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[2015] FCA 492
Federal Court of Australia
2015-05-21
Flick J
Original judgment source is linked above.
Solicitor for the Applicant: Australian Government Solicitor
Solicitor for the Respondent: People + Cultlure Strategies
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 2253 of 2013
BETWEEN: DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE
AND: FOXVILLE PROJECTS GROUP PTY LTD (ACN 116 744 300)
JUDGE: FLICK J DATE OF ORDER: 21 MAY 2015 WHERE MADE: SYDNEY
Luis Rodriguez
Workplace Relations Act Contraventions 2. In respect of the Respondent's employment of Luis Rodriguez under the Workplace Relations Act up to 30 June 2009: (a) the Respondent contravened s 318 of the Workplace Relations Act by failing to credit (i) annual leave; and (ii) personal / carer's leave, for the benefit of Luis Rodriguez;
Fair Work Act Contraventions 3. In respect of the Respondent's employment of Luis Rodriguez from 1 July 2009 under the Fair Work Act: (a) the Respondent contravened s 44 of the Fair Work Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of Luis Rodriguez;
Daniel Rodriguez 4. Daniel Rodriguez was: (a) from some time in 2008 up to 30 June 2009, an employee of the Respondent within the meaning of s 5 of the Workplace Relations Act; and (b) from 1 July 2009 to 21 February 2012, a National System Employee of the Respondent within the meaning of s 13 of the Fair Work Act.
Workplace Relations Act Contraventions 5. In respect of the Respondent's employment of Daniel Rodriguez under the Workplace Relations Act up to 30 June 2009: (a) the Respondent contravened s 318 of the Workplace Relations Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of Daniel Rodriguez;
Fair Work Act Contraventions 6. In respect of the Respondent's employment of Daniel Rodriguez from 1 July 2009 under the Fair Work Act: (a) the Respondent contravened s 44 of the Fair Work Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of Daniel Rodriguez;
Schedule AA Employees 7. In respect of the persons identified in Schedule AA of the Further Amended Statement of Claim: (a) in the period between 1 July 2009 and 8 May 2012 the Respondent was the true employer of the employees identified in Schedule AA; (b) the Respondent contravened s 44 of the Fair Work Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of the employees identified in Schedule AA;
The 2008 Enterprise Agreement 8. In the period from 1 June 2009 to 12 October 2011, the 2008 Enterprise Agreement applied to the Respondent's employment of: (a) Luis Rodriguez; (b) Daniel Rodriguez; (c) the employees identified in Column 1 of Schedule AA of the Statement of Agreed Facts, (the 2008-2011 Foxville Employees). 9. The Respondent contravened s 50 of the Fair Work Act by failing to provide the 2008-2011 Foxville Employees entitlements in breach of clauses 4 (which incorporated clause 24.9.1 of the National Building and Construction Industry Award 2000 (the "NBCI Award")), 10.1 (and Appendix B), 10.2 (and Appendix C), 10.3(a), 10.4, 10.5, 13, 16, 17, 25.2 and 25.3 of the 2008 Enterprise Agreement.
The 2011 Enterprise Agreement 10. In the period from 13 October 2011 to May 2012, the 2011 Enterprise Agreement applied to the Respondent's employment of: (a) Luis Rodriguez; (b) Daniel Rodriguez; and (c) the employees identified in Column 2 of Schedule AA of the Statement of Agreed Facts, (the 2011-2012 Foxville Employees). 11. The Respondent contravened s 50 of the Fair Work Act by failing to provide the 2011-2012 Foxville Employees entitlements in breach of clauses 12 (and Appendix B), 12.3 (and Appendix D), 12.4 (and Appendix C), 12.5, 12.8, 15 (and Appendix D), 18, 19, 25.2, 25.3 29.4, 29.5, 29.5(c)-(d), 29.2 and Appendix C of the 2011 Enterprise Agreement.
Failure to provide a Fair Work Information Statement 12. The Respondent contravened s 44 of the Fair Work Act by failing to provide its employees a Fair Work Information Statement pursuant to s 125 of the Fair Work Act.
