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Martin v Fresho Foods Pty Ltd [2009] FMCA 15 (27 January 2009)

Last Updated: 30 January 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MARTIN v FRESHO FOODS PTY LTD

INDUSTRIAL LAW – Continuing operation of State Award after reform commencement date.

INDUSTRIAL LAW – Alleged breach of APCS and NAPSA where business transmitted after reform commencement date – whether provisions apply only to transferring employees.

INDUSTRIAL LAW – Whether named persons were employees of the respondent or independent contractors.

INDUSTRIAL LAW – Alleged breach of clause 28(2) of Schedule 9 to the Workplace Relations Act.

Workplace Relations Act 1996, ss.5, 171, 172, 178, 182, 204, 208, 216, 577, 580, 581, 598, 717, 718, 719 – Schedule 8, clauses 1, 2, 31, 32, 33, 34, 43 - Schedule 9, clauses 1, 4, 19, 28, 31

PP Consultants Pty Ltd v Finance Sector Union of Australia [2000] HCA 59; (2000) 201 CLR 648
Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; (1986) 160 CLR 16
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Country Metropolitan Agency Contracting Services Pty Ltd v Slater (2003) 124 IR 293

Applicant:
SHELBY MARTIN

Respondent:
FRESHO FOODS PTY LTD ACN 120 091 296

File Number:
BRG 747 of 2007

Judgment of:
Wilson FM

Hearing date:
10 March 2008

Date of Last Submission:
10 March 2008

Delivered at:
Brisbane

Delivered on:
27 January 2009

REPRESENTATION

Counsel for the Applicant:
Mr Horneman-Wren

Solicitors for the Applicant:
Corrs Chambers Westgarth

Counsel for the Respondent:
N/A

The Respondent in person:
Mr Pirrottina

ORDERS

(1) It is declared that:
(2) The hearing be adjourned to 10 am on 6 March 2009 to determine what penalty or penalties should be imposed on the Respondent, and what other orders, if any, should be made pursuant to s.719(6) of the Act.
(3) The Applicant shall, within 14 days, prepare a schedule consistent with the Reasons for Judgment setting out the amount of alleged underpayment of wages and non payment of overtime in respect of each of the persons identified in order 1(a) hereof, and shall provide a copy of such schedule to the Respondent.
(4) The Respondent shall, within 14 days of receipt of the said schedule notify the solicitors for the Applicant:
(5) Any further affidavits to be relied on by the Applicant as to the issue of penalty or other monetary orders sought shall be filed and served on or before 20 February 2009.
(6) Any affidavits to be relied on by the respondent as to the issue of penalty or other monetary orders sought shall be filed and served on or before 27 February 2009.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 747 of 2007

