Fair Work Ombudsman v Tiger Telco Pty Ltd

Federal Court of Australia|2012-05-09|Before: Bromberg J

In or about May 2010 the second respondent contravened s 44(1) of the Fair Work Act 2009 (Cth) by being involved in the failure of the first respondent to return Michelle Jorgensen to her pre-parental leave position of full time Store Manager of the first respondent's Corio store, in contravention of s 84 of the Fair Work Act 2009 (Cth).

In or about May 2010 the second respondent contravened s 44(1) of the Fair Work Act 2009 (Cth) by being involved in the first respondent's failure to take all reasonable steps to give Michelle Jorgensen information about, and an opportunity to discuss, the effect on her pre-parental leave position of the first respondent's decision to appoint another person as the permanent Store Manager of its Corio store, in contravention of s 83 of the Fair Work Act 2009 (Cth).

In or about May 2010 the second respondent contravened s 351(1) of the Fair Work Act, by being involved in the first respondent discriminating between Michelle Jorgensen and another employee, when appointing the other employee as the Store Manager of its Corio Store, and when attempting to transfer Michelle Jorgensen to alternative and more distant Store Manger positions, because of her pregnancy and/or her family or carer's responsibilities.

A penalty of $5,940 be imposed on the second respondent for engaging in conduct in contravention of ss 44(1) and 351(1) of the Fair Work Act 2009 (Cth).
The penalty referred to in order 1 be paid to Michelle Jorgensen within sixty days of the making of these orders.
The proceeding be otherwise dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1147 of 2010

AND: TIGER TELCO PTY LTD (IN LIQUIDATION)(ACN 119 342 371)

JUDGE: BROMBERG J DATE: 9 MAY 2012 PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 This proceeding is brought by the Fair Work Ombudsman ("FWO"). The FWO seeks the making of declarations, and the imposition of a civil penalty upon the second respondent ("Ramadan"). Ramadan was, at all relevant times, the Managing Director and Company Secretary of the first respondent ("Tiger Telco"). 2 At all relevant times, Tiger Telco carried on a mobile telephone business under the trading name Mo's Mobiles. Although served with a copy of the FWO's application, Tiger Telco has not participated in these proceedings. The corporation went into liquidation on or about 1 March 2011. Section 500(2) of the Corporations Act 2001 (Cth) has the effect that any proceeding against a company in liquidation is stayed. No orders are sought against Tiger Telco by the FWO. 3 The FWO and Ramadan filed a joint Statement of Agreed Facts. They contend that on the facts before the Court, findings can be made that Tiger Telco engaged in conduct which contravened ss 44(1) and 351(1) of the Fair Work Act 2009 (Cth) ("Fair Work Act"). Ramadan concedes that he was involved in that conduct and that he contravened ss 44(1) and 351(1) of the Fair Work Act. 4 The conduct which the FWO and Ramadan agree resulted in these contraventions, involved the failure to return Michelle Jorgensen ("Jorgensen"), an employee of Tiger Telco on parental leave, to her pre-parental leave position, and to consult with her when appointing another employee into that position. 5 The FWO and Ramadan also filed a Joint Submission on Penalty. They propose that a penalty of $5,940 be imposed on Ramadan and that the Court make declarations declaring that Ramadan was involved in the contraventions which I have earlier identified. They also propose that any penalty imposed be paid to Jorgensen. 6 Whilst I am aided by the agreement of the parties as to the facts and as to penalty, I need nevertheless be satisfied that there were contraventions by Ramadan as alleged and that, if so, the proposed penalty and declarations are appropriate. 7 For the reasons that follow, I am satisfied that Ramadan contravened ss 44(1) and 351(1) of the Fair Work Act, that the imposition of a penalty of $5,940 should be imposed by the Court and that the declarations in similar terms to those proposed should be made. I am also satisfied that Ramadan should pay the penalty to Jorgensen.

