Fair Work Ombudsman v Crystal Carwash Cafe Pty Ltd

AND: CRYSTAL CARWASH CAFE PTY LTD (ACN 060 916 770)

JUDGE: BUCHANAN J DATE: 19 December 2013 PLACE: SYDNEY

Buchanan J: 1 The issue which is presented for immediate attention in these proceedings is a narrow one concerning a question of construction of a Federal Award - the Vehicle Manufacturing, Repair, Services and Retail Award 2010 ("the Award") - made under the Fair Work Act 2009 (Cth) ("Fair Work Act"). The parties asked that this question should be determined first. They have agreed that if the Award applies to the activities of the first respondent, it will have breached the Award and consideration should be given to the imposition of penalties upon it. They have agreed that if the Award does not apply to the first respondent, the present proceedings should be dismissed. 2 The proceedings were commenced by application and statement of claim filed on 15 October 2012. They asserted a failure by the first respondent (or alternatively by the fourth to thirteenth respondents) to pay 359 employees in accordance with the Award and a failure to keep records required by the Fair Work Regulations 2009 (Cth). The second and third respondents were alleged to be "involved in" those contraventions of the Fair Work Act (see s 550(2) of the Fair Work Act). The application sought recovery of the amounts allegedly underpaid and the imposition of penalties on the respondents. The parties now agree that the first respondent was the employer of the 359 individuals whose circumstances gave rise to the proceedings. 3 The parties have agreed that at the relevant time the first respondent operated 11 carwashes and cafés in various Sydney suburbs. They also agreed the following: 5. Crystal Carwash offers the following car washing services to customers as part of the operations of the Carwash Business: (a) washing the exterior of motor vehicles by hand; (b) washing the exterior of motor vehicles with equipment such as pressure hoses; (c) polishing the exterior of motor vehicles; (d) clay buffing; (e) vacuuming the interior of motor vehicles; (f) cleaning the windows of motor vehicles; (g) chemdrying carpet mats; (h) chemically treating specific parts of a motor vehicle such as the bonnets, boots, door frames and rubber mats; and (i) conditioning the leather interior of motor vehicles. 6. Crystal Carwash offers the services set out in paragraph 5 above as part of car washing packages which are sold to customers including: (a) "Crystal Deluxe - Hot Wax Wash"; (b) "Crystal Deluxe - Polish and Detail"; (c) "Crystal Care - Interior Detail and Protection"; and (d) "Crystal Guard - Ultimate Paint Protection", (collectively, Carwash Packages). 4 Clause 4 of the Award states the "Coverage" of the Award. Clauses 4.1 and 4.2 provide as follows: 4. Coverage … 4.1 This award covers employers throughout Australia of employees engaged in vehicle manufacturing and/or vehicle industry repair, services and retail, as defined in this clause, to the exclusion of any other modern award and where the employer's establishment, plant or undertaking is principally connected or concerned with: (a) the selling, distributing, dismantling/wrecking/restoring, recycling, preparing for sale, storage, repairing, maintaining, towing, servicing, and/or parking of motor vehicles of all kinds, including caravans, trailers or the like and equipment or parts or components or accessories thereof including the establishments concerned for such vehicles and the like; (b) operations or allied businesses concerned with selling, distributing or supplying running requirements for vehicles (including motor fuels, gas and oils); (c) the selling and/or handling and/or retreading and/or storing/distribution and/or fitting and/or repairing of tyres or the like made of any material; (d) the repair and servicing of motor vehicles in the establishment of an employer not falling within clauses 4.1(a), (b) and (c) but who is engaged in the motor vehicle rental business; (e) the manufacturing, assembling or repairing of carriages, carts, wagons, trucks, motor cars, bodies, motorcycles, railway cars, tram cars, side-cars or other vehicles or parts or components or accessories in wood, metal and/or other materials; (f) manufacturing, assembling, fabricating, installing, servicing, maintaining, reconditioning or repairing of engines or vehicle servicing equipment and agricultural machinery or implements or the like where such employer immediately prior to 31 December 2009 was bound by clause 1.5.4(a) of the Vehicle Industry Award 2000; (g) any operation concerned with roadside/mobile service; or (h) driving school instruction. 4.2 For the purposes of coverage of this award: (a) employees engaged in vehicle industry repair, services and retail means employees covered by the classifications at clause 33 and for whom Section 1 - Vehicle Industry RS&R Employees applies; and (b) employees engaged in vehicle manufacturing means employees covered by the classifications at clause 45 and for whom Section 2 applies. (emphasis in original) 5 The lowest paid adult classification in the Award is "Vehicle RS&R industry employee - Level 1" at wage group level R1. The Award provides, in Schedule B, a definition of skill level for this classification in the following terms: B.1 Vehicle industry RS&R - employee - Level 1 R1 (entry) An employee at Level 1 is an employee who has undertaken little or no formal or informal training. A Level 1 employee may be undertaking up to 38 hours of induction training. The induction training may include information on the enterprise, conditions of employment, introduction to supervisors and fellow workers, training and career path opportunities, plant layout, work and documentation procedures, occupational health and safety, equal employment opportunity and quality control/assurance. An employee at this level would acquire/possess skills relevant to the performance of routine duties essentially of a manual nature and to the level of their training: performs general labouring and/or cleaning duties; has basic numeracy skills; exercises minimal judgment; works to defined procedures and under direct supervision; and may be undertaking structured training so as to enable the employee to progress to a higher level. Classifications contained within Level 1 R1 Car cleaner/washer Workshop cleaner Car polisher - by hand Detailer - other Driveway attendant Office cleaner Parking attendant Process worker Tradesperson's assistant (see also Level 2) Employee not elsewhere prescribed as contained in clauses 10 and 11 in previous award 6 The respondents accept that the first respondent is an employer of employees engaged in "vehicle industry repair, services and retail" within the meaning of the opening words in cl 4.1, having regard to the definition in cl 4.2(a) and the provisions of Schedule B, cl B.1. 