SHELBY MARTIN

Applicant


And


FRESHO FOODS PTY LTD ACN 120 091 296

Respondent


REASONS FOR JUDGMENT

  1. The applicant, a senior workplace inspector at the Workplace Ombudsman, seeks orders pursuant to ss.719(1) and (6) Workplace Relations Act 1996 (“the Act”): first, for the imposition of a penalty against the respondent for breaches of an ‘applicable provision’ binding on it, relating to the underpayment of wages and overtime for its employees; and, secondly, for an order requiring the amounts of such underpayment to be paid to the specified employees. The applicant also seeks the imposition of a penalty under clause 31(2) of Schedule 9 to the Act.
  2. The respondent did not contest that the applicant had standing under s.718 of the Act or clause 31(4) of Schedule 9 to the Act to seek the orders in the Amended Application.
  3. The material relied upon by the applicant was:
    1. Application filed 30 August 2007;
    2. Amended Application filed 14 December 2007;
    1. Further Amended Application filed by leave on 10 March 2008;
    1. Affidavit of Shelby Mary Martin filed 30 August 2007;
    2. Affidavit of Steven Leslie Williams filed 14 December 2007;
    3. Affidavit of Shelby Mary Martin filed 17 December 2007;
    4. Affidavit of Alison Kay Bold filed 12 February 2008;
    5. Affidavit of Jamie Ross Odering filed 12 February 2008;
    6. Affidavit of Melvyn Edward Bradford filed 12 February 2008;
    7. Affidavit of Leanne Kym Dorricott filed 12 February 2008;
    8. Affidavit of Caroline Therese O’Connor filed by leave on 10 March 2008.
  4. The respondent filed no affidavit evidence. It was represented at the hearing by Mr Tony Pirrottina, who gave oral evidence and was cross examined. Mr Pirrottina also cross examined some of the applicant’s witnesses. An ASIC search exhibited to the affidavit of Leanne Kym Dorricott confirms that Mr Pirrottina is, and at all relevant times has been, a director of the respondent corporation which carries on the business of ‘Fresho Foods’.
  5. The statutory scheme pursuant to which the applicant seeks relief is, to put it kindly, convoluted. Section 719(1) is deceptively simple. It provides:
  6. There the simplicity ends. It is necessary to follow a labyrinthine path to determine each of the matters in s.719(1) of the Act.
  7. To determine whether the respondent is bound by an applicable provision, it is necessary to go first to s.717 of the Act which defines that term, relevantly for this case as follows:
  8. To determine whether the Australian Fair Pay and Conditions Standard applies to the respondent, it is then necessary to go to Part 7 of the Act. Its purpose is set out in s.171 which provides:
  9. Section 172(1) and (2) of the Act provides:
  10. Because this matter concerns the alleged underpayment of wages and overtime entitlements, it is then necessary to go to Division 2 of Part 7 of the Act. In s.178 an ‘APCS’ is defined to mean a preserved APCS or a new APCS, an acronym for Australian Pay and Classification Scale. The applicant alleges that a preserved APCS is binding on the respondent.
  11. A ‘preserved APCS’ is defined to have the meaning given by s.208(1) of the Act. That section provides:
  12. The term ‘pre-reform wage instrument’ used in s.208(1) of the Act is defined in s.178 to mean, relevantly, a ‘pre-reform non-federal wage instrument’, also a defined term. It means:
  13. In turn, ‘pre-reform State wage instrument’ is defined, relevantly to this application, to mean:
  14. It is alleged in this case that the Jam, Preserve Fruit and Vegetable Processing Award - Southern Division, Eastern District (No. AR22 of 2002) which took effect from 23 December 2002 was a State award applicable to the respondent’s business.
  15. Clause 1.3 of the Award provided:
  16. Clause 1.5 of the Award provided:
  17. The respondent’s admission of paragraph 2 of the applicant’s Notice to Admit Facts and Authenticity of Documents dated 19 February 2008 is sufficient for me to find that, if the business conducted by the respondent was that same as that conducted by the company from which it purchased the business ‘Fresho Foods’ prior to the reform commencement (27 March 2006), the Award was applicable to employees of that business conducted by its former owner.
  18. For reasons that will follow when I come to discuss the Transmission of Business Rules, I conclude that the business now conducted by the respondent is the same as that conducted by the previous proprietor of “Fresho Foods”.
  19. Therefore, the Award was in force immediately before 27 March 2006 for the business of Fresho Foods. The Award was therefore a pre-reform State wage instrument. The Award contains rate provisions as described in s.208(1) of the Act.
  20. There is therefore taken to be a preserved APCS that includes the subject matters identified in s.208(1) of the Act. This is relevant to the claim for underpayment of wages, but not to the claim for non-payment of overtime because the latter matter is not comprehended by s.208(1) of the Act.
  21. The Australian Fair Pay Commission has twice adjusted the APCS, as it is empowered to do by s.216(1) of the Act. The two pay scales effective from 1 December 2006 and 1 October 2007 applicable to the Award were admitted as exhibit 4.
  22. Section 182(1) of the Act provides:
