Fair Work Ombudsman v Wongtas Pty Ltd

1. Paragraph 1 of the Amended Defence filed on 15 March 2011 be struck out. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 793 of 2010

JUDGE: COWDROY J DATE: 8 June 2011 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 A separate question of law has arisen in these proceedings and on 23 March 2011 the Court ordered, inter alia, that pursuant to O 29 r 2 of the Federal Court Rules ('the Rules') such question should be determined as a separate question prior to a hearing of the substantive proceedings. 2 The proceedings arise out of a claim by the applicant that the respondents discriminated against an employee, contrary to the provisions of s 340(1)(a) and s 340(1)(b) and of s 340(2) of the Fair Work Act 2009 (Cth) ('the FW Act'); and in breach of s 351(1) of the FW Act and of subregulation 3.42(1) of the Fair Work Regulations 2009 (Cth) ('the Regulations') in relation to the employee's records. 3 The Amended Statement of Claim ('the ASOC') filed on 15 February 2011 seeks declarations of breaches of the above provisions and also seeks penalties in accordance with s 546 of the FW Act. The applicant also seeks an order under s 545(2)(b) of the FW Act that the respondents pay compensation to the employee for losses suffered by her as a result of the contraventions of s 340(1) and/or s 351(1) of the FW Act. 4 The ASOC states that the applicant has the requisite standing and authority pursuant to s 539 of the FW Act to apply for penalties and compensation in relation to contraventions of ss 340(1) and 351(1) of the FW Act. The ASOC claims that the applicant has standing pursuant to subregulation 4.01A(2) of the Regulations to apply for penalties in relation to contraventions of subregulation 3.42(1). 5 An Amended Defence was filed by the respondents on 15 March 2011. The Amended Defence raises the following two questions of law for determination which are the subject of this preliminary hearing: 1. Whether the applicant has standing to bring these proceedings in the absence of a certificate from Fair Work Australia ('FWA') pursuant to s 369 of the FW Act. 2. Whether the claim has been instituted out of time by virtue of s 544 of the FW Act.

Standing of the APPLICANT 6 The respondents submit that the applicant was not entitled to institute these proceedings without first having made an application to FWA to deal with the dispute. The respondents refer to s 365 of the FW Act, which is contained in Part 3-1 thereof and provides: Application for FWA to deal with a dispute If: (a) a person has been dismissed; and (b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part; the person, or the industrial association, may apply to FWA for FWA to deal with the dispute. 7 Section 369 of the FW Act provides: Certificate if dispute not resolved If FWA is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful, FWA must issue a certificate to that effect. 8 The respondents further submit that the applicant should have commenced proceedings with FWA pursuant to s 372 of the FW Act before commencing proceedings in this Court. Section 372 of the FW Act (which is also contained in Part 3-1 thereof) provides: Application for FWA to deal with a dispute If: (a) a person alleges a contravention of this Part; and (b) the person is not entitled to apply to FWA under section 365 for FWA to deal with the dispute; the person may apply to FWA under this section for FWA to deal with the dispute. 9 Section 370 of the FW Act provides: Advice on general protections court application (1) If FWA considers, taking into account all the materials before it, that a general protections court application in relation to the dispute would not have a reasonable prospect of success, it must advise the parties accordingly. (2) A general protections court application is an application to a court under Division 2 of Part 41 for orders in relation to a contravention of this Part. 10 The respondents submit that prior to commencing these proceedings (being described in s 370(1) as a 'General protections court application in relation to the dispute') it was necessary for the applicant to comply with the requirements of s 371(1) and s 371(2) of the FW Act. Sections 371(1) and 371(2) of the FW Act relevantly provide: General protections court applications FWA conference to be held before application (1) A person who is entitled to apply under section 365 to FWA for FWA to deal with a dispute must not make a general protections court application in relation to the dispute unless: (a) FWA has issued a certificate under section 369 in relation to the dispute; or (b) the general protections court application includes an application for an interim injunction. Time for application (2) Despite section 544, a general protections court application that requires a certificate under section 369 must be made within 14 days after the certificate is issued, or within such period as a court allows on an application made during or after those 14 days. 11 In support of the respondents' submission, reference is made to the Explanatory Memorandum ('EM') to the FW Act which the respondents assert may be relied upon pursuant to s 15AB(2)(e) of the Acts Interpretation Act 1901 (Cth) ('the Interpretation Act'). 12 The EM to the FW Act relevantly provides: 1492. Where a person alleges a contravention of Part 3-1 but is not entitled to make an application under clause 365, the person has the option of applying under clause 372 for FWA to deal with the dispute rather than proceeding immediately to a court action. Applications can be made under this clause if, for example, an employee was not dismissed, but suffered a reduction in wages because of the alleged contravention. 1493. … 1494. In cases where an application is made to FWA, the process is broadly the same as for applications under clause 365, except that a conference to deal with the dispute can only be convened by FWA if all parties to the dispute agree to participate (subclause 374(1)). 1495. Where all the parties to the dispute do not agree to participate in an FWA conference, the person alleging a contravention of Part 3-1 can still make an application to the Federal Court or the Federal Magistrates Court under Division 2 of Part 4-1 for orders in relation to the contravention. 1496. An example of where an FWA conference may not be appropriate and where the dispute would instead proceed directly to court is where an inspector is bringing the action and is seeking the imposition of a monetary penalty. 13 The respondents submit that the EM envisages an applicant commencing proceedings in the FWA prior to any proceedings in this Court. The respondents assert that such interpretation is consistent with s 334 of the FW Act. Section 334 of the FW Act is a guide to the operation of Part 3-1 of the FW Act and describes the operation of the various divisions within such part. Section 334 of the FW Act states that Division 8: …deals with compliance. In most cases, a general protections dispute that involves dismissal will be dealt with by a court only if the dispute has not been resolved by FWA. 14 Since no certificate pursuant to s 369 of the FW Act has been issued as required by s 371(1)(a) the respondents submit that the applicant has no standing in the proceedings. 15 The respondents further submit that Part 3-1 of the FW Act makes specific provision concerning the requirement to bring applications to FWA prior to instituting any proceedings in the Court and also imposes time limits. The respondents submit that the general provisions in s 541 [sic - 544] of the FW Act must give way to specific provisions and refers the Court to several authorities in support of this submission: see Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-stock Corporation and Others (No 2) (1980) 29 ALR 333; Effort Shipping Co Ltd v Linden Management SA (the Giannis NK) [1998] 1 All ER 495 at 513; Hoffman v Chief of Army (2004) 137 FCR 520 at 527 and 570-572. 16 The respondents also refer the Court to numerous decisions which consider the interpretation of statutes in support of their submission that the FW Act envisages that applications for contraventions of the FW Act should first be referred to FWA. Those authorities are Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd and Others (2004) 218 CLR 273; Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Others (2003) 130 FCR 524, particularly French J (as he then was) at [33]; K.& S. Lake City Freighters Proprietary Limited v Gordon & Gotch Limited (1985) 157 CLR 309 at 315; Mills v Meeking and Another (1990) 169 CLR 214 at 235; 242-243.

