Fair Work Ombudsman v Eastern Colour Pty Ltd

BACKGROUND 7 Determination of this case, and the key question of the identity of the employer of relevant employees, is very much dependent on the facts. The parties have made extensive submissions based on those facts. It is appropriate to recount the facts in some detail before examining the case before the Court.

The parties 8 Antonio Baronio and the fourth respondent, Louisa Baronio, have been married since 1972. They have four adult children: Stephen Baronio, Nathan Baronio, Karen Baronio and Angela Baronio. 9 Mr and Mrs Baronio are the sole directors and shareholders of Eastern Colour. Eastern Colour is the trustee of the Eastern Colour Family Trust, which is effectively a family trust established for the benefit of the Baronio family. The beneficiaries of the trust are Mr and Mrs Baronio's children, their children's spouses, and their grandchildren. 10 In its capacity as trustee for the Eastern Colour Family Trust, Eastern Colour conducts the business of the Eastern Colour farm ("the farm") at 244 Aerodrome Road, Applethorpe, Queensland. Since their marriage, Mr and Mrs Baronio have continued to operate the farm. At material times the farm grew and sold capsicums, stone fruit and apples. 11 Stephen Baronio is the sole shareholder and director of the second respondent, SB Employments Pty Ltd ("SB"). 12 Nathan Baronio is the sole shareholder and director of the third respondent, NB Employments Pty Ltd ("NB"). 13 The FWO discontinued the proceedings against the fifth respondent, Mr Catanzaro, on 4 October 2012. 14 In 2008 the following former casual workers of the farm made complaints to the FWO (formerly the Workplace Ombudsman) in relation to overtime and penalty rates on public holidays: Gordon Falconer; Lachlan Falconer (Gordon Falconer's son); Sandra Di Betta; and Joanne Donges. (For convenience throughout this judgment I will refer to these employees collectively as "the relevant employees".) 15 The hours worked by each employee are not in dispute. The respondents acknowledge that the Falconers and Ms Di Betta worked more than 40 hours at the farm during some weeks and that all four employees worked on at least one public holiday. The issue is whether the employees were employed by the first respondent. If so, they were entitled to overtime and penalty rates, and the first respondent has contravened the Act and cll 6.4.2, 7.6.1, 7.6.2 and 7.6.3 of the NAPSA.

Material relied upon by the parties 16 The FWO relied on the following material: Affidavit of Melissa Maree King sworn 2 May 2012 (exhibit 1(A)). Affidavit of Annaliese Jackson affirmed 31 August 2012 (exhibit 2(A)). Affidavit of Jennifer Anne Crook sworn 2 May 2012 (exhibit 3(A)). Supplementary affidavit of Jennifer Anne Crook sworn 31 August 2012 (exhibit 4(A)). Affidavit of Gordon Peter Falconer sworn 2 May 2012 (exhibit 5(A)). Supplementary affidavit of Gordon Peter Falconer sworn 31 August 2012 (exhibit 6(A)). Two shirts (exhibit 7(A)). Affidavit of Lachlan Eric Falconer affirmed 18 May 2012 (exhibit 8(A)). Supplementary affidavit of Lachlan Eric Falconer affirmed 29 August 2012 (exhibit 9(A)). Affidavit of Sandra Di Betta affirmed 3 May 2012 (exhibit 10(A)). Supplementary affidavit of Sandra Di Betta affirmed 31 August 2012 (exhibit 11(A)). A roll of stickers (exhibit 13(A)). Affidavit of Joanne Kathleen Donges sworn 4 May 2012 (exhibit 14(A)). Supplementary affidavit of Joanne Kathleen Donges affirmed 30 August 2012 (exhibit 15(A)). Two colour photographs displaying "Eastern Colour Pty Ltd" (exhibit 18(A)). Four aerial photographs of 244 Aerodrome Rd, Applethorpe (exhibit 19(A)). Electronic lodgement declaration forms being tax declarations of Louisa Baronio (exhibit 20(A)). Tax returns and associated financial statements for Eastern Colour and the Eastern Colour Family Trust for the years ending 30 June 2006 to 30 June 2011 (exhibit 26(A)). 17 Counsel for the respondents cross-examined Jennifer Anne Crook, Gordon Falconer, Lachlan Falconer, Sandra Di Betta and Joanne Donges. 18 The respondents relied on the following material: Two employment documents, one of SB and one of NB, dated 28 June 2007 signed by Sandra Di Betta (exhibit 12(R)). Affidavit of Louisa Baronio sworn 10 July 2012 (exhibit 16(R)). Affidavit of Louisa Baronio sworn 17 July 2012 (exhibit 17(R)). Affidavit of Antonio Giovanni Baronio sworn 10 July 2012 (exhibit 21(R)). Affidavit of Adela Caruso sworn 10 July 2012 (exhibit 22(R)). Affidavit of Vincenzo Cateno Catanzaro sworn 10 July 2012 (exhibit 23(R)). Tax returns for SB for the years ending 30 June 2006 - 30 June 2011 (exhibit 24(R)). Tax returns for NB for the years ending 30 June 2006 - 30 June 2011 (exhibit 25(R)). 19 Counsel for the FWO cross-examined Louisa Baronio, Antonio Giovanni Baronio, Adela Caruso and Vincenzo Cateno Catanzaro.

The farming business 20 The farm sells most of its produce to major Australian supermarket chains including Coles and Woolworths. These chains have high standards in respect of the shape, size, colour, imperfections and sugar content of the fruit that they will accept. 21 Mrs Baronio deposed that the Eastern Colour business is a "price taker" because it has no capacity to negotiate the supermarket chains as there are no substitute purchasers. As a result the farm runs on small margins. Her evidence was that the ongoing viability of the business depended on the farm producing sufficient volumes and quality of produce to ensure the supermarket chains will purchase the goods. 22 The vast majority of the work available at the farm is seasonal. This high-volume work involves picking and packing particular produce during the few months each year when it is ripe. The farm requires few permanent staff, but during peak periods a large volume of work is required to be performed at the farm. During these peak periods, the workforce comprises backpackers, itinerant workers and unskilled local residents. The backpackers and itinerant workers generally seek as much work as possible to finance their travel or holidays. The local workers tend to work only in the fruit picking and packing industry, so they aim to work long hours during the peak season to support themselves through the rest of the year when there are few local employment opportunities. 23 At paragraph 16 of her affidavit sworn 10 July 2012, Mrs Baronio deposed: The workers engaged at the farm would regularly say that they wanted to work more than 40 hours per week. The workers were always extremely disappointed when I told them that we could not offer them more than 40 hours per week. Almost all of the workers I spoke [sic] stated that they were prepared to forego their entitlement to over time if we could provide them with further hours. I would always explain to the workers that the we [sic] could not offer them more than 40 hours per week. 24 Mrs Baronio deposed that given its small profit margin, the farm would not be commercially viable if it had to pay overtime during the picking season because the wages costs would exceed the prices that the supermarkets paid. Mrs Baronio was not aware of any other farms which paid overtime rates to their picking and packing staff. 25 Generally Mrs Baronio was responsible for the farming operations in the packing shed and Mr Baronio was responsible for farming operations in the field. In 2006 the farm engaged Mr Corrado Rizzato as shed manager. Mrs Baronio shared the role with him for 12 months so he could learn how to allocate work to employees and how to determine how many workers would be required each day.

