Identifying the contraventions of s 45
162 Section 45 of the FW Act, which came into operation on 1 January 2010, provides that a person must not contravene "a term" of a modern award.
163 There is an issue as to the number of contraventions of a term of the CS Award indicated by the findings I have made above. In order to identify how that issue arises, it is appropriate to summarise the declarations sought by the FWO.
164 In relation to the employment in 2009 (to which s 45 is inapplicable), the FWO sought first a declaration that South Jin had contravened s 185(2) of the WR Act in the period to 30 June by not paying to the Casual Employees a loading which was at least equal to "the guaranteed casual loading percentage" (20%). A declaration to that effect is appropriate in respect of Avi Narayan Baskota, he being the only casual employee who, on my findings, worked during this period.
165 In respect of the period between 1 July and 31 December 2009, the FWO sought a declaration that South Jin had contravened item 5 of Sch 16 of the Transitional Act by not paying the same casual loading. A declaration to that effect is appropriate in respect of Avi Narayan Baskota, Dongog Kim, Kyewoon Lee, Prabin Rajbhandari, Rabin Bk, Sehwan Kim and Wenjin Liao as they performed casual work in this period.
166 In respect of the period between 1 January and 22 April 2010, the FWO sought separate declarations that South Jin had contravened each of cl 16 and cl 12.5(a) (and thereby in each case, s 45 of the FW Act) by failing to pay the prescribed rate and by failing to pay the casual loading of 25%. In respect of the Full-time Employees, the FWO also sought a declaration giving effect to my finding that South Jin had breached cl 28 of the Award by failing to pay overtime at the prescribed rates.
167 In relation to the period between 23 April and 30 June 2010, the FWO sought separate declarations that South Jin had, in relation to the Casual Employees, contravened each of cl 16 and cl 12.5(a) of the CS Award (and thereby in each case, s 45 of the FW Act) by failing to pay the prescribed minimum rate and by failing to pay the casual loading of 20%. In addition, the FWO sought a declaration that, in respect of the Full-time Employees, South Jin had breached cl 28 by failing to pay overtime at the prescribed rates. In relation to full-time employees in this period, the FWO sought declarations that South Jin had contravened both cl 16 and 28.
168 In respect of the period from 1 July 2010 to 21 November 2010, the FWO sought separate declarations that South Jin contravened cl C.2.5 of Sch C of the CS Award (the minimum hourly rate) and of cl C.7.3 of Sch C of the CS Award (the casual loading of 21%). In relation to the Full-time Employees, the FWO sought declarations that each of cl 16 (the minimum hourly rate), cl 27.2 (Saturday and Sunday penalty rates) and cl 28 (overtime) was breached.
169 The question is whether, in relation to both the Full-time and the Casual Employees, declarations of contraventions of all the Award provisions just identified are appropriate. The resolution of this question turns on the identification of the obligations imposed by the CS Award and therefore of what it is that South Jin has contravened.
170 The FWO contended, in the case of the Casual Employees, that the CS Award imposes separate and distinct obligations to pay the ordinary hourly rate and the casual rate so that a contravention of each attracts the operation of s 45 of the FW Act. Similarly, in relation to the Full-time Employees, the FWO contended that the CS Award imposes separate and distinct obligations to pay the ordinary hourly rate, the overtime rate and the respective weekend penalty rate so that a contravention of each also attracts the operation of s 45. An alternative position would be to regard the Award terms with respect to casual, weekend and overtime payments as subsuming the earlier obligations so that there is a single obligation with respect to payment for each hour worked, and accordingly, a single term of the CS Award which has been contravened.
171 In support of her submission, the FWO referred to Gibbs v The Mayor, Councillors and Citizens of the City of Altona [1992] FCA 374; (1992) 37 FCR 216. In that case, the respondent Council admitted that it had contravened the redundancy clause in the applicable award by failing, after it had made a definite decision that it no longer wished an employee's job to be done by anyone, to hold discussions with the relevant union about the proposed termination of the employee's employment and by failing to provide in writing to the union all the relevant information about the proposed termination. Gray J considered the application of s 178(2) of the Industrial Relations Act 1988 (Cth) in these circumstances. Section 178(2) provided:
Subject to subsection (3), where:
(a) 2 or more breaches of the term of an award or order are committed by the same organisation or person; and
(b) the breaches arose out of a cause of conduct by the organisation or person;
the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.
