Workplace Ombudsman v A and a Martins Pty Ltd
[2009] FMCA 599
•26 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WORKLACE OMBUDSMAN v A & A MARTINS PTY LTD & ANOR | [2009] FMCA 599 |
| INDUSTRIAL LAW – Pecuniary penalties – breaches of award – underpayment of employee – agreed statement of facts – breaches admitted – determination of penalty (principles). |
| Superannuation Guarantee (Administration) Act 1992 (Cth), Part 3 Workplace Relations Act 1996 (Cth) ss.182 (1), 235 (2), 719 (1), (6), (7) 728 Building and Construction Industry (ACT) Award 2002 |
| Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8; (2008) 246 ALR 35 Construction, Forestry, Mining and Energy Union v Hamberger (2003) 127 FCR 309; [2003] FCAFC 38; (2003) 125 IR 183 Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285; (1996) 141 ALR 640; (1997) ATPR 41-546 Gibbs v City of Altona (1992) 37 FCR 216; (1992) IR 255 Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357; (2005) 215 ALR 213; (2005) 79 ALJR 1048 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; [2007] FCAFC 65; (2007) 162 IR 444 R v Hunter (1984) 36 SASR 101 R v Thompson(1975) 11 SASR 217 Temple v Powell (2008) 169 FCR 169; [2008] FCA 714; (2008) 173 IR 189 Trade Practices Commission v Annand and Thompson Pty Ltd (1987) ATPR 40-472 Trade Practices Commission v Axive Pty Ltd (1994) ATPR 41-368 Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 ; (1988) 77 ALR 385; (1988) ALJR 224 Yardley v Betts (1979) 22 SASR 108 |
| Applicant: | WORKPLACE OMBUDSMAN |
| First Respondent: | A & A MARTINS PTY LTD |
| Second Respondent: | AGOSTINHO MARTINS |
| File Number: | CAG 60 of 2008 |
| Judgment of: | Neville FM |
| Hearing date: | 11 June 2009 |
| Date of Last Submission: | 11 June 2009 |
| Delivered at: | Canberra |
| Delivered on: | 26 June 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Cook |
| Solicitors for the Applicant: | Minter Ellison Lawyers |
| Advocate for the Respondents: | Mr Martins in person and on behalf of A & A Martins Pty Ltd |
ORDERS
A penalty of $1500.00 be imposed on the First Respondent pursuant to section 719(1) of the Workplace Relations Act 1996 (Cth) (“the WR Act”) for breaches of:
(a)Section 182(1) of the WR Act and the relevant provisions of the Building & Construction Industry (ACT) Award (Transitional) for the First Respondent's:
(i)failure to pay the Classification Scale specified basic periodic rate of pay applicable to Mr Campbell during the relevant period of 17 October 2006 to 30 November 2006 of $513.70 per week for ordinary hours worked per week;
(ii)failure to pay the Classification Scale specified basic periodic rate of pay applicable to Campbell during the relevant period of 1 December 2006 to 16 January 2007 of $541.70 per week for ordinary hours worked per week;
(iii)failure to pay the Classification Scale specified basic periodic rate of pay applicable to Campbell during the relevant period of 17 January 2007 to 2 October 2007 of $553.66 per week for ordinary hours worked per week;
(iv)failure to pay the industry allowance prescribed by clause 14.4 of the Award of $748.42 for the period 17 October 2006 to 19 September 2007;
(v)failure to pay the fares and Travel Patterns Allowance prescribed by clause 14.6.1 of the Award of $2,231.90 for the period 17 October 2006 to 19 September 2007; and
(b)Sub-section 235 (2) of the WR Act for the First Respondent's failure to pay accrued annual leave at the time of termination of Mr Campbell's employment with the First Respondent as required by sub-section 235 (2) of the WR Act of an amount of $638.53; and
(c)Part 3 of the Superannuation Guarantee (Administration) Act 1992 (Cth) for a failure to make the superannuation contributions of an amount of $2,015.76 from 17 October 2006 to 19 September 2007 as prescribed and required by Part 3 of the Superannuation Guarantee (Administration) Act 1992 (Cth).