Historical practices in engaging workers at the farm 26 Mrs Baronio deposed that historically the farm engaged workers as casuals for a maximum of 40 hours per week. As a general rule once that group of workers had exceeded 40 hours, the farm employed another group of workers, who would also only be permitted to work up to 40 hours each week at the farm. Those additional workers were recruited from labour hire companies as well as being workers who had already worked 40 hours at other local farms. 27 Mrs Baronio deposed that it was normally more expensive to pay the labour hire companies than to directly employ workers, due to the surcharge the labour hire companies charged. However she also deposed that paying the labour hire companies' surcharge was less expensive than paying workers overtime. 28 In relation to two or more external labour companies hiring a single worker Mrs Baronio deposed at the hearing as follows: HER HONOUR: Ms Baronio, can you just explain to me again why you setup - why S.B. and N.B. were setup. Why didn't you continue to simply hire people directly from Eastern Colour or by Eastern Colour?---Well - - - I know it's quite a long time ago, obviously the advice ..... but can you recall why?---Well, we couldn't employ people out of Eastern Colour, right, unless we had kept the hours under 40 hours. I see, it was the 40 hours limitation that was the problem?---Yes. I see. And you did mention that before?---Yes. And that was the reason?---The reason was that we wanted everything to be legal and above board, right, and the workers were asking for more than 40 hours. We had staff - the labour hire companies had staff where they would refuse to work at the workplace unless they would give them more than 40 hours. How do we tackle this problem. Okay. So under the arrangement where you before S.B. and N.B. went through other labour hire companies, that was a problem - it was a similar problem then?---The problem was from way back, right, and then in 1994 we engaged the first two labour hire companies, right, which was Ag-Grow and FarmLink and then it moved on from there. Okay?---And we kept the same system in regards - in - from advice given by Livingstones. Right. So just let me understand this, just say a person, I will say a man, wants some workers as a pickup, so before you engaged the labour hire companies, he would come to you and you would say, "We can only engage you for 40 hours a week."?---That's right. And then you started using different labour hire companies, so in, was it, 1994 you started doing that, so how would that person's position have changed under those labour hire companies?---Well, the way they were engaged was they were explained that the first 40 hours would be under S.B. Employments, if it wasn't - - - No, no, I mean under the old labour hire companies, not S.B.?---Under Eastern Colour? No, no, you know there was a list of labour hire companies?---Yes, well - - - I [sic] just trying to understand, what was the situation in the transitional period between Eastern Colour and S.B. and N.B., so that person could have been engaged by several labour hire companies?---Could have done, yes. And maybe worked more than 40 hours because he was engaged by different labour hire companies?---Yes. All right. And so you were seeking to duplicate that arrangement by S.B. and N.B. being set up; is that right?---Yes, from the advice that Vince had received. (Transcript 23 October 2012 p 79 l 1 - p 80 l 5.)

Creation of SB and NB 29 In 1994 Mr and Mrs Baronio sought legal advice in respect of alternative strategies for labour hire without affecting the commercial viability of the farm. Mr Vince Catanzaro, the farm's solicitor and accountant, advised the Baronios that their problem was faced by many farmers in the Stanthorpe area and that some farmers used internal labour hire companies. He recommended however that they seek advice from an industrial relations expert, Livingstones. 30 Livingstones provided a short written advice. Mrs Baronio discussed this advice with Mr Catanzaro and understood it to be as follows: a) we would incorporate two separate companies; b) those companies would be distinct legal entities from Eastern Colour; c) those two companies and Eastern Colour would reach an agreement for the provision of labour; d) those two companies would agree that certain Eastern Colour employees or directors (i.e. John and Me) could act as agents for the companies; e) both of those companies would offer employment to the workers at the farm; f) the first company would engage the workers for a period of up to 40 hours per week; g) after the completion of 40 hours for the first company the employees would be entitled to take up employment with the second company; h) each of the separate companies would be responsible for the wages of the employees for the relevant hours; i) at the end of any given period the separate companies would invoice Eastern Colour for the costs of the labour; j) the employees needed to be clear that they were accepting employment with two companies and that they would not be entitled to overtime; k) two separate timesheets would need to be completed for each employee; l) each company would be responsible for making the payment to its workers; and m) certain Eastern Colour employees or directors (i.e. John and Me) would be entitled to direct and control the employee provided [sic] pursuant to the agreement between the three companies. 31 The Baronios decided to set up their own labour hire companies rather than use companies provided by Livingstones. Two shelf companies were purchased: Farmlink Pty Ltd ("Farmlink") and Agro Pty Ltd ("Agro"). Stephen Baronio became shareholder and director of Farmlink and Karen Baronio became shareholder and director of Agro. Mrs Baronio deposed that the following agreement was reached: a) Farmlink and Argo would provide labour to Eastern Colour; b) Eastern Colour would pay Farmlink and Agro for the costs of that labour; c) John and myself would be entitled to act as agents of Farmlink and Agro; d) when a new worker started at the farm they would be offered employment with Farmlink and Agro; e) the worker would be free to accept employment with one or both employers; f) at the commencement the employee would be advised that their first 40 hours of work would be with Farmlink and that any subsequent hours worked on the farm would be with Agro; g) John and I (and any other nominated employees of Eastern Colour, Farmlink or Agro) would have authority to offer employment with Farmlink and Agro and to dismiss employees; and h) John and I (and any other nominated employees of Eastern Colour, Farmlink or Agro) would have authority to direct and control the labour provided by Farmlink and Agro. 32 The family also decided that new employees would sign a separate commencement letter and tax file declaration form for each of the two companies, and each week complete a separate timesheet for each of the two companies. 33 Due to changes within the Baronio family, in 2000 two new labour hire companies replaced Farmlink and Agro: Louanda Pty Ltd and Jasak Pty Ltd. Notwithstanding this development, the farm's operations continued exactly as they had under Farmlink and Agro. 34 In 2005 SB and NB were created to replace Louanda Pty Ltd and Jasak Pty Ltd. 35 Subsequently Mr and Mrs Baronio met with Stephen Baronio (director and shareholder of SB) and Nathan Baronio (director and shareholder of NB). They agreed that Eastern Colour, SB and NB would adopt the agreements reached between the previous labour hire companies and Eastern Colour. 36 It appears from his affidavit sworn 10 July 2012 that Mr Catanzaro's recollection of events leading to the creation of SB and NB is similar to that of Mrs Baronio.

