Fair Work Ombudsman v Bedington

Transcription

FEDERAL MAGISTRATES COURT OF AUSTRALIA
FAIR WORK OMBUDSMAN v BEDINGTON
[2012} FMCA 1133
INDUSTRIAL LAW- 'Sham' contract of employment- agreed statement of
facts - admission of breach - considerations regarding penalty - agreed penalty
not appropriate - penalty fixed.
Corporations Act 2001
Fair Work Act 2009 (Cth), ss.14(a), 44, 45, 87(2), 90(2), 357(1), 539(2),
545(1), 546(1), 547(2), 550, 550(2), 557, 712
Hair and Beauty Industry Award 2010, c1.33.3
A & L Silvestly Pty Limited v Construction, Forestry, Mining and Energy
Union [2008] FCA 466
Australian Ophthalmic Supplies Pty Ltd v MeA/my-Smith (2008) 165 FCR
560
Carr v CEPU [2007] FMCA 1526
CPSUv Telstra Corporation Limited (2001) 108 IR 228
Darlaston v Risetop Construction Pty Ltd and Ors [20 11] FMCA 220
Fair Work Ombudsman v Centennial Financial Services Pty Ltd [2011] FMCA
459
Fair Work Ombudsman v Land Choice Pty Ltd [2009] FMCA 1255
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Limited [2007] FMCA 7
Mornington Inn Pty Ltdv Jordan (2008) 168 FCR 383
Plancor Pty Ltd v LHMU (2008) 171 FCR 357
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Applicant:
FAIR WORK OMBUDSMAN
Respondent:
BRYAN CHARLES BEDINGTON
File Number:
BRG360 of2012
Judgment of:
Jarrett FM
Hearing date:
8 October 2012
Date of Last Submission:
27 November 2012
Fair Work Ombudsman v Bedington [2012] FMCA 1133
Cover sheet and Orders: Page 1
Delivered at: Brisbane
Delivered on: 29 November 2012
REPRESENTATION
Solicitor for the Applicant:
Ms Olsen
Solicitors for the Applicant:
Fair Work Ombudsman
Solicitor for the Respondent:
Ms Milner
Solicitors for the Respondent:
Milner Lawyers
ORDERS
THE COURT DECLARES THAT:
(1) New Image Beauty Salons Pty Ltd contravened s.357 of the Fair Work
Act 2009 by misrepresenting to Daniel Elder that the contract of
employment under which he was employed was a contract for services
under which he was to perform work as an independent contractor;
Act 2009 by misrepresenting to Muhammad Mehdi that the contract of
under which he was to perform work as an independent contractor;
Act 2009 by misrepresenting to Kayne Turner that the contract of
under which he was to perfonn work as an independent contractor;
Act 2009 by misrepresenting to J essica Bradley that the contract of
employment under which she was employed was a contract for services
under which she was to perfonn work as an independent contractor;
Fair Work Ombudsman v Bedington [2012] FMCA 1133 Cover sheet and Orders: Page 2
Act 2009 by misrepresenting to Natalie Towns that the contract of
under which she was to perform work as an independent contractor;
Act 2009 by misrepresenting to Samantha Dodd that the contract of
Act 2009 by misrepresenting to Esther Marshall that the contract of
(8) New Image Beauty Salons Pty Ltd contravened s. 44 of the Fair Work
Act 2009 by failing to pay to the persons named in declarations 1 - 7
hereof their accrued annual leave at termination pursuant to s.90 of the
Fair Work Act 2009;
Act 2009 by failing to pay to Samantha Dodd, Esther Marshall and
Kayne Turner their accrued annual leave loading at termination
pursuant to clause 33.3 of the Hair and Beauty Industry Award 201 0;
(10) The respondent was involved, within the meaning of s.550 of the Fair
Work Act 2009, in New Image Beauty Salons Pty Ltd's contraventions
set out in declarations 1 - 9 hereof.
THE COURT ORDERS THAT:
(11) The Respondent pay a penalty under s.546(1) and 550 of the Fair Work
Act 2009 for New Image Beauty Salons Pty Ltd's contravention of s.44
of the Fair Work Act 2009 in the amount of$1,980.
Act 2009 for New Image Beauty Salons Pty Ltd's contravention of s.45
of the Fair Work Act 2009 in the amount of$1,980.
Act 2009 for New Image Beauty Salons Pty Ltd's contravention of
s.357 of the Fair Work Act 2009 in respect of:
(a)
Daniel Elder in the amount of$1,980;
(b)
Muhammad Mehdi in the amount of $1 ,980;
(c)
Kayne Turner in the amount of$1,980;
(d)
Samantha Dodd in the amount of $1 ,980;
(e)
Esther Marshall in the amount of $1 ,980;
(f)
Natalie Town in the amount of$1,980; and
(g)
Jessica Bradley in the amount of$1,980.
(14) That the Respondent pay the penalties imposed under orders 11 to 13 to
the Applicant within 28 days of the date of this order.
(15) That the Applicant apply the monies received by it under order 14 as
follows:
(a)
distributing the following amounts to the followingpersons:
(i) Daniel Elder
$1,178.76
(ii) Jessica Bradley
$997.41
(iii) N atalie Towns
$149.08
(iv) Muhammad Mehdi
$680.05
(v) Samantha Dodd
$1,512.74
(vi) Kayne Turner
$2,164.38
(vii) Esther Marshall $1,605.84
·~,
(b) if the Applicant is unable to locate any of the persmJset out in
order 15(a) hereof the Applicant shall remit any monies held on
account of those persons to the Commonwealth Consolidated
Revenue Fund; and
(c) in respect of any remainder, remitting to the Commonwealth
Consolidated Revenue Fund.
