is that the Applicant never agreed with the Second Respondent’s proposal (as was his right); just as the Second Respondent never agreed with the Applicant’s proposal (as was his right). There is also no evidence that either party exercised their rights to escalate the dispute for resolution in accordance with the procedure in the Award. I discern no breach of an express or implied condition of the written employment agreement as orally varied and as pleaded.
Conclusion in relation to bonus pay
For the above reasons, there is no identifiable breach of the written employment agreement or oral variation and no contravention of s.323 of the Act as pleaded in relation to the bonus.
No declarations will be made.
Superannuation payable pursuant to the Award (s.45)
By the amended statement of claim, the Applicant sought a declaration that the First Respondent contravened s.45 of the Act by failing to make superannuation contributions to a superannuation fund for the benefit of the Applicant as required by cl.29.2 of Award over the period 1 July 2017 to 31 December 2019. Further, the proposed minute of orders claimed compensation for a loss to the Applicant in the amount of $1,929.36 as of 31 August 2022 (which quantum was reduced from that in the pleadings of $3,962.75, not through any formal amendment to the pleadings).
The Respondents accepted that Award covered and applied. Further, that superannuation was not entirely deposited into the Applicant’s superannuation account during the course of his employment with the First Respondent. The Respondents contended that the superannuation payments were rectified after the Applicant provided his correct superannuation details and the Second Respondent had a series of communications with the payroll provider.
Evidence
The First Respondent engaged an external payroll organisation (ADP) to administer the superannuation arrangements.
On 7 August 2017, the Second Respondent’s late wife had provided the Applicant’s superannuation details to ADP. By 15 November 2019, the Second Respondent had discovered that superannuation had not been paid to the Applicant and requested ADP to arrange to start payments immediately.
Email correspondence in evidence included a statement from ADP that they were unable to explain the reason why the Applicant’s superannuation payments had not been set up earlier. The Second Respondent’s evidence was that the superannuation contributions for the Applicant were recorded on weekly payslips, deducted and accounted for and paid to ADP and he did not know what happened (why it was not passed on to the Applicant by ADP) but eventually the payments were traced and the issue was fixed. Further the Second Respondent said part of the issue was that the information the Applicant had provided about the details of his superannuation fund was incorrect and this took “some time” to rectify.
The Second Respondent also gave evidence of the great difficulties that he and his late wife had experienced around this time, trying to do payroll from Wagga Base Hospital where his daughter was suffering from leukemia. First his daughter and then his wife passed away within a relatively short period.
As of January 2020, the Applicant was being paid superannuation monthly but his evidence was that the amount was usually incorrect even though his salary was always the same and the residual had not been corrected.
On 28 March 2020, the Second Respondent sent an email to the Applicant regarding an exchange with ADP. By that email exchange, the Second Respondent had requested ADP to adjust its systems and rectify the Applicant’s unpaid superannuation which was still outstanding for a period from 2017.
The Applicant raised other queries about superannuation (not paid, paid in incorrect amounts and interest) by emails to the Second Respondent of 17 August 2020, 30 September 2020 and by telephone on 13 and 15 October 2020 (the transcribed recordings of which were in evidence).
On 5 and 7 December 2020, the Applicant sent emails to the Second Respondent with the subject lines “salary”. In those emails, the Applicant queried (among other things) his entitlement to superannuation. In their exchange of emails, the Second Respondent maintained that the Applicant was being paid correctly because he was “on JobKeeper” - addressed further above. On 6 December 2020, the Second Respondent responded to confirm he would get an update on the matter from ADP and on 7 December 2020 said he did not have time to stuff around with this at the moment and there were a few matters to discuss when the Applicant returned from sick leave.
On 14 December 2020, the First Respondent terminated the Applicant’s employment. After the employment ended, the Applicant had filed an unfair dismissal claim in the Fair Work Commission.
On 18 February 2021, the unfair dismissal claim was resolved. The resolution was recorded on a document titled “Terms of Settlement” which relevantly included:
(a)a denial by the First Respondent in relation to the claim that the Applicant was unfairly dismissed;
(b)agreement between the Applicant and the First Respondent to fully and finally settle the unfair dismissal remedy application, together with any claims for outstanding accrued annual leave and superannuation on the bases or terms then described therein including that at (c) and (d) below;
(c)agreement that the First Respondent would deposit into the Applicant’s superannuation fund account a sum equal to the outstanding superannuation contributions, the precise sum to be advised in writing by ADP, the Respondents payroll and HR services provider;
(d)the amounts specified (including that at (c) above) to be paid an deposited by the First Respondent within 21 days of both parties signing the terms of settlement (the Applicant signed on 18 February 2021 and the Second Respondent signed on 17 February 2021).