Record Keeping 13. The Respondent contravened s 535 of the Fair Work Act by failing to keep records in accordance with regulations 3.32, 3.33 and 3.34 of the Fair Work Regulations 2009 (Cth) (the "Fair Work Regulations"). AND THE COURT ORDERS THAT:
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 2253 of 2013
BETWEEN: DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE
AND: FOXVILLE PROJECTS GROUP PTY LTD (ACN 116 744 300)
REASONS FOR JUDGMENT 1 On 31 October 2013 the Applicant commenced a proceeding in this Court against the Respondent, Foxville Projects Group Pty Ltd ("Foxville"). 2 The Applicant is the Director of the Fair Work Building Industry Inspectorate (the "Director") appointed under s 59A of the Fair Work (Building Industry) Act 2012 (Cth). 3 Foxville is a business engaged in providing interior fit-out, plastering and related services for construction projects. Relevantly for present purposes, in 2011 and 2012 Foxville was engaged to provide its services in connection with two major construction projects in the Sydney CBD, namely the Gowings site on Market Street and the Park Hyatt Hotel in The Rocks. 4 The proceeding commenced by the Director seeks (inter alia) declaratory relief and the imposition of pecuniary penalties for alleged contraventions of various provisions of the Workplace Relations Act 1996 (Cth) (the "Workplace Relations Act") and the Fair Work Act 2009 (Cth) (the "Fair Work Act"). 5 In April 2015 the parties notified the Court that they had agreed the relevant facts and that the outstanding matter for the Court to resolve was the making of such declaratory relief as it considered appropriate and to quantify any penalties to be imposed. 6 An Agreed Statement of Facts was tendered as an exhibit during the course of the hearing pursuant to s 191 of the Evidence Act 1995 (Cth). Foxville also filed during the hearing an affidavit of Mr George Lu, a director of Foxville. Mr Lu was briefly cross-examined by Counsel for the Director. 7 Both the Director and Foxville had filed written submissions in advance of the hearing. 8 It is concluded that the declaratory relief sought by the Director should be made, and that penalties in the sum of $145,000 should be imposed. Orders should also be made for the payment of monies to those employees who have been underpaid.
The principles to be applied 9 A consideration of the principles which apply to the orders which the Director seeks needs separately to address: the Court's power to grant declaratory relief upon the basis of an agreed statement of facts; the purpose which the imposition of a penalty seeks to achieve and the considerations relevant to the assessment or quantification of any penalty to be imposed; and whether the regulator and a contravening respondent may proffer an agreed penalty to be imposed or even make submissions as to the range in which any penalty to be imposed may fall. The former two matters are well-settled. The last matter has recently been considered by a Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 (the "CFMEU" decision). 10 In the context of the present proceeding, none of these three matters requires any detailed or elaborate exposition. But each should briefly be addressed.
Declaratory relief & agreed facts 11 As to the first of these matters, s 21 of the Federal Court of Australia Act 1976 (Cth) confers power upon this Court to grant declaratory relief. In Aussie Airlines Pty Ltd v Australian Airlines Inc (1996) 68 FCR 406 at 414 Lockhart J summarised the general requirements to be satisfied before granting declaratory relief as follows: For a party to have sufficient standing to seek and obtain the grant of declaratory relief it must satisfy a number of tests which have been formulated by the courts, some in the alternative and some cumulative. I shall formulate them in summary form as follows: • The proceeding must involve the determination of a question that is not abstract or hypothetical. There must be a real question involved, and the declaratory relief must be directed to the determination of legal controversies … The answer to the question must produce some real consequences for the parties. • The applicant for declaratory relief will not have sufficient status if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" … or if the court's declaration will produce no foreseeable consequences for the parties … • The party seeking declaratory relief must have a real interest to raise it … • Generally there must be a proper contradictor … Spender and Cooper JJ agreed with Lockhart J. 12 There is no impediment to the Court granting declaratory relief founded upon facts agreed between the parties: e.g., Australian Competition and Consumer Commission v Real Estate Institute of Western Australian Inc [1999] FCA 18, (1999) 161 ALR 79; Australian Competition and Consumer Commission v Digital Products Group Pty Ltd [2006] FCA 1732, (2007) ATPR 42-144; Australian Competition and Consumer Commission v Fisher & Paykel Customer Services Pty Ltd [2014] FCA 1393; Australian Competition and Consumer Commission v South East Melbourne Cleaning Pty Ltd (in liq) (formerly known as Coverall Cleaning Concepts South East Melbourne) [2015] FCA 25. 13 But "close attention" should be given "to the form of proposed declarations, particularly those 'by consent'": Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75 at [90], (2003) 216 CLR 53 at 91 per Gummow, Hayne and Heydon JJ. At "the very least", a declaration "should disclose the basis on which" a contravention has occurred: BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167 at [35], (2004) 207 ALR 452 at 465 per Gray, Goldberg and Weinberg JJ. The declaration should "contain sufficient indication of how and why the relevant conduct is a contravention of the" Act: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [77] per Gordon J. See also: Comcare v Linfox Australia Pty Ltd [2015] FCA 61 at [11] to [12].