  23. The effect of this review of the statutory provisions enables me to conclude that, if they were properly described as employees, those persons engaged to work by the business ‘Fresho Foods’ prior to the reform commencement date (27 March 2006) were entitled to be paid the periodic rates of pay specified in the Award as adjusted by the Australian Fair Pay Commission.
  24. The intricacies of the statutory scheme do not end there. Because the respondent purchased the business of Fresho Foods after the reform commencement date it is then necessary to go to Part 11 of the Act which prescribes what are described as Transmission of Business Rules. The object of the Part is set out in s.577 as follows:
  25. The respondent has admitted paragraphs 3, 4 and 5 of the applicant’s Notice to Admit Facts and Authenticity of Documents dated 19 February 2008 which sought the admission of the following:
  26. Section 580 of the Act provides:
  27. Section 598(1) of the Act provides:
  28. I have found that employees of T-Jay’s Wholesalers Pty Ltd (the previous owner of Fresho Foods) at the reform commencement date were subject to an APCS. The respondent has admitted that the following persons were employed by T-Jay’s Wholesalers Pty Ltd before the respondent purchased that business:
  29. Section 581(1) of the Act provides:
  30. As a consequence of the admission of paragraph 11(i) of the applicant’s Notice to Admit Facts and Authenticity of Documents, in addition to those persons specified at paragraph 28, James Odering is potentially covered as a transferring employee as he was engaged on or about 11 August 2006, within two months of the respondent’s acquisition of the business of ‘Fresho Foods’.
  31. To determine whether the APCS applies to these identified persons it is necessary to determine:
    1. Whether the respondent became the successor, transmittee or assignee of the whole , or a part, of a business of another person;
    2. If so, whether the persons are employees of the respondent.
  32. To support the submission that there had been a transmittal of the business of Fresho Foods, the applicant relied upon the joint judgment of Gleeson CJ and Gaudron McHugh and Gummow JJ in PP Consultants Pty Ltd v Finance Sector Union of Australia [2000] HCA 59; (2000) 201 CLR 648 at [15]:
  33. The contract for the admitted purchase of the business was called for at the hearing, but not produced. The transfer of lease from T-Jays Wholesalers Pty Ltd to the respondent was put into evidence. The transfer was said to be pursuant to a business contract dated 26 June 2006.
  34. A search of the business name Fresho Foods revealed a change in ownership from T-Jays Wholesale Foods Pty Ltd to the respondent on 14 July 2006. I find that the business was transferred on that date. The ‘transmission period’ is therefore 12 months from this date.
  35. The work carried out by the business did not change after its acquisition by the respondent. Evidence was adduced by the applicant from two workers who were formerly employed by T-Jays Wholesale Foods Pty Ltd and subsequently worked for the respondent.
  36. Melvyn Edward Bradford said at paragraph 8 of his affidavit:
  37. Alison Kay Bold said at paragraph 22 of her affidavit:
  38. At T43/40 Mr Pirrottina accepted that the business that was Fresho Foods was very much the same business after he took it over in terms of what the business actually did. He also accepted that in terms of the work that was performed the workers did pretty much the same work in the business before and after the respondent took it over.
  39. I find that there was the transmission of the business of Fresho Foods from T-Jays Wholesale Foods Pty Ltd to the respondent.
  40. Subsections 5(1) and (2) of the Act provide:
  41. What is ordinarily understood by the term employee is the subject of much judicial authority. It is sufficient to refer to three decisions.
  42. In Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 24 Mason J (with whom Brennan J agreed) said;
  43. Wilson and Dawson JJ said at 35 - 37 :
  44. In Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [39] – [40] in the joint majority judgment it was said:
  45. At [48] – [57] their Honours identified seven matters that led to the conclusion that the bicycle couriers in that case were employees and not independent contractors:
    1. The couriers were not providing skilled labour or labour which required special qualifications;
    2. The couriers had little control over the manner of performing their work;
    1. The couriers were presented to the public and to those using the courier service as emanations of the company that engaged them;
    1. The matter of deterrence;
    2. The company that engaged them supervised the couriers’ finances;
    3. The situation in respect of tools and equipment;
    4. The company retained control of the allocation and direction of the various deliveries.
  46. Counsel for the applicant helpfully referred me to the decision of the Workers’ Compensation Tribunal of South Australia that considered whether a worker engaged as casual tomato picker was an employee, although purportedly engaged as a contractor through a labour hire company: Country Metropolitan Agency Contracting Services Pty Ltd v Slater (2003) 124 IR 293. This case contains a useful digest of the relevant authorities.
  47. I have little difficulty concluding that each of the named persons at paragraph 28, and Mr Odering, were ‘transferring employees’. They were each employees as that term is ordinarily understood.
  48. The respondent admitted paragraphs 14 and 15 of the applicant’s Notice to Admit Facts and Authenticity of Documents, which sought the admission of the following:
  49. Mr Pirrottina was at pains to point out when cross examining his workers, and when interviewed by the applicant and others, that he made it clear to the workers that the basis on which they would be engaged was as an independent contractor, and that they would have to supply their own ABN. He stressed that he did not mislead any of the persons who subsequently worked for the business. Putting to one side the failure to provide a statutory notice to the workers, which I will deal with in due course, so much can be accepted. However, the mere fact that a person is described as an independent contractor does not mean that the person is an independent contractor. The nature of the relationship between the worker and the person who engages them must be examined.
  50. At T 40 Mr Pirrottina gave the following evidence:
  51. At T44/5 Mr Pirrottina accepted that the workers would do the work they were instructed to do in the course of the day, they were paid at a set rate per hour (T44/2) and they might rotate through the various tasks to be performed (T44/15). At T45/5 Mr Pirrottina virtually admitted the applicant’s contention that the workers were employees when he said that the workers “were employed to work whatever hours they were told to work for a certain amount of money”.
  52. In this case, the workers worked at the respondent’s premises, under the respondent’s control. They were told what tasks they had to perform, and were supervised when doing so. They produced product on behalf of the respondent that was identified as the respondent’s product and not that of any individual workers. Although there was undoubtedly some skill required to peel and chop vegetables and fruit and prepare it for packaging, the tasks performed by the workers could not be described as requiring special skills. The workers were paid a flat hourly rate, and were not remunerated according to the quantity of product produced. They were required to record their hours in the respondent’s books and were required to work on the days and for the hours directed by the respondent.
  53. At paragraph 16 of his affidavit Mr Odering said:
  54. Although some workers provided their own tools, in the nature of peelers and knives, such implements were provided by the respondent if required. The respondent provided the machinery used in some parts of the process. The respondent provided each worker with an apron to wear.
  55. Although it was contended by the respondent that a worker could delegate his or her work to another person, Mr Pirrottina could only give one example of where that had occurred, and accepted that the substitute worker would have had to be acceptable to him.
  56. I accept the evidence of those workers called as witnesses by the applicant, which was not challenged by the respondent, that invoices were not provided by the workers to the respondent. Mr Pirrottina considered that a worker signing the wage book with a record of hours worked constituted an invoice. I disagree. Exhibited to Ms Dorricott’s affidavit is a document described as a payslip for an employee. It is inimical to the contention that workers were engaged as independent contractors.
  57. I find that each of the persons identified in the Amended Application and the Further Amended Application were employees within the ordinary meaning of that term.
  58. I find that those persons set out at paragraph 28 above, and Mr Odering, were ‘transferring employees’.
  59. Accordingly, the employment of those employees set out at paragraph 28 above, and Mr Odering, was covered by the APCS, which in turn picked up the Award.
  60. The position thus determined is tolerably clear for the transferring employees. However, employees additional to those transferring employees are the subject of the application.
  61. It seems to be the applicant’s case that persons employed by the respondent after the transmission date (and the two month statutory extension period) are also entitled to the benefit of the ACPS. This is said to derive from s.204(1) of the Act which provides:
  62. It is submitted (see, for example at T8-9) that because the Award is generally applicable to all of the respondent’s employees by its coverage provisions, if the Award continued to operate in respect of the respondent’s business, so the employment of all employees is covered by the ACPS.
  63. It was also submitted (T8) that s.598(1) of the Act applies the APCS to all employees, whether transferring employees or those subsequently employed. In my opinion it does not. The subsection specifically is limited to transferring employees.
  64. The effect of the statutory provisions to which I have made reference is to impose on a corporation that purchases a business after 27 March 2006 an obligation to preserve the entitlements of transferring employees. That is, if the transferring employees were entitled to benefits under an Award before the reform commencement date, they continued to remain entitled after that date, if the business remained in the same ownership; and, if the business changed hands, remained entitled to the same benefits for the period of time stipulated by the Act from their new employer.
  65. However, the Act does not, in my opinion, extend that protection to employees engaged by the employer after the acquisition of the business.
  66. Therefore, I conclude that the APCS applies only to transferring employees consequent upon the respondent’s purchase of the business.