By reason of section 728 of the WR Act, a penalty of $300.00 be imposed on the Second Respondent pursuant to section 719(1) of the WR Act for his involvement in the First Respondent's breaches of:
(a)section 182(1) of the WR Act and the relevant provisions of the Building & Construction Industry (ACT) Award (Transitional) for the First Respondent's:
(i)failure to pay the Classification Scale specified basic periodic rate of pay applicable to Mr Campbell during the relevant period of 17 October 2006 to 30 November 2006 of $513.70 per week for ordinary hours worked per week;
(ii)failure to pay the Classification Scale specified basic periodic rate of pay applicable to Campbell during the relevant period of 1 December 2006 to 16 January 2007 of $541.70 per week for ordinary hours worked per week;
(iii)failure to pay the Classification Scale specified basic periodic rate of pay applicable to Campbell during the relevant period of 17 January 2007 to 2 October 2007 of $553.66 per week for ordinary hours worked per week;
(iv)failure to pay the industry allowance prescribed by clause 14.4 of the Award of $748.42 for the period 17 October 2006 to 19 September 2007;
(v)failure to pay the fares and Travel Patterns Allowance prescribed by clause 14.6.1 of the Award of $2,231.90 for the period 17 October 2006 to 19 September 2007; and
(b)section 235 (2) of the WR Act for the First Respondent's failure to pay accrued annual leave at the time of termination of Mr Campbell's employment with the First Respondent as required by sub-section 235 (2) of the WR Act of an amount of $638.53; and
(c)Part 3 of the Superannuation Guarantee (Administration) Act 1992 (Cth) for a failure to make the superannuation contributions of an amount of $2,015.76 from 17 October 2006 to 19 September 2007 as prescribed and required by Part 3 of the Superannuation Guarantee (Administration) Act 1992 (Cth).
An order pursuant to section 719(6) of the WR Act that the Employee, Matthew Campbell, be paid, within 60 days of the date of these orders, all outstanding entitlements in the amount of $10,391.60 (gross prior to tax) by:
(a)the First Respondent; and/or
(b)the Second Respondent by reason of section 728 of the WR Act.
An order pursuant to section 719(7) of the WR Act that the, that a payment be made to or in respect of Mr Matthew Campbell to his nominated superannuation fund, within 60 days of the date of these orders, all outstanding superannuation entitlements in the amount of $907.60 (gross prior to tax) by:
(a)the First Respondent; and/or
(b)the Second Respondent by reason of section 728 of the WR Act.
The penalties be paid into the Collector of Public Monies of the Commonwealth saving:
(a)an amount of $10,391.60 from the Second Respondent's penalty to be paid by bank cheque made payable to Mr Matthew Campbell and forwarded to the Applicant's solicitors in the event that Order 3 above remains outstanding;
(b)an amount of $907.60 from the Second Respondent's penalty to be paid by bank cheque made payable to Mr Matthew Campbell's, or in respect of Mr Matthew Campbell to his nominated superannuation fund, and forwarded to the Applicant's solicitors in the event that Order 4 above remains outstanding; and
(c)an amount referred to in Order 5 above from the Second Respondent's penalty to be paid by bank cheque made payable to Mr Matthew Campbell, or in respect of Mr Matthew Campbell to his nominated superannuation fund, and forwarded to the Applicant's solicitors in the event that Order 5 above remains outstanding.
The penalty imposed on the First and Second Respondents be paid by:
(a)by the First Respondent within 60 days of the date of these orders; and
(b)the Second Respondent within 60 days of the date of these orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAG 60 of 2008
| WORKPLACE OMBUDSMAN |
Applicant
And
| A & A MARTINS PTY LTD |
First Respondent
| AGOSTINHO MARTINS |
Second Respondent
REASONS FOR JUDGMENT
A. Introduction
These are proceedings brought by the Workplace Ombudsman that concern the determination of an appropriate penalty following the settlement and filing (on 3rd April 2009) of a Statement of Agreed Facts (“the Statement”) in relation to liability. That Statement confirms that the Respondents underpaid a former cadet/apprentice employee, contrary to the Building and Construction Industry (ACT) Award 2002 (“the Award”). A copy of that Statement is attached to these reasons.
The Second Respondent, Mr Martins, is a director of the First Respondent.
The former employee in question is Mr Campbell, who was employed by the first respondent between 17th October 2006 and 19th September 2007. Mr Campbell made a complaint to the Workplace Ombudsman on 2nd October 2007 in relation to underpayment of wages and the non-payment of allowances, contrary to the Award. The allowances not paid relate to an industry allowance, and to a fares and travel patterns allowance.