Considerations relevant to an assessment of penalty 14 As to the second matter, namely the range of considerations to be taken into account when quantifying a penalty, the legal ground has been well-travelled. Principal among the considerations to be taken into account is the objective of deterrence, both general and specific: e.g., Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 at [65], (2013) 250 CLR 640 at 659 per French CJ, Crennan, Bell and Keane JJ. The formulation of other considerations relevant to the exercise of the discretion has, unsurprisingly, been variously expressed over the years by different Judges of this Court. 15 In Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [89], (2008) 165 FCR 560 at 579 to 580, Buchanan J, for example, identified the following list of factors as relevant to the exercise of the discretion: • The nature and extent of the conduct which has led to the breaches. • The circumstances in which that conduct took place. • The nature and extent of any loss or damage sustained as a result of the breaches. • Whether there had been similar previous conduct by the respondent. • Whether the breaches were properly distinct or arose out of the one course of conduct. • The size of the business enterprise involved. • Whether or not the breaches were deliberate. • Whether senior management was involved in the breaches. • Whether the party committing the breach had exhibited contrition. • Whether the party committing the breach had taken corrective action. • Whether the party committing the breach had cooperated with the enforcement authorities. • The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and • The need for specific and general deterrence. The relevance of "co-operation" with a regulator was further addressed by Stone and Buchanan JJ in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70, (2008) 168 FCR 383 at 405 as follows: [76] … a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice. Also relevant to the quantification of any penalty to be imposed is whether the conduct which constitutes the contraventions is a "single course of conduct" and a consideration of the penalties in their "totality". 16 Section 557(1) of the Fair Work Act provides that two or more contraventions of a civil remedy provision are "taken to constitute a single contravention" if they are committed by the same person and "arose out of a course of conduct by the person". In Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39, (2010) 269 ALR 1 at 12 to 13 Middleton and Gordon JJ said of the principles relevant to whether conduct constitutes a "single course of conduct": [39] … a "course of conduct" or the "one transaction principle" is not a concept peculiar to the industrial context. It is a concept which arises in the criminal context generally and one which may be relevant to the proper exercise of the sentencing discretion. The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is "the same criminality" and that is necessarily a factually specific enquiry. … [41] … the principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, the court must ensure that the offender is not punished twice for the same conduct. In other words, where two offences arise as a result of the same or related conduct that is not a disentitling factor to the application of the single course of conduct principle but a reason why a court may have regard to that principle, as one of the applicable sentencing principles, to guide it in the exercise of the sentencing discretion … [42] A court is not compelled to utilise the principle … 17 With reference to the need to consider the "totality" of a penalty imposed, Goldberg J in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53 observed: The totality principle is designed to ensure that overall an appropriate sentence or penalty is appropriate and that the sum of the penalties imposed for several contraventions does not result in the total of the penalties exceeding what is proper having regard to the totality of the contravening conduct involved ... But that does not mean that a court should commence by determining an overall penalty and then dividing it among the various contraventions. Rather the totality principle involves a final overall consideration of the sum of the penalties determined … As Spender J pointed out in McDonald v R [(1994) 48 FCR 555 at 556]: Implicit … is that the sentence for each offence should be "properly calculated in relation to the offence for which it is imposed". It is explicit in this statement that a sentencer or penalty fixer must, as an initial step, impose a penalty appropriate for each contravention and then as a check, at the end of the process, consider whether the aggregate is appropriate for the total contravening conduct involved … With reference (inter alia) to this decision, Gyles J in Mornington Inn v Jordan observed that the "principle has been applied since then in civil penalty cases too numerous to mention": [2008] FCAFC 70 at [7], (2008) 168 FCR 383 at 387. 18 Any penalty must not be so high as to be oppressive: Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 40-091 at 17,896 per Smithers J. A penalty that "is no greater than is necessary to achieve the object of general deterrence, will not be oppressive": Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254 at [9], (2005) 215 ALR 281 at 284 per Merkel J.