THE RELEVANT LEGISLATIVE PROVISIONS 8 Section 44(1) of the Fair Work Act provides that an employer must not contravene a provision of the National Employment Standards. The National Employment Standards are minimum standards that apply to the employment of employees covered by the Fair Work Act. Those minimum standards are identified by s 61(2) of the Fair Work Act and include the parental leave and related entitlements set out in Division 5 of Part 2-2 of the Fair Work Act. Division 5 of that Part includes ss 83 and 84. 9 Section 83 is headed "Consultation with Employee on Unpaid Parental Leave" and provides: (1) If: (a) an employee is on unpaid parental leave; and (b) the employee's employer makes a decision that will have a significant effect on the status, pay or location of the employee's pre-parental leave position the employer must take all reasonable steps to give the employee information about, and an opportunity to discuss, the effect of the decision on that position. (2) The employee's pre-parental leave position is: (a) unless paragraph (b) applies, the position the employee held before starting the unpaid parental leave; or (b) if, before starting the unpaid parental leave, the employee: (i) was transferred to a safe job because of her pregnancy; or (ii) reduced her working hours due to her pregnancy; the position the employee held immediately before that transfer or reduction. 10 Section 84 is headed "Return to Work Guarantee" and provides: On ending unpaid parental leave, an employee is entitled to return to: (a) the employee's pre-parental leave position; or (b) if that position no longer exists - an available position for which the employee is qualified and suited nearest in status and pay to the pre-parental leave position. 11 Section 351 is headed "Discrimination" and s 351(1) provides that: An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person's race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin. 12 Section 539(2) of the Fair Work Act provides that the maximum penalty for a contravention of s 44(1) or 351(1) is 60 penalty units. Pursuant to s 12 "penalty unit" has the meaning given by s 4AA of the Crimes Act 1914 (Cth) which, in turn, provides that one penalty unit equals $110. Accordingly, the maximum penalty for a contravention of s 44(1) or 351(1) of the Fair Work Act is $6,600.

