Workplace Ombudsman v Saya Cleaning Pty Ltd & Anor (No.2)
[2009] FMCA 154
•10 March 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WORKPLACE OMBUDSMAN v SAYA CLEANING PTY LTD & ANOR (No.2) | [2009] FMCA 154 |
| INDUSTRIAL LAW – Penalty hearing – orders to recompense employees for non-payment of wages and superannuation – interest on unpaid wages – to whom penalties should be paid – costs. |
| Federal Court of Australia Act 1976 (Cth), s.51A Federal Court Rules (Cth), Order 35, r.8 Federal Magistrates Act 1999 (Cth), s.76 Superannuation Guarantee (Administration) Act 1992 (Cth), s.76 Superannuation Guarantee Charge Act 1992 (Cth) Superannuation Industry (Supervision) Act 1993 (Cth) Workplace Relations Act 1996 (Cth), ss.719(1), 719(6), 719(7), 719(8), 722, 722(1)(b) and 824(2) |
| Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 |
| Applicant: | WORKPLACE OMBUDSMAN |
| First Respondent: | SAYA CLEANING PTY LTD |
| Second Respondent: | YOUSEF JELIL |
| File Number: | ADG 289 of 2007 |
| Judgment of: | Simpson FM |
| Hearing date: | 10 February 2009 |
| Date of Last Submission: | 10 February 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 10 March 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Ey |
| Solicitors for the Applicant: | Piper Alderman |
| Counsel for the First and Second Respondents: | No appearance by or on behalf of the First and Second Respondents |
ORDERS
The penalties imposed against the respondents on 29 January 2009 be paid to the Commonwealth.
Pursuant to s.719(6) of the Workplace Relations Act 1996 (Cth) (“the Act”) the first respondent pay to Ms Keny Iglesias the sum of $900 which sum includes interest pursuant to s.722(1)(b) of the Act.
Pursuant to s.719(6) of the Act the first respondent pay to Mr Helal Elbehidi the sum of $3,400 which sum includes interest pursuant to s.722(1)(b) of the Act.
Pursuant to s.719(7) of the Act the first respondent pay the sum of $69.34 to a fund nominated by Ms Keny Iglesias providing that the fund complies with the Superannuation Industry (Supervision) Act 1993 (Cth) or, if no such fund is nominated, to the Australian Retirement Fund and, in either event, to the benefit of Ms Keny Iglesias.
Pursuant to s.719(7) of the Act the first respondent pay the sum of $276.49 to a fund nominated by Mr Helal Elbehidi providing that the fund complies with the Superannuation Industry (Supervision) Act1993 (Cth) or if no such fund is nominated, to the Australian Retirement Fund and, in either event, to the benefit of Mr Helal Elbehidi.
Pursuant to s.824(2) of the Act the second respondent pay the applicant’s costs thrown away in relation to the aborted mediation fixed in the sum of $973.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADG 289 of 2007
| WORKPLACE OMBUDSMAN |
Applicant
And
| SAYA CLEANING PTY LTD |
First Respondent
| YOUSEF JELIL |
Second Respondent
REASONS FOR JUDGMENT
On 29 January 2009 I imposed penalties on the first and second respondents pursuant to s.719(1) of the Workplace Relations Act 1996 (Cth) (“the Act”) and adjourned the matter to hear further submissions in relation to ancillary matters. The respondents were not present during the penalty hearing or when the penalties were imposed. They again failed to attend on the adjourned date when further submissions were heard.
I have now heard from Counsel for the applicant who raises 3 matters: firstly, what orders should be made to recompense the employees for their losses resulting from the conduct of their employer, the first respondent; second, to whom should the penalties be paid; and, third, what if any order should be made in relation to costs thrown away as a result of the aborted mediation.
Recompense of the employees for their losses
Orders are sought to recompense the employees for their unpaid wages, their unpaid superannuation and interest of these sums.
Wages
In relation to wages, I have already found in my earlier decision that Ms Iglesias should have been paid $770.45 and Mr Elbehidi $3,072.15. Pursuant to s.719(6) of the Act they are entitled to orders against the first respondent for payment of these sums.