Employment of workers 37 In relation to the hiring of casual workers at the farm, Mrs Baronio deposed in her affidavit sworn 10 July 2012 as follows: 67. Throughout the existence of N.B and S.B the process for hiring new employees was as follows: a) the prospective employee would be interviewed by either John, Stephen, Corrado or myself. If we formed the view that the prospective employee was suitable we would advise them that there was work available and refer them to Ms Adela Caruso in the office; b) Ms Caruso would give the prospective employee: an employee detail form for S.B, a tax file number declaration form for S.B, an employee detail form for N.B, a tax file number declaration form for N.B, and a one page work document (in relation to each of S.B. and N.B.) about their workplace health and safety obligations; c) Ms Caruso would then explain to the worker that they would work for S.B. for up to 40 hours per week. If they wished to work more than 40 hours they would then start working for N.B. It was made clear to the worker that any work that was done for N.B. was voluntary additional hours at the same rate of pay as work done for S.B; d) if the employee was content with those terms they would then sign the forms and commence working. So the position was abundantly clear to the employees, the forms for S.B. were white in colour and the forms for N.B. were green in colour. It has always been our practice to have different coloured forms for each labour hire entity. 68. At the end of each week the employees would be required to sign two timesheets, one for the hours that they have worked with S.B and one for the hours they have worked with N.B. The employees would then receive payment from S.B and N.B respectively. 69. It was part of Ms Caruso's responsibility to ensure that each new worker understood and agreed to the arrangements at the farm. Further, Ms Caruso was responsible for ascertaining whether a new worker wished to work more than 40 hours per week. If they did not wish to work more than 40 hours per week then they were only to accept employment with S.B. 70. When Ms Caruso ceased working in the administrative office in the middle 2007 [sic] we decided that her responsibilities, in respect of new employees, would be undertaken by Mr Rizzato, in respect of packing shed workers and Stephen, in respect of field workers. 71. At no time were employees forced to accept employment with S.B or N.B. Further, no employees were forced to work in excess of 40 hours per week. All work undertaken by employees was done so on a voluntary basis. 38 During cross-examination, the following exchange occurred: MR PHILLIPS: And the reason why these entities were established was for the simple reason that if people worked for more than 40 hours a week, you didn't want to pay overtime?---There was no overtime available in the system. No, but - - -?---There was never any - why would we pay overtime when we've got staff knocking on doors looking for work? Yes, but - - -?---I mean, if we pick our fruit on a Saturday instead of a Friday, Coles and Woolworths are not going to give us extra money because we paid 150 or 200 per cent. (Transcript 23 October 2012 p 80 ll 12-21.) 39 During cross-examination, Mrs Baronio was shown the Eastern Colour t-shirts, and the following exchange occurred: MR PHILLIPS: You will see - have you - I think - when you were in court yesterday, I think they were being shown to Mr Falconer?---Yes. That's right. Mr Falconer, Senior, and other witnesses. And those shirts or shirts like them were worn by packers in the shed if they wanted to purchase one?---That's right. Yes. But they were the only shirts or type like that with Eastern Colour's livery on them which were available for sale for packers if they wanted them?---Packers and staff in the field, yes. Yes. They could by [sic] those. Were there any shirts with the livery of NB Employments Proprietary Limited on them for sale?---No, because that was - Eastern Colour was the workplace. Yes?---Right? And this symbolises the workplace. (Transcript 23 October 2012 p 70 ll 24-38.)

Practice at the farm in relation to public holidays 40 Mrs Baronio deposed that the practice at the farm in relation to public holidays was as follows: a) at the commencement of the week in which the public holiday fell the shed manager would assess whether it was likely that we would need people to work on the public holiday; b) if it was expected that work would be required, a meeting of all workers would be held and they would be asked whether they would like to work on the public holiday in return for a day off in lieu; and c) the workers who wanted to work would then raise their hands. Those workers who wanted to work would then complete a form confirming that they wished to work on the public holiday. Those workers who did not wish to work on the public holiday were not asked to work on the public holiday. 41 Most of the workers always opted to work on public holidays. However, it appears that in 2008 Mrs Baronio inadvertently threw away a significant number of the forms that workers had signed, in which they agreed to work on public holidays.

Re-signing of paperwork by employees in June 2007 42 In her supplementary affidavit sworn 17 June 2012, Mrs Baronio deposed that the employees of SB and NB signed a second set of "employee engagement" paperwork in June 2007. Mr Catanzaro's office had commenced administration of the payroll and noticed deficiencies in some of the employee paperwork, for example in relation to choice of superannuation. 43 In the packing shed Mrs Baronio organised a meeting of all workers on the farm. She took the workers through the new paperwork and repeated her earlier explanation to them of how they worked their core hours for SB and their voluntary additional hours for NB. She said that she took special care to ensure that the workers understood the reason and purpose behind the new forms, which replicated the existing arrangements, and how the employment arrangements between SB and NB worked.

Enterprise agreement - employment practices at farm 44 As at 10 July 2012, all employees at the farm were employed by Stanap Services Pty Ltd pursuant to an enterprise agreement approved by Fair Work Australia on 16 May 2010. All employees had taken up the option in the enterprise agreement to work voluntary additional hours at their ordinary rates of pay.

Evidence of Adela Caruso 45 Adela Caruso immigrated to Australia from El Salvador on 13 July 1990. Both of her parents have worked at the farm. After 1999 Ms Caruso accepted work in the farm office. In her affidavit sworn 10 July 2012 Ms Caruso deposed that her responsibilities included the following: providing commencement forms and explaining employment arrangements to new employees; collecting the commencement forms and tax file number declaration forms from new employees; preparing each employee's timesheet for each company based on their weekly run sheets; ensuring that each employee checked and signed their timesheets, and understood the pay arrangements. 46 Ms Caruso deposed that if there was insufficient work in the office, she would perform packing duties in the packing shed. 47 Ms Caruso ceased performing any payroll or roster duties in June 2007. She has not worked at the farm since June 2008.

Practice in relation to informing new employees of their employment arrangements 48 In early 2006 Louisa Baronio convened a meeting of all of the farm's workers in the packing shed. At that meeting, Mrs Baronio advised the workers (in summary): the two existing labour hire companies were being wound up; two new companies, SB and NB, would be incorporated and responsible for employing all of the workers on the farm; the workers were invited to accept employment with SB and NB on the same arrangement as with the two previous companies; the workers would work their first 40 hours of work each week for SB. Any subsequent work would be for NB; if the workers did not wish to work more than 40 hours per week, they could accept employment solely with SB. 49 Ms Caruso deposed that subsequently her general practice was to explain to new employees that they would be employed by both SB and NB. If a new employee wished to work more than 40 hours per week, they would need to accept employment with both companies. They would work their first 40 hours for SB and any additional hours for NB. Ms Caruso made it clear that if an employee accepted employment with both SB and NB, they would not be paid overtime. Ms Caruso would provide an employee who accepted these conditions with a set of white commencement forms for SB, and a set of green commencement forms for employment with NB. If instead a supervisor had given the forms to a new employee, Ms Caruso would ensure that she took the time to explain the employment arrangements to them when the employee returned the forms to her.

Timesheets 50 Each work crew at the farm had a run sheet listing all of the employees in that crew. At the end of each day, each worker recorded the total hours they had worked for that day. As a general practice Ms Caruso took the run sheets and created weekly timesheets of work performed by each worker for SB and NB. Ms Caruso would record up to 40 hours of work by a worker for SB and any remainder for NB. 51 Ms Caruso would ask each employee to review their weekly timesheets in the office, and sign them if they were accurate. Ms Caruso deposed that her practice was that while an employee reviewed their timesheets she would reiterate the details about why the worker was being paid by two companies. She could not recall any employee expressing confusion about the SB and NB arrangements.

Evidence of Jennifer Crook 52 Jennifer Crook is the Fair Work Inspector who had carriage of the investigations relating to the relevant employees from 2008 when the complaints were referred to or lodged with the Workplace Ombudsman. 53 On 16 December 2008 Ms Crook interviewed Wendy McDonald, ex shed manager at the farm. Ms Crook was unable to obtain a signed statement from Ms McDonald, due to Ms McDonald being ill. However, Ms Crook deposes that the record of interview transcript dated 16 December 2008 annexed to her affidavit sworn 2 May 2012 is an accurate record of the interview. During the interview Ms McDonald stated, in summary, that: It was explained to her to tell new employees that the reason they had to fill out two tax file declaration forms was as follows: "I was - I was told that you would work 40 hours under one company and then you would work 40 hours under the other and I was told to tell them this way. They - they had to pay less tax." (transcript 16 December 2008 p 14 ll 16-33). When the employees had to sign new tax file declaration forms for SB and NB, the rest of the staff were told "just that they were changing pay companies" (transcript 16 December 2008 p 15 ll 13-29). Ms McDonald agreed with her husband's statement that the reason for SB and NB was "to cancel out overtime" so that the workers never received overtime or holiday pay (transcript 16 December 2008 p 16 ll 13-30).

Evidence of Gordon Falconer 54 Gordon Falconer worked at the farm as a forklift driver from 27 November 2005 until November 2007.