FACTS BEFORE THE COURT 13 A helpful summary of the factual background to the admitted contraventions of Ramadan is set out in the Joint Submission on Penalty and, with minor adaptation, the summary is as follows: (a) Ramadan was the managing director of Tiger Telco and was involved in its day-to-day operation and in the overall direction, supervision and management of its operations. (b) Jorgensen was employed by Tiger Telco as the full time store manager of its Corio store from around May 2007 to on or about 1 June 2010. The Corio store was located approximately 1.9 kilometres from Jorgensen's home. (c) In or around October 2008 Jorgensen became pregnant. On or about 10 July 2009 she gave birth to a child for whom she has family and carer's responsibilities. (d) From on or about 30 March 2009, Jorgensen worked reduced hours of 32 hours per week due to her pregnancy. (e) Jorgensen took unpaid parental leave from 1 June 2009. (f) Leniece Mannisto ("Mannisto") was appointed acting store manager of the Corio store during Jorgensen's absence on parental leave. (g) In or around March and April 2010 Jorgensen attempted to contact Daniel Dib, Retail Sales Manager of Tiger Telco, and Ramadan to discuss her early return to work. For some weeks her calls to Ramadan were not returned. Eventually Jorgensen and Ramadan spoke in late April 2010. Jorgensen told Ramadan that she wished to return to work early and that she was interested in performing a different role if possible. Ramadan responded by informing Jorgensen that he would look into whether a different role could be created for her. In a later conversation in April 2010, Ramadan offered Jorgensen the position of store manager of the Watergardens store in Taylors Lakes located approximately 75.7 kilometres from Jorgensen's home. They arranged to meet on 7 May 2010. (h) On 7 May 2010 Jorgensen met Ramadan at a cafÉ in Corio to discuss her return to work. She told him that she did not want to work as store manager of the Watergardens store. She raised the possibility of taking up a different and more senior position involving a roving training role. (i) Later on 7 May 2010 Jorgensen met Ramadan, Gary Allwood ("Allwood"), the General Manager of Tiger Telco and Kylie Johns ("Johns"), the newly appointed Area Manager for Tiger Telco at another cafÉ in Corio to further discuss her return to work. Jorgensen outlined her proposal for a roving training role and stated that if a different position was not available then she wanted to return to the Corio store as store manager. (j) Also on 7 May 2010, Tiger Telco appointed Mannisto as store manager of the Corio store on a permanent basis. This occurred in a face to face meeting in Corio between Ramadan, Johns, Allwood and Mannisto. This appointment had a significant effect on the status, pay and location of Jorgensen's pre-parental leave position. No representative of Tiger Telco told Jorgenson about this decision, offered to discuss its possible effect with her or consulted with her before implementing the decision. (k) Ramadan sent an email to Jorgensen on 13 May 2010, advising that he could not agree to offer her a roving training role because of the additional cost. Instead he offered her the position of store manager of the Airport West store, located 71.4 kilometres from Jorgensen's home. (l) Jorgensen responded by email, expressing her disappointment at the outcome of their meeting. She stated that she would return to her pre-parental leave position of store manager of the Corio store and that she was entitled to return to the same position at the same location. (m) Ramadan sent Jorgensen an email later that day, to the effect that he was not required to offer her the same position as when she commenced parental leave, and that he was required to offer her the same position but it need not be at the same location. He again offered her the position of store manager of the Airport West store at her previous salary, commencing on 17 May 2010. (n) Their respective positions were reiterated without change in various communications over the following 10 days. On 24 May 2010 Jorgensen sent an email to Ramadan to the effect that she could not accept the store manager position at Airport West due to her family responsibilities and he should make a final decision about her returning to the Corio store. Ramadan did not respond to the substance of Jorgensen's email. (o) Ramadan, on behalf of Tiger Telco, agreed that Jorgensen could reduce her period of parental leave. (p) At the end of Jorgensen's parental leave, Tiger Telco did not return her to her pre-parental leave position of full time store manager of the Corio store. (q) Jorgensen's employment with Tiger Telco came to an end on or about 1 June 2010 in circumstances where Tiger Telco had not returned her to her pre-parental leave position at the end of her unpaid parental leave and had made her continued employment conditional on transferring to alternative and more distant positions at other stores. 14 On the basis of the facts contained in the Statement of Agreed Facts, I am satisfied that, at all relevant times, Tiger Telco was a constitutional corporation, within the meaning of s 12 of the Fair Work Act, which employed employees. I am also satisfied that Tiger Telco was an employer of employees in Victoria. On that basis, I am satisfied that Tiger Telco was, by reason of the provisions of ss 14 and 30D of the Fair Work Act, a national system employer and bound to observe s 44(1) of the Fair Work Act. I am also satisfied that as an employer, Tiger Telco was bound to observe the requirements of s 351 of the Fair Work Act. 15 Furthermore, the agreed facts include the further facts that at all relevant times, Ramadan was acting as an officer, employee and agent of Tiger Telco. By reason of the contravention of s 351 admitted by Ramadan in the Statement of Agreed Facts, I would infer that Ramadan admits that: he made the decision not to return Jorgensen to her pre-parental position and did so for reasons including Jorgensen's pregnancy and/or her family and carer's responsibilities. he made the decision to appoint Mannisto as the permanent Store Manager of the Corio store and attempted to transfer Jorgensen to the more distant positions of Store Manager of the Watergarden's store and then the Airport West store and did so for reasons including Jorgensen's pregnancy and/or her family and carer's responsibilities.

CONTRAVENTIONS OF THE FAIR WORK ACT 16 On the facts before me, I am satisfied that the conduct in which Tiger Telco engaged, as summarised above, involved: (a) a contravention of s 44(1) of the Fair Work Act, by contravening s 84 of the Fair Work Act by reason of the failure to return Jorgensen to her pre-parental leave position; (b) a contravention of s 44(1) of the Fair Work Act, by contravening the requirement in s 83 of the Fair Work Act by reason of a failure to take all reasonable steps to give Jorgensen information about, and an opportunity to discuss, the effect on her pre-parental leave position of Tiger Telco's decision to appoint Mannisto as permanent store manager of the Corio store; (c) a contravention of s 351(1) of the Fair Work Act, by injuring Jorgensen in her employment and/or altering her position to her prejudice by not returning her to her pre-parental leave position of store manager of the Corio store at the end of her parental leave, because of her pregnancy and/or her family and carer's responsibilities; and (d) a contravention of s 351(1) of the Fair Work Act, by discriminating between Jorgensen and Mannisto, when appointing Mannisto as permanent store manager of the Corio store, and when attempting to transfer Ms Jorgensen to alternative and more distant Store Manager positions at the Watergardens store and then the Airport West store, because of Jorgensen's pregnancy and/or her family or carers responsibilities. 17 Ramadan admits that he was knowingly concerned in or a party to each of these contraventions. By the operation of s 550 of the Fair Work Act, I am satisfied that Ramadan has committed each of the four contraventions described in [16] above.