On 30 March 2021, the Second Respondent sent an email to the Applicant with the subject line “settlement” and which attached the following documents:
(a)Pay slips dated 19 November 2020, 26 November 2020, 3 December 2020, 10 December 2020 and 1 April 2021;
(b)Certificate of employment; and
(c)CSV file for the Applicant’s superannuation uploaded to ADP authorised for payment.
On or about 16 April 2021, as the superannuation component of the Terms of Settlement had not been paid, the Applicant purported to accept the Respondents’ alleged repudiation of the Terms of Settlement (or otherwise sought to terminate the Terms of Settlement on account of an alleged breach of an essential condition).
On or about 29 April 2021, the Applicant was paid $12,000 into his superannuation account. The Second Respondent’s evidence was that he had understood this to be all that was owed to the Applicant.
After these proceedings were commenced, the Second Respondent had his accountant “run the numbers again” in case he or ADP had made an error in calculating the Applicant’s superannuation. He gave evidence that his accountant found there was superannuation outstanding and calculated the interest owed on it.
On or about 17 January 2022, the First Respondent paid a further amount of $9,415.07 to the Australian Tax Office which was understood to be for the Applicant’s unpaid superannuation.
A bundle of payslips were in evidence and in each case reflected a monetary value alongside the description “AMP Flexible Lifetime Super”.
In the course of these proceedings, the Respondents filed an “ACR Report” which appeared to show a summary of superannuation contributions alongside “Client Dedn Date” and “Recpnt Dedn Date” (among other information). They also filed an “SPX Report” which was a schedule prepared by their accountant and was described as a summary of superannuation owed and paid to the Applicant. There was also an email exchange in evidence between the Second Respondent and the accountant from 11 January 2022 to 17 January 2022 which evidenced that the accountant was instructed to calculate interest on superannuation payments owed. There was otherwise no explanation in evidence as to how these documents were prepared or what documents or source records were used to create it.
Consideration
As a preliminary matter, the Terms of Settlement do not preclude the Applicant from pursuit of a declaration for contravention of s.45 (on account of a breach of cl.29.2 of the Award) or pursuit of unpaid superannuation entitlements under the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGC Act). However, the Terms of Settlement may be relevant to relief.
The proceedings involve an allegation of unpaid superannuation in contravention of a modern award and s.45 of the Act. The First Respondent was required to keep records of superannuation contributions including amounts paid, the pay period and dates paid: reg.3.37(1). On the evidence, the First Respondent prepared payslips which constituted a report of amounts directed to its third party payroll provider (ADP) but for a significant period of time from August 2017 to December 2019 did not in fact reflect amounts paid to the Applicant or dates of payment because the Applicant was not paid superannuation for the period from commencement of employment to December 2019. The accountant’s summary appeared to be a record created in the context of the post-employment dispute about outstanding superannuation payments but there was no explanation as to when this document was prepared or on what information it was based. After the employment ended, the Applicant was provided a “CSV” file which record apparently related to superannuation but was not adequately explained in evidence in terms of who it was prepared by, the inputs or information on which it was based. On the evidence before the Court, the First Respondent has since created, and may have kept some contemporaneous records of its payments to ADP (which were not passed on to the Applicant at that time), but did not comply with its record-keeping obligations in relation to superannuation. The presumption at s.557C therefore applies and the First Respondent has the burden of disproving the allegation.
As to the changed quantum sought from that in the pleadings, whilst a formal amendment ought properly have been sought, the changed position was explained by the First Respondent’s further payment of superannuation that occurred during the course of the proceedings (after the amended statement of claim was filed on 17 December 2021). There is no apparent prejudice to the Respondents arising from the reduction in the claimed figure where detailed calculations were provided in ample time for the Respondents to interrogate those calculations and produce evidence in relation to those calculations.
By their amended defence, the Respondents admitted that the Applicant was covered by the Award and that the Award applied to his employment with the First Respondent: ss.47 and 48 of the Act. The evidence before the Court as to the duties and responsibilities actually performed by the Applicant was limited and this judgment proceeds on the basis of the Respondents’ admission in that respect.
The First Respondent was required to make such superannuation contributions to a superannuation fund for the benefit of the Applicant as to avoid the superannuation guarantee charge under the SGC Act with respect to the Applicant’s employment: cl.29.1 of the Award.
To avoid the superannuation guarantee charge under superannuation guarantee legislation, those payments were required to be made quarterly: s.16 SGC Act.