Findings 17 Chapter 3 of the FW Act is entitled 'Rights and Responsibilities of Employees, Employers, Organisations etc'. Part 3-1 of the FW Act is entitled 'General Protections'. Division 8 is entitled 'Compliance' and is within Part 3-1. 18 Section 365 of the FW Act is contained within Subdivision A of Division 8. Such subdivision is entitled 'Contraventions involving dismissal'. Section 372 of the FW Act is contained in Subdivision B of Division 8 and is entitled 'Other Contraventions'. 19 In contrast, Chapter 4 of the FW Act is entitled 'Compliance and Enforcement' and contains provisions for civil remedies in Part 4-1. Division 2 thereof is entitled 'Orders' and Subdivision A thereof is entitled 'Applications for orders'. 20 Section 539 of the FW Act which is contained in Division 2 Subdivision A of Chapter 4 contains the caption 'Applications for orders in relation to contraventions of civil remedy provisions'. Section 539(1) of the FW Act refers to a table ('the table') forming part of s 539(2) and states: A provision referred to in column 1 of an item in the table in subsection (2) is a civil remedy provision. 21 Section 539(2) of the FW Act provides: (2) For each civil remedy provision, the persons referred to in column 2 of the item may, subject to sections 540 and 544 and Subdivision B, apply to the courts referred to in column 3 of the item for orders in relation to a contravention or proposed contravention of the provision, including the maximum penalty referred to in column 4 of the item. 22 Within the table is a section entitled 'Standing jurisdiction and maximum penalties'. Item 11 of such table relates to proceedings brought under Part 3-1 - General Protections and relevantly includes proceedings brought under s 340(1) and s 340(2) and under s 351(1) of the FW Act. As provided by the table, an 'inspector' is one of the persons nominated who may apply to this Court, as well as the person affected by the alleged contravention and that person's industrial organisation. 23 The term 'inspector' is defined in s 12 of the FW Act ('the Dictionary') as a 'Fair Work Inspector'. A Fair Work Inspector is also defined in the Dictionary as follows: "Fair Work Inspector" means: (a) a person appointed as a Fair Work Inspector under section 700; or (b) the Fair Work Ombudsman in his or her capacity as a Fair Work Inspector under section 701. 24 Section 687 of the FW Act makes provision for the appointment of the Fair Work Ombudsman. 25 Section 701 of the FW Act provides: The Fair Work Ombudsman is a Fair Work Inspector by force of this section. 26 Therefore, the applicant, being an inspector, is empowered to institute these proceedings pursuant to s 539(2) of the FW Act. 27 The application presently before the Court is not made under s 365 nor under s 372 of the FW Act. Rather, the proceedings are instituted pursuant to s 539 of the FW Act which expressly permits the institution of proceedings by, inter alia, an inspector. 28 Section 365 of the FW Act does not permit an application to be made by an inspector in respect of a dismissal. Further, s 372 of the FW Act enables an application in respect of 'other contraventions', being contraventions which do not involve dismissal. Accordingly, only the provisions of Part 4-1 empower the applicant to bring proceedings in the present factual circumstances. 29 There is no requirement that where an application is made by an inspector under s 539(2) of the FW Act, a certificate must first be issued under s 369 of the FW Act. The procedure provided by the FW Act to enable an application of the kind now before the Court without first applying to FWA is foreshadowed in the EM at 1492, set out in [12] above. 30 In consequence it follows that the applicant, as the Fair Work Ombudsman, is entitled to bring the proceedings by virtue of s 539(2) of the FW Act in respect of the alleged contravention of s 340(1) and (2) and of s 351(1) of the FW Act without having first submitted the dispute to FWA and without first having obtained a certificate under s 369 of the FW Act. It follows that the respondents' challenge to the standing of the Fair Work Ombudsman is rejected.