Commencement at the farm by Gordon Falconer 55 In his affidavit sworn 2 May 2012, Gordon Falconer deposed that in 2005 he had had his forklift licence for more than 20 years. He went into Ready Workforce, an employment centre in Stanthorpe on Friday 25 November 2005. The manager of the employment centre told him to go to Eastern Colour's farm and speak to John Baronio, who had a position for a forklift driver. 56 Mr Falconer deposed that, at the farm, John Baronio said words to the following effect: Are you willing to work long hours because you'll have to work as long as it takes each day to pack the day's goods. You should expect to be working at least 50 hours a week. You will have to work at least six days per week and sometimes seven days per week. 57 Gordon Falconer said that was not a problem. Mr Baronio told him he would start off on a casual basis, probably over the weekend. Gordon Falconer deposed that Mr Baronio did not discuss wages with him or which law would apply to his employment. He did not recall Mr Baronio saying anything to him about labour hire companies offering 40 hours of work with SB and working any additional voluntary hours at the same rate of pay with NB. 58 Louisa Baronio subsequently called Gordon Falconer, and asked him to start work on 27 November 2005. While he worked at the farm, Mrs Baronio directed his days and hours of work. Mrs Baronio never told him that she was acting as an agent for SB or NB. While he met Stephen and Nathan Baronio, they did not play any role in Gordon Falconer's recruitment or direct his work at the farm. 59 In his affidavit sworn 2 May 2012 Gordon Falconer deposed that he signed a single tax file number declaration form. He could not remember the name of the employer on the form. However, under cross-examination he conceded that on 27 November 2005 he filled out two tax file number declaration forms (transcript 22 October 2012 p 20 ll 21-24). The section "to be completed by a payer" was blank (transcript 22 October 2012 p 19 ll 23-33). 60 Annexed to the affidavit of Mr Catanzaro are the commencement forms that Gordon Falconer signed on 27 November 2005 when he started working at the farm. There is one bundle of documents for SB (annexure VC-2) and one bundle of documents for NB (annexure VC-3). 61 Gordon Falconer did not recall ever having a conversation with Ms Caruso in relation to the payment arrangements by SB and NB. He recalls returning his employment forms to Ms Wendy McDonald. Nor did Gordon Falconer recall any explanation by Ms Caruso of the SB and NB structures to him or his son, Lachlan. 62 In contrast to Gordon Falconer's recollection, Ms Caruso deposed that Gordon Falconer returned his commencement forms to her. When he did so, she said: You understand that you are accepting employment with two companies. SB will pay you for the first 40 hours and NB will pay you for any hours after that. All wages will be paid at the ordinary time rate. 63 Mr Falconer deposed that when he started work, and throughout his employment, he believed that his employer was Eastern Colour. The boxes that were packed and shipped out of the farm had Eastern Colour's labels and address on them. The transport documents for the goods were also in the name of Eastern Colour. During examination-in-chief, Gordon Falconer deposed that Mrs Baronio or Wendy McDonald gave him two shirts with the Eastern Colour label on them. Other workers in the packing shed had similar clothes. However, he conceded during cross-examination that the workers did not have to wear the Eastern Colour shirts when they worked at the farm.

Timesheet and pay of Gordon Falconer 64 Gordon Falconer completed one timesheet for every day he worked. The timesheet was signed by him and his supervisor. Gordon Falconer generally worked six days per week, having Saturday off. He would normally work from 5 am or 6 am until 6 pm or 7 pm. There was no formal work roster. Mrs Baronio would tell him each afternoon whether he would be required to work the next day, depending on the number of orders that were required to be filled. The details of the days and hours that Gordon Falconer worked at the farm are not in dispute. 65 Mr Falconer was paid weekly in arrears every Wednesday by direct deposit into his bank account. His bank accounts show deposits from NB and SB. Every week Gordon Falconer received two payslips, one from SB for 40 hours work, and one from NB for the hours that he worked above 40 hours per week. The payslips showed the total hours worked for each company and did not detail the hours that Gordon Falconer worked each day. Both companies paid him at the same rate of pay. 66 In mid-2007 a meeting was held for the workers to fill out new tax file number declarations for SB and NB. Gordon Falconer recalled the meeting, but did not recall Mrs Baronio or Ms Caruso saying anything about how the workers worked their core hours for SB and their voluntary additional hours for NB.

Overtime and work on public holidays 67 In relation to the overtime that he worked while at the farm, Gordon Falconer deposed in his affidavit sworn 2 May 2012 that: 45. I worked more than 40 hours per week at least every three out of every four weeks … 46. I worked all the hours voluntarily. However I was never given a choice by my employer to work over 40 hours per week. I just kept on working until the work was completed each day. 47. No one from SB every spoke to me about my work when I reached 40 hours. No one from NB ever offered me work for the rest of the week in excess of the 40 hours I had already worked for SB. 48. Nothing ever happened that alerted me to the fact that at any given point in time I was working for a different employer. The nature of my work never changed. I worked in the same shed whether I was paid by SB or NB. After 40 hours were completed, I never signed off and then signed on with another employer. 49. When I got my first pay cheque I asked Wendy Anderson, one of the other employees, to the effect why we did not get paid overtime and she told me to the effect that employer's [sic] in the fruit industry do not have to pay overtime. I had been away in America for 18 years so I was unaware of any changes in industrial relations laws so I just accepted this explanation. 50. I never understood why I was being paid by two companies. I thought it was strange but I never asked about this as I just thought it must be because the industrial relations laws had changed while I was living overseas. 51. I was never paid overtime for any of the hours I worked over 40 hours per week. 68 However, under cross-examination, the following exchanges took place between Counsel for the respondents and Mr Falconer: So you were clearly aware that there were two employers involved in this transaction, weren't you?---Not really sure, you know, I had an odd number of forms to fill out and I just did it and handed them in. I wasn't aware of the way SB and NB actually operated until after I got my first pay. (Transcript 22 October 2012 p 19 ll 15-18.) Now, you said that you didn't realise what was happening about the payment that Eastern Colour and the work on the farm until you got your first pay?---Yes. But from the time you got your first page [sic], you knew that there were two employers, one would play [sic] for the first 40 hours and the next - yes? ---Yes. (Transcript 22 October 2012 p 20 ll 26-30.) 69 Gordon Falconer also deposed that he never received additional payments for the work he did on public holidays. He denied that the workers had had a meeting to vote in relation to working on public holidays. Instead, the workers were told whether they were required to work on public holidays. He recalled he was only asked once or twice to sign a form substituting a public holiday for a normal working day.

Evidence of John Baronio 70 Mr Baronio confirmed that he spoke to Gordon Falconer when Mr Falconer came to farm to enquire about work. Mr Baronio deposed that: 12. During the conversation Mr Falconer (Snr) told me that he had recently been divorced from his wife who lived in the United States. Mr Falconer (Snr) told me that he was seeking work so that he could bring out his teenage son from the United States. During the conversation Mr Falconer (Snr) said words to the following effect: "I need as much work as I can get. I need to bring my family out from the United States." 13. I then said words to the following effect: "Here at Eastern Colour, we use labour hire companies. Those labour hire companies offer 40 hours of work with SB. If you want to work additional hours, they will be with NB as additional voluntary hours at the same rate of pay." 14. I then said that Mr Falconer (Snr) should see Ms Adela Caruso in the administration office and she would explain to him the details for the employment arrangements on the farm.