Superannuation
It is submitted that I should calculate the amount of superannuation that should be paid by reference to the provisions of the Superannuation Guarantee (Administration) Act 1992 (Cth) (“SGA Act”) namely 9% of the wages that should have been paid. I agree. Clause 5.9 of the applicable NAPSA provided that the employer was to make superannuation contributions for employees in accordance with the requirements referred to in the SGA Act and the Superannuation Guarantee Charge Act 1992 (Cth) (“SGC Act”). I conclude that it was intended that an employee could nominate another fund if they did not want their superannuation contributions to be placed in the Australian Retirement Fund. I calculate that Ms Iglesias and Mr Elbehidi are entitled to superannuation payments of $69.34 and $276.49 respectively. The employees are therefore also entitled, pursuant to s.719(7) of the Act, to an order for payment of this unpaid superannuation. But to whom or what fund should the amounts be paid?
Clause 5.9 of the NAPSA further states that the payments were to be made to the Australian Retirement Fund or an approved fund that complies with the Superannuation Industry (Supervision) Act 1993 (Cth) (“SIS Act”). I am informed that the applicant is unable to provide evidence of the superannuation fund or funds to which the first respondent should have made contributions in respect of these employees. It is submitted by the applicant that in such circumstances, the Court should make an order under s.719(7) of the Act that the respective amounts be paid directly to the employees. Section 719(7) states:
(7) [Order to pay superannuation] Where, in a proceeding against an employer under this section, it appears to the eligible court that the employer has not paid an amount to a superannuation fund that the employer was required, under an applicable provision, to pay on behalf of a person, the court may order the employer to make a payment to or in respect of that person for the purpose of restoring the person, as far as practicable, to the position that the person would have been in had the employer not failed to pay the amount to the superannuation fund. (my emphasis)
It is submitted on behalf of the applicant that the words “… to or in respect of that person …” permit the Court to order that the superannuation payments be paid directly to the employees. I do not agree. Payments of superannuation amounts directly to employees would conflict with superannuation legislation which requires that superannuation payments be paid to an appropriate superannuation fund. In addition s.719(8) of the Act supports the conclusion that any amounts payable pursuant to s.719(7) of the Act should be paid to a superannuation fund as it provides that any lost return on unpaid superannuation amounts are to be paid to “… the superannuation fund referred to in subsection (7), or another superannuation fund …”. There is no mention in the section of the amount of the lost return being paid directly to an employee although I acknowledge that the subsection starts with the words “without limiting the generality of subsection (7) …”. In my opinion the appropriate order is that the superannuation amounts be paid to the Australian Retirement Fund or an approved fund that complies with the SIS Act as nominated by the relevant employee.
Interest
The applicant submits that the first respondent should pay interest on the amounts of underpayment of wages pursuant to s.722 of the Act. That section provides:
(1)[Court must order] In exercising its powers under subsection 719(5) or (6) or in a proceeding under section 720 or 721, the eligible court must, upon application, unless good cause is shown to the contrary, either:
(a)order that there be included in the sum for which an order is made or judgment given, interest at such rate as the eligible court, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date on which the order is made or judgment entered; or
(b)without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which an order is made or judgment given, a lump sum instead of any such interest.
(2)[Subsection (1) does not authorise] Subsection (1) does not:
(a)authorise the giving of interest upon interest or of a sum instead of such interest; or
(b)apply in relation to any debt upon which interest is payable as a right whether by virtue of an agreement or otherwise; or
(c)authorise the giving of interest, or a sum instead of interest, otherwise than by consent, upon any sum for which judgment is given by consent.
The applicant submits that interest should be calculated at 10.5% (this is the interest rate provided for in Order 35 r.8 of the Federal Court Rules (“FCR”)), should be calculated on a compounding basis and should be allowed for 30 months in the case of Ms Iglesias and 21 months in the case of Mr Elbehidi. The applicant calculates interest payable to be $219.66 in relation to Ms Iglesias and $589.90 in relation to Mr Elbehidi.