RELEVANT PRINCIPLES FOR DETERMINING PENALTY 18 The relevant principles to be applied in an assessment of an appropriate penalty to be imposed in a case like the present case, have been discussed at length by this Court and need not be fully canvassed again here: See Stuart- Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 at [40] (Tracey J); Temple v Powell (2008) 169 FCR 169 at [56]-[78] (Dowsett J); Cahill v Construction, Forestry, Mining and Energy Union (No 4) [2009] FCA 1040 at [9]-[10] (Kenny J). 19 A summary of the considerations that the Court may take into account is set out in Stuart-Mahoney at [40] as follows: • The nature and extent of the conduct which led to the breaches. • The circumstances in which that relevant conduct took place. • The nature and extent of any loss or damage sustained as a result of the breaches. • Whether there had been similar previous conduct by the respondent. • Whether the breaches were properly distinct or arose out of the one course of conduct. • The size of the business enterprise involved. • Whether or not the breaches were deliberate. • Whether senior management was involved in the breaches. • Whether the party committing the breach had exhibited contrition. • Whether the party committing the breach had taken corrective action. • Whether the party committing the breach had cooperated with the enforcement authorities. • The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. • The need for specific and general deterrence. 20 The following principles should also inform the exercise of the Court's discretion: (a) Proportionality: that any penalty imposed should not exceed that which is appropriate or proportionate to the gravity of the contravention found proven in the light of its objective circumstances: Hoare v the Queen (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ). See also Veen v The Queen (No 1) (1979) 143 CLR 458 at 467-468 (Stephen J) and 482-483 (Jacobs J) and 495 (Murphy J); Veen v The Queen (No 2) (1988) 164 CLR 465 at 472 (Mason CJ, Brennan, Dawson and Toohey JJ), 485-486 (Wilson J), 490-491(Deane J) and 496 (Gaudron J). (b) Parsimony: the Court must ensure that it imposes the minimum term consistent with the attainment of the relevant purposes of sentences taking care that the punishment is only for the crimes before the court: R v Valentini (1980) 48 FLR 416 at 420 (Bowen CJ, Muirhead and Evatt JJ). (c) Penalty maximum: that the maximum penalty should be reserved for the worst type of contravention: Veen v The Queen (No 2) at 478 (Mason CJ, Brennan, Dawson and Toohey JJ); Stuart v Construction, Forestry, Mining and Energy Union (2010) 185 FCR 308 at [30] (Moore J). 21 As the parties have proposed an agreed penalty, the relevant question for the Court is whether that agreed penalty is "appropriate in all the circumstances": Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] (Branson, Sackville and Gyles JJ) where the Full Court adopted the reasoning of Burchett and Kiefel JJ (with whom Carr J agreed) in NW Frozen Foods Pty Ltd v ACCC (1996) 71 FCR 285 at 298-299. 22 In Mobil at [51], the Full Court listed the principles enunciated in NW Frozen Foods including that: it is the Court's responsibility to determine the appropriate penalty; determining the quantum of a penalty is not an exact science; there is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy; the view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty; in determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case; where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so in the circumstances of the case; where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement; the question is whether that figure is, in the Court's view, appropriate in the circumstances of the case; in answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure; and it will be appropriate if within the 'permissible range'. 23 The 'permissible range' of penalties refers to that range that would be permitted by the court, which is neither manifestly inadequate nor manifestly excessive. Only where the agreed penalty falls outside the permissible range should the court depart from the figure agreed by the parties: Wells v Locano Management Pty Ltd [2008] FCA 1034 at [23] (Jessup J); Ponzio v B & P Caelli Constructions (2007) 158 FCR 543 at [129] (Jessup J) and Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556 at [68] (Tracey J).

