Australian Liquor, Hospitality & Miscellaneous Workers Union v Dimension Cleaning Service Pty Ltd [1999] FCA 90 (12 February 1999)

Last Updated: 16 February 1999

FEDERAL COURT OF AUSTRALIA

Australian Liquor, Hospitality & Miscellaneous Workers Union v Dimension Cleaning Service Pty Ltd [1999] FCA 90

INDUSTRIAL LAW - failure to include prescribed particulars in payslips - penalty - no evidence of underpayment - no complaint from any employee - costs - motion for permanent stay - motion unsuccessful - whether motion a separate proceeding - held motion a matter in a proceeding under the Act - s 347 - proceeding not instituted vexatiously or without reasonable cause

Workplace Relations Act 1996 (Cth) ss 347, 353A

Thompson v Hodder [1989] FCA 493; (1989) 21 FCR 467 followed

Shackley v The Australian Croatian Club (1997) 41 AILR 3-530 cited

Fencott v Muller (1983) 152 CLR 570 followed

Phillip Morris v Adam P. Brown Male Fashions Pty Ltd [1981] HCA 7; (1981) 148 CLR 457 cited

Viner v ABCE&BLF (1981) 38 ALR 550 cited

R v Moore & Ors ex parte Federated Miscellaneous Workers Union of Australia [1978] HCA 51; (1978) 140 CLR 470 cited

Municipal Officers Association of Australia v The Shire of Wanneroo (1985) 27 AILR 361 cited

Gibbs v City of Altona (1988) 42 IR 255 considered

AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION v DIMENSION CLEANING SERVICE PTY LTD

VG 595 of 1997

Ryan JR

Melbourne

12 February 1999

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 595 OF 1997

BETWEEN:	AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION PROSECUTOR
AND:	DIMENSION CLEANING SERVICE PTY LTD DEFENDANT
JUDICIAL REGISTRAR:	RYAN
DATE OF ORDER:	12 FEBRUARY 1999
WHERE MADE:	MELBOURNE

THE COURT:

1. Orders that the order of 8 September 1998 that "the respondent pay the applicant's costs in respect of the Motion" be vacated.

2. Declares that the defendant failed to specify the relevant particulars required by reg 132B on the 180 occasions set out in the charges contained in the Information filed 23 October 1997.

3. Orders the defendant to pay a penalty of $10 in respect of each of the 180 charges.

4. Orders that each penalty of $10, in aggregate $1800, be paid to the Australian Liquor, Hospitality and Miscellaneous Workers Union pursuant to s 356 of the Act.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 595 OF 1997

BETWEEN:	AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION PROSECUTOR
AND:	DIMENSION CLEANING SERVICE PTY LTD DEFENDANT

JUDICIAL REGISTRAR:	RYAN
DATE:	12 FEBRUARY 1999
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

FAILURE TO INCLUDE PRESCRIBED PARTICULARS IN PAYSLIPS - PENALTY AND COSTS

The Information

1 Section 353A(2) of the Workplace Relations Act 1996 and regulations 132A and 132B require an employer who employs an employee under an award to issue the employee with payslips. The employer must include on each payslip the particulars specified in regulation 132B.

2 On 23 October 1997 the Australian Liquor, Hospitality and Miscellaneous Workers Union as prosecutor filed an Information and initiating Summons alleging that the defendant, Dimension Cleaning Service Pty Ltd, on 180 occasions between 30 October 1996 and 30 September 1997, failed to specify on payslips given to 14 named employees relevant particulars required by regulation 132B.

3 Each failure to provide particulars is the subject of a separate charge so that the Information and Summons contain 180 charges. Some charges allege that the defendant failed to specify the classification of the employee. Some charges allege that the defendant failed to specify on the payslip the date on which the payment of wages was made. Most of the charges allege that the defendant failed to specify the particulars of superannuation contributions made for the benefit of the specific employee and the name of the superannuation fund to which the contributions were made.

4 On 27 October, following an unsuccessful application to stay the proceedings as an abuse of process, the defendant pleaded to the 180 charges. These Reasons for Judgment deal with two remaining matters namely:

* penalty for failing to include the particulars on the payslips

* costs in respect of the unsuccessful attempt by notice of motion to permanently stay the proceedings.

Background

5 The background to the prosecution and to the Motion alleging abuse of process are of some relevance. This background is outlined in Australian Liquor, Hospitality and Miscellaneous Workers Union and Dimension Cleaning Service Pty Ltd (Federal Court of Australia unreported 8 September 1998) but, for convenience, some aspects are repeated.

