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Workplace Ombudsman v A & A Martins Pty Ltd & Anor [2009] FMCA 599 (26 June 2009)
Last Updated: 29 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
WORKLACE OMBUDSMAN v A
& A MARTINS PTY LTD & ANOR
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INDUSTRIAL LAW – Pecuniary penalties –
breaches of award – underpayment of employee – agreed statement of
facts – breaches admitted – determination of penalty
(principles). |
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First Respondent:
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A & A MARTINS PTY LTD
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Second Respondent:
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AGOSTINHO MARTINS
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File Number:
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CAG 60 of 2008
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Hearing date:
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11 June 2009
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Date of Last Submission:
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11 June 2009
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Delivered on:
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26 June 2009
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REPRESENTATION
Counsel for the
Applicant: |
Mr Cook
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Solicitors for the Applicant: |
Minter Ellison Lawyers
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Advocate for the Respondents: |
Mr Martins in person and on behalf of A & A Martins Pty
Ltd
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ORDERS
(1) A penalty of $1500.00 be imposed on the First
Respondent pursuant to section 719(1) of the Workplace Relations Act
1996 (Cth) (“the WR Act”) for breaches
of:
- (a) Section
182(1) of the WR Act and the relevant provisions of the Building &
Construction Industry (ACT) Award (Transitional) for the First
Respondent's:
- (i) failure to
pay the Classification Scale specified basic periodic rate of pay applicable to
Mr Campbell during the relevant period
of 17 October 2006 to 30 November
2006 of $513.70 per week for ordinary hours worked per week;
- (ii) failure to
pay the Classification Scale specified basic periodic rate of pay applicable to
Campbell during the relevant period
of 1 December 2006 to 16 January 2007
of $541.70 per week for ordinary hours worked per week;
- (iii) failure
to pay the Classification Scale specified basic periodic rate of pay applicable
to Campbell during the relevant period
of 17 January 2007 to 2 October
2007 of $553.66 per week for ordinary hours worked per week;
- (iv) failure to
pay the industry allowance prescribed by clause 14.4 of the Award of $748.42 for
the period 17 October 2006 to 19
September 2007;
- (v) failure to
pay the fares and Travel Patterns Allowance prescribed by clause 14.6.1 of the
Award of $2,231.90 for the period 17
October 2006 to 19 September 2007; and
- (b) Sub-section
235 (2) of the WR Act for the First Respondent's failure to pay accrued annual
leave at the time of termination of
Mr Campbell's employment with the First
Respondent as required by sub-section 235 (2) of the WR Act of an amount of
$638.53; and
- (c) Part 3 of
the Superannuation Guarantee (Administration) Act 1992 (Cth) for a
failure to make the superannuation contributions of an amount of $2,015.76 from
17 October 2006 to 19 September 2007 as
prescribed and required by Part 3
of the Superannuation Guarantee (Administration) Act 1992
(Cth).
(2) By reason of section 728 of the WR Act, a penalty of $300.00
be imposed on the Second Respondent pursuant to section 719(1) of the WR
Act for his involvement in the First Respondent's breaches
of:
- (a) section
182(1) of the WR Act and the relevant provisions of the Building &
Construction Industry (ACT) Award (Transitional) for the First
Respondent's:
- (i) failure to
pay the Classification Scale specified basic periodic rate of pay applicable to
Mr Campbell during the relevant period
of 17 October 2006 to 30 November
2006 of $513.70 per week for ordinary hours worked per week;
- (ii) failure to
pay the Classification Scale specified basic periodic rate of pay applicable to
Campbell during the relevant period
of 1 December 2006 to 16 January 2007
of $541.70 per week for ordinary hours worked per week;
- (iii) failure
to pay the Classification Scale specified basic periodic rate of pay applicable
to Campbell during the relevant period
of 17 January 2007 to 2 October
2007 of $553.66 per week for ordinary hours worked per week;
- (iv) failure to
pay the industry allowance prescribed by clause 14.4 of the Award of $748.42 for
the period 17 October 2006 to 19
September 2007;
- (v) failure to
pay the fares and Travel Patterns Allowance prescribed by clause 14.6.1 of the
Award of $2,231.90 for the period 17
October 2006 to 19 September 2007; and
- (b) section 235
(2) of the WR Act for the First Respondent's failure to pay accrued annual leave
at the time of termination of Mr
Campbell's employment with the First
Respondent as required by sub-section 235 (2) of the WR Act of an amount of
$638.53; and
- (c) Part 3 of
the Superannuation Guarantee (Administration) Act 1992 (Cth) for a
failure to make the superannuation contributions of an amount of $2,015.76 from
17 October 2006 to 19 September 2007 as
prescribed and required by Part 3
of the Superannuation Guarantee (Administration) Act 1992
(Cth).