I accept the Second Respondent’s evidence of the steps taken on behalf of the First Respondent in endeavouring to have the third party payroll provider make the requisite superannuation contributions to the Applicant. It would appear on the evidence that an initial period of some months’ delay was attributable to incorrect details provided by the Applicant to his employer. However, the fact remains that despite steps taken the Applicant was not in receipt of superannuation contributions to his nominated superannuation fund until December 2019 at the earliest.
The First Respondent has not disproved the allegation that the First Respondent did not comply with cl.29.2 of the Award.
Further, as identified above, the First Respondent’s evidence of superannuation “records” was unexplained in various respects including as to whether interest was included in the various calculations. Accordingly the First Respondent has not disproved the allegation that there is an outstanding amount owed of $1,929.36.
Conclusion as to superannuation
For the above reasons, the First Respondent contravened s.45.
I will make a declaration in the terms sought by the fourth proposed declaration.
The question of penalty and any other relief will be addressed separately.
Annual leave on cessation of employment (ss.44 and 45)
By the amended statement of claim, the Applicant sought a declaration that the First Respondent contravened s.45 of the Act by failing to pay his accrued but unused annual leave as he was entitled under cl.37.5 of the Award. And, expressed as further and in the alternative, s.44 by virtue of the same conduct and his entitlement under s.90 of the NES in the Act. The claimed amount of compensation was $2,582.75.
The First Respondent’s primary defence was that any accrued but unused annual leave owed to the Applicant was paid in April 2021, which had been calculated by its accountant and was agreed as part of the resolution of the unfair dismissal claim before the Fair Work Commission. To the extent that the claimed amount in these proceedings represented annual leave allegedly payable on the claimed bonus pay, they said no bonus was owed (a separate feature of this claim, addressed earlier in these reasons).
At the hearing, the Applicant submitted that it sought to challenge the calculation of the annual leave payment made in April 2021 (and never did claim annual leave on bonus pay). By his detailed calculation produced at the hearing, the Applicant was owed 36.32 days’ annual leave accrual in the 2020 calendar year at the rate of $305.34 per day and totalling $11,089.95 less the $8,507.20 paid in resolution of the Fair Work Commission proceedings = $2,582.75.
Evidence
During the course of the employment, the evidence on behalf of the First Respondent was that it kept a record of the Applicant’s leave taken and leave balance which was managed by its external provider, the ADP payroll system. The evidence included email correspondence between the Second Respondent and ADP regarding the Applicant’s superannuation issues but none of those communications evidence annual leave accruals. The various payslips in evidence included a box to record “leave balances” but were blank in each case. When a payment of annual leave was made, the payslip recorded the number of hours paid.
As of 14 December 2020, when the First Respondent terminated the Applicant’s employment, the Applicant had accrued but unused annual leave which was not paid at that time.
Following the termination of his employment, the Applicant filed an unfair dismissal application in the Fair Work Commission which was resolved on or around 18 February 2021. The resolution was recorded on a document titled “Terms of Settlement” which relevantly included:
(a)a denial by the First Respondent in relation to the claim that the Applicant was unfairly dismissed;
(b)agreement between the Applicant and the First Respondent to fully and finally settle the unfair dismissal remedy application, together with any claims for outstanding accrued annual leave and superannuation on the bases or terms then described therein including that at (c) and (d) below;
(c)agreement that the First Respondent would pay to the Applicant outstanding accrued annual leave in the amount $8,840.00 gross less taxation;
(d)the amounts specified (including that at (c) above) to be paid and deposited by the First Respondent within 21 days of both parties signing the terms of settlement (the Applicant signed on 18 February 2021 and Second Respondent signed on 17 February 2021).
On 30 March 2021, the Second Respondent sent an email to the Applicant with the subject line “settlement” and which attached the following documents:
(a)Pay slips dated 19 November 2020, 26 November 2020, 3 December 2020, 10 December 2020 and 1 April 2021;
(b)Certificate of employment; and
(c)CSV file for the Applicant’s superannuation uploaded to ADP authorised for payment.
On 31 March 2021, the Applicant received payment of $8,484.00 gross ($5,543.20 after tax) being the accrued annual leave component of the Terms of Settlement.
On or about 16 April 2021, as the superannuation component of the Terms of Settlement had not been paid, the Applicant purported to accept the Respondents’ alleged repudiation of the Terms of Settlement (or otherwise sought to terminate the Terms of Settlement on account of an alleged breach of an essential condition). Then, on or about 29 April 2021, the Applicant was paid $12,000 into his superannuation account.
These proceedings were commenced on 18 May 2021 and an amended statement of claim filed on 17 December 2021.