6 The Information and Summons were the subject of a Directions hearing before Marshall J on 11 November 1997 in which the matter was referred to a Judicial Registrar for hearing and determination. Directions hearings were held before Parkinson JR on 6 March 1998, 18 March 1998 and 22 May 1998.

7 On 22 May the defendant filed a Notice of Motion in the South Australian Registry seeking a permanent stay of proceedings as an abuse of process. In the supporting affidavit the respondent alleged that the union, as prosecutor, "had improperly brought the proceedings for an ulterior purpose and as an instrument of oppression".

8 I have assumed that the Motion to permanently stay the Information was foreshadowed to Parkinson JR in the Directions hearing on 22 May and I note that a draft of the Notice of Motion was faxed to the Melbourne Registry later that day. Indeed, an earlier draft had been faxed to Melbourne on 19 May. In any event, the Judicial Registrar adjourned the matter for further Directions by telephone on Monday 25 May at 2.00 pm in Melbourne. Counsel and solicitors for the defendant are based in Adelaide and the telephone hearing was to avoid the expense and inconvenience of travelling to Melbourne for a brief hearing.

9 The Motion had been made returnable on 25 May and on that day the parties and their advisers agreed that the Motion should be listed for hearing in Melbourne on 25 and 26 June. The Motion proceeded before me on 25 and 26 June and on 1, 2 and 3 July. The state and substance of the evidence did not satisfy me that the predominant purpose of the prosecutor in initiating and pursuing the payslip prosecution was an improper purpose and the following orders were made on 8 September:

"1. The respondent's motion of 22 May 1998 be dismissed.
2. The respondent pay the applicant's costs in respect of the Motion.
3. The Information filed on 23 October 1997 be listed for hearing as soon as practicable."

10 On 14 September the solicitor for the defendant, Ms Elizabeth Perry of Manual Fuller Merrigan, made a written submission to the Court requesting "that the question of costs be reopened" and indicating that:

* she understood from a telephone conversation with my Associate on 7 September that the defendant could reserve its position on costs without being present at the Judgment on 8 September

* she had been advised that if there were any difficulties in reserving the position on costs for argument at a later date advice to that effect would be provided

* no advice about difficulties in reserving on costs had been provided and on that basis the defendant's solicitors did not attend on 8 September.

11 On 15 September solicitors for both parties were advised in writing that I was prepared to accept written submissions on the question of costs. This amounted to advice to both solicitors that I was prepared to reopen the question of costs.

12 The advice to Mr Tee, solicitor for the prosecutor, included the following:

"It is undoubtedly correct that while a date was being fixed for Judgment, Ms Perry advised Ms Julie Zappia that the Defendant would not be represented at the delivery of Judgment, provided that `the Defendant was able to reserve its rights'.

Indeed, the Judicial Registrar commented on this conversation before Judgment was delivered. The order for Costs was a conventional order following the dismissal of a Notice of Motion. However, the request to re-open the question of costs is clearly within the `reservation of rights' made by Ms Perry and referred to by the Judicial Registrar on 8^th September 1998."

Costs

13 Section 347(1) of the Workplace Relations Act 1996 states that "a party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first mentioned party instituted the proceeding vexatiously or without reasonable cause".

14 Counsel for the prosecutor submits that "the abuse of process application":

* "does not arise under the (Workplace Relations) Act"

* "is an application under the Federal Court Act"

* "is not part of the payslips prosecution"

* "is a separate justiciable matter"

* "involves a determination of legal and factual issues which are quite separate and distinct to those of the payslips prosecution and is not a step in the payslips prosecution".

15 Counsel for the defendant submits:

* "Section 347 prohibits the making of a costs order in a matter arising under the Act unless the proceedings were instituted vexatiously or without reasonable cause"

* "the notice of motion was a proceeding in a matter arising under the Act although the application itself was made pursuant to the rules of (the Federal) Court"

* "the proceeding was neither vexatious nor instituted without reasonable cause".

16 Both counsel seek comfort from Thompson v Hodder [1989] FCA 493; (1989) 21 FCR 467 and Shackley v The Australian Croatian Club (1997) 41 AILR 3-530.

17 Thompson applied Fencott v Muller (1983) 152 CLR 570 at 608 in holding that matter is a single justiciable controversy. However, in Thompson Northrop J pointed out the specific and careful wording of provisions such as s 347 and that those provisions apply "not to a proceeding arising under the Act but to a proceeding in a matter arising under the Act".