(3) An order pursuant to section 719(6) of the WR Act that the Employee, Matthew
Campbell, be paid, within 60 days of the date of
these orders, all outstanding
entitlements in the amount of $10,391.60 (gross prior to tax)
by:
- (a) the First
Respondent; and/or
- (b) the Second
Respondent by reason of section 728 of the WR Act.
(4) An order pursuant to section 719(7) of the WR Act that the, that a payment
be made to or in respect of Mr Matthew Campbell to
his nominated superannuation
fund, within 60 days of the date of these orders, all outstanding superannuation
entitlements in the
amount of $907.60 (gross prior to tax) by:
- (a) the First
Respondent; and/or
- (b) the Second
Respondent by reason of section 728 of the WR Act.
(5) The penalties be paid into the Collector of Public Monies of the
Commonwealth saving:
- (a) an amount
of $10,391.60 from the Second Respondent's penalty to be paid by bank cheque
made payable to Mr Matthew Campbell and
forwarded to the Applicant's solicitors
in the event that Order 3 above remains outstanding;
- (b) an amount
of $907.60 from the Second Respondent's penalty to be paid by bank cheque made
payable to Mr Matthew Campbell's, or
in respect of Mr Matthew Campbell to his
nominated superannuation fund, and forwarded to the Applicant's solicitors in
the event
that Order 4 above remains outstanding; and
- (c) an amount
referred to in Order 5 above from the Second Respondent's penalty to be paid by
bank cheque made payable to Mr Matthew
Campbell, or in respect of Mr Matthew
Campbell to his nominated superannuation fund, and forwarded to the Applicant's
solicitors
in the event that Order 5 above remains outstanding.
(6) The penalty imposed on the First and Second Respondents be paid
by:
- (a) by the
First Respondent within 60 days of the date of these orders; and
- (b) the Second
Respondent within 60 days of the date of these
orders.
|
FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT
CANBERRA
|
CAG 60 of 2008
Applicant
And
First Respondent
Second Respondent
REASONS FOR JUDGMENT
A. Introduction
- These
are proceedings brought by the Workplace Ombudsman that concern the
determination of an appropriate penalty following the settlement
and filing (on
3rd April 2009) of a Statement of Agreed Facts
(“the Statement”) in relation to liability. That Statement confirms
that
the Respondents underpaid a former cadet/apprentice employee, contrary to
the Building and Construction Industry (ACT) Award 2002 (“the
Award”). A copy of that Statement is attached to these reasons.
- The
Second Respondent, Mr Martins, is a director of the First Respondent.
- The
former employee in question is Mr Campbell, who was employed by the first
respondent between 17th October 2006 and
19th September 2007. Mr Campbell made a complaint to
the Workplace Ombudsman on 2nd October 2007 in relation
to underpayment of wages and the non-payment of allowances, contrary to the
Award. The allowances not paid
relate to an industry allowance, and to a fares
and travel patterns allowance.
- The
amount agreed between the parties that has been underpaid (in relation to wages,
and superannuation) and not paid (in relation
to allowances) totals $11,299.20.
- Each
of the matters recited in paragraphs 12, 15, 18, 23, 27, 30 and 33 of the
Statement constitute contraventions of the Workplace Relations Act 1996
(Cth) (“the Act”). By virtue of the Second Respondent’s
position with the First Respondent, his liability attaches
because of the
operation of s.728 of the Act.
B. Submissions
- Notwithstanding
the matters set out in the Statement, Mr Martins maintained that (a) there was
never any intention to breach any award
or the Act, (b) the building course
undertaken by Mr Campbell was the best and most useful one but pursuant to
which, in his view,
entitled the First Respondent to make payments which he now
knows to have been under-payments, (c) Mr Campbell was very regularly
away from
his employment, and (d) because of the very difficult financial position of the
First Respondent company, in large measure
because of Mr Martin’s
extremely difficult health issues, which include those associated with his
newborn son, any penalty
would be extremely difficult to pay. Because of other,
long-running proceedings in this Court, completely unrelated to the current
proceedings, I am very much aware of the extraordinarily difficult health
position of Mr Martin, and that he has been in this situation
for more than 12
months. This also accounts for the fact that two mediation sessions were unable
to proceed.
- For
the Applicant, Mr Cook submitted as follows:
- since
the inception of the proceedings, both respondents have sought to assist the
Applicant in resolving the matter as expeditiously
as possible, evidenced, for
example, by agreeing with the Statement, and to orders proposed;
- the
respondents have admitted liability and have agreed to repay the underpayments
to Mr Campbell;
- in
accordance with the authority of Gibbs v City of
Altona,[1] each
individual act of under-payment, which has been itemised in the Statement in
these proceedings, constitutes a separate contravention.