  67. As I stated earlier the APCS provides an avenue for establishing an entitlement in the transferring employees to certain rates of pay. There is also a claim for the non-payment of overtime. In this regard it is necessary to have regard to another acronym created by the Act – a Notional Agreement Preserving a State Award (NAPSA).
  68. Here, it is necessary to go to Schedule 8 of the Act. Clause 2 of the Schedule sets out the objects of the Schedule as follows:
  69. Clause 1 of the Schedule defines ‘notional agreement preserving State awards’ as follows:
  70. Clause 31 of the Schedule provides:
  71. Therefore a NAPSA came into existence in respect of the business ‘Fresho Foods’ on 27 March 2006.
  72. Clause 32 of the Schedule provides:
  73. Clause 33 of Schedule 8 provides:
  74. T-Jays Wholesale Foods Pty Ltd and its employees were bound by the Award until 27 March 2006. But for the reform those employees and any future employees of the business would thereafter have been covered by the Award. For reasons that I have already given, there was a transmission of the business from T-Jays Wholesale Foods Pty Ltd to the respondent on 14 July 2006. The respondent and the transferring employees thereupon became bound by the Award. Additional employees engaged by T-Jays Wholesale Foods Pty Ltd after 27 March 2006, and before the business was transmitted to the respondent were also bound by the Award, pursuant to Clause 32(2) of Schedule 8 to the Act. Therefore, those persons employed by that company between the reform commencement date and the date of sale of the business would also be entitled to the benefit of the award conditions.
  75. By clause 34 of the Schedule:
  76. I will deal with the terms of the Award shortly, but I find that it satisfied the requirements of Clause 34(1) of Schedule 8.
  77. Clause 43 of Schedule 8 provides:
  78. It will be recalled that in s.717 in the definition of ‘applicable provision’ reference was made to a collective agreement.
  79. Had there not been a transfer of the business to the respondent the effect of these provisions is that the Award would apply to employees of the business engaged both before and after the reform commencement date of 27 March 2006.
  80. However, the position is different where there was a transmission of the business after the reform commencement date. Schedule 9 deals with the Transmission of Business Rules. Its object is set out in clause 1:
  81. A ‘State transitional instrument’ is defined in clause 3 of Schedule 9 to mean, relevantly, a NAPSA.
  82. Clause 4 of Schedule 9 provides:
  83. For the reasons already given at paragraphs 31 to 39 above I find that the respondent became the transmittee of the business of Fresho Foods. I find that those persons set out at paragraph 28 above, and Mr Odering, were transferring employees as dealt with by clause 5 of Schedule 9.
  84. Clause 19(1) of Schedule 9 provides:
  85. However, clause 19(4) provides:
  86. It seems, because Schedule 9 specifically deals with the matter, that the NAPSA preserving the Award applies to the respondent upon the transfer of the business to it, but only in respect of transferring employees.
  87. It is then necessary to turn to the Award to see what rates of pay and overtime entitlements were available to those transferring employees, and then to determine what they were actually paid, to see if there has been an underpayment.
  88. Clause 4.1.1 of the Award recognises three categories of employment. Notwithstanding the definition of ‘casual hand’ in clause 1.6 of the Award (which might be thought to describe the employees of the respondent), that term does not appear subsequently and appears to have been included by oversight, perhaps as a result of the use as a precedent of an earlier incarnation of the Award.
  89. Having regard to the evidence of those employees called by the applicant, and having regard to the respondent’s employment records, the authenticity of which has been accepted by the respondent, I conclude that workers engaged by the respondent were not part time employees as dealt with in clause 4.2 of the Award, primarily because they were not rostered to work regular hours on regular days. Work was offered on a needs (of the respondent) basis.
  90. Clause 4.3 of the Award deals with casual employment. It provides:
  91. I accept the submission of counsel for the applicant that clause 4.3.1 of the Award should be read as if the words “up to” were inserted before the word “eight” in the first line. That is a worker would still be a casual if they worked less than eight hours in a day.
  92. Thus, those transferring employees employed by the respondent were entitled to be paid a loading on top of their prescribed rates of pay of 23%, and to the extent that they worked more than eight hours on any day, and in certain circumstances on a Saturday or Sunday, they were entitled to be paid at overtime rates.
  93. The applicant also submits that if the employees were required to work before 6 am they were also entitled to be paid at overtime rates for the time worked before 6 am.
  94. Mr Pirrottina accepted that the workers often commenced work in the early hours of the morning. This is reflected in the time sheets kept as part of the respondent’s business.
  95. The entitlement to overtime rates for these early starts is said to derive from clause 6.1.3 of the Award which provides:
