Wright v Ultra Tune Warrandyte Pty Ltd (in Liquidation)

[2019] FCCA 2620

FEDERAL CIRCUIT COURT OF AUSTRALIA

WRIGHT v ULTRA TUNE WARRANDYTE PTY LTD (IN LIQUIDATION) & ANOR [2019] FCCA 2620

Catchwords:
INDUSTRIAL LAW – Whether adverse action taken against the Applicant – whether Respondents breached relevant Award.

Legislation:

Fair Work Act 2009 (Cth), ss. 44, 45, 323, 342, 361(1), 546, 550

Vehicular Manufacturing, Repair Services and Retail Award 2010, cl 27.9, 28.2(c)

Applicant: LUKE WRIGHT

First Respondent: ULTRA TUNE WARRANDYTE PTY LTD ACN 095 583 547 (IN LIQUIDATION)

Second Respondent: JASON GLAZNER

File Number: MLG 2643 of 2017

Judgment of: Judge C. E. Kirton QC

Hearing date: 18 February 2019

Date of Last Submission: 18 February 2019

Delivered at: Melbourne

Delivered on: 5 December 2019

REPRESENTATION

The Applicant appeared in person

No appearance by the First Respondent

The Second Respondent appearance in person

ORDERS

1. Within 28 days, the Second Respondent to pay to the Applicant the sum of $22,062.76 by way of unpaid entitlements.

DECLARATION

1. That the Respondents contravened s.44 of the Fair Work Act 2009 (Cth) in terminating the Applicant’s employment prior to the date on which written notice of the day of termination was given to the Applicant.

FURTHER ORDERS

1. Within 42 days the parties’ are to provide to Chambers:

   (a)Short minutes of Orders, or failing agreement;

   (b)Written submissions;

   in relation to quantification of compensation to be paid to the Applicant in respect of the contravention of s.342(1) of the Fair Work Act 2009 (Cth).

2. The matter be adjourned for mention to 17 February 2020 at 9.30 am to consider allocating a Hearing date in relation to penalty.

3. Non-compliance with Order 3 above, or failure to attend pursuant to Order 4 above, may result in the Application being dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 2643 of 2017

LUKE WRIGHT

Applicant

and

ULTRA TUNE WARRANDYTE PTY LTD ACN 095 583 547 (IN LIQUIDATION)

First Respondent

JASON GLAZNER

Second Respondent

REASONS FOR JUDGMENT

Introduction and Background

1. The Applicant was employed by the First Respondent company as a workshop manager between 1 July 2015 and 30 August 2017.  He contends that he was terminated on that date. The Respondents say that he resigned.

2. By way of an Application and claim alleging dismissal in contravention of a general protection filed 5 December 2017, the Applicant seeks compensation and the imposition of a pecuniary penalty on the First Respondent company, and the Second Respondent as its principal.

3. By way of a Response filed 18 September 2018, the Respondents oppose the claim and seek dismissal of the application.

4. The First Respondent went into voluntary liquidation, and the claim against it is stayed.

5. The Court is satisfied from his own oral and written evidence that the Second Respondent, as Director and shareholder in said company, and as the owner and operator of the business conducted by the First Respondent company, was involved in any contraventions that are established, pursuant to s.550 of the Fair Work Act 2009 (Cth) (Act).

The Evidence

1. The Applicant relied on the following documents:

   a)Application – Fair Work Division, filed 5 December 2017.

   b)Form 2: Claim under the Fair Work Act 2009 alleging dismissal in contravention of a general protection, filed 5 December 2017.

   c)Applicant’s Genuine Steps Statement, filed 5 December 2017.

   d)Affidavit of Luke Wright, affirmed and filed 5 November 2018.

   e)Outline of Submissions, filed 8 February 2019.

2. The Second Respondent relied on the following documents:

   a)Response, filed 19 September 2018.

   b)Affidavit of Jason Glazner, sworn and filed 7 February 2019.

   c)Outline of Submissions (filed in Court on 18 February 2019).

The Hearing

1. The Applicant and Second Respondent both represented themselves at the hearing.  They did their best to do so, and to conduct their cases in the context of a complex statutory framework.

2. It was, however, very hard to understand at times precisely what they were contending.  This is not meant as a criticism of them.  The Court was assisted, however, by the case outline documents that each party relied on.  It is possible they each had the benefit of some legal advice as regards these documents.

3. The parties cross-examined each other.  Many of the contentious factual issues in this case did not, regrettably, receive the benefit of critical scrutiny that would have been useful to the Court.  The Court will simply have to do the best it can in these circumstances.

Uncontested Facts

1. The uncontested facts include:

   a)There was no written employment contract.

   b)The Applicant’s employment was covered by the provisions of the Vehicular Manufacturing, Repair Services and Retail Award 2010 (Award).

   c)The Applicant was paid at an hourly rate.

   d)The Applicant was paid weekly by way of direct deposit into a nominated bank account and also in cash for some work on Saturdays.

   e)The Applicant’s last day of employment was 30 August 2017.