On this basis there
have been, as submitted by the Applicant, seven contraventions;
- because
of the operation of s.728 of the Act, and because of what is set out in the
Statement, Mr Martins was involved in each of the contraventions, and therefore
stands liable for imposition of a penalty under the Act.
- In
relation to principles to be applied in relation to penalty, without being
exhaustive in detailing each of Mr Cook’s further
submissions, he
contended that:
- in
relation to penalty concerning Mr Martins, and impliedly more generally, the
Court should follow the instruction of Tracey J in
Kelly v
Fitzpatrick.[2] His
Honour’s approach has been referred to in a number of more recent cases,
including the Full Court decision in Australian Ophthalmic Supplies Pty Ltd v
McAlary-Smith;[3]
- there
have been no other breaches by either of the respondents under the Act;
- there
have been no prior breaches of the award by the respondents;
- it
was acknowledged by the applicant that the respondents sought information from
relevant government agencies to determine correct
entitlements. Mr Martins
confirmed this and stated – in Court and on oath – that incorrect
information had been provided
to the respondents;
- the
Applicant acknowledged that, although there were separate breaches, they arose
out of what is properly described as `one course
of conduct;’
- the
Applicant also acknowledged that the first respondent conducts a “small
business, owned and operated by the Second Respondent
as Director with his wife
and mother and father as co-Directors”;
- the
Applicant submitted that “... the Court should have regard to the message
sent, in the imposition of penalties, to employers
about the profitability of
engaging in conduct in breach of conditions to pay employees. The message sent
should be one that `underpayment
of wages will not be tolerated’;
- the
Applicant also submitted that while ‘... the penalties against the
Respondents should not be so great as to be oppressive,
for a penalty to have
the desired effect, it must be imposed at a meaningful level;’
- no
specific figure – either as to a monetary amount or as to percentage - was
proposed by the Applicant in relation to
penalty.[4]
C. Legal Principles & Determination of Penalty
- As
already indicated, the Full Court decision in McAlary-Smith, in my
respectful view, provides the most comprehensive treatment of principles
relevant to the matters that are currently before
this Court. In particular, I
refer to the following from that judgment.
- First,
all three judgments in McAlary-Smith refer to and accept the observations
in the joint judgment of Burchett and Kiefel JJ in NW Frozen Foods Pty Ltd v
Australian Competition and Consumer
Commission,[5] where
their Honour’s said, at
p.295:[6]
- A hallmark
of justice is equality before the law, and, other things being equal,
corporations guilty of similar contraventions should
incur similar penalties:
Trade Practices Commission v Axive Pty Ltd [(1994) ATPR |P41-368] (at 42,795).
There should not be such
an inequality as would suggest that the treatment meted
out has not been even-handed ... However, other things are rarely equal where
contraventions of the Trade Practices Act are concerned. In the present case,
differing circumstances, size, market power and responsibility
for the
contraventions, as well as other factors, complicate any attempt to compare the
penalties imposed on the appellant with those
imposed on the other corporations.
- Another
form of comparison is not appropriate. The facts of the instant case should not
be compared with a particular reported case
in order to derive therefrom the
amount of the penalty to be fixed. Cases are authorities for matters of
principle; but the penalty
found to be appropriate, as a matter of fact, in the
circumstances of one case cannot dictate the appropriate penalty in the
different
circumstances of another case. The point was well made by Spender J in
Trade Practices Commission v Annand and Thompson Pty Ltd [(1987)
ATPR |P40-472]
(at 48,394) when he said:
- "Each case
must, of course, be viewed on its own facts and facts may be infinite in their
variety."
- It follows,
as his Honour also said, that "[t]he quantum of penalties imposed in other cases
can seldom be of very much direct assistance".’
- I
accept, unreservedly, the observations and instructions of the Full Court both
in NW Frozen Foods and in McAlary-Smith as set out in the passages
above in relation to determining penalty by reference to the particular facts of
this case, which is not
to be determined by reference to any other case.
- Secondly,
in relation to the “totality [or proportionality] principle,” again
I note the following from the judgments
of the Full Court in
McAlary-Smith. In arriving at what Gray J described, at [28], as his
“instinctive reaction to the aggregate penalty” in that case,
his
Honour noted that he had arrived at this conclusion by reference to the High
Court’s process or description of “instinctive
synthesis” in
Markarian v The
Queen.[7]
- In
more detail, Graham J referred to the decision of Lander J in Ponzio v B
& P Caelli Constructions Pty
Ltd.[8] At [53] and
[54], Graham J cited the following from Lander J in
Ponzio:
- In Ponzio v
B & P Caelli Constructions Pty Ltd [2007] FCAFC
65; (2007)
158 FCR 543 (‘Ponzio’) at [93]-[94] Lander J summarised the
purpose of imposing penalties for breaches of the Act as follows:
- There are
three purposes at least for imposing a penalty: punishment; deterrence; and
rehabilitation. The punishment must be proportionate
to the offence and in
accordance with the prevailing standards of punishment: R v Hunter (1984)
36 SASR 101 at 103. Therefore the circumstances of the offence or
contravention are especially important. The penalty must recognise the need
for
deterrence, both personal and general. In regard to personal deterrence, an
assessment must be made of the risk of re-offending.
