Zanoni v MFT Holdings Pty Ltd

[2013] FCCA 1593

FEDERAL CIRCUIT COURT OF AUSTRALIA

ZANONI v MFT HOLDINGS PTY LTD [2013] FCCA 1593

Catchwords:
INDUSTRIAL LAW – Small claims – unpaid wages – where employee employed on a full-time basis and paid a salary – salary found to be lower than award provisions.

Legislation:  

Fair Work Act; s.536

Clerks – Private Sector Award 2010

Applicant: REBECCA ZANONI

Respondent: MFT HOLDINGS PTY LTD

File Number: BRG 576 of 2013

Judgment of: Judge Baumann

Hearing dates: 6 & 27 September 2013

Date of Last Submission: 27 September 2013

Delivered at: Brisbane

Delivered on: 4 October 2013

REPRESENTATION

Counsel for the Applicant: In person

The Respondent: No appearance

ORDERS

1. The Respondent pay to the Applicant within thirty (30) days the sum of $10,490.80 (gross) and be entitled to deduct form the employee the applicable income tax on such payment before being paid to the employee.

2. A copy of these Reasons be transcribed and provided to the parties.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 576 of 2013

REBECCA ZANONI

Applicant

And

MFT HOLDINGS PTY LTD

Respondent

REASONS FOR JUDGMENT

(settled from extempore reasons)

1. The application by Rebecca Zanoni was filed in this Court in its Small Claims Division on 17 July 2013.  The respondent to the application is MFT Holdings (Queensland) Pty Ltd.  That company is apparently the trustee of the McCulloch Enterprises Trust, and Mr McCulloch of that company (which also operates under the trading name of NRG Building Systems) has appeared before the court on both 6 September 2013 and again on 27 September 2013.  The applicant and respondent agreed on the first return date that the applicant was employed by the respondent as an administrative secretary on a full-time basis from September 2004 until February 2013.

2. The applicant’s claim seeks unpaid wages in the gross sum of $12,077.21 (for the period between 1 June 2008 and 1 February 2013) and a payment in lieu of notice of termination of employment in the sum of $3068.40.  Previously, the court has dealt with the payment in lieu of notice, and on 27 September, Mr McCulloch agreed to pay the said sum on behalf of the respondent to the applicant.  I note the earlier order of this Court reflected that finding.  The outstanding issue identified through this process for my determination is the issue of whether there is any unpaid wages. 

3. It is noted that the respondent in fact asserts that they have overpaid the applicant. The parties agreed both in the affidavits filed during the proceedings and as a result of evidence given that the applicant’s employment was subject to the Clerks – Private Sector Award 2010. In this regard, I should note that of course in the small claims division of this court’s Fair Work Act jurisdiction, the rules of evidence do not strictly apply. The transcript of earlier proceedings before the court, particularly that on 27 September 2013, reveal the informal way in which evidence was procured.

4. At the hearings on 6 and 27 September 2013 the issue for these parties appeared to revolve around how many hours the applicant worked during her period of employment.  This was, it would seem, a significant concern of Mr McCulloch, who in his evidence identified concerns that the applicant had not worked full time beyond 33 hours per week and even then was often distracted doing work, he alleged, for her boyfriend or her parents’ business.  As it transpires upon reflection, in my view it is not the relevant issue to determine how many hours the applicant worked.

5. It is not relevant in my view, because the applicant was employed on a full-time basis on a salary.  That a full-time employee may be engaged to work the number of hours regarded as a full-time employee at a particular workplace on a salary is identified by item 10 of the Clerks – Private Sector Award 2010.  It provides that full-time hours “must be 38 or less per week”.  As I say, the parties agree that the applicant was employed on a full-time basis and on a salary.  Accordingly, it is not the number of hours the applicant worked that is relevant but whether the number of hours constituted “full-time hours at the particular workplace”.

