Disclosure of purpose
35 A valid notice under s 712 of the Act must also specify the purpose for which that notice has been issued. The statutory "purpose" of a notice was considered in Thorson v Pine (No 1), Thorson v Pine (No 2), Aurora, Alfred and Lam. (Marshall J in Thorson v Pine (No 2) also referred to the "sub-purposes" of the notice in that case.) Similarly, in Bannerman and Baxt, the Full Court, borrowing from the terms of s 155(1) of the Trade Practices Act 1974 (Cth) (which was in question in those cases), referred to the "matter" that is said to constitute, or may constitute, a contravention of that Act. Bromberg J referred to a "matter" in the relevant test in Lam at [27(b)(ii)] (as paraphrased above at [22]), and also equated this to "the particular inquiry as to non-compliance". Although Bromberg J's test did not designate the identification of the statutory purpose as a separate limb of the test, to do so is necessary in order to determine whether the notice has adequately disclosed the relationship between the documents required and the statutory purpose of the notice: see Thorson v Pine (No 2) at [36].
36 The reason why the "purpose" of a statutory notice to produce documents must be adequately disclosed to the notice recipient was explained by Bowen CJ and Neaves J in Bannerman at 584 (in the context of a notice given by the Chairman of the Trade Practices Commission under the Trade Practices Act 1974 (Cth)):
The requirement that a notice under sub-section 155(1) identify the matter that constitutes, or may constitute, a contravention of the Act has a twofold purpose. First it is necessary that the notice disclose on its face that it is an exercise of the power which the subsection confers. That power depends upon the existence, objectively determined, of a "matter", in the sense in which that expression has been explained in earlier decisions of the court, that constitutes, or may constitute, a contravention of the Act and a belief in the person issuing the notice that the recipient is capable of furnishing information or producing documents relating to the matter so identified. Secondly, the identification of the matter that constitutes, or may constitute, a contravention of the Act provides for the recipient the point of reference by which to judge whether the notice validly requires the specified information to be furnished or the specified documents to be produced. It will only validly do so if the information and the documents specified in the notice can be seen, from the face of the notice itself, to be information or documents that relate to a matter of the kind described in the subsection and identified in the notice.
See, relatedly, Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd [1979] HCA 67; 143 CLR 499 at 525 per Gibbs ACJ and Aurora at [87] per Kaye JA. In a different context (the specification of a criminal offence in a warrant to search), see Smethurst v Commissioner of Police [2020] HCA 14 at [30] per Kiefel CJ, Bell and Keane JJ.
37 The Notice in the present case states in its opening paragraph that the request for documents is "in respect of United's compliance with its responsibility as a franchisor entity pursuant to section 558B of the Act". (And, in this regard, the Notice continues to explain Inspector Paul's belief that United is a "responsible franchisor entity".) The invocation of s 558B is repeated throughout the Notice. In particular, the Notice expresses the following:
RATIONALE FOR THE RECORDS OR DOCUMENTS SOUGHT
The records and/or documents below are required to determine whether United has contravened section 558B of the Act; specifically, whether United, as a responsible franchisor entity, or an officer of United (within the meaning of section 9 of the Corporations Act 2001 (Cth)):
(a) knew, or could reasonably be expected to have known, that the contraventions by Parashar's would occur; or
(b) at the time of the contraventions by Parashar's, knew or could reasonably be expected to have known that a contravention by Parashar's of the same or similar character was likely to occur.
38 Thus, the overarching purpose of Inspector Paul issuing the Notice is to investigate whether United has contravened its obligations under s 558B of the Act. That much is certain.
39 As s 558B of the Act is a mode of secondary liability (which is contingent on there being a primary contravention by a "franchisee entity"), the Notice explains that the primary contravention is said to have been committed by one of United's franchisees - Parashar's. The Notice provides some background to the primary contraventions of Parashar's found by Inspector Paul:
NON-COMPLIANCE WITH COMMONWEAL TH WORKPLACE LAWS BY PARASHAR'S
I am investigating United's compliance with its responsibility as a responsible franchisor entity pursuant to section 558B of the Act, following my separate investigation into a complaint made by Siddhartha Pathak (Mr Pathak), a former employee of Parashar's who performed work for Parashar's during the period from 22 October 2017 to 14 January 2018.