18 In my view the motion was a proceeding in a matter arising under the Act. It was not itself a matter arising under the Act but it was a proceeding in a matter arising under the Act. The motion moved the Court for an order "to stay any further proceedings on the Information laid by the Australian Liquor, Hospitality and Miscellaneous Workers Union against Dimension Property (sic) Services Pty Ltd for alleging certain offences contrary to the Workplace Relations Act Regulations". The motion was an application for an indefinite stay albeit on the grounds of abuse of process. If the motion seeking to permanently stay the prosecution was to be categorised as a "completely disparate claim constituting in substance a separate proceeding" per Barwick CJ in Fencott v Muller (1983) 152 CLR 570at 373 or a non-Federal matter which is "completely separate and distinct from the matter which attracted Federal jurisdiction" (per Murphy J in Phillip Morris v Adam P. Brown Male Fashions Pty Ltd [1981] HCA 7; (1981) 148 CLR 457 at 521 and if the motion was in such a context made outside of the Workplace Relations Act, then it could not be held to be a "proceeding in a matter arising under the Workplace Relations Act", and the prohibition on costs in s 347 could not apply. However, the motion to permanently stay the proceeding under the Workplace Relations Act is not, in my view, "completely separate and distinct from the matter which attracted Federal jurisidiction" and it is not "a completely disparate claim constituting in substance a separate proceeding". Irrespective of whether the motion was, as described by the defendant in final submissions, "of its nature a defence, albeit an unsuccessful defence", the application "to stay any further proceedings" was not a completely separate and distinct claim. Indeed it was part of the proceedings.

19 Counsel for the prosecutor also relied on Viner v ABCE&BLF (1981) 38 ALR 550. Viner is distinguishable on at least two grounds. Firstly, that case involved contempt proceedings separate from the proceedings which gave rise to the contempt. Secondly, motions for contempt were taken out against media companies which were not parties in the proceeding arising under the Act. In this case, the motion may be similar to contempt proceedings but it is not a contempt proceeding and it is not a separate proceeding and the parties in the motion are the parties in the prosecution proceeding before the Court. In fact, the motion was to "stay any further proceedings on the Information". The Information was indisputably a proceeding under the Workplace Relations Act.

20 The motion to stay the proceedings failed but it was not vexatious or without reasonable cause. In R v Moore & Ors ex parte Federated Miscellaneous Workers Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473 Gibbs J said:

"In my opinion a party cannot be said to have commenced a proceeding without reasonable cause, within the meaning of that section, simply because his argument proves unsuccessful. In the present case the argument presented on behalf of the prosecutor was not unworthy of consideration and it found some support in two decisions of this Court to which I have referred. The fact that those decisions have been distinguished, and that the argument has failed, is not justification for ordering costs in the face of the prohibition contained in s 197A."

21 That is also the situation here. Section 347 applies and costs cannot be ordered against either party. The order of 8 September that "the respondent pay the applicant's costs in respect of the Motion" should be vacated.

Penalty

22 The prosecutor describes as "blatant breaches of the regulations' the failure of the defendant to specify on payslips:

* superannuation contributions

* the names of the superannuation funds

* the classification of the employees

* the date on which wages were paid.

23 The prosecutor asserts that in the cleaning industry with numerous employees working different hours at different sites the information on payslips is vital to any investigation or assessment of adequate payment of wages and superannuation. The prosecutor also points to the delay from institution of prosecution on 23 October 1997 to compliance with the regulations on 1 July 1998 and dismisses as "flimsy" the claims and evidence of the respondent of the difficulties, time, effort and expense associated with the development of a computerised payroll system capable of providing the payslips information required by reg 132B.

24 Regulation 132A(2) provides a maximum penalty of $1,000 for any breach of reg 132B. The prosecutor seeks a penalty of $200 for each of the 180 breaches and seeks an order under s 356 that the aggregate penalty of $36,000 be paid to the union.

25 The defendant takes issue with the prosecution description of the breaches of the "payslips" regulations as "blatant". The defendant submits that:

* there has been no challenge to the oral and affidavit evidence of Mr Kokkinos and the affidavit evidence of Ms Darvall and Mr Brdjanin that until 1 July 1998 the "computer software package" used by the defendant was "unable to provide" classifications of employees, dates of salary payments, superannuation contribution amounts and the names of the funds to which the contributions were made

* there has been no challenge to the claim that the defendant has spent "approximately $100,000 plus time spent ... after hours by ... employees to ensure the programming of the computer system to meet the requirements of the regulations and our business."