6. It seems to me that the applicant was so employed, and that is acknowledged by the respondent.  Ms McSweeney, the respondent’s accountant/bookkeeper, asserts in an affidavit filed 26 September 2013 that “Rebecca was on a salary and not an hourly rate”.  I accept that evidence.  It is consistent with the payslips attached to the affidavit of Mr McCulloch, where the salary, as I will soon identify, was a fixed amount per annum.  Under item 17.1 of the Award, an employer is entitled to pay its employees an annual salary as opposed to the award provisions contained within that instrument, and further that if an employer exercises its discretion to pay one of its employees an annual salary, the annual salary must “be no less than the amount the employee would have received under the award for the work performed over the year for which the salary is paid”.

7. What this effectively means is that if an employer decides to employ an employee on a salary, they can not do so on a salary which would in dollar terms be less than what the employee would have received under the award otherwise.  The award in question came into effect on 1 January 2010.  The applicant does not include anything in her statement of claim to indicate what instrument, being a statutory award or a private agreement, her employment was regulated by prior to 1 January 2010. 

8. For that reason, together with the fact that this claim has been brought in respect of the period in 2008 over five years from its commencement, in the exercise of my discretion, I restrict the claimable period for alleged underpayment of wages to be from 1 January 2010 to when her employment ceased on 1 February 2013.  On the calculations the court has made, this represents a period of 161 weeks. 

What the Applicant Was Paid During this Period

1. In annexure F annexed to the respondent’s affidavit filed 26 September 2013, the company bookkeeper, Jodi McCulloch, states that the applicant’s annual salary was increased from $32,177.60 from September of 2009.  The payslips annexed to the affidavit reveal that the applicant was paid on the basis of that salary for the entire 161-week period between 1 January 2010 to 1 February 2013.  $32,177.60 computes to $618.80 per week (gross).  On that basis, the applicant was paid approximately $99,626.80 gross for the claimable period. 

What the Applicant Should Have Been Paid

1. In her statement of claim, the applicant indicates she is a Level 2 secretary/personal assistant.  She has been working with the company since 2004 before her termination and would therefore come under the Year 2 component as a Level 2 classification.  The minimum weekly wages are contained in item 16 of the Clerks – Private Sector Award 2010, which have been the subject of yearly wage reviews since its commencement on 1 January 2010.  The award reveals that:

   a)during the period from 1 January 2010 to 18 June 2010, the award wage for Year 2 Level 2 employee was $650 per week;

   b)during the period from 18 June 2010 to 20 June 2011, the award wage for such an employee was increased to $676 per week;

   c)during the period from 20 June 2011 to 18 June 2012, the award wage for such an employee was increased to $699 per week;  and

   d)during the period from 18 June 2012 until the employment ceased on 1 February 2013, the award wage for the employee had been increased to $719.30 per week.

2. As a result of this award applying in these circumstances, I calculate that the applicant should have been paid a total of $110,117.60 for the 161-week claimable period, and after allowance for the amount actually paid of $99,626.80, I find that the applicant was underpaid a gross total amount of $10,490.80.  I propose to make an order that the respondent pay to the applicant within 30 days the sum of $10,490.80 (gross) and be entitled to deduct from the employee the applicable income tax for such payment before payment to the employee. 

3. Before concluding this judgment, it is appropriate I make some observations. In my view, Mr McCulloch, who I had the opportunity of seeing on more than one occasion in my Court, appeared to be clearly embarrassed to some degree by the lack of business records and business discipline applied in his office. There are certain requirements which an employee is entitled to expect an employer will maintain. For example, pursuant to section 536 of the Fair Work Act 2009, employers have an obligation to provide “a payslip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work”.

4. It is the evidence of the respondent (note annexure B of the affidavit filed 26 September 2013) that “our company does not provide payslips to employees unless requested”. This would, if such a charge had been made, be likely to be a contravention of section 536 of the Fair Work Act 2009. That is but one example of some of the irregularities in the office. It may be that the respondent could do well to audit the office practices to ensure that they comply with the provisions of the Fair Work Act as it now applies since its creation in 2009. I will direct that a copy of these reasons be transcribed and provided to the parties.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Baumann

Date:  10 October 2013