Time for institution of proceedings 31 The respondents further submit that the proceedings have been instituted out of time. The applicant submits that as a person listed in column 2 of the table in s 539(2) of the FW Act, the applicant may apply to the Court for orders in relation to a contravention or proposed contravention of ss 340 and 351 of the FW Act. The applicant further submits that the relevant time limit is set out in s 544 of the FW Act. 32 Section 544 of the FW Act (contained in Part 4-1 Division 2) provides: Time limit on applications A person may apply for an order under this Division in relation to a contravention of one of the following only if the application is made within 6 years after the day on which the contravention occurred: (a) a civil remedy provision; (b) a safety net contractual entitlement; (c) an entitlement arising under subsection 542(1). Note 1: This section does not apply in relation to general protections court applications or unlawful termination court applications (see subsections 371(2) and 779(2)). Note 2: For time limits on orders relating to underpayments, see subsection 545(5). 33 The term 'civil remedy provision' is defined in the Dictionary by referring to subsections 539(1) and (3) of the FW Act. 34 Section 366(1) of the FW Act relevantly provides: Time for application (1) An application under section 365 must be made: (a) within 60 days after the dismissal took effect; or (b) within such further period as FWA allows under subsection (2). (2) … 35 Section 371(2) of the FW Act provides: Time for application (2) Despite section 544, a general protections court application that requires a certificate under section 369 must be made within 14 days after the certificate is issued, or within such period as a court allows on an application made during or after those 14 days. 36 A 'general protections court application' is defined in the Dictionary by reference to s 370(2) of the FW Act. Section 370(2) of the FW Act defines such application as one made 'to a court under Division 2 of Part 4-1 for orders in relation to a contravention of this Part'. 37 The respondents submit that both s 371(2) and Note 1 to s 544 ('the Note') apply with the consequence that the present application to the Court is out of time. Further, should such time limits not apply to the applicant, there be no applicable time limits within which the applicant must commence its proceedings and thus the time limitations contained in s 366(1) and in s 371(2) of the FW Act would be rendered otiose. 38 The applicant submits that the Note is not itself part of the FW Act and consistently with s 371(2) of the FW Act, the Note should be read down to mean: A general protections court application that requires a certificate under s 369 must be made within 14 days after the certificate is issued, or within such other period as the court allows on application made under that section.