  96. The time span specified only applies to the ‘ordinary hours of work prescribed in clause 6.1’. Clause 6.1.1 and 6.1.2 of the Award provide:
  97. In my view, when regard is had to these two subclauses, they are not applicable to casual employees. By their nature casual employees do not have ordinary hours of work, and would not necessarily work an average of 38 hours a week. They may work much less, or indeed much more. Casual employees would not necessarily work on five consecutive days as contemplated by clause 6.1.2 of the Award.
  98. In my view clause 6.1.3 is inapplicable to casual employees. That view is reinforced by the language of clause 4.3 itself which specifically addresses the circumstances in which casual employees are to be paid overtime. If it was intended that any casual work performed outside the hours of 6 am to 6 pm attract overtime rates, one would expect that to be specified in clause 4.3 of the Award.
  99. I therefore conclude that the transferring employees were casual employees, entitled to a loading of 23% on their rates of pay, and to overtime if they otherwise satisfied clause 4.3 of the Award.
  100. The respondent has admitted that he paid his employees a flat rate of remuneration and did not pay overtime.
  101. I accept that those transferring employees, other than Mr Odering, were properly classified as a manufacturing/production worker level 1 as set out at clause 5.1.1 of the Award.
  102. I accept that Mr Odering was properly classified as a manufacturing/production worker level 4 as set out at clause 5.1.4 of the Award.
  103. The rates of wages payable to the transferring employees are set out at clause 5.2 of the Award and were adjusted by the Australian Fair Pay Commission as set out in exhibit 4.
  104. Caroline O’Connor in her affidavit has helpfully prepared a number of schedules setting out from the respondent’s own documents, and by applying the relevant award rates of pay, what the employees of the respondent were paid, and what the applicant contends they should have been paid.
  105. For the reasons I have already given, the applicant can only succeed in respect of the identified transferring employees. At paragraph 12 of her affidavit Ms O’Connor has correctly identified these employees. Because he was engaged within the two month window permitted by the legislation, Mr Odering should be included in this group.
  106. The process that Ms O’Connor adopted in her preparation of the schedules for the transferring workers is set out at paragraphs 17 to 19 of her affidavit.
  107. Ms O’Connor says, at paragraph 24 of her affidavit:
  108. In my view, the respondent is entitled to offset overpayments against underpayments before it can be fairly concluded that it has in fact underpaid a particular employee.
  109. Further calculations obviously need to be undertaken to accurately state the amount of the underpayment in respect of each transferring employee. It would be easier if Ms O’Connor did those calculations. The re-calculations should be undertaken with the following guidelines:
    1. Each of the transferring employees that I have identified (including Mr Odering) were entitled to be paid at the Award rate with a loading of 23% for the hours that they worked;
    2. Overtime entitlements should be calculated solely by reference to clause 4.3 of the Award and no adjustment should be made for hours worked before 6 am;
    1. Overpayments should be set off against underpayments in the final figure arrived at.
  110. A schedule can then be produced to reflect the amount, if any, of any underpayment of wages, or non-payment of overtime.
  111. I consider the best course to follow at the present time is to find that, in so far as there has been an underpayment of wages or non-payment of overtime to a transferring employee, there has been a breach of an applicable provision in terms of s.719(1) of the Act. I am satisfied that, having regard to the work done by Ms O’Connor to date, that there have been occasions of underpayment of wages and non-payment of overtime, but the exact amounts involved cannot be ascertained until further calculations are performed.
  112. Section 719(2) of the Act provides:
  113. Section 719(3) is not said to be applicable in this case.
  114. In my view there have been two breaches of an applicable provision by the respondent: the first relating to the underpayment of wages to transferring employees; and the second relating to the non payment of overtime. I consider that the breaches in respect of all transferring employees arose out of a course of conduct by Mr Pirrottina on behalf of the respondent. Mr Pirrottina made it clear to the transferring employees, including at a meeting, that he would only engage them on certain terms, under the mistaken belief that they would then be independent contractors, and that he would pay a flat rate of remuneration. Similarly, it was the respondent’s practice not to pay overtime. In the case of each breach there was a course of conduct.
  115. As suggested by counsel for the applicant, having determined that there were the breaches identified, the matter should be adjourned for a penalty hearing so that:
    1. The re-calculations to which I have referred can be performed;
    2. The respondent can, if it wishes, put on evidence as to penalty;
    1. The applicant and the respondent can each address the court as to the appropriate penalty.
  116. The final matter with which I have to deal relates to the alleged breach of clause 28 of Schedule 9 to the Act. It provides:

that the employer intends to be the source for terms and conditions that will apply to the matters that are dealt with by the transmitted instrument when the transmitted instrument ceases to bind the employer; and

(g) identify any award or collective agreement that binds:
and that would bind the transferring employee but for the transmission provision.
(3A) Subject to subclause (3B), if the notice under subclause (3) identifies an instrument under paragraph (3)(g), the employer must give the transferring employee a copy of the instrument together with the notice.
(3B) Subclause (3A) does not apply if:
(4) Subclause (2) does not apply if:

117. The clause applies because the respondent is bound by the State transitional instrument.

  1. The respondent did not admit that the requisite notice was not given, despite being requested to do so. Two transferring employees, Melvyn Edward Bradford, and Alison Kay Bold gave evidence that they were not given any notice by the respondent. The applicant asks that I infer that notice was not given to any transferring employee.
  2. I am prepared to draw that inference for four reasons:
    1. There is no identified reason why notice would be given to some transferring employees and not the two that I have identified;
    2. The two employees gave evidence and were cross examined. They were not challenged about their statements that no notice was given to them;
    1. The respondent’s case was that the transferring employees were independent contractors, and therefore there was no need for it to give the notices;
    1. The respondent made disclosure, and gave evidence and did not contend that a notice had been given.
  3. I find that the respondent failed to give notice to each of the transferring employees that complied with clause 28(3) of Schedule 9 to the Act.
  4. So that all matters of penalty are dealt with at the same time, I will also adjourn consideration of the penalty to be imposed for the breaches of clause 28(2) for further hearing.
  5. There will be orders as set out at the commencement of these reasons.

I certify that the preceding 122122one hundred122122twenty-twosixone hundred and twenty-two (122) paragraphs are a true copy of the reasons for judgment of Wilson FM


Associate: Lynnette Chin


Date: 27 January 2009

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