In regard to general
deterrence, it is assumed that an appropriate penalty will act as a deterrent to
others who might be likely
to offend: Yardley v Betts (1979)
22 SASR 108. The penalty therefore should be of a kind that it would be
likely to act as a deterrent in preventing similar contraventions by like
minded
persons or organisations. If the penalty does not demonstrate an appropriate
assessment of the seriousness of the offending,
the penalty will not operate to
deter others from contravening the section. However, the penalty should not be
such as to crush the
person upon whom the penalty is imposed or used to make
that person a scapegoat. In some cases, general deterrence will be the paramount
factor in fixing the penalty: R v Thompson (1975)
11 SASR 217. In some cases, although hardly in this type of contravention,
rehabilitation is an important factor.
- The
individual or personal circumstances of the contravenor must be taken into
account as also any relevant matter in mitigation.
For a contravention of these
sections the minimum penalty which addresses punishment and deterrence, both
personal and general, will
be appropriate. Where one act may involve a number of
contraventions, as in this case, it would be generally inappropriate to impose
separate penalties because almost inevitably that would offend against the
totality principle as known to the criminal law. ...’
- And
further, per McHugh J in Markarian v The Queen [2005] HCA
25; (2005)
228 CLR 357 (‘Markarian v The Queen’) at
[83]:
The ultimate control on the judicial sentencing discretion
is the requirement that the sentence be proportionate to the gravity of
the
offence committed. In pursuit of other sentencing purposes, a judge may not
impose a sentence that is greater than is warranted
by the objective
circumstances of the crime. Both proportionality and consistency commonly
operate as final checks on a sentence
proposed by a judge (see also Veen v The
Queen (No. 2) [1988] HCA
14; (1988)
164 CLR 465 at 472).
- Again,
the remarks set out by each of these Courts govern the determination of what
penalties should be imposed in the current matter.
- Having
regard to the principles articulated in the cases to which I have referred, and
having regard to the facts of the matter -
in particular, that (a) there have
been no other breaches either before or since the matters that give rise to
these proceedings,
(b) the co-operation of the respondents with the applicant
and consequent savings to all, (c) the respondents sought information
from
relevant sources and was provided with incorrect information, and (d) the
relatively modest amounts involved, (e) the genuine
plight of the second
respondent - in my view the penalties that should be imposed are $1500.00 in
relation to the first respondent,
and $300.00 in relation to the second
respondent. These penalties are in addition to the payment of the sums agreed
to be owing
to Mr Campbell. Orders will be made to this effect, and having
regard to the circumstances of the respondents, there is also modest
provision
for time to pay. Formally, orders will be made essentially as sought by the
Applicant.
I certify that the preceding sixteen (16) paragraphs
are a true copy of the reasons for judgment of Neville FM
Associate: Jacquelyn Curtis
Date: 26 June
2009
[1] [1992] FCA 374; (1992) 37 FCR 216
at p.223 (Gray
J).
[2] (2007) 166 IR
14.
[3] [2008] FCAFC 8; (2008) 165
FCR 560 (Gray, Graham & Buchanan JJ). See also the judgment of Dowsett J in
Temple v Powell [2008] FCA 714; (2008) 169 FCR 169, especially at [56] ff in
relation to “penalties” and the earlier Full Court decision in
Construction, Forestry, Mining and Energy Union v Hamberger [2003] FCAFC 38; (2003) 127
FCR 309 at [51].
[4]
I have omitted reference to Mr Cook’s internal citations in relation to
deterrence, “the message” to be communicated,
and the
“meaningful level” of penalty to be imposed. Such matters, as I
shortly show, are dealt with by the Full Court
in McAlary-Smith and other
cases to which I
refer.
[5] [1996] FCA 1134; (1996) 71
FCR 285 at 295.
[6]
This citation is found at the following paragraphs of the judgments in
McAlary-Smith: 165 FCR at [12] (Gray J), [55] (Graham J), and [87]
(Buchanan J).
[7]
[2005] HCA 25; (2005) 228 CLR 357 at [37]. Graham J also advocated, at [78], the approach of
the High Court in
Markarian.
[8]
[2007] FCAFC 65; (2007) 158 FCR 543 at [93] – [94].
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