The relevance of Barbaro to civil penalty cases 19 The last of the three matters of principle to be addressed, namely whether the parties may proffer an agreed penalty to be imposed, or even whether it remains open to the regulator to make submissions as to the range in which any penalty to be imposed may fall, has been the subject of detailed consideration by the Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59. 20 Prior to that decision, it had been established practice in this Court for the regulator seeking the imposition of a penalty to make submissions on what it considered to be an appropriate range of penalty. Indeed, this Court has previously accepted that "the Court is likely to be assisted greatly by views put forward by" a regulator: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 290 to 291 per Burchett and Kiefel JJ. See also: Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [77], (2004) ATPR 41-993 at 48,632 per Branson, Sackville and Gyles JJ. And, quite frequently, the regulator and the contravening employer would reach agreement on what they mutually considered to be an appropriate quantum of the penalty to be imposed. Notwithstanding any such agreement, the quantum of the penalty nevertheless always remained a matter for the Court to determine in the exercise of its own independent discretion. The Court, it had been said, did not act as "a mere rubber stamp": Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18 at [1], (1999) 161 ALR 79 at 80 per French J (as his Honour then was). 21 All that changed with the recent CFMEU decision delivered on 1 May 2015. 22 Submissions in the CFMEU case canvassed the significance to civil "penalty cases" of the decision of the High Court in Barbaro v The Queen [2014] HCA 2, (2014) 305 ALR 323. In Barbaro the High Court concluded that the practice should cease of the prosecution in criminal cases making submissions as to the range of criminal sentences that could be imposed. It was concluded that the prosecution's statement was a statement of mere opinion, and not a submission as to law, and was therefore impermissible. In so concluding, French CJ, Hayne, Kiefel and Bell JJ stated: Two flawed premises [6] The applicants' arguments depend on two flawed premises. The first is that the prosecution is permitted (or required) to submit to a sentencing judge its view of what are the bounds of the range of sentences which may be imposed on an offender. That premise, in turn, depends on the premise that such a submission is a submission of law. For the reasons which follow, each premise is wrong. [7] The prosecution's statement of what are the bounds of the available range of sentences is a statement of opinion. Its expression advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed. That being so, the prosecution is not required, and should not be permitted, to make such a statement of bounds to a sentencing judge. 23 In the CFMEU decision, Dowsett, Greenwood and Wigney JJ carefully traced earlier decisions of this Court, and traversed evidence from regulators and detailed submissions from the Commonwealth. On whether the observations of the High Court in a criminal case should be transposed into the present context of civil penalties in industrial law, their Honours concluded: [232] The Commonwealth submits that perceived procedural differences between criminal and civil proceedings should lead to our not applying the decision in Barbaro for present purposes. It is said that the regulator must, "choose to plead and pursue particular relief (including pecuniary penalties)". On the other hand, the prosecution, "does not seek a sentence as the relief to which it, as a party, claims to be entitled". The prosecution, it is said, "presents the case that may result in a conviction, and the Court passes sentence as a consequence of that outcome". It is said that as the regulator has a "more engaged" role in relation to the pecuniary penalty than has the prosecution in relation to a sentence, "this should afford a different approach in relation to the submissions that address that relief". This submission seems to imply that the "more engaged" role of the regulator may justify an unidentified approach to the imposition of pecuniary penalties which differs from that adopted in criminal sentencing. However no attempt has been made to explain why that "more engaged" role should lead to the view that the considered opinion in Barbaro has no relevance to the pecuniary penalty process. [233] We do not accept that criminal procedure is, in principle, necessarily different from civil procedure. Both are conducted as adversarial proceedings in the long tradition of the common law. Both are generally conducted by counsel who have, with some qualifications, the same roles in both kinds of proceedings. Both are conducted according to largely similar rules of procedure and evidence. The demise of the jury in most civil cases has led to apparent differences between civil and criminal trials, as has the tradition of oral pleading in criminal cases. This is not the occasion for a detailed examination of the history of civil and criminal proceedings in the Court of Queen's Bench and in Australian courts. For present purposes, we see no basis for treating any identified procedural differences as a basis for declining to apply the reasoning in Barbaro. The similarities between the sentencing process and that for imposing a pecuniary penalty are obvious and compelling. 24 These, accordingly, are the principles now to be applied to the facts agreed between the parties - unassisted by any submission from the Director as to the range within which any penalty should be fixed and unassisted by any agreement that may have been reached as to the quantum of any penalty. Whatever may be the view of individual Judges of the Court as to the assistance that such matters previously provided to the Court, such assistance is no longer available. It remains open to the contravening employer, however, to continue to advance submissions as to what is considered to be an appropriate range of penalty and to nominate a "figure as the penalty to which it will submit…": [2015] FCAFC 59 at [241].