Grouping of contraventions 24 Section 557(1) of the Fair Work Act provides that where two or more breaches of a term of a relevant civil remedy provision are committed by the same person, and the breaches arose out of a course of conduct by the person, the breaches are taken to constitute a single breach of the provision. The relevant civil remedy provisions include s 44(1) but do not include s 351(1). It is also open to the court to group separate contraventions together where the contraventions may be said to overlap or involve the potential punishment for the same or substantially similar conduct: Pearce v R (1998) 194 CLR 610 at [40] (McHugh, Hayne and Callinan JJ), Johnson v R (2004) 205 ALR 346 at [27] - [34] (Gummow, Callinan and Heydon JJ) and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [46], [71] and [72] (Graham J) and [93] (Buchanan J). 25 I am satisfied that grouping is appropriate in this case, and that the contraventions of Ramadan could be grouped, as suggested by the parties, as falling into two categories. Firstly, a failure to consult Jorgensen which would encompass the contravention described at (b) of [16]. Secondly, a failure to return Jorgensen to her pre-parental leave position, which would encompass the contraventions described in (a), (c) and (d) of [16].

THE APPROPRIATE PENALTY 26 I have considered the relevant principles and the applicable considerations for determining an appropriate penalty including the appropriateness of grouping the contraventions. The contraventions in this case represent a failure to provide basic and important conditions and entitlements under the Fair Work Act to an employee seeking to return to work from parental leave. Ramadan's conduct demonstrated his lack of understanding of Tiger Telco's statutory obligations in respect of Jorgensen's right to return to her pre-parental leave position and to be consulted in respect of any significant changes to it. 27 As a result of the contravening conduct Jorgensen's employment with Tiger Telco ended on or about 1 June 2010, and as a consequence, Ms Jorgensen suffered economic loss of $12,9750. 28 There was no evidence before me of any prior contravention of workplace laws by Ramadan. 29 There was also no evidence before me that Tiger Telco or Ramadan deliberately set out to breach the Fair Work Act. 30 Ramadan has accepted wrongdoing, including by making the admissions in respect of the contraventions which I have found. Those admissions avoided the need for the parties to prepare for and conduct a contested liability hearing involving the time and resources of the Court and of a public regulatory authority. From a public policy perspective, such cooperative conduct by a party in forging a pre-trial agreement should be regarded as beneficial: Wells v Locano at [23] (Jessup J). 31 Ramadan also cooperated with the FWO during its investigations. Further, Ramadan has shown contrition by apologising to Jorgensen. 32 I have taken into account the need for both general and specific deterrence. As a measure of general deterrence, a penalty should be imposed at a meaningful level so as to deter other employers from committing similar contraventions. In relation to specific deterrence, the penalty imposed should reinforce to Ramadan that failing to comply with the Fair Work Act will not be tolerated. 33 I am satisfied that the proposed penalty of $5,940 is within the 'permissible range' as an appropriate penalty for the contraventions which I have found. Such a penalty is neither manifestly inadequate nor manifestly excessive and as it falls within what I consider to be the permissible range. I do not consider that I should depart from the penalty proposed by the parties. 34 The parties have also proposed that the agreed penalty be paid directly to Jorgensen. Section 546(3) of the Fair Work Act empowers the Court to make such an order. Given that Jorgensen has suffered economic loss arising from the contraventions and that such loss is unlikely to be recoverable from her former employer in liquidation, I consider that the payment of the penalty to her is appropriate including because the amount in question will not provide a 'windfall': Hill v Sutton [2007] FCA 2033 at [14] - [16] (Tracey J); Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [45] (Gray J).

DECLARATIONS 35 I am satisfied that it is appropriate for declarations to be made in the form proposed by the parties, with some minor amendments. 36 The declarations sought will have educative utility and serve the public interest: Australian Competition and Consumer Commission v Yellowpage Marketing BV (No 2) [2011] FCA 352 at [68], [69] (Gordon J).

DISPOSITION 37 I will make the declarations sought, and order that a penalty of $5,940 be imposed on Ramadan. I will further order that the penalty be paid to Jorgensen within sixty days of the making of these orders. The FWO has not sought its costs, presumably because of the restrictions imposed by s 570 of the Fair Work Act. There will be no order as to costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

Fair Work Act 2009(Cth)ss 44(1), 351(1), 61(2), 83, 84, 539(2), 14, 30D, 550, 557(1), 546(3)

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