During my separate investigation into the complaint made by Mr Pathak, I have assessed Parashar's compliance with the following provisions of the Act:
(a) section 44: compliance with the National Employment Standards;
(b) section 45: compliance with a Modern Award, specifically the Vehicle, Manufacturing, Repair, Services and Retail Award 2010 (Vehicle Award):
(c) section 535: compliance with employer obligations in relation to employee records;
(d) section 536: compliance with employer obligations in relation to pay slips; and
(e) section 550: determining if any individuals were involved in the above contraventions of Parashar's.
As a result of the above investigation, I have made findings that Parashar's has contravened some provisions of the Vehicle Award, the Act and the Fair Work Regulations 2009 (Cth) (Regulations).
40 Each of the first four statutory provisions listed in this section of the Notice - ss 44, 45, 535 and 536 of the Act - are civil remedy provisions that are eligible primary contraventions for the purposes of secondary liability under s 558B: see s 558B(7).
41 Based on the analysis thus far, the Notice is, from a high-level view, addressing the topics necessary to identify the matter underlying the request under the Notice. However, the problem for the validity of the Notice is that it fails to provide the necessary detail as to the nature of the primary contraventions by Parashar's. To explain this, let us step into the shoes of United.
42 At the time of receiving the Notice, United was evidently aware of Parashar's; there is a "Commission Agency Agreement" (amongst other arrangements) between those two parties: see para 4.1 of the Agreed Facts (as extracted above at [16]). The extent of United's knowledge (prior to receiving the Notice) about the nature of Inspector Paul's investigation into Parashar's (and when United first learned that information) is not precisely clear from the Agreed Facts. However, in any event, United's subjective knowledge about the content of that investigation is not relevant to assessing the validity of the Notice. This is because the Notice must sufficiently describe its statutory purpose in its own terms; it is insufficient for the Notice to obliquely rely on the existence of extraneous information to establish its own validity. As Heerey J explained in Thorson v Pine (No 1) at [8] (in the context of a notice issued under s 86(1A)(c) of the Workplace Relations Act 1996 (Cth) (Workplace Relations Act)):
It is not to the point that the recipient may suspect that the inspector has in mind some particular award or agreement or requirement of the Act. Nor is it any answer that subsequent to the issue of the notice the inspector has provided information as to what she has in mind. This is a question of validity. The notice when issued is either valid or it is not. This is a matter of legal power.
43 As a starting point, the terms of s 558B of the Act are clear. By reading the Notice, United can understand, at least from a high level, what Inspector Paul is seeking to do: investigate United's compliance with that statutory provision. United can moreover discern from the Notice that Inspector Paul conducted an investigation into Parashar's compliance with, relevantly, ss 44, 45, 535 and 536 of the Act. United can also infer that these matters are somehow connected to the complaint made by Mr Pathak in relation to his employment at Parashar's between 22 October 2017 and 14 January 2018. However, without more, these disclosures are insufficient for two reasons.
44 First, the list of relevant statutory provisions in the Notice - ss 44, 45, 535 and 536 - are only the statutory provisions in respect of which Inspector Paul investigated Parashar's compliance. The Notice does not state that Inspector Paul, having conducted the investigation, found Parashar's to have contravened those particular provisions. Rather, the Notice states that "[a]s a result of the above investigation, I have made findings that Parashar's has contravened some provisions of the Vehicle Award, the Act and the Fair Work Regulations 2009 (Cth)" (emphasis added). There is no particularisation of the particular provisions which Parashar's contravened. (And, as a sidenote, a breach of the Regulations by a franchisee is not a form of contravention for which a franchisor may be held liable under s 558B: s 558B(7)). Thus, to paraphrase Logan J in Alfred at [24], the description of Parashar's contraventions is set at such a level of generality as to make it impossible, reasonably, to ascertain the matter to which production of the specified documents relates.
45 This analysis is consistent with that undertaken by Bromberg J in relation to the statutory notice in Lam. In that case, the notice issued by the inspector - Mr Lam - under s 712(1) of the Act specified that the purpose of production of the specified documents was to determine "whether the [Act] is being or has been complied with, specifically Part 3-3 (compliance with industrial action provisions). His Honour noted at [32]-[33] that Pt 3-3 of the Act contained 11 provisions and that, although each of the provisions had some connection with the taking of industrial action, their nature was disparate.