* no employee has complained about the inadequacy of payslip information

* no employee has claimed that there has been any underpayment in wages or any inadequate contribution to superannuation

* the union has not made any claim for underpayment of wages

* the filing of an Information and Summons including 180 charges amounted to "loading the Information ... to make it as difficult as possible for the defendant"

* "any suggestion it was necessary to lay 180 charges to bring underlying culpability to book is ludicrous"

* any penalty in the region of $36,000 or "near $36,000" is "manifestly excessive" in the circumstances of the case and particularly in a case in which the Court has found that Mr Breheney, the Assistant Secretary of the Miscellaneous Workers Division of the Victorian Branch of the union threatened the defendant with industrial action and that "it is possible, even likely that the threat included a threat to launch a prosecution for payslip deficiencies" (page 14, unreported judgment 8 September 1998)

* once the motion to stay the proceedings had been dismissed the defendant pleaded guilty and has saved additional expense and cost.

26 In my view the circumstances of this case warrant a penalty on each of the 180 charges but a small penalty. I accept the unchallenged evidence that change to a CBA 2000 accounting package has cost the defendant $71,000 from May 1998 to October 1998. I do not accept, and it is not claimed, that all of this expenditure was incurred to provide the payslip information. I accept the unchallenged evidence that the new computer package has cost the defendant well in excess of $100,000. Again I do not accept, and it is not claimed, that all of this expenditure was incurred to provide the payslip information. It seems extraordinary to me that the defendant's original payroll package could not readily provide the required information. Indeed, I do not accept that a payroll package to provide the required information could not have been procured and quickly procured and put in place well before 1 July 1998. However, I accept the defendant wanted an integrated system that met other requirements and not just the regulation requirements on payslips.

27 There are some aspects of similarity between this case and that of Municipal Officers Association of Australia v The Shire of Wanneroo (1985) 27 AILR 361. In that case Toohey J decided not to impose a penalty for failure to pay the award rate of wages but required the respondent to pay $1,477.48 to an employee, this being the agreed amount of the underpayment of wages. His Honour found that it was not a case of flagrant breach of award or a conscious attempt to pay an employee less than his entitlement. In this case there is no evidence of any underpayment and likewise I do not accept that the defendant is guilty of flagrant breaches of reg 132B. On the other hand I am not satisfied that the breaches could not have been remedied more quickly than occurred here although I appreciate the defendant wanted to introduce a computer system which met other business requirements in addition to payslip information.

28 Although there is no evidence of any underpayment and no complaint from any employee this is not a case in which it would be appropriate to decline to impose any penalty at all. Obligations imposed by awards, and in this case, by reg 132B, are serious. In Gibbs v City of Altona (1988) 42 IR 255 Gray J reviewed a number of authorities dealing with breaches of award. Similar principles should be applied to breaches of the Workplace Relations Regulations. At 259 His Honour stated:

"It is not appropriate to impose the maximum penalty, nor to treat the matter as one appropriate for no penalty, or for nominal penalty only."

29 In that case a penalty of $700 was imposed for failing to hold discussions with the union about the proposed termination of an employee and a penalty of $50 for failing to provide the union in writing all relevant information about the proposed termination. The aggregate penalty of $750 was by order paid to the union.

30 In all the circumstances I consider an appropriate penalty in this case to be $10 for each of the 180 charges, an aggregate penalty of $1,800 and I will order that the aggregate penalty be paid to the union pursuant to s 356 of the Act.

Orders

The Court:

1. Orders that the order of 8 September 1998 that "the respondent pay the applicant's costs in respect of the Motion" be vacated.

2. Declares that the defendant failed to specify the relevant particulars required by reg 132B on the 180 occasions set out in the charges contained in the Information filed 23 October 1997.

3. Orders the defendant to pay a penalty of $10 in respect of each of the 180 charges.

4. Orders that each penalty of $10, in aggregate $1800, be paid to the Australian Liquor, Hospitality and Miscellaneous Workers Union pursuant to s 356 of the Act.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of Judicial Registrar Ryan

Associate:

Dated: 12 FEBRUARY1999

Solicitor for the Applicant:	Mr B Tee, Australian Liquor, Hospitality and Miscellaneous Workers Union
Counsel for the Respondent:	Mr C Kourakis, QC
Solicitor for the Respondent:	Manuel Fuller Merrigan
Dates of Hearings:	25 September 1998, 27 October 1998
Written Submissions:	29 October 1998, 3 November 1998, 5 November 1998
Date of Judgment:	12 February 1999