I do not consider it appropriate to apply the interest rate referred to in FCR Order 35 r.8 as that rule is concerned with post judgment interest. Section 76[1] of the Federal Magistrates Act 1999 (Cth) (“FM Act”) addresses interest up to judgment and states in part as follows:
[1] Section 51A of the Federal Court of Australia Act 1976 (Cth) (“FC of A Act”) is the analogous provision for the Federal Court.
76 Interest up to judgment
(1) …
(2) A party to proceedings that are:
(a) in the Federal Magistrates Court; and
(b) for the recovery of any money (including any debt or damages or the value of any goods) in respect of a particular cause of action;
may apply to the Federal Magistrates Court or a Federal Magistrate for an order under subsection (3).
(3) If:
(a) an application is made under subsection (2); and
(b) the Federal Magistrates Court or the Federal Magistrate is not satisfied that good cause has been shown for not making an order under this subsection:
the Federal Magistrates Court or the Federal Magistrate must either:
(c) order that there be included in the sum for which judgment is given interest at such rate as the Federal Magistrates Court or the Federal Magistrate thinks fit on the whole or any part of the money for the whole or any part of the period between:
(i)the date when the cause of action arose; and
(ii) the date as of which judgment is entered; or
(d) without proceeding to calculate interest in accordance with paragraph (c), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.
(4) Subsection (3) does not:
(a) authorise the giving of interest upon interest or of a sum in lieu of such interest; or
(b) apply in relation to any debt upon which interest is payable as or fight, whether by virtue or an agreement or otherwise; or
(c) …
It is to be noted that no interest rate is stated in s.76 and that compounding of interest is prohibited.
The usual practice, at least in the Federal Court in relation to its similar provision, is to adopt the rate of interest applied by the Supreme Court of the State or Territory in which the Court is dealing with the matter. Although in South Australia the Supreme and District Courts have allowed prejudgment interest at a rate of 4% in situations of non-economic loss, wherever the damages have been assessed in the money value as at the date of trial and awards in defamation cases[2], in the case (as here) of economic loss the Court should normally fix a rate that properly compensates a person for being held out of the damages they are entitled to. As the Court has not been provided with information about the circumstances of the employees that we are here concerned with I propose instead to simply include modest sums for interest in the orders for recompense of wages as provided for in s.722(1)(b) of the Act.
[2] Lunn’s Civil Procedure South Australia para.SCA 30C.20.
To whom penalties should be paid
In the circumstances of this case the penalties should all be paid to the Commonwealth as the proceeds have been brought by a public official. This fact displaces the general rule that the proper recipient of a penalty is the party initiating the proceedings. (See Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 at paras.[38] to [46] per Gray J and paras.[63] to [70] per Branson and Lander JJ).
Costs
The applicant seeks an order for costs against the second respondent pursuant to s.824(2) of the Act for costs thrown away in relation to a proposed mediation. Costs can only be ordered against a respondent if the Court:
“… is satisfied that a party to the proceedings has, by an unreasonable act or omission, caused another party to the proceedings to incur costs in connection with the proceedings …”.
It is submitted on behalf of the applicant that the second respondent should be ordered to pay for the work done on behalf of the applicant in preparation for a mediation that was ordered on 9 November 2007. The second respondent agreed to the order being made but then, without advising the applicant or the Court, decided to take no further part in the proceedings or the mediation. The applicant paid the fee for the mediation and took the usual steps to prepare for the mediation. The applicant submits that in these circumstances, it was unreasonable for the second respondent to fail to make himself available for the mediation or to advise the applicant in a timely fashion that he would not be attending. Without any explanation from the second respondent being forthcoming for his failure to make himself available, I agree with the submission put on behalf of the applicant. After consideration of a Schedule of Costs document provided on behalf of the applicant I would fix those costs thrown away in the sum of $973.00.
Conclusion
I make the orders to be found at the beginning of these reasons.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Simpson FM
Associate: Julie Davey
Date: 10 March 2009
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