The contraventions as agreed 25 The CFMEU decision says nothing, of course, as to the ability of a regulator and a contravening employer to reach agreement as to the facts. 26 The statement of agreed facts in the present proceeding records that Foxville has admitted that over a number of years, but principally during a period of approximately 10 months from 24 August 2011 to 8 May 2012, it: failed to credit annual leave to certain employees under the Workplace Relations Act and then under the Fair Work Act; failed to credit personal leave to certain employees under the Workplace Relations Act and then under the Fair Work Act; failed to confer certain entitlements to specified employees under an enterprise agreement; failed to confer certain entitlements to specified employees under a subsequent enterprise agreement; failed to provide specified employees a Fair Work Information Statement pursuant to s 125 of the Fair Work Act; and failed to keep records in accordance with regulations 3.32, 3.33 and 3.34 of the Fair Work Regulations 2009 (Cth) (the "Fair Work Regulations"). In total, $150,127.06 was underpaid. 27 Much of the Foxville workforce, it should be noted, were persons who did not speak fluent English. Mr Lu's explanation for the contraventions focussed upon how Foxville retained the labour-hire company Caiman Pty Ltd "to look after the administration and payment of wages and other entitlements to [Foxville's] employees".
The quantification of penalties 28 Prior to 28 December 2012, the maximum penalty under the Fair Work Act for: a civil remedy provision found in Part 2-1 (including ss 44 and 50) was $33,000; and a contravention of s 535(1) or s 535(2) was $16,500. Prior to 28 December 2012, the maximum penalty for a body corporate under the Workplace Relations Act for: a relevant contravention was $33,000. 29 Prior to the Full Court decision in CFMEU, both the Director and Foxville had given considerable attention to the resolution of the present proceeding. Prior to that decision, the parties had prepared an Agreed Statement of Facts and had also reached agreement as to the amount that they jointly considered was an appropriate penalty to be imposed. The agreement as to quantum for each of the contraventions in question was as follows (without alteration): TABLE OF PENALTIES Section breached Conduct Maximum Penalty Agreed Penalty s 318 Workplace Failure to credit annual $33,000 $30K in aggregate Relations Act leave s 44 Fair Work Act Failure to credit annual leave $33,000 s 318 Workplace Failure to credit $33,000 $35K in aggregate Relations Act personal leave s 44 Fair Work Act Failure to credit $33,000 personal leave s 44 Fair Work Act Failure to provide Fair $33,000 Work Information $5K Statement s 50 Fair Work Act Failure to provide 2008-2011 Foxville Employees $33,000 with entitlements under $30K in aggregate 2008 Enterprise Agreement s 50 Fair Work Act Failure to provide 2011-2012 Foxville Employees with entitlements under $33,000 2011 Enterprise Agreement s 535 Fair Work Act Failure to keep records in accordance with Fair Work Regulations $16,500 $15K TOTAL TOTAL $247,500 $115,000
Section 44(1) of the Fair Work Act, it may be noted, provides that an "employer must not contravene a provision of the National Employment Standards". The entitlement to annual leave (s 87) and personal leave (s 96) formed part of those Standards. So, too, did the requirement to provide a Fair Work Information Statement (s 125). 30 Given the decision in CFMEU, however, Counsel for the Director quite properly did not see it as a course open to him to tender or inform the Court of the agreement which the parties had previously reached on the quantification of penalties. He also, quite properly, did not seek to resile from the fact that agreement had been reached. In any event, Counsel for Foxville tendered the content of that agreement. Whatever may be the course which is pursued in future cases, the present proceeding straddled the world of decision-making prior to the CFMEU decision and the world post-dating it. Given the fact that the parties had previously reached an agreement as to the facts and the penalty, it was considered appropriate for the Court to be informed as to the extent of that agreement. To place the parties in a position whereby the Court could be informed as to the content of the agreement as to the facts, but not informed as to the quantification of the agreed penalty based upon those facts, had the potential to be somewhat artificial. The penalty agreed between the parties may well have influenced the extent to which Foxville was prepared to reach agreement on the facts underlying the contraventions. 31 Largely it should be noted at the urging of the Court, the prior agreement on the quantum of the penalty came to light. 32 Separate from any consideration of whether the prior agreement between the parties as to quantum continued to be relevant, there were two fundamental issues upon which they adopted a competing stance - first, the manner in which s 557 of the Fair Work Act should be applied to the facts; and, second, the degree of "culpability" exposed by Foxville's conduct. 