Commencement at the farm by Lachlan Falconer 71 Between 1 September 2006 and 11 March 2007 Lachlan Falconer worked as a casual fruit packer at the farm. He obtained the job through his father, Gordon Falconer. In August 2006, before he started work, Lachlan Falconer met with Mrs Baronio, Mr Baronio and Ms McDonald. 72 When he started work, Ms McDonald asked him to complete two tax file number declaration forms. However she did not explain to Lachlan Falconer the purpose for which he was completing two different forms. Mr Falconer also signed commencement documents for NB and SB on 4 September. During cross-examination, the following exchange occurred between Lachlan Falconer and Counsel for the respondents: You would have realised you were signing two copies of the same documents at the time, wouldn't you?---Yes. You realised that there were two employment arrangements being set up at that time, didn't you?---I didn't really understand it. I just signed it to commence working. (Transcript 22 October 2012 p 29 ll 13-17.) 73 Lachlan Falconer does not recall the meeting that Mrs Baronio deposes occurred in mid-2007. 74 Lachlan Falconer deposed that he believed that his employer was Eastern Colour. The name of the farm was Eastern Colour, and Eastern Colour was printed on the stickers that went on the fruit and the label on his work uniform (transcript 22 October 2012 p 33 ll 30-37). In Mr Falconer's view his employers at the Eastern Colour farm were Mr and Mrs Baronio, because they were the ones telling people what to do and how to do their job, and they were the people who hired and fired workers at the farm.

Completion of timesheets and payment of wages 75 Lachlan Falconer worked at the same shed at the same address during the entire period at which he worked at the farm. Normally he stacked boxes of fruit onto pallets in preparation for them to be shipped. However, he would help out with whatever he was asked to do. All the workers were directed and disciplined, if necessary, by Mr Baronio, Mrs Baronio, Ms McDonald or Mr Rizzato. Lachlan Falconer personally was always directed by Mrs Baronio, Ms McDonald or Mr Rizzato. 76 By hand he completed one timesheet at the end of every day entitled Eastern Colour. The timesheet was kept on a desk by the office in the shed. He completed the same timesheet, regardless of the numbers of hours he worked. 77 In her affidavit sworn 10 July 2012, Adela Caruso deposed that she recalled the first time that Lachlan Falconer inspected his timesheet, because he came with his father, Gordon Falconer. She explained the arrangement between SB and NB to Lachlan Falconer. He said he understood. In contrast, Lachlan Falconer deposed that he does not recall Ms Caruso explaining why he would be paid by both SB and NB (transcript 22 October 2012 p 32 ll 9-20). Ms Caruso might have said something about SB and NB paying him, but he did not recall her telling him why the arrangement was set up in that way. 78 At the end of each day Mrs Baronio or someone directed by her would tell Lachlan Falconer whether he would be working the next day. If Lachlan Falconer could not work on a day he would contact Mrs Baronio or Ms McDonald. They resolved any disputes between workers at the farm. 79 Mr Falconer gave evidence that he was never told when he had worked more than 40 hours in a week. He was offered work by Mr or Mrs Baronio, but he was never given a choice about whether he wanted to work more than 40 hours per week. He was never paid for working on a public holiday and never agreed to substitute another day for a public holiday. He thought there may have been a meeting of the workers about public holidays once. He recalled that sometimes he might have had a choice to work on a public holiday, but most of the time he was required to work on a public holiday. 80 Mr Falconer said that Mrs Baronio determined his rate and method of pay. SB made a weekly deposit of Lachlan Falconer's wages into his bank account. Some weeks he also received a deposit from NB. During cross-examination, the following exchange took place: Okay, so you will see the third entry on that page, 19 September, NB Employments, pay for 19 September 2006?---Yes. And the fourth entry, SB Employments, pay for 19 September 2006?---Yes. That would have been your first pay, would it not?---Yes. It's the first entry, yes. So you would have known that you were being paid by the two different companies from the beginning?---Yes. Yes. (Transcript 22 October 2012 p 30 ll 31-36.) 81 Lachlan Falconer deposed that he did not know much about SB and NB, did not agree to work for them, and was never aware that either company was his employer. While Lachlan Falconer had met Nathan Baronio, he never met Stephen Baronio.

Evidence of Sandra Di Betta 82 Sandra Di Betta worked in the packing shed at the farm from 13 January 2007 to 21 February 2008. Her duties included fruit grading, packing orders, operating machinery, cleaning the shed and training backpackers.

Commencement at the farm by Ms Di Betta 83 Ms Di Betta deposed that when she went to the farm to see if there was any work available she spoke with Louisa Baronio. Mrs Baronio offered Ms Di Betta a job two days later over the telephone. Ms Di Betta deposed that Mrs Baronio never said anything about the work being with SB and NB. Ms Di Betta did not agree to work for SB and NB, was unaware that she had a relationship with SB and NB, and did not know what the company names stood for. She thought she was employed and paid by Eastern Colour. 84 Ms Di Betta understood that the name of the business for which she worked was Eastern Colour, as this was the name written on the sign on the front gate and the packing stickers and boxes. Each fruit packer had a different packing number on their stickers, so that when the boxes of fruit went through a quality check it was obvious who had packed which fruit. Some of the workers in the packing shed wore "Eastern Colour" shirts. Ms Di Betta did not as the workers had to pay for the shirts. No one told Ms Di Betta that they were acting on behalf of SB or NB. 85 In her affidavit evidence Ms Di Betta stated that she believed during her time at the farm that her employers were Mrs and Mr Baronio, because they owned the property, the business and the company. Ms Di Betta said that Mrs Baronio was in control of the working conditions at the farm. At the start of the season she oversaw everyone and checked which orders were to be packed. She told the workers when to take breaks, and reprimanded workers if they threw away too much fruit. Mrs Baronio also hired and dismissed workers. Ms McDonald filled these roles when Mrs Baronio was not there, which occurred more frequently as the season progressed. 86 However, in relation to her knowledge of SB and NB, during cross-examination Ms Di Betta deposed the following: I see. Now, you have got Mr Catanzaro's affidavit there? The thick one, I'm sorry?---Yes. Can you turn to page 62 please of that affidavit? That is a document you signed about workplace health and safety guidelines on 13 January, is that right?---Yes. All right. And look at 63. Do you remember getting that document about the same time?---Yes. Did you read it?---Yes. And you read those first words prior to commencing employment with the above company: The following information will be required. ?---Yes. Fax numbers and everything like that. Yes. And you signed a form about SB Employments - the next page, 64?---Yes. And you signed another form, 65, with your employee details for SB Employments?---Yes. And indeed, you completed a tax file declaration which is at page 73 for SB Employments, didn't you?---Yes. You also, on the same day, looking over to page 76, filled out an employee detail form for NB Employments, didn't you?---Yes. And you filled out the document on page - signed the document on page 79 for NB Employments?---Yes. The ..... document on page 78 about NB Employments: Before commencing with the above company, the following information will be required. You have seen that as well?---Yes. Yes. And you did a tax file declaration for NB Employments, as well. You knew at that stage that you were accepting employment with two companies, didn't you?---I was led to believe that there were two companies operating in the shed? Yes. And you knew that that's what the employment was offered to you was with the two companies?---Yes. (Transcript 22 October 2010 p 39 l 11 - p 40 l 8.) 87 When Ms Di Betta started work at the farm she did not receive a letter of appointment. Mrs Baronio handed her two sheets of paper - a white sheet with SB at the top and a green one with NB at the top. The forms stated that employees, prior to commencing, were required to provide personal, tax, superannuation and bank information. The forms discussed meal breaks and when wages would be paid but not hours of work or rate of pay. The forms stated further that the position was a casual position on a trial basis, until confirmed in writing. 88 On 28 June 2007 Ms Di Betta completed employee details forms for SB and NB and a document entitled "Eastern Colour Pty Ltd Workplace Health and Safety Guidelines". Mrs Baronio also gave her two tax file number declaration forms to sign for SB and NB. When Mrs Baronio gave Ms Di Betta those forms, section B to be completed by the payer was blank (transcript 22 October 2012 p 47 l 44 - p 78 l 5).