The amount agreed between the parties that has been underpaid (in relation to wages, and superannuation) and not paid (in relation to allowances) totals $11,299.20.
Each of the matters recited in paragraphs 12, 15, 18, 23, 27, 30 and 33 of the Statement constitute contraventions of the Workplace Relations Act 1996 (Cth) (“the Act”). By virtue of the Second Respondent’s position with the First Respondent, his liability attaches because of the operation of s.728 of the Act.
B. Submissions
Notwithstanding the matters set out in the Statement, Mr Martins maintained that (a) there was never any intention to breach any award or the Act, (b) the building course undertaken by Mr Campbell was the best and most useful one but pursuant to which, in his view, entitled the First Respondent to make payments which he now knows to have been under-payments, (c) Mr Campbell was very regularly away from his employment, and (d) because of the very difficult financial position of the First Respondent company, in large measure because of Mr Martin’s extremely difficult health issues, which include those associated with his newborn son, any penalty would be extremely difficult to pay. Because of other, long-running proceedings in this Court, completely unrelated to the current proceedings, I am very much aware of the extraordinarily difficult health position of Mr Martin, and that he has been in this situation for more than 12 months. This also accounts for the fact that two mediation sessions were unable to proceed.
For the Applicant, Mr Cook submitted as follows:
i)since the inception of the proceedings, both respondents have sought to assist the Applicant in resolving the matter as expeditiously as possible, evidenced, for example, by agreeing with the Statement, and to orders proposed;
ii)the respondents have admitted liability and have agreed to repay the underpayments to Mr Campbell;
iii)in accordance with the authority of Gibbs v City of Altona,[1] each individual act of under-payment, which has been itemised in the Statement in these proceedings, constitutes a separate contravention. On this basis there have been, as submitted by the Applicant, seven contraventions;
iv)because of the operation of s.728 of the Act, and because of what is set out in the Statement, Mr Martins was involved in each of the contraventions, and therefore stands liable for imposition of a penalty under the Act.
[1] (1992) 37 FCR 216 at p.223 (Gray J).
In relation to principles to be applied in relation to penalty, without being exhaustive in detailing each of Mr Cook’s further submissions, he contended that:
i)in relation to penalty concerning Mr Martins, and impliedly more generally, the Court should follow the instruction of Tracey J in Kelly v Fitzpatrick.[2] His Honour’s approach has been referred to in a number of more recent cases, including the Full Court decision in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith;[3]
[2] (2007) 166 IR 14.
[3] (2008) 165 FCR 560 (Gray, Graham & Buchanan JJ). See also the judgment of Dowsett J in Temple v Powell (2008) 169 FCR 169, especially at [56] ff in relation to “penalties” and the earlier Full Court decision in Construction, Forestry, Mining and Energy Union v Hamberger (2003) 127 FCR 309 at [51].
ii)there have been no other breaches by either of the respondents under the Act;
iii)there have been no prior breaches of the award by the respondents;
iv)it was acknowledged by the applicant that the respondents sought information from relevant government agencies to determine correct entitlements. Mr Martins confirmed this and stated – in Court and on oath – that incorrect information had been provided to the respondents;
v)the Applicant acknowledged that, although there were separate breaches, they arose out of what is properly described as `one course of conduct;’
vi)the Applicant also acknowledged that the first respondent conducts a “small business, owned and operated by the Second Respondent as Director with his wife and mother and father as co-Directors”;
vii)the Applicant submitted that “… the Court should have regard to the message sent, in the imposition of penalties, to employers about the profitability of engaging in conduct in breach of conditions to pay employees. The message sent should be one that `underpayment of wages will not be tolerated’;
viii)the Applicant also submitted that while ‘… the penalties against the Respondents should not be so great as to be oppressive, for a penalty to have the desired effect, it must be imposed at a meaningful level;’
ix)no specific figure – either as to a monetary amount or as to percentage - was proposed by the Applicant in relation to penalty.[4]
[4] I have omitted reference to Mr Cook’s internal citations in relation to deterrence, “the message” to be communicated, and the “meaningful level” of penalty to be imposed. Such matters, as I shortly show, are dealt with by the Full Court in McAlary-Smith and other cases to which I refer.