Consideration
As a preliminary matter, the Terms of Settlement do not preclude the Applicant from pursuit of a declaration for contravention of s.44 (on account of a breach of s.90 of the NES) or s.45 (for contravention of the Award). However, the Terms of Settlement may be relevant to questions of relief.
Under the NES, the Applicant was entitled to accrue 4 weeks’ annual leave per year of service: s.87(1) NES in the Act.
These proceedings relate to an alleged contravention of s.44 involving accrued but unused and unpaid annual leave on termination in breach of s.90 of the NES. The First Respondent was required to keep records of annual leave taken and the balance of the Applicant’s entitlement to leave: s.535 and reg.3.36. The Respondents may have engaged a third party payroll provider to keep such records but have not provided any evidence of compliance with those record-keeping obligations to the Court. The reverse onus at s.557C is engaged.
It is a term of the NES in the Act that when employment ends, the employer is obliged to pay a period of untaken paid annual leave in the amount that would have been payable to the employee had the employee taken that period of leave: s.90(2). The Award also reflects this obligation: cl.37.5 of the Award.
The absence of records has not assisted the First Respondent who bears the legal and evidentiary onus and has failed to disprove the allegation.
Conclusion as to annual leave
For the above reasons, the First Respondent contravened s.44. By the same conduct, it contravened s.45.
I will make a declaration in the terms sought by the fifth proposed declaration which related only to s.44.
The question of penalty and any other relief will be addressed separately.
PAYSLIPS AND RECORDS
Failure to provide payslips within one day (s.536)
By the amended statement of claim, the Applicant claimed that the First Respondent failed to give a payslip to the Applicant within one working day of paying the Applicant an amount for the performance of work on 24 separate occasions in contravention of s.536 of the Act.
By the amended defence, the First Respondent admitted that it did not provide the Applicant with a physical payslip within one working day in the period between March and December 2020 due to the circumstances of the global COVID-19 pandemic but said that payslips were provided when attendance was effected (later, in submissions, the First Respondent admitted to a longer period of 29 January 2020 to 28 October 2020 = a total of 12 payslips). The Respondents otherwise denied the claim.
Evidence
The Second Respondent gave evidence of his ordinary practice of printing hard copy payslips generated through the ADP system which he would then immediately provide to all employees. Sometimes (eg. in holiday periods) he would ring the information through to ADP who would generate a payslip within 10 minutes. However, during the global COVID-19 pandemic, the Second Respondent said that he was not in the office as frequently due to concerns about safety and infection and during that period would print a number of payslips and distribute when he was in the office.
The Second Respondent gave speculative evidence of his recollection that the Applicant had maintained an untidy workspace which may have resulted in payslips being misplaced. He also gave evidence of the sudden end to the Applicant’s employment, which had involved the Second Respondent directing the Applicant to leave immediately, and in cross-examination said that he probably did not give payslips on the way out the door because he did not pay the Applicant in the hope of recovering “some of the losses”. The Second Respondent also referred to this sudden departure as an explanation for why the Applicant had not collected all payslips that had been provided to him before his departure.
Whereas the Applicant gave evidence that he had kept all or most of the payslips that he had received during his employment. His evidence was that a wider range of payslips were never provided (in addition to those identified by the Respondents, those from 4 December 2019 to 18 March 2020 and the final 5 weeks of his employment which were later provided by email of 30 March 2021) and said there were also a handful of other unspecified occasions.
By the conclusion of the evidence, the Court had received in evidence a copy of payslips for the employment period (28 June 2017 to 8 December 2021) with the exception of the following dates for which there was no payslip in evidence:
·20 December 2017 to 2 January 2018
·28 November 2018 to 4 December 2018
·12 December 2018 to 15 January 2019 (in this period, there was evidence that the Applicant was not at work and was not paid, addressed above)
·14 August 2019 to 20 August 2019
·27 November 2019 to 17 December 2019
·24 June 2020 to 30 June 2020 (admitted, COVID-19 period)
·22 July 2020 to 28 July 2020 (admitted, COVID-19 period)
·23 September 2020 to 29 September 2020 (admitted, COVID-19 period)
·7 October 2020 to 28 October 2020 (admitted, COVID-19 period)
There was also a payslip in evidence for the final payment made on 1 April 2021 following the agreement reached in the Fair Work Commission.
Consideration
The First Respondent did not take issue with the reverse onus at s.557C being engaged in relation to this alleged contravention and I find that it does apply, with the legal and evidentiary onus therefore resting with the First Respondent.
Section 536 of the Act provides (and relevantly provided) that an employer must 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.