Working hours and pay of Ms Di Betta 89 The usual hours that Ms Di Betta worked were 6 am to 5 pm. However, these changed depending on the number of orders that Mrs Baronio had accepted for each day, and Ms Di Betta deposed that she never knew at what time she would finish work. Ms Di Betta completed a single timesheet every day. On Mondays Ms Di Betta had to a sign a pay sheet for SB listing all of her hours for the week. If she had worked more than 40 hours that week she would also sign a pay sheet for NB. It was never explained to Ms Di Betta why she was required to sign two pay sheets. 90 Every Wednesday SB would pay Ms Di Betta by direct credit into her bank account, except for a few times when she first started working at the farm and collected a cheque from Mr Catanzaro's office. Some weeks she also received a payment from NB. Ms Di Betta believed that since Mr and Mrs Baronio were the owners of Eastern Colour, they decided how much she was paid. She would receive one or two payslips depending on how many hours she had worked that week. She never asked why she received two payslips and assumed it was so the farm could avoid paying her overtime. In paragraph 11 of her supplementary affidavit affirmed 31 August 2012, Ms Di Betta deposed that she did not recall Ms Caruso explaining to her why she was being paid by two different companies, and she was not asked about giving up her entitlement to overtime. Further she did not recall Mrs Baronio holding any meetings in mid-2007 to explain the employment arrangements at the farm. 91 Regardless of the number of hours she worked in a week, Ms Di Betta always worked in the same spot in the Eastern Colour packing shed, supervised by the same people. On one occasion she asked Mrs Baronio whether she could work fewer hours, but Mrs Baronio said she could not as that would amount to favouritism. Ms Di Betta was never paid additional wages for working on public holidays, and never agreed to substitute another day for a public holiday. In her supplementary affidavit affirmed 31 August 2012, Ms Di Betta deposed that she was never asked whether she wanted to work public holidays. She did not recall any meeting in which the workers voted to work on a public holiday.

Evidence of the respondents concerning Ms Di Betta 92 In her affidavit sworn 10 July 2012, Mrs Baronio deposed in summary: Ms Di Betta called the farm in January 2007 to enquire whether there was work available. Mrs Baronio said it did not matter that Ms Di Betta had no experience in packing capsicums, and she would call her if any vacancies arose. Mrs Baronio subsequently called Ms Di Betta to advise her of a vacancy in the packing shed. Ms Di Betta stated that she was keen to start work. Mrs Baronio told Ms Di Betta that when she arrived at the farm she could speak to Ms Caruso, who would provide her with all the details about the job. 93 Mrs Baronio denies she told Ms Di Betta that she could not work fewer hours, because at all times the hours worked at the farm were voluntary. 94 Ms Caruso does not recall providing Ms Di Betta with commencement forms. However, she did remember that Ms Di Betta returned the forms to her, at which time Ms Caruso deposed that the following exchange took place (affidavit of Adela Caruso sworn 10 July 2012 at [38]-[41]): 38. … I said words to the following effect: "Do you understand that you are accepting employment with two companies, S.B and N.B?" 39. Ms Di Betta said words to the following effect: "Yes." 40. I then said words to the following effect: "S.B will pay you for the first 40 hours and N.B will pay you for any hours after that. All hours will be paid at ordinary time rate." 41. Ms Di Betta said in words to the following effect: "Yes." 95 Annexure VC-6 to the affidavit of Vincenzo Cateno Catanzaro sworn 10 July 2012 shows that Ms Di Betta signed the following documents on 13 January 2007: Eastern Colour Pty Ltd Workplace Health & Safety Guidelines; an "Agreement Authority" headed SB; an employee and bank details forms for SB; a choice of superannuation fund - Standard choice form for SB; a tax file number declaration form (the payer information section B was signed on 20 February 2007 for SB). 96 On 15 February 2007, Ms Di Betta signed the following documents (affidavit of Vincenzo Cateno Catanzaro sworn 10 July 2012 annexure VC7): an employee and bank details forms for NB; a choice of superannuation fund - Standard choice form for NB; an "Agreement Authority" headed NB; a tax file number declaration form (the payer information section B was signed on 28 February 2007 for NB). 97 In her Statement dated 14 November 2008 to the Workplace Ombudsman, Ms Di Betta stated at [20]: I also had to complete two tax file number declaration forms that were given to me at the same time. I had to write SB Employments Pty on one hand and NB Employments Pty Ltd on the other. I can't remember whether I had to put their Australian Business Numbers on the tax file number declarations or not … (Affidavit of Vincenzo Cateno Catanzaro sworn 10 July 2012 annexure VC20.) 98 Mrs Baronio deposed that all of the employees voted to work the show holiday in February 2008. Ms Di Betta left prior to the completion of the shift without giving Mrs Baronio any notice.

Evidence of Joanne Donges 99 From 13 July 2007 to 21 February 2008 Joanne Donges worked in the packing shed at the farm as a fruit and vegetable packer, cleaner and machine operator. Her duties included stacking, labelling, re-boxing, making up cartons and training other workers. 100 Ms Donges deposed that she was offered the job of packer by Mrs Baronio and Mr Currado Rizzatto, one of the shed bosses (affidavit of Joanne Kathleen Donges sworn 4 May 2012). She knew Mrs Baronio and Mr Currado were in charge as they were allocating tasks to the workers. 101 When she started working at the farm Ms Donges believed that her employers were Mr and Mrs Baronio because they were the bosses. When she started work Mrs Baronio asked her to complete a tax file number declaration form, with SB listed as the employer. However, Ms Donges deposed that it was incorrect to say that she accepted employment with SB but declined employment with NB. She knew that SB stood for Stephen Baronio, but he never instructed her in her work. 102 In her evidence Ms Donges stated: I did not receive a letter of appointment but at the end of my shift on the first day I started I was given a job description form. The name of the employer on this form was S.B. Employments Ltd. It was given to me with my tax form and other paperwork which I completed and gave back the same day. The details of the job description included that we worked for SB and that we got breaks. I didn't pay much attention to it at all. I also signed a document entitled "Eastern Colour Pty Ltd Workplace Health and Safety Guidelines" ... 103 In relation to overtime work, Ms Donges deposed: 46. When I first started Louisa gave me a tax form for SB and a tax form for NB. Louisa said words to the following effect: "You won't need the second tax form as the first 40 hours are paid by SB and once you have worked over 40 hours those hours are paid by NB. We pay with two companies so you pay less tax. Because you won't work over 40 hours per week you only need to fill out the form for SB." 47. Louise showed me a form where I could choose what amount of tax I wanted to pay, there was 10%, 13%, 20% or the standard. I chose to pay the standard amount of tax. 48. I did not work more than 40 hours in one week. 104 Usually Ms Donges worked from 6 am to 7 pm over two-three days, for an average of 30-35 hours per week. She deposed that she would be told by Mrs Baronio or Mr Rizzatto when she was to work, and had no say in when or where she worked. Mrs Baronio would call her in the evening and inform her of her start time the next day. Her finish time changed each day depending on how many orders had to be filled. 105 Ms Donges does not recall Ms Caruso ever explaining why the workers were paid by two different companies or the mid-2007 meeting referred to by Mrs Baronio. She signed one timesheet each week for SB. At some point each week she would receive a payslip with SB on it. 106 In relation to public holidays, Ms Donges deposed that she never agreed to substitute another day for a public holiday as it was never discussed with her. She did not get paid additional wages for working on the public holidays. She never signed a public holiday waiver form, and no meeting of workers was held in relation to voting to work on public holidays. 107 During oral examination-in-chief, Ms Donges deposed that (transcript 22 October 2012 p 50 l 30 - p 51 l 3): although she did not wear the work shirts from Eastern Colour, other workers did; the stickers with Eastern Colour on them were for the workers to place on the crates and boxes for Woolworths and Coles; the packing boxes all had Eastern Colour on them. 108 During cross-examination, Ms Donges conceded that she had written a letter of complaint to Workplace Health and Safety. She responded, "Yes", to the question, "So you made as many complaints as you could think of there, didn't you?" (transcript 22 October 2012 p 54 l 28).