46 Bromberg J concluded as follows (at [34]) in relation to the specificity of the notice's purpose:
The failure of Mr Lam to expressly identify the particular provisions that founded his compliance inquiry may have been overcome if the notice had made the nature of the suspected contraventions discernible. However, the notice's reference to Pt 3-3 in the context of the disparity of the subjects addressed by the civil penalty provisions in that Part, makes it difficult to discern from the face of the notice, the nature of the suspected contravention or contraventions and thus the particular provision or provisions in Pt 3-3 that provide the foundation for the notice's requirement that particular documents be produced.
47 Second, and relatedly, even if the list of relevant statutory provisions did form the primary contraventions determined by Inspector Paul, the references to ss 44 and 45 of the Act are, by themselves, unhelpful. For reference, those provisions relevantly provide as follows:
44 Contravening the National Employment Standards
(1) An employer must not contravene a provision of the National Employment Standards.
…
45 Contravening a modern award
A person must not contravene a term of a modern award.
48 It can be seen that these statutory provisions simply declare that the relevant person (in this case, Parashar's) must not breach the terms of another source: see Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62; 221 FCR 153 at [13] per North, Flick and Jagot JJ. And, relevantly for current purposes, the National Employment Standards and the relevant modern award in the present case are not brief.
49 The National Employment Standards, as referred to in s 44(1), are set out in Divs 3-12 of Pt 2-2 of the Act: s 61(3) of the Act. As identified in s 61(2), the National Employment Standards relate to the following matters:
(a) maximum weekly hours (Division 3);
(b) requests for flexible working arrangements (Division 4);
(c) parental leave and related entitlements (Division 5);
(d) annual leave (Division 6);
(e) personal/carer's leave, compassionate leave and unpaid family and domestic violence leave (Division 7);
(f) community service leave (Division 8);
(g) long service leave (Division 9);
(h) public holidays (Division 10);
(i) notice of termination and redundancy pay (Division 11);
(j) Fair Work Information Statement (Division 12).
50 Accordingly, a contravention of the National Employment Standards could include, for example (amongst many others), requiring an employee to work beyond the maximum weekly hours (s 62), failing to provide an employee with the appropriate parental leave (s 70), failing to return an employee to an appropriate position upon return from unpaid parental leave (s 84), failing to provide the long service leave to which an employee is entitled (s 113) or failing to pay redundancy pay to an employee where entitled (s 119). The point is that there are many different forms of an employer's conduct that could constitute a contravention of the National Employment Standards.
51 The same analysis applies in relation to a contravention of a modern award for the purposes of s 45 of the Act. In the present case, the relevant modern award is the Vehicle Award. Without descending into detail, that award contains 62 clauses and nine schedules. It specifies a range of obligations broadly relating to salary rates and employee entitlements. By way of example, the obligations under the Vehicle Award relate to matters as diverse as paying an employee's superannuation contributions (cl 25.4) and ensuring that an unpaid tea break does not exceed 15 minutes (cl 26.7). This should demonstrate that, like the National Employment Standards, there are many different forms of conduct by an employer that may constitute the contravention of the Vehicle Award.
52 Given that ss 44(1) and 45 of the Act are, for current purposes, simply conduits to the underlying provisions of the National Employment Standards and the Vehicle Award and that, as demonstrated above, a wide range of conduct may constitute breaches of those underlying provisions, United is not reasonably able to identify the conduct of Parashar's which underpins United's alleged secondary liability under s 558B. Instead, United is, from the face of the Notice, left guessing as to the conduct of Parashar's that is said to breach ss 44(1) and 45 of the Act.
53 The analysis of the Notice above does not gainsay the principle that it will not always be necessary for a valid notice under s 712(1) of the Act to expressly specify the particular provision or provisions to which the inquiry as to non-compliance relates (for which, see Aurora at [92] per Kaye JA and Lam at [30] and [34]). However, an exemption from the notice doing so is only available where there is an alternative manner in which the notice informs the recipient of the nature of the suspected contravention: ibid.