Section 178(2) has its counterpart in s 557(1) in the FW Act.
172 Gray J concluded that each obligation in the redundancy clause was a "term" of the award, so that each breach of obligation was a breach of a term for the purposes of s 178. His Honour's reasoning, at 222-3 [21]-[24], was as follows:
It is possible to regard cl 23(a) as a term of the Award, imposing a number of different obligations. It is possible to regard each of pars (i), (ii) and (iii) of cl 23(a) as a "term", each of which imposes several obligations. It is possible to regard each of the separate obligations within these paragraphs as a separate term.
…
The object of s 178(2) appears to be that a party bound by an award and pursuing a course of conduct involving repeated acts or omissions, which would ordinarily be regarded as giving rise to a series of separate breaches, should not be punished separately for each of those breaches. If such a party has pursued a course of conduct which gives rise to breaches of several different obligations, there is no reason why it should be treated as immune in respect of its breach of one obligation, merely because it has acted in breach of another. This reasoning leads to the conclusion that each separate obligation found in an award is to be regarded as a "term", for the purposes of s 178 of the Act. The ascertainment of what is a term should depend not on matters of form, such as how the award maker has chosen to designate by numbers or letters the various provisions of an award, but on matters of substance, namely the different obligations which can be spelt out. For these reasons, I incline to the view that each separate obligation imposed by an award is to be regarded as a "term", for the purposes of s 178 of the Act. If the different terms imposed cumulative obligations or obligations that substantially overlap, it is possible to take into account the substance of the matter by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others.
173 The FWO referred next to McIver v Healey [2008] FCA 425. That was an underpayment of wages case and so, on its facts, more like the present. The relevant award required the employer to pay casual employees an hourly rate which was 1/38th of the prescribed weekly rate "plus the appropriate undermentioned addition to that rate". These additions were loadings of varying amounts depending on the time of day at which the work was performed and whether it was performed on Saturdays, Sundays or public holidays.
174 Marshall J considered that each of these award obligations should be regarded as a term for the purposes of s 178(2) and its counterpart in s 719(2) of the WR Act so that each breach was a separate contravention of a term.
175 Tracey J applied a similar approach in Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14. Again, this was an underpayment of wages case and involved the application of s 178 of the WR Act. The employer had admitted breaches of award obligations with respect to payment for ordinary time, overtime and Saturday, Sunday and public holiday work. Those obligations were contained in different award provisions. Tracey J considered that the parties had been correct to regard City of Altona as requiring the non-compliance with each of the obligations to be treated as a contravention of a separate term.
176 The FWO submitted that this reasoning should be applied in the present case. The CTS Respondents did not contend to the contrary.
177 In addition to her reliance on the authorities, the FWO referred to two further considerations. First, the FWO submitted that the imposition of penalties would be a more difficult task if it was held that there had been a failure to pay the appropriate aggregate amount required by the CS Award for each hour of work, rather than to pay each element making up the aggregate amount. Secondly, the FWO submitted that as she herself had made findings that "the employees were entitled to receive the benefit of these specific award entitlements, it was appropriate for the Court to make separate declarations as to each".
178 I do not regard either of these latter considerations as persuasive. The difficulties to which the FWO referred in relation to the imposition of penalties are not readily apparent. Nor is it readily apparent that such difficulties, if they exist, could bear upon the proper construction and application of the CS Award. I agree, however, that the framing of the declarations necessary to give effect to the Court's findings may be more difficult.
179 The manner in which the FWO has chosen to express her "findings" cannot control the proper construction of the FW Act nor of the construction and application of the CS Award.
180 The more significant consideration is the authorities to which reference has already been made.
181 In my opinion, the reasoning in City of Altona, McIver and Kelly v Fitzpatrick is not conclusive in the present context. In this case, the issue arises at the stage of determining the contraventions of the award involved whereas, in those cases, the issue was whether two or more admitted contraventions were to be treated as a single contravention for the purposes of imposition of penalty. That is to say, the present issue arises at a stage which is antecedent to that considered in the authorities.