Evidence of Louisa Baronio 109 In early July 2007 Ms Di Betta asked Mrs Baronio whether there was work available at the farm for her friend, Ms Donges. Mrs Baronio told Ms Di Betta to tell the friend to come to see her (affidavit of Louisa Baronio sworn 10 July 2012 at [106]). 110 Ms Donges came to the farm and had a brief discussion with Mrs Baronio about the types of work available. Ms Donges stated that she only wished to work two days every week. Mrs Baronio said that was fine. She should speak with Ms Caruso, who would inform her of the details of working at the farm. Mrs Baronio did not ask Ms Donges to complete any forms. In accordance with her usual practice she referred Ms Donges to Ms Caruso for these to be completed.

RELEVANT LEGISLATIVE PROVISIONS 111 At material times, s 182(1) of the Act stated as follows: Subdivision B - Guarantee of basic rates of pay 182 The guarantee Guarantee of APCS basic periodic rates of pay (1) If: (a) the employment of an employee is covered by an APCS; and (b) the employee is not an APCS piece rate employee; the employee must be paid a basic periodic rate of pay for each of the employee's guaranteed hours (pro-rated for part hours) that is at least equal to the basic periodic rate of pay (the guaranteed basic periodic rate of pay) that is payable to the employee under the APCS. Note: For what are the employee's guaranteed hours, see section 183. 112 It is not in dispute that from 27 March 2006 there existed an Australian Pay and Classification Scale ("APCS"), being a preserved APCS within the meaning of that term given by s 208(1) of the Act and which was applicable to the work performed by the relevant employees. The APCS was derived from the Fruit and Vegetable Growing Industry Award - State 2002 (Qld) upon the commencement of Sch 1 of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) on 27 March 2006. 113 The coverage provisions of the APCS set out in cl 1.4 of the NAPSA provided that the APCS applied to: All employers and their employees engaged in the fruit and vegetable growing industry, including the preparation of land, cultivation, planting, care, picking, handling, treating, packing and despatching of all fresh fruits (including tomatoes) and vegetables, on or from fruit and vegetable farms, vineyards, orchards and plantations, throughout the State of Queensland. 114 It is clear that the conditions of employment of the relevant employees in this case fell within the terms of the NAPSA. 115 Clause 6.4.2 of the NAPSA provides in relation to overtime that: 6.4.2 All time worked by casual employees in excess of 40 hours in any 7 days shall be deemed overtime and paid for at the rate of time and a half for the first 3 hours and double the ordinary rate of pay thereafter. 116 Clause 7.6 of the NAPSA relevantly provides in relation to public holidays that: 7.6.1 Subject to clause 7.6.7 all work done by an employee on: the 1st January; the 26th January; Good Friday; Easter Saturday (the day after Good Friday); Easter Monday; the 25th April (Anzac Day); The Birthday of the Sovereign; Christmas Day; Boxing Day; or any day appointed under the Holidays Act 1983, to be kept in place of any such holiday will be paid for at the rate of double time and a-half with a minimum of 4 hours. 7.6.2 Labour Day All employees covered by this Award are entitled to be paid a full day's wage for Labour Day (the first Monday in May or other day appointed under the Holidays Act 1983, to be kept in place of that holiday) irrespective of the fact that no work may be performed on such day, and if any employee concerned actually works on Labour Day, such employee will be paid a full day's wage for that day and in addition works on Labour Day, such employee will be paid a full day's wage for that day and in addition a payment for the time actually worked by the employee at one and a-half times the ordinary time rate of pay prescribed for such work with a minimum of 4 hours. 7.6.3 Annual show All work done by employees in a district specified from time to time by the Minister by notification published in the Industrial Gazette on the day appointed under the Holidays Act 1983, to be kept as a holiday in relation to the annual agricultural, horticultural or industrial show held at the principal city or town, as specified in such notification of such district will be paid for at the rate of double time and a-half with a minimum of 4 hours. In a district in which a holiday is not appointed for an annual agricultural, horticultural or industrial show, the employee and employer must agree on an ordinary working day that is to be treated as a show holiday for all purposes.

CLAIMS AGAINST THE RESPONDENTS 117 In its application filed 7 September 2010 the FWO claimed that Eastern Colour had contravened all of these provisions. Alternatively, the FWO claimed that Eastern Colour and the second and third respondents had contravened those provisions. 118 In relation to the fourth respondent Louisa Baronio, the FWO claims that Mrs Baronio should be held to have been involved in Eastern Colour's contravention of the Act by virtue of s 728 of the Act, which provides: 728 Involvement in contravention treated in same way as actual contravention (1) A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision. (2) For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. 119 The FWO claims that s 182(1) of the Act and cll 6.4.2, 7.6.1, 7.6.2 and 7.6.3 of the NAPS are "applicable provisions" within the meaning of s 717 of the Act, and for the purposes of s 718 of the Act. Section 719 of the Act empowers the Court to impose a penalty on a person if that person is bound by an applicable provision and the person breaches the provision. The FWO seeks the imposition of penalties against each respondent for contraventions of these applicable provisions. 120 In summary, the FWO claims that: in breach of s 182 of the Act, the first respondent failed to pay each of: o Mr Gordon Falconer from 5 December 2006 until 30 September 2007; o Mr Lachlan Falconer from 5 December 2006 until 11 March 2007; o Ms Di Betta from 16 January 2007 until 30 September 2007; and o Ms Donges from 9 July 2007 until 30 September 2007, at least the guaranteed basic periodic rate of pay payable under the AFPCS for each of the employees guaranteed hours of work. The first respondent was required to pay each of the employees at least the overtime rate of pay for hours worked in excess of 40 hours in any seven days, and failed to do so in respect of each of the relevant employees. The first respondent was required to pay each of the employees at least the penalty rate of pay for hours worked on public holidays, and failed to do so in respect of each of the relevant employees. As a result of these contraventions, the first respondent underpaid wages and entitlements to the relevant employees in the amount of $19,034.11. 121 In the second further amended statement of claim the FWO pleads that the underpayments were actually paid to each of the relevant employees by the second respondent in or about August 2010. 122 In summary, the respondents dispute the FWO's claims on the basis that the relevant employees accepted offers of employment from both SB and NB and/or worked for those entities, and further that to the extent they acted Mr and Mrs Baronio were acting on behalf of SB and NB. 123 It does not appear to be in dispute that penalty rates were not paid on public holidays. The major area of contention concerns the identity of the employer of the relevant employees.