Issue about Payslips

1. There is an issue in this case about whether the Applicant was provided with payslips when he was paid.  The Second Respondent contends that this took place.  The Applicant contends that very few, if any, of his payslips were received contemporaneous with or shortly after payment.  Indeed, he contends that most payslips were not provided until much later.

2. The Court prefers the Applicant’s evidence about this.  The Second Respondent could have, indeed should have, been able to produce to the Court in his evidence the totality of the business records of the First Respondent, including all payroll records.  He did not do so.  The Court does not accept that his failure to provide these records can be explained by the voluntary liquidation of the First Respondent. Nor can it be explained by the transfer of the assets of the business to a third party who was, in any event, the Second Respondent’s father-in-law.  Moreover, the Second Respondent’s wife, Andria Glazner, who performed administrative and bookkeeping work for the company, and who allegedly was also involved in physically providing the payslips to the Applicant, was not called to give evidence even though she was physically present at the hearing.  Had the Second Respondent been at least able to produce the entire pay records of the Applicant for the relevant period, the plausibility of his assertion that payslips were provided would have been enhanced.  The more likely scenario, based on the totality of the evidence, is that the Applicant was correct, and the payslips were produced in response to the litigation.  As will be seen below, the Court has other concerns about what evidence was given about the Applicant’s pay.

3. Apart from making the Applicant’s task in proving his case so much harder, the payslips actually produced by the Second Respondent are probably unreliable and self-serving.

Understanding the Applicant’s Claim

Non-Compliance with the Award

1. The Applicant’s claim for his statutory entitlements has various components. 

2. The first component relates to hours worked and overtime and commences from 1 July 2016.  It is common ground that the Applicant worked 45 hours per week and was paid $1,200 gross per week.  The Applicant contends that their agreement was that he be paid $27 per hour when he first joined on 1 July 2015 as a technician, but that this was increased to $30 per hour from 1 July 2016 when he became workshop manager, and his hours were extended as well.  Curiously, the Second Respondent contended in his Outline of Submissions dated 10 February 2010 that the Applicant’s initial hourly rate was $23.90 per hour till 1 July 2016, but then was $23.77 per hour from 1 July 2016.  With respect to the Second Respondent, it is plainly implausible that the Applicant’s hourly rate would decrease during his employment.  With further due respect to the Second Respondent, the calculations he sets out in both his affidavit of 7 February 2019, and Outline of Submissions of 10 February 2019, create a strong impression of re-engineering to suit his case, particularly in circumstances where the pay records are in such a poor state.  The Applicant’s case is far more plausible.

3. Thus from 1 July 2016 the Applicant worked 45 hours per week at $30 per hour, but was only paid for 40.  Clause 37.2 of the Award provides that the ordinary hours of work is 38 hours per week.  The Applicant concedes that two hours per week in excess of the 38 hours was attributable to his monthly rostered day off.  However, that leaves five hours per week which, in accordance with the Award, should be treated as overtime.

4. The Applicant contends that clause 28.2(c) of the Award stipulates that he should have been paid time and a half for the first three hours, and double time thereafter, thus, $45 per hour for the first three hours and $60 per hour for the next two hours.  He thus contends that he was underpaid $255 each week, for the 61 weeks between 1 July 2016 and 30 August 2017.  The Applicant’s contention is soundly based on the relevant Award.

5. The Second Respondent’s Outline of Submissions demonstrates, with respect, the extent that he misunderstood his statutory and Award obligations to the Applicant.  Whilst at one point in the outline he asserts that the Applicant was always paid above the Award rate, in effect, he uses the difference between the Award rate and what he actually paid the Applicant in the calculations to establish the Applicant’s entitlement.  That was, fundamentally, the wrong approach.  The parties had contracted for over Award payments, and overtime entitlements were thus calculated not by reference to the Award rate, but what the parties had themselves agreed to.

6. The failure to pay the Applicant for his hours worked and overtime is in breach of clause 28.2 of the Award, and ss.45 and 323 of the Act. The Second Respondent is obliged to pay to the Applicant the shortfall in his entitlement, namely $15,555.

7. The Second component of the Applicant’s claim to his statutory entitlements relates to annual leave loading of 17.5 per cent. 

8. The Court accepts the Applicant’s evidence that during the course of his employment with the Respondent he took a total of 35 days annual leave.  The Court accepts his evidence that he was not paid annual leave loading in respect of any of this leave.

9. Clause 27.9 of the Award provides for a 17.5 per cent loading on pay, attributable to periods of leave.  This is based on what the Applicant would have been paid had he worked, and thus the focus is on what the Applicant was actually paid, rather than what the Award rate is. 

10. The Applicant calculates this as being $1,890 leave loading for the first 10 days, $2,362.50 for the next 10 days, and then $3,543.75 in respect of the last 15 day leave period.  The difference between the first and second periods of annual leave is represented in the different hourly rate that he was paid at the time.