33 As to the first of these two issues, the grouping of the conduct as set forth in the Table of Penalties reflected the case which the Director advanced. It was his case that there were eight separate contraventions which should each attract a penalty. Foxville, on this approach, had already received the benefit of s 557 by reason of the contravention of one or other of the same statutory provision in respect to a number of employees being regarded as but a single contravention. A failure (for example) to credit personal leave to a number of employees was not to be regarded as a contravention in respect to each employee but would be "taken to constitute a single contravention…". Counsel for Foxville, by way of contrast, contended that "breaches of sections 44, 50 and 535 of the Fair Work Act 2009 … [should] be dealt with as a single contravention…". Alternatively, Counsel for Foxville further contended that it mattered little how the number of contraventions may be calculated, provided that the overall penalty ultimately imposed was appropriate in its "totality". 34 It is concluded that s 557 should be applied so that the conduct as agreed constitutes eight separate contraventions. So characterised, each contravention exposes the "interrelationship between the legal and factual elements" (CFMEU v Cahill [2010] FCAFC 39 at [39] to [41], (2010) 269 ALR at 12 to 13) of the one offence as it was committed against one or more employees. 35 As to the second of the two issues, Counsel for Foxville - perhaps not surprisingly - contended in his written submissions that "the level of culpability in relation to the contraventions falls towards the lower end of the seriousness of contraventions…". In resisting such a characterisation, Counsel for the Director contended that there were a number of "aggravating factors" to be taken into account, including: the fact that the quantum of the under-payment was a relatively significant amount and occurred during a relatively short period of time, coupled with the absence of any evidence to suggest that Foxville's failure to comply with its workplace obligations would have ceased but for the present proceeding; the fact that Foxville's failure to keep complete records may have had the effect of preventing a proper determination of the full extent of under-payments; the fact that Foxville failed to provide a number of employees with basic and important entitlements; the fact that the engagement of employees through labour-hire companies, which had little or no involvement in the management of those employees, may have made it difficult for those employees to identify their actual employer and to pursue their employment entitlements; and the fact that under-payments were deliberate and "occurred at the highest level of the company", namely through the direct involvement of its directors. 36 The resolution of these competing submissions, with respect, has not proved an easy task. 37 There was some tension between the affidavit and oral evidence of Mr Lu and the Agreed Statement of Facts. In the absence of his evidence, an inference was open on the agreed facts (for example) that Foxville retained the labour-hire company for the purpose of distancing Foxville from its workplace obligations. Another available inference was that the failure properly to keep records was simply part of the means by which contraventions potentially could be obfuscated or made difficult to detect. But Mr Lu's affidavit, by way of contrast, states that the labour-hire company was retained not for these purposes but because Foxville simply did not have "the knowledge or experience necessary to properly manage the Respondent's employees…". 38 But there is reason to question Mr Lu's explanation. 39 The affidavit of Mr Lu states, for example, that Foxville "did not set out" to avoid its legal obligations. Notwithstanding that statement, a theme developed during his cross-examination focussed on the reasons why Foxville entered into the enterprise agreements in 2008 and 2011. It was suggested that these agreements were entered into simply as an "artifice" to keep the CFMEU at bay and to enhance the prospects of successfully tendering for work. One exchange between Mr Lu and his cross-examiner was thus as follows: But you didn't comply with the 2011 enterprise agreement either, did you? --- At the time we thought we did. All right. Well, you've admitted in these proceedings, haven't you, that there were contraventions of the 2011 agreement. Correct? --- Correct. But not deliberate contraventions. Well, I will come to that in a moment. Can I suggest to you that the reason why you wanted to have enterprise agreements was so you could present an artifice to the outside world? --- No. Because you never had any intention to comply with those agreements, did you? --- No. I mean, yes. We did intend to comply. And a little later: All right. Can I just come back to the proposition I put to you earlier? Do you accept that entering into these enterprise agreements was just an artifice? --- No. No. We always had the intention of - of employing people directly as employees. Just focus on my question. You wanted to show the outside world - by which I mean the CFMEU and Built - that you had an enterprise agreement in place, didn't you? --- Yes. But in fact, you knew that the agreement - those two agreements were never being complied with by Foxville? --- No. No. Notwithstanding Mr Lu's evidence, the inference that is drawn is that Foxville entered into the enterprise agreements for the purposes being suggested by the Director. They were entered into as a mere "artifice". 40 Moreover, and even on the account he provided in his cross-examination, the labour-hire company retained by Foxville had minimal involvement with any of the employees. One further exchange between Mr Lu and his cross-examiner was thus as follows: You know that [Caiman] never had any presence on site at any of the Foxville projects, don't you? --- I do. Yes. You agree with me, don't you? --- Yes. They didn't have any supervisors. Correct? --- No. They didn't do any separate induction for these workers. Correct? --- Not to my knowledge. You didn't see any of their records. Correct? --- No. So how can you tell his Honour that you were satisfied that [Caiman] was going to be complying with the same enterprise agreement that you had entered into? --- That's what I was told. Contrary to the evidence of Mr Lu, it is concluded that the labour-hire company was retained in an attempt to distance Foxville from its workplace obligations. Mr Lu's evidence to the contrary is rejected. 