C. Legal Principles & Determination of Penalty
As already indicated, the Full Court decision in McAlary-Smith, in my respectful view, provides the most comprehensive treatment of principles relevant to the matters that are currently before this Court. In particular, I refer to the following from that judgment.
First, all three judgments in McAlary-Smith refer to and accept the observations in the joint judgment of Burchett and Kiefel JJ in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission,[5] where their Honour’s said, at p.295:[6]
[5] (1996) 71 FCR 285 at 295.
[6] This citation is found at the following paragraphs of the judgments in McAlary-Smith: 165 FCR at [12] (Gray J), [55] (Graham J), and [87] (Buchanan J).
A hallmark of justice is equality before the law, and, other things being equal, corporations guilty of similar contraventions should incur similar penalties: Trade Practices Commission v Axive Pty Ltd [(1994) ATPR |P41-368] (at 42,795). There should not be such an inequality as would suggest that the treatment meted out has not been even-handed ... However, other things are rarely equal where contraventions of the Trade Practices Act are concerned. In the present case, differing circumstances, size, market power and responsibility for the contraventions, as well as other factors, complicate any attempt to compare the penalties imposed on the appellant with those imposed on the other corporations.
Another form of comparison is not appropriate. The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. The point was well made by Spender J in Trade Practices Commission v Annand and Thompson Pty Ltd [(1987) ATPR |P40-472] (at 48,394) when he said:
"Each case must, of course, be viewed on its own facts and facts may be infinite in their variety."
It follows, as his Honour also said, that "[t]he quantum of penalties imposed in other cases can seldom be of very much direct assistance".’
I accept, unreservedly, the observations and instructions of the Full Court both in NW Frozen Foods and in McAlary-Smith as set out in the passages above in relation to determining penalty by reference to the particular facts of this case, which is not to be determined by reference to any other case.
Secondly, in relation to the “totality [or proportionality] principle,” again I note the following from the judgments of the Full Court in McAlary-Smith. In arriving at what Gray J described, at [28], as his “instinctive reaction to the aggregate penalty” in that case, his Honour noted that he had arrived at this conclusion by reference to the High Court’s process or description of “instinctive synthesis” in Markarian v The Queen.[7]
[7] (2005) 228 CLR 357 at [37]. Graham J also advocated, at [78], the approach of the High Court in Markarian.
In more detail, Graham J referred to the decision of Lander J in Ponzio v B & P Caelli Constructions Pty Ltd.[8] At [53] and [54], Graham J cited the following from Lander J in Ponzio:
In Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 (‘Ponzio’) at [93]-[94] Lander J summarised the purpose of imposing penalties for breaches of the Act as follows:
There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.
The individual or personal circumstances of the contravenor must be taken into account as also any relevant matter in mitigation. For a contravention of these sections the minimum penalty which addresses punishment and deterrence, both personal and general, will be appropriate. Where one act may involve a number of contraventions, as in this case, it would be generally inappropriate to impose separate penalties because almost inevitably that would offend against the totality principle as known to the criminal law. ...’
[8] (2007) 158 FCR 543 at [93] – [94].
And further, per McHugh J in Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 (‘Markarian v The Queen’) at [83]:
The ultimate control on the judicial sentencing discretion is the requirement that the sentence be proportionate to the gravity of the offence committed. In pursuit of other sentencing purposes, a judge may not impose a sentence that is greater than is warranted by the objective circumstances of the crime. Both proportionality and consistency commonly operate as final checks on a sentence proposed by a judge (see also Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 at 472).
Again, the remarks set out by each of these Courts govern the determination of what penalties should be imposed in the current matter.
Having regard to the principles articulated in the cases to which I have referred, and having regard to the facts of the matter - in particular, that (a) there have been no other breaches either before or since the matters that give rise to these proceedings, (b) the co-operation of the respondents with the applicant and consequent savings to all, (c) the respondents sought information from relevant sources and was provided with incorrect information, and (d) the relatively modest amounts involved, (e) the genuine plight of the second respondent - in my view the penalties that should be imposed are $1500.00 in relation to the first respondent, and $300.00 in relation to the second respondent. These penalties are in addition to the payment of the sums agreed to be owing to Mr Campbell. Orders will be made to this effect, and having regard to the circumstances of the respondents, there is also modest provision for time to pay. Formally, orders will be made essentially as sought by the Applicant.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Neville FM
Associate: Jacquelyn Curtis
Date: 26 June 2009
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