Finding 39 The proceedings brought by the Fair Work Ombudsman seek civil remedies and are not in respect of a contravention under Part 3-1, Division 8. Accordingly these proceedings satisfy the definition of a 'general protections court application'. Section 544 of the FW Act is clearly intended to provide a time limit of six years in which to bring proceedings in a court, save for those proceedings where a certificate is required under s 369 of the FW Act. For matters where such certificate is required, the proceedings must be commenced within 14 days of the issue of the certificate. This might include the situation where a person dismissed is entitled to apply to FWA under s 365 of the FW Act, and if the dispute remains unresolved, the person may seek the issuance of a s 369 certificate and then proceed to a court. 40 The complicating factor is that the Note appears to indicate that the six year limit prescribed by s 544 does not apply to general protections court applications. However, such a result would be contrary to both the text of s 544 and s 371(2) of the FW Act. As stated above at [35], s 371(2) provides that only general protections court applications which require the submission of a certificate under s 369 must be instituted within 14 days of the issuance of such a certificate. 41 Section 12 of the Interpretation Act provides: Every section of an Act shall have effect as a substantive enactment without introductory words. 42 Section 13(3) of the Interpretation Act relevantly provides: No marginal note, footnote, or end note to an Act, and no heading to a section of an Act, shall be taken to be part of the Act. 43 Pearce and Geddes in 'Statutory Interpretation in Australia' (6th edition) ('Pearce') at [4.48] refer to historic authority which prohibited courts from taking into account notes when interpreting legislation: see for example Re Baldwin (1891) 12 LR (NSW) 128; Sanderson v Fotheringham (1885) 11 VLR 190; Frauenfelder v Reid (1963) 109 CLR 42 at 50; Chandler v Director of Public Prosecutions [1964] AC 763 at 789-790 per Lord Reid. 44 Section 15AB of the Interpretation Act provides that notes, explanatory memoranda and second reading speeches and other relevant extrinsic materials can be used to determine the meaning of a provision where the meaning is 'ambiguous or obscure'. Pearce observes that reference may be made to notes where the meaning of a section is in doubt: see Joyce v Paton (1941) 58 WN (NSW) 88 at 90 (per Street J); see also R v Schildkamp [1971] AC 1 per Lord Reid at 10. It follows that in the present proceedings, the Note could be referred to should there be any doubt concerning the application of s 544 of the FW Act. 45 In Joyce v Paton Street J (as he then was) considered at 89 whether a marginal note could be used to assist in the interpretation of a statutory provision, the interpretation of which 'presents itself as one of considerable difficulty'. The note in question formed no part of the statute. However, his Honour at 90 adopted the observations of Collins MR in Bushell v Hammond [1904] 2 KB 563; 73 LJ KB 1005 in finding that '…although it formed no part of the section it was of some assistance in as much as it showed the drift of the section'. 46 More recent decisions of this Court confirm that extraneous materials may be used to assist in the interpretation of a statute where ambiguity or confusion exists: see for example Evans v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2003) 135 FCR 306 per Kenny J at 319-320; IMF (Australia) Ltd v Sons of Gwalia Ltd (Administrator Appointed) (2005) 143 FCR 274 at 289-290. 47 The terms of s 544 of the FW Act however are clear and unambiguous. Accordingly, the Note should not be interpreted to override the explicit intention of s 544. There is no inconsistency in the statutory text of s 544 but rather the Note is apparently defective or at the very least, misleading. If the Note was amended (as suggested by the applicant) to insert the words 'that requires a certificate under s 369' it would be consistent with s 371(2) of the FW Act. The Note would then read: This section does not apply in relation to general protections court applications or unlawful termination court applications that require a certificate under s 369. 48 So construed, and applying the principle in Project Blue Sky Inc at [69], namely that the 'primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute', the operative provisions of s 544 of the FW Act pose no difficulty. 49 Since the application before the Court does not require a certificate under s 369 of the FW Act, s 371(2) has no application and accordingly the time limit contained in s 371(2) does not apply to the present proceedings.

Choice of Forum 50 The respondents submit that the word 'may' contained in s 365 of the FW Act has the same effect as the word 'may' in s 372 of the FW Act. That is, it provides the person aggrieved, or his or her industrial association the choice of whether to commence proceedings. However, the respondents submit that if the person (or industrial association) decides to institute proceedings the dispute is to be commenced with FWA. 51 The applicant disagrees with the respondents' construction and submits that the word 'may' when used in the above circumstances refers to the option of lodging the dispute with FWA or applying directly to this Court. Under this construction, pursuant to s 372 of the FW Act a person who is barred from lodging a dispute with FWA under s 365 is given the right to seek to bring the matter before FWA or directly to the Court. 52 The Court notes that [1496] of the EM to the FW Act (set out above at [12]) supports the applicant's construction and envisages circumstances where a person, including an inspector, may bring a dispute directly to a court. In the circumstances in which an inspector has no eligibility to the proceedings under Part 3-1, there is no obligation upon the inspector to first lodge a dispute in FWA. 53 So construed, the Court upholds the applicant's submissions concerning the effect of the word 'may' in ss 365 and 372 of the FW Act, namely that the legislature intended to provide the option of where to institute proceedings, not merely whether to institute proceedings at all.

Orders 54 For the above reasons the Court concludes that the applicant has been given the right to commence the present proceedings within a six year limitation period. 55 It follows from the above that there is no basis for the assertions made in paragraph 1 of the respondents' Amended Defence and the Court will order that such pleading be struck out.

Other Issues 56 The applicant has referred the Court to subsidiary issues. It is unnecessary to make any findings upon them in view of the Court's findings made above. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.