CONSIDERATION 124 In my view it is clear that, at all material times, the employer of the relevant employees was the first respondent, Eastern Colour. 125 The respondents submit, in summary, that: There is evidence before the Court as to the commercial purpose of the arrangements adopted wherein SB and NB were incorporated as labour hire companies, and employees would work up to 40 hours for one of those companies and then work additional hours for the other. SB and NB were substantial business structures in their own right with tiers of management. 126 That the respondents operate in an industry where profits are low, where persons in the Stanthorpe area are keen to work in the fruit industry and indeed to work as many hours as possible, where the work is seasonal and an employee may be required to work more than 40 hours per week, where the respondents are required to take prices offered to them by the major supermarket chains, and where farms may otherwise take employees from labour hire companies and impose a maximum of 40 hours per week, are facts which are not in dispute. Indeed, the difficulties faced by primary producers in this country are of daily report in the media. However these facts do not detract from the legal position under the Act, which this Court is required to apply. 127 Principles relevant to the identification of an employer in circumstances of ambiguity were considered by the Full Court in Damevski v Giudice (2003) 133 FCR 438. In that case in particular Marshall J observed, in summary, that: the existence of a contractual relationship and employment relationship, in any given set of circumstances, is ultimately a question of law (at 450). Payment of wages by a third party is not fatal to the existence of a contract of employment between a worker and a putative employer (at 451). control over a worker did not merely relate to the on-the-job situation, but rather the ultimate or legal control over the worker (at 451). Contact between the putative employer and employee is an indicator of an employment relationship (at 452). contracts of employment may be entered into with a minimum of formality (at 452). It is necessary to look "beyond and beneath the documents" and not reach a decision concerning the existence of an employment contract on the basis of construing the correspondence (at 453, cf Lord Mummery in Franks v Reuters Ltd [2003] IRLR 423). Even where the work relations are documented, it is necessary to examine not only the correspondence, but also the circumstances surrounding it, the subsequent conduct of the parties, and the way in which the parties operated and understood the situation (at 453). 128 In this case the evidence demonstrates that each of the relevant employees signed (or had signed for them) weekly time sheets under the heading of either SB or NB. Similarly, each of the employees received payment advices under the name of either SB or NB. However in my view the arrangements whereby the relevant employees were identified as working for SB or NB were, effectively, a sham. That the true employer was Eastern Colour is clear from the evidence before the Court. In particular I note the following: The fact that all relevant employees considered that Mr and Mrs Baronio were "the bosses" who could hire and fire employees, and that this did actually appear to be a correct perception. The evidence of each of the relevant employees that they believed that they were working for Eastern Colour. Indeed employees on the farm wore shirts bearing the name "Eastern Colour", on the basis that this was their employer. Similarly, the only Workplace, Health and Safety Guidelines applicable at the farm were in the name of Eastern Colour (transcript 23 October 2012 p 84 ll 9-19). This may be compared with the absence of evidence of any employees having any direct separate involvement with SB or NB in the employment environment. The fact that the employees performed the work in the same location, namely on the farm owned by Eastern Colour, and by packing fruit in boxes labelled as produced by Eastern Colour. The fact that the relevant employees had limited knowledge of SB or NB other than as entities whose name appeared on pay slips. Indeed, there is clear evidence before the Court that there was no practical difference in their work environment or practice after an employee had worked 40 hours. The lack of awareness of the relevant employees of the arrangements whereby they worked up to 40 hours for one of the respondents and any additional hours for another, notwithstanding evidence of Ms Caruso and Mrs Baronio that they had informed them of the arrangements. The directors of SB and NB had no involvement in employing staff. The clear fact that SB and NB existed only to provide services to the first respondent. Notwithstanding the existence of time sheets and pay slips, the absence of any contract of employment between either SB or NB, and the relevant employees. Mrs Baronio repeatedly gave evidence to the effect that there was no overtime available in the system, and that no farms paid overtime rates to their harvesting and packing staff. However while this may have been the practice, it is very clear that Mrs Baronio was aware of the legal obligation on employers to pay overtime once an employee had worked 40 hours. Indeed, it was for this very reason that SB and NB were created - namely to be entities who could be the nominal employers of employees on the farm to obviate the legal requirements of Eastern Colour as employer to pay overtime for more than 40 hours work. That the directors of SB and NB were the children of Mr and Mrs Baronio simply supports the inference that SB and NB functioned in the context of the family business. 129 The respondents relied on comments of Buchanan J in Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174, in particular the following observations of his Honour: 76. There may be many reasons why companies, businesses or enterprises associated with each other might wish to organise their affairs in a way where one legal personality employs labour for the ultimate use and benefit of other legal personalities. Such arrangements will often not be characterised or accompanied by the apparent profitability or identified reward which might be necessary in order to regard an arms-length arrangement as a genuine one. 77. In such intra-group arrangements there may be overlapping, or even common, directorships, interlocking shareholdings (either cross-ownership or through ultimate ownership) and there is frequently a system of cross-guarantees in place. Little of this may be apparent to outsiders. The details may not be discoverable through the public records system. Arrangements between or amongst companies related in this way where one company (or more) operates to engage labour while others are concerned with management, operations, marketing or sales are by no means unusual. They are certainly not illegal. Arrangements along these lines may even be indispensable for some forms of business activity e.g. joint ventures. Although more than mere lip service must be paid to the separation of legal personality provided by individual incorporation, the tests applied to other labour hire arrangements, of independence and separate business, are either not relevant or are much less readily applied in such a circumstance. 78. Nevertheless, it must be possible to identify a rational explanation for the arrangement and the explanation must be satisfactorily related to an intelligible business objective. That is so because otherwise, doctrines of agency, at least, may operate to defeat a bare claim of independence and isolated liability, supported only by a bare reference to separate incorporation. That is particularly likely to be the case when: the separate employing company is completely reliant upon a company to which it purportedly supplies labour; it has no assets and no management structure of its own; and it exists only as a corporate shell to protect another company, which does have assets, from liability to employees. In such a case a court might not hesitate long before pronouncing the arrangement ineffective or, in a more serious case, a sham. 130 In my view these observations do not assist the respondents. Indeed the concluding comments of Buchanan J at [78] concerning circumstances where the Court would not hesitate long before pronouncing an arrangement ineffective or a sham are squarely applicable here. While there may have been a rational explanation for the arrangements put in place by the respondents, to adopt comments of Marshall J in Damevski v Giudice at 450, it was to effectively to: attempt to exploit difficult areas of law and create vehicles designed, inter alia, to enable employers to avoid their award and statutory obligations. 131 As Marshall J observed in Damevski v Giudice there is no legitimacy in such arrangements. 132 It follows that the FWO has substantiated its claim that the first respondent was the employer of Mr Gordon Falconer, Mr Lachlan Falconer, Ms Di Betta and Ms Donges. 133 Finally I am satisfied that any contravention by the first respondent involving underpayment of entitlements to these employees involved the second, third and fourth respondents within the meaning of s 728 of the Act. As the High Court explained in Yorke v Lucas (1985) 158 CLR 661 at 670: There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention. 134 It is clear from the material before the Court that these three respondents aided and abetted the contravention, and/or were knowingly concerned in the contravention, in that: The second and third respondents were party to the arrangements whereby the relevant employees were allegedly employed by one of them for up to 40 hours per week and then by another respondent for additional hours. Each of the second and third respondents made payments to the relevant employees which were in breach of the provisions of the Act. The second and third respondents had knowledge of the essential facts constituting the contravention of the Act by the first respondent. The fourth respondent, who had detailed knowledge of the arrangements, had knowledge of the essential facts constituting the contravention of the Act by the first respondent.

CONCLUSION 135 I will ask the parties to prepare a minute of order to reflect these findings. Further, I note that the applicant seeks the imposition of penalties for contravention of the Act. In the circumstances I will make timetabling orders for the matter to return to Court for the parties to make appropriate submissions on penalty. I certify that the preceding one hundred and thirty-three (133) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.