182 Further, to my mind, the question of whether the underpayments by South Jin give rise to two or more contraventions of a term of the CS Award is to be determined by reference to the terms of that Award. The manner of expression of an award may make it apparent that the failure to pay each element of a composite hourly rate is itself a contravention of the award. Alternatively, it may be apparent from an award that there is but a single obligation in respect of each hour of work with the amount to be paid derived from two or more provisions in the award. It is also possible that an award which provides for two or more entitlements may indicate that the obligation to pay the first is subsumed by the obligation to pay the second.
183 For these reasons, I consider that the present issue is to be resolved by regard to the terms of the CS Award, and not by reference to s 577, or to the terms of the awards considered in City of Altona, McIver or Kelly v Fitzpatrick.
184 Clause 16 of the CS Award is foundational. It stipulates the minimum hourly rate as follows:
An employer must pay full-time employees minimum weekly wages for ordinary hours (exclusive of penalties and allowances) as follows …
Clause 16 then goes on to specify both a minimum weekly and a minimum hourly rate.
185 Other provisions in the Award contain references to these minimum rates. It is important in my opinion to pay close attention to the manner in which they do so. Clauses 27.2 and 27.3 provide in respect of weekend penalties and public holiday work:
27.2 Weekend Penalties
(a) Saturday work
For all hours worked between midnight Friday and midnight Saturday, an employee will be paid time and one half of the ordinary hourly rate for their classification.
(b) Sunday work
For all hours worked between midnight Saturday and midnight Sunday, an employee will be paid double the ordinary hourly rate for their classification.
27.3 Public holiday work
For all hours worked on public holidays an employee will be paid double time and one half of the ordinary hourly rate for their classification.
186 In respect of overtime, cl 28 provides as follows:
28.2 Overtime, worked from midnight Sunday to midnight Saturday will be paid at the rate of time and a half for the first two hours and double time thereafter.
28.3 Overtime worked on Sundays will be made at the rate of double time.
28.4 Overtime worked on Public holidays will be paid at the rate of double time and one half.
187 As can be seen, these clauses require payment of a specified rate (time and half, double time and double time and a half, as the case may be). Their effect is to prescribe the award obligation in respect of each hour worked on a weekend, a public holiday and in overtime. The obligation imposed by cl 16 is, on its own terms, inapplicable to work in these hours, as it applies only to work in ordinary hours. Clause 16 is relevant only to the extent that it indicates the amount of one integer in the calculation of the obligations imposed by cll 27 and 28.
188 In these circumstances, I consider that the obligations imposed by cll 16, 27 and 28 of the CS Award should not be regarded as separate and distinct obligations, each of which can be contravened simultaneously, or in respect of the same hour of work.
189 The position with respect to the casual loading for which cl 12.5(a) provides, is different. For convenience I set that clause out again.
Casual employees will be paid, in addition to the ordinary hourly rates and rates payable for shift and weekend work that apply to full-time employees, an additional loading of 25% of the ordinary hourly rate for the classification under which they are employed.
190 The structure of cl 12.5(a) is to require an employer to make a payment which is additional to the amount which cl 16 requires. That is to say, cll 12.5(a) and 16 impose cumulative obligations. This is indicated by the specification that the casual loading is to be paid "in addition to" the hourly rate which is "payable". This terminology is suggestive of separate and distinct obligations operating simultaneously.
191 Accordingly, in respect of casual employees, I conclude that an employer may contravene the term of the CS Award which imposes the obligation to pay the ordinary time rate, a weekend penalty rate, a public holiday penalty rate, and an overtime rate, as the case may be, on the one hand, and the applicable casual rate, on the other. However, in relation to full-time employees, an employer may contravene only that term which imposes the liability to pay the greatest amount to the employee for the hour of work in question.
192 In respect of the Casual Employees, I consider that there should be declarations that South Jin contravened cl 16 by failing to pay the applicable ordinary time hourly rate and separate declarations that it contravened cl 12.5(a) by failing to pay the applicable casual loading.
193 In respect of the Full-time Employees, there should be declarations that South Jin contravened the term imposing the highest hourly rate applicable from time to time to each employee's work.