11. In short, the Applicant contends that he did not receive his annual leave loading totalling $7,796.25.  He accepts, however, that the Respondent did pay him an amount of $565 on 29 August 2017.  This means that his unpaid annual leave loading entitlement is $7,231.25.

12. In the Second Respondent’s affidavit, he accepts that leave loading was payable, but, curiously, only for the first 20 days of the leave, not the remaining period.  The calculations that the Second Respondent uses lack transparency, i.e. it is simply not possible to discern how he gets an hourly rate of loading of $23.77, but, presumably, this was based on a misapprehension about the applicability of the Award rate, rather than the agreed contractual rate.  In any event, whilst it seems that the Second Respondent concedes that $3,612.28 was, indeed, payable to the Applicant, even on the Applicant’s own documents it is hard to see why it is only for 20 days, rather than the 35 days leave actually taken.

13. One can only have a measure of sympathy for the Second Respondent.  The paucity of the business records must have made it as difficult for him to defend the Applicant’s claim, as it was for the Applicant to establish it.

14. The failure to pay annual leave loading is in breach of clause 29.9 of the Award and ss.45 and 323 of the Act. The Applicant has suffered loss and damage in the sum of $7,231.25.

15. Annexed to the affidavit of the Second Respondent as JG-2 is what purports to be the Applicant’s final payslip.  The Applicant agrees that he received the net figure of $4,902 referred to in this document, which thus enhances the Court’s confidence in the same.  In this document, however, it is clear that part of the $4,902 is $723.49 of annual leave loading.  Prima facie, therefore, this amount should be deducted from the Applicant’s entitlement referred to above. The Applicant’s entitlement to annual leave loading is therefore: $7,231.25 – $723.49 = $6,507.76.

The adverse action claim

1. The Court finds that on 30 August 2017, the First Respondent, through the Second Respondent, summarily dismissed the Applicant because, in effect, he asserted his right to be paid his statutory and Award entitlements.  The Applicant’s claim was summarised in his letter of 30 August 2017, which was the Annexure LW-5 to the Applicant’s Affidavit.  As it turns out, the amount that he claimed there was, in fact, a conservative estimate of his actual entitlements as found by the Court.

2. There are different versions about what, in fact, happened on the day.  The Second Respondent asserts that the Applicant resigned.  The Court does not accept that this took place.  The Second Respondent asserts that the Applicant was, in effect, aggressive and offensive towards both him, and to Mrs Glazner.  The Applicant accepts that he was, in effect, frustrated and possibly angry, but he left.  There is nothing in the evidence of the Applicant or, indeed, of the Second Respondent that would lead the Court to conclude that the Applicant resigned.  Even if the Court accepted paragraph 36 of the Second Respondent’s affidavit (which it does not) it would not constitute a resignation.  It might suggest that the Applicant was frustrated, angry, and was leaving, but there was nothing to suggest he would not return. 

3. In any event, the Court prefers the Applicant’s evidence about the events that occurred on 30 August 2017 in his affidavit.  It is far more detailed.  It survived what little cross-examination took place about the issue.  Once again, the Second Respondent’s evidence was greatly hampered by the fact that there was no attempt to lead evidence from a person who was there during the events in question, at least for part of the time, i.e. Mrs Glazner.  Moreover, the Second Respondent’s evidence was permeated with an emotional, subjective overtone, in contrast to the Applicant’s evidence.

4. In any event, the onus of proof was on the Second Respondent pursuant to s.361(1) of the Act. The onus was on him to establish that the prohibited reason (i.e. that the Applicant raised issues about his statutory entitlements) did not form part of the reason for the adverse action. The Court does not accept that the Second Respondent has done so.

5. The Court would be entitled to impose a pecuniary penalty order under s.546, as it is clear that the First and Second Respondents have contravened a civil remedy provision in the Act. The section is discretionary, however. There is possibly an element of futility in considering a pecuniary order, in the circumstances of this case. The Applicant leads no evidence of having been disadvantaged, or incurring a loss, as a result of the Respondent’s contraventions. Indeed, attached to the Applicant’s Affidavit at LW-8 is a text message exchange dated 31 August 2017 in which he says; “…depends on work…” which creates the impression that he was in fact working on the day following the day of termination.

6. The First Respondent is in liquidation.  The Second Respondent gave evidence, in response to questions asked by the Court, suggesting that his income was minimal, as were his assets, though there is a strong impression that he has structured his assets so the business, at the very least, is controlled by a friendly entity who is prepared to continue to employ him. 

7. Even if a pecuniary penalty were considered, it might not be substantial, and it would further add to the complexity of proceedings that are being conducted by litigants in person to pursue this issue further.  It is possible that if the Applicant is able to recover from the Second Respondent the amounts to which he is entitled pursuant to orders to be made in these proceedings, he may wish to reconsider pursuing pecuniary penalty orders.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge C. E. Kirton QC

Associate: 

Date: 5 December 2019