7 The applicant contends that the first respondent is also an employer whose establishment(s) or undertaking(s) are principally concerned with the "maintaining" and "servicing" of motor vehicles within the meaning of cl 4.1(a) of the Award. The respondents deny this contention. Resolution of that issue is the matter for present attention. 8 The Federal Magistrates Court of Australia (now the Federal Circuit Court of Australia) dealt with an identical question in Fair Work Ombudsman v Kingsford Carwash Pty Ltd [2012] FMCA 464. In that judgment, Smith FM concluded that a carwash operated at premises leased from the second respondent which adopted operational methods known as the "Crystal Car Wash Café system" was not involved in motor vehicle "servicing" (at [39], [40] and [59]) but was involved in "maintaining" motor vehicles (at [61]). 9 At [61], Smith FM said: 61. In ordinary Australian parlance, in my opinion, 'maintaining' a motor vehicle includes maintaining its ordinary appearance and cleanliness, and an establishment concerned only with cleaning the motor vehicles of its customers would ordinarily be described as 'principally connected or concerned with … maintaining motor vehicles'. I do not accept the submission of counsel for the respondents that, for an employer's business to be 'maintaining' motor vehicles, it must always involve more than cleaning vehicles, so that "an establishment that merely washes the car is not 'maintaining' the car". I agree that 'maintaining' can mean more than cleaning, but it may also refer to cleaning alone. In my opinion, an establishment which cleans cars is 'principally connected with … maintaining motor vehicles' within the language of cl.4.1(a). (emphasis in original) 10 In the present proceedings, the applicant pressed the submission that employees of the first respondent were involved in motor vehicle "servicing". However, the applicant accepted that if the work in question was not, at least, work in connection with "maintaining" motor vehicles, it would not be found to be work involved in motor vehicle servicing. In those circumstances, it is only necessary to concentrate on whether the work in question is performed for an employer whose establishment or undertaking is principally connected or concerned with maintaining motor vehicles. 11 The respondents accepted that cleaning motor vehicles may make a contribution to the maintenance of motor vehicles, but argued that "[c]leaning alone is not sufficient to establish maintenance of a motor vehicle". The respondents also argued: 12. With respect, Magistrate Smith in FWO v Kingsford Carwash Pty Limited erred in asking himself the wrong question. It is not correct to ask, "Is cleaning, maintenance?" and then after answering it in the affirmative, since cleaning is a component of maintenance, to then conclude that a cleaning establishment is therefore principally connected or concerned with maintenance. In other words, it is wrong to go from one specific instance of a thing and conclude that the whole is so represented. Clause 4.1(a) of the Award requires the question be asked whether the work situation is aptly described as one, " ... where the employer's establishment, plant or undertaking is principally connected or concerned with ... maintaining ... motor vehicles." Accordingly, in answering the question, "Is the employer maintaining motor vehicles?" it is more correct to ask "Is the employer a maintainer of motor vehicles?" as opposed to "Does maintenance of motor vehicles include cleaning?" or "Is cleaning a motor vehicle, maintenance?" because although "cleaning" is a part of "maintenance", the specific instance of "cleaning" is not sufficient to establish "maintenance" - or to put it the right way around, a maintainer of a motor vehicle, must do more than merely clean the vehicle. 12 I do not accept that the position may be sufficiently tested by asking whether the employer is a maintainer of motor vehicles. The test posed by the Award is whether the employer's establishment or undertaking is principally connected or concerned with the maintenance of motor vehicles. The services offered by the first respondent are, in my view, concerned with or connected with maintaining motor vehicles. The first respondent's establishments and undertakings are principally connected or concerned with that matter. 13 I agree with the observations made by Smith FM that maintaining a motor vehicle includes maintaining its ordinary appearance and cleanliness. There is no reason to construe "maintaining" in the context of cl 4.1(a) of the Award as restricted to maintaining mechanical serviceability and to not include maintaining appearance, removal of dirt, dust or grime from paint and other surfaces, or the other services offered by the first respondent set out earlier. In my view, therefore, the respondents' arguments should be rejected. 14 Although the conclusion to which I have come arises directly from the terms of cl 4.1(a) of the Award, the remaining provisions in (b) to (h) do not, in my respectful view, detract from the analysis. If anything, the diverse nature of those additional descriptions adequately accommodates a wide view of the terms of cl 4.1(a). So does the language of cl 4.1(a) itself. The employer's establishments and undertakings to which reference is there made include matters as diverse as parking or storing trailers or caravans, as well as garages and service centres involving a full range of mechanical servicing and maintenance. 15 In my view, on the facts agreed by the parties, the Award applies to the employment by the first respondent of the employees in question. The matter will be re-listed for directions to set a timetable for the further hearing of the matter. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.