41 The submission advanced on behalf of Foxville that its conduct falls at "the lower end of the seriousness of contraventions" is thus rejected. The comparative innocence of its conduct, as Mr Lu's affidavit sought to convey, simply is consistent neither with the facts nor his own evidence. Although there is a danger and an inherent difficulty in expressing "comparative culpability", Foxville's conduct falls at or slightly above "the middle of the range". It certainly does not fall at "the lower end…". 42 Using the Table of Penalties tendered by Foxville as a structure, it is concluded that the following penalties should be imposed: TABLE OF PENALTIES Section breached Conduct Maximum Penalty Agreed Penalty Penalty Imposed s 318 Workplace Failure to credit annual $33,000 $30,000 in aggregate $35,000 in aggregate Relations Act leave s 44 Fair Work Act Failure to credit annual leave $33,000 s 318 Workplace Failure to credit $33,000 $35,000 in aggregate $40,000 in aggregate Relations Act personal leave s 44 Fair Work Act Failure to credit $33,000 personal leave s 44 Fair Work Act Failure to provide Fair Work Information $33,000 $5,000 $20,000 Statement s 50 Fair Work Act Failure to provide 2008-2011 Foxville Employees with entitlements under $33,000 2008 Enterprise $30,000 in aggregate $35,000 in aggregate Agreement s 50 Fair Work Act Failure to provide 2011-2012 Foxville Employees with entitlements under $33,000 2011 Enterprise Agreement s 535 Fair Work Act Failure to keep records in accordance with Fair Work Regulations $16,500 $15,000 $15,000 TOTAL: TOTAL $115,000 TOTAL $247,500 $145,000
43 A significantly different approach, it will be noted, has been adopted in determining the appropriate penalty for the failure to provide a Fair Work Information Statement. The requirement imposed by s 125 of the Fair Work Act to provide such a Statement to an employee, it is respectfully considered, is an important means to ensure employees are informed of their rights. This may be seen as assuming even greater importance where the work-force consists of many persons not fluent in English. The provision of such Statements, translated into different languages, at least provides some measure of assurance that they are made aware of their rights. A failure to be made aware of one's rights places an almost insurmountable obstacle in the path of those who may need to exercise those rights. 44 In reaching this conclusion, attention has been given to each of those considerations identified by Buchanan J in Ophthalmic Supplies. The quantum of $145,000, it is respectfully considered, represents an appropriate balance between rejecting Foxville's submission as to how its "culpability" should be gauged whilst recognising that the contraventions and conduct are not at the "upper levels" of "culpability". 45 A significant reason for not imposing a higher penalty is the fact that Foxville has co-operated with the Director and made appropriate admissions (Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [76], (2008) 168 FCR 383 at 405). Foxville has, at the very least, accepted its "wrongdoing". Little weight can be given, however, to the steps ostensibly implemented by Foxville to address its past transgressions. Notwithstanding the fact that Foxville took the positive steps of filing Mr Lu's affidavit, that affidavit was conspicuously silent - for example - on how Foxville was now going to ensure compliance with its obligations. And there was but a passing reference during Mr Lu's oral evidence as to Foxville now having its own "accounts department". 46 Separate consideration has also been given to whether a more favourable view could - or should - have been given to Mr Lu's evidence. Even had his explanations been accepted at face value, it almost certainly would still have been concluded that Foxville adopted a fairly cavalier attitude to its workplace obligations. Whilst professing to have entered into enterprise agreements with the intention of complying with its obligations, it did nothing (for example) to ensure compliance. 47 On either approach to Mr Lu's evidence, the need for both general and specific deterrence assumes importance. Even if Foxville did not set out deliberately to distance itself from its workplace obligations by means of a labour-hire company, it nevertheless remains important to fix a penalty at a level which serves to deter other employers from engaging in similar conduct for that very purpose. The penalty now to be imposed should also more immediately act as a deterrent to Foxville. 48 The quantum of the penalty has also been considered in its "totality" (Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53) and is considered to be appropriate. It is not considered to be oppressive.
CONCLUSIONS 49 Declaratory relief in the form proposed by the Director should be granted. 50 Orders should also be made for the payment of those sums underpaid to the identified employees. A penalty in the sum of $145,000 should also be imposed. The payment of those penalties, it should be noted, is also to be paid to the former employees identified. 51 The Director does not seek any order as to costs.