It is uncontroversial and on the evidence I find that 12 payslips were not provided to the Applicant within one working day of payment for the performance of work in the period 29 January 2020 to 28 October 2020. The Respondents’ explanation of the difficulties experienced with meeting the obligation at s.536 during the period that properly related to the global COVID-19 pandemic work restrictions may be a matter relevant to penalty. However these admitted failures to comply amount to a contravention of s.536 of the Act.
On the balance of probabilities, I am prepared to accept the Second Respondent’s evidence that the First Respondent had a system for printing and providing hard copy payslips to employees and that, other than on the admitted occasions, ordinarily this occurred in accordance with s.536 of the Act. I prefer this evidence to the belated recollection of the Applicant particularly given that the system required him to take and keep physical records which (through no fault or criticism of the Applicant) I consider less reliable.
However the First Respondent did not produce payslips for the periods identified at paragraph 168 above or otherwise provide evidence that the Applicant did not work or was not paid (excluding the period 12 December 2018 to 15 January 2019 for which there was evidence to establish that there was no payment and excluding also the admitted periods from 24 June 2020 to 28 October 2020). These failures to produce the payslips did not assist in establishing that those particular missing payslips were provided in accordance with s.536 of the Act or at all. Accordingly, the First Respondent has not disproved this allegation in those respects.
Conclusion in relation to payslips
For the above reasons, the First Respondent contravened s.536 of the Act.
I will make a declaration in terms that the First Respondent contravened s.536 of the Act by failing to provide the Applicant with pay slips within one working day of paying an amount to the Applicant in relation to the performance of work on the following occasions: 20 December 2017 to 2 January 2018; 28 November 2018 to 4 December 2018; 14 August 2019 to 20 August 2019; and 27 November 2019 to 17 December 2019; and 12 occasions between 29 January 2020 to 28 October 2020.
The question of penalty and any other relief will be addressed separately.
Failure to make and keep records (s.535)
Evidence
In the course of considering the claims relating to annual leave and superannuation above, consideration has been given to whether the First Respondent failed to comply with its record-keeping obligations under s.535 of the Act and in accordance with the relevant Regulations in those respects.
Consideration
For the above reasons, I conclude that:
(a)The First Respondent failed to keep records of annual leave in contravention of s.535; and
(b)The First Respondent failed to keep records of superannuation in contravention of s.535.
In relation to bonus, I have concluded that the Applicant was entitled to be paid a bonus conditional on achievement of mutually agreed sales and profit targets which target was never agreed. The agreement as to the entitlement to be mutually agreed was recorded in the written employment agreement that the Applicant signed on 20 June 2017. The record set out details of the bonus entitlement to the extent that they were agreed. There is no identifiable contravention of the record-keeping obligations at s.535.
Conclusion
I will make declarations in the terms sought by the proposed eighth and ninth declarations.
The question of penalty and any other relief will be addressed separately.
SECOND RESPONDENT’S INVOLVEMENT IN CONTRAVENTIONS
The Applicant claimed that the Second Respondent was the controlling mind of the First Respondent and therefore was “involved” in each respective contravention of the Act within the meaning of s.550. It was further claimed that the Second Respondent was aware of the Applicant’s salary and the weekly amounts he was being paid and therefore procured the contravention.
The Respondents’ in the amended defence did not admit and contended the pleadings as to the Second Respondent’s alleged involvement within the meaning of s.550 failed to plead material facts that give rise to the alleged accessorial liability but were a matter for the Court. The Respondents at closing oral submissions maintained this position.
Consideration
On the evidence before the Court, the Second Respondent is and was the sole director of the First Respondent and held the requisite state of knowledge that the First Respondent was required to comply with the Act and was responsible for ensuring that the First Respondent complied with its statutory obligations under the various employment instruments and legislation.
I did not understand it to be seriously disputed that the Second Respondent was solely responsible for ensuring compliance of the First Respondent with its various employment obligations. The Second Respondent was the sole director of the First Respondent and the only witness called on behalf of the Respondents. He was plainly integral to decision-making and administration of the business. There were some matters that the Second Respondent sought to outsource to third party providers but ultimately accepted that he was responsible to ensure compliance in all respects.
Conclusion as to Second Respondent’s involvement
I will make a declaration in the terms of the proposed tenth declaration.
The questions of penalty and any other relief will be addressed separately.
CONCLUSION
Declarations will be made to give effect to these reasons.
The question of what penalty and any other relief to be ordered (if any) will be fixed for separate hearing.
I certify that the preceding one hundred and ninety (190) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 11 August 2023
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