54 In this regard, the Ombudsman relied on the decision of Marshall J in Donnelly v O'Donnell [2005] FCA 1412; 146 IR 434 (Donnelly) in support of the proposition that it was unnecessary for Inspector Paul to identify the particular provisions of the Act, Regulations and Vehicle Award that were the subject of the findings against Parashar's. In that case, a notice was issued under s 86(1A)(c) of the Workplace Relations Act by an inspector in the Commonwealth Department of Employment and Workplace Relations to the National Secretary of the National Union of Workers. The notice specified four purposes (Donnelly at [5]), one of which (referred to in Marshall J's reasons as the "second purpose") was
whether section 170MN of the Act has been observed by; organisations bound by the provision of any certified agreement or s 170MX(3) Award to which the NUW or their related bodies corporate is party, officers or employees of such an organisation acting in that capacity, or employees whose employment is subject to the certified agreement or s 170MX(3) Award … .
55 For context, s 170MN of the Workplace Relations Act, when in operation, relevantly (and broadly) provided that, in respect of certain employment relationships, an organisation of employees was prohibited in certain circumstances from engaging in industrial action for the purpose of supporting or advancing claims against an employer. The application of this prohibition hinged on, amongst other things, the time at which a "certified agreement" or a particular award came into operation. However, the operation of s 170MN was not contingent on there being a breach of those instruments.
56 The notice recipient in Donnelly relevantly argued that the "second purpose" lacked particularity by failing to specify any particular agreements in relation to which the inspector sought to ascertain compliance. To this, Marshall J responded as follows at [16]:
The sub-purpose in mind for Ms O'Donnell to ascertain under this sub-heading is whether a provision of the Act has been breached. The relevant provision, s 170MN, is disclosed in the identification of the purpose. The fact that the particular awards or agreements are not set out does not mean that a relevant purpose is not stated. Had the relevant purpose been to ascertain whether an award or certified agreement had been breached, it would have been expected that the award or agreement be identified for the purpose to be properly stated and conveyed to the recipient of the notice. …
57 Donnelly does not assist the Ombudsman in the present case. The "second purpose" in Donnelly was to investigate whether s 170MN of the Workplace Relations Act was complied with. The notice in Donnelly expressly stated so. And it was not necessary for the notice to also specify a particular breach of the award or certified agreement because the operation of s 170MN was not contingent on such a breach.
58 In the present case, the Notice only states (in broad terms) that Parashar's has contravened the Act, Regulations or the Vehicle Award. The Notice, unlike the notice considered in Donnelly, does not specify that a particular provision has been contravened. And, in respect of ss 44(1) and 45 of the Act, the operation of those provisions, unlike s 170MN of the Workplace Relations Act, is reliant on subsidiary breaches. Moreover, the Notice in the present case does not provide an alternative means (that is, a means other than specifying the particular statutory provisions) by which the purpose of the Notice may be discerned. In particular, the descriptions of the documents requested, although generally centring on the 2018 financial year, are particularly broad. They do not greatly assist United to identify the purpose of the Notice. Ultimately, United is left to speculate.
59 Where a statutory notice is issued to compel the production of documents for the purpose of investigating whether the notice recipient is accessorily or secondarily liable in connection with an actual or suspected primary contravention committed by a third party, it will ordinarily be insufficient, for the purpose of specifying the matter underlying the production of documents, for the notice to simply detail the source of the accessorial or secondary liability, but fail to specify the nature of the primary contravention to which the accessorial or secondary liability is connected. This is because, for the notice to be valid, the notice recipient needs to be informed of the nature of the primary contravention to enable the recipient (and the Court) to assess whether the notice validly required the specified documents to be produced.
60 The Notice in the present case, on a non-technical and fair reading of its terms, failed to adhere to this requirement. United was able to recognise from the face of the Notice that Inspector Paul was investigating United's compliance with s 558B of the Act. A reasonable person in the position of United would have turned to that statutory provision, and seen that liability under that provision depended on, amongst other things, whether:
(a) United (or its officers) knew or could reasonably be expected to have known that the contravention by Parashar's would occur; or
(b) at the time of Parashar's contravention, United (or is officers) knew or could reasonably be expected to have known that a contravention by Parashar's of the same or a similar character was likely to occur.
61 However, without the Notice adequately particularising the nature of Parashar's primary contraventions, a reasonable person in the position of United would be left to speculate as to what Parashar's contravening conduct was, or what a contravention of a "similar conduct" would look like. This means, to paraphrase Bowen CJ and Neaves J in Bannerman, that United was not provided a sufficiently precise point of reference by which to assess whether the Notice validly required the production of the specified documents.