Luis Rodriguez
Workplace Relations Act Contraventions 2. In respect of the Respondent's employment of Luis Rodriguez under the Workplace Relations Act up to 30 June 2009: (a) the Respondent contravened s 318 of the Workplace Relations Act by failing to credit (i) annual leave; and (ii) personal / carer's leave, for the benefit of Luis Rodriguez;
Fair Work Act Contraventions 3. In respect of the Respondent's employment of Luis Rodriguez from 1 July 2009 under the Fair Work Act: (a) the Respondent contravened s 44 of the Fair Work Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of Luis Rodriguez;
Daniel Rodriguez 4. Daniel Rodriguez was: (a) from some time in 2008 up to 30 June 2009, an employee of the Respondent within the meaning of s 5 of the Workplace Relations Act; and (b) from 1 July 2009 to 21 February 2012, a National System Employee of the Respondent within the meaning of s 13 of the Fair Work Act.
Workplace Relations Act Contraventions 5. In respect of the Respondent's employment of Daniel Rodriguez under the Workplace Relations Act up to 30 June 2009: (a) the Respondent contravened s 318 of the Workplace Relations Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of Daniel Rodriguez;
Fair Work Act Contraventions 6. In respect of the Respondent's employment of Daniel Rodriguez from 1 July 2009 under the Fair Work Act: (a) the Respondent contravened s 44 of the Fair Work Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of Daniel Rodriguez;
Schedule AA Employees 7. In respect of the persons identified in Schedule AA of the Further Amended Statement of Claim: (a) in the period between 1 July 2009 and 8 May 2012 the Respondent was the true employer of the employees identified in Schedule AA; (b) the Respondent contravened s 44 of the Fair Work Act by failing to credit: (i) annual leave; and (ii) personal / carer's leave, for the benefit of the employees identified in Schedule AA;
The 2008 Enterprise Agreement 8. In the period from 1 June 2009 to 12 October 2011, the 2008 Enterprise Agreement applied to the Respondent's employment of: (a) Luis Rodriguez; (b) Daniel Rodriguez; (c) the employees identified in Column 1 of Schedule AA of the Statement of Agreed Facts, (the 2008-2011 Foxville Employees). 9. The Respondent contravened s 50 of the Fair Work Act by failing to provide the 2008-2011 Foxville Employees entitlements in breach of clauses 4 (which incorporated clause 24.9.1 of the National Building and Construction Industry Award 2000 (the "NBCI Award")), 10.1 (and Appendix B), 10.2 (and Appendix C), 10.3(a), 10.4, 10.5, 13, 16, 17, 25.2 and 25.3 of the 2008 Enterprise Agreement.
The 2011 Enterprise Agreement 10. In the period from 13 October 2011 to May 2012, the 2011 Enterprise Agreement applied to the Respondent's employment of: (a) Luis Rodriguez; (b) Daniel Rodriguez; and (c) the employees identified in Column 2 of Schedule AA of the Statement of Agreed Facts, (the 2011-2012 Foxville Employees). 11. The Respondent contravened s 50 of the Fair Work Act by failing to provide the 2011-2012 Foxville Employees entitlements in breach of clauses 12 (and Appendix B), 12.3 (and Appendix D), 12.4 (and Appendix C), 12.5, 12.8, 15 (and Appendix D), 18, 19, 25.2, 25.3 29.4, 29.5, 29.5(c)-(d), 29.2 and Appendix C of the 2011 Enterprise Agreement.
Failure to provide a Fair Work Information Statement 12. The Respondent contravened s 44 of the Fair Work Act by failing to provide its employees a Fair Work Information Statement pursuant to s 125 of the Fair Work Act.
Record Keeping 13. The Respondent contravened s 535 of the Fair Work Act by failing to keep records in accordance with regulations 3.32, 3.33 and 3.34 of the Fair Work Regulations 2009 (Cth) (the "Fair Work Regulations").
AND THE COURT ORDERS THAT:
Director, Fair Work Building Industry Inspectorate
Foxville Projects Group Pty Ltd
[2014] HCA 2
(1996) 68 FCR 406
(1997) 145 ALR 36
(2005) 215 ALR 281
(1999) 161 ALR 79
(2013) 250 CLR 640
(2008) 165 FCR 560
(2014) 305 ALR 323
(2004) 207 ALR 452
(2010) 269 ALR 1
(2008) 168 FCR 383
(1996) 71 FCR 285
(2003) 216 CLR 53
(1994) 48 FCR 555