(16)
Each party bear their own costs.
Cover sheet and Orders: Page 5 FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE
BRG 360 of 2012
FAIR WORK OMBUDSMAN
Applicant
And
BRYAN CHARLES BEDINGTON
Respondent
REASONSFORJUDGMENT
1. The Fair Work Ombudsman alleges that the respondent, Mr Bryan
Bedington, was involved in certain breaches of the Fair Work Act 2009
that were committed by New Image Beauty Salons Pty Ltd. Mr
Bedington admits that New Image contravened the Fair Work Act as
alleged and that he was involved in those contraventions as alleged.
By this application, the Fair Work Ombudsman seeks the imposition of
pecuniary penalties upon Mr Bedington in respect of the admitted
contraventions.
2. Essentially, the allegations against New Image and Mr Bedington are
that New Image misrepresented to certain employees that they were
engaged under a contract for services, when in fact they were each
engaged under a contract of employment. That is to say, the allegation
is one of sham contracting. It is alleged, and admitted, that as a
consequence of the manner in which they were engaged, each of the
relevant employees was not paid any annual leave or annual leave
entitlements in contravention of the Fair Work Act.
Fair Work Ombudsman v Bedington [2012] FMCA 1133 Reasons for Judgment: Page 1
3. The application proceeds before me as a penalty hearing on the basis of
an agreed statement of facts. The parties agree on the penalty that the
Court might consider imposing. The form of the order to be made by
the Court is also agreed between the parties. For reasons that appear
below, however, I have difficulty with the agreed penalty suggested by
the parties and the form of the orders I am asked to make.
The Relevant Facts
4. The parties have agreed on a statement of facts for the purposes of this
application. The agreed facts are set out in a document entitled
"Amended Statement of Agreed Facts" filed in court on 8 October,
2012. The following recitation of the relevant facts comes largely,
although not exclusively, from that document.
5. New Image was at all material times:
a) duly incorporated under the Corporations Act 2001 (Cth);
b) a national system employer within the meaning of s.14(a) of the
Fair Work Act;
c) carrying on a business located at 859 Stanley Street,
Woolloongabba, Brisbane, the principal functions of which were
photographic services in the nature of mobile photographic and
associated make-over services across Australia; and
d) for varying periods between about 20 January, 2011 to 1
December, 2011 New Image employed the employees
particularised later in these reasons.
6. Liquidators were appointed to New Image on 7 September, 2011.
7. At all material times Mr Bedington was:
a) the sole director ofNew Image;
b) the secretary ofNew Image;
c) the majority shareholder ofBryna Pty Ltd, the sole shareholder of
New Image;
d) responsible for the day to day management, direction and control
ofNew Image's operations and business;
e) responsible for determining the terms and conditions upon which
workers were engaged in the business; and
f) responsible for implementing a system of work whereby workers
were engaged in the business as independent contractors.
8. Daniel Elder, Jessica Bradley, Natalie Towns and Muhammad Mehdi
were each engaged on a full-time basis to work in the business as
photographers travelling around Australia taking portrait and glamour
photographs of clients of New Image, selling those photographs to the
clients, processing sales and setting up and cleaning up the various
venues.
9. Samantha Dodd, Esther Marshall and Kayne Turner were engaged on a
full-time basis to work in the business as make-up artists travelling
around Australia doing hair and makeup and perfonning makeovers of
clients of New Image for photographic shoots, and setting up and
cleaning up the various venues. Ms Marshall was also employed as a
photographer.
10. The particulars of the relevant employees and their employment are:
Employee
Age
Daniel Elder
21
14 February, 2011
14 August, 2011
Jessica Bradley
20
11 April, 2011
10 September, 2011
9 May, 2011
31 May, 2011
20 April, 20 11
2 August, 2011
14 February, 2011
14 August, 2011
17 March, 2011
1 December, 2011
20 January, 2011
1 August ,2011
Date Started
N atalie Towns
Muhammad Mehdi
Samantha Dodd
Kayne Turner
Esther Marshall
19
Fair Work Ombudsman v Bedington [2012] FMCA 1133 Date Finished
Reasons for Judgment: Page 3
11. In respect of each of the employees particularised above:
a) New Image exercised a high degree of control over the manner in
which they performed their work;
b) New Image provided to each employee the tools and equipment
necessary to perform the work including a trailer, all of the
photography equipment, accessories, makeup and tools and other
items necessary for the application of make-up and styling hair, a
lap-top computer, printer and EFTPOS machine;
c) New Image reimbursed them for any purchases they made m
relation to the camera, laptop and printer;
d) they were each prevented from subcontracting or delegating their
work;
e) they were not free to refuse work allocated to them by New
Image;
f) they were unable to work for others;
g) they were not required to generate invoices in order to receive
payment from New Image;
h) they had no control over what New Image's clients were charged
for photographs and were required to sell photographs m
accordance with New Image's pricing structure; and
i) they were not required to possess any qualifications.
12. The parties agree that each of the employees was engaged by New
Image as an employee, and not an independent contractor. However, at
the time each employee was engaged New Image represented to each
that the contract under which he or she would perform the work was a
contract for services by which they would perform the work as an
independent contractor.
13. Each employee received a letter of offer (for present purposes m
identical terms) before the engagement was perfected.
A
representation about the nature of the engagement was contained in the
letter of offer as follows:
14. a) clause 1 of the letter of offer provided: "We will engage you as a
selfemployed Photographer/Make Up Artist with effect from ... to
carry out the services ("the Services") required of
Photographers/Make Up Artists as specified in our manual, a
copy of which has been handed to you with this letter of offer
("the Manual''). "
b) clause 3 of the letter of offer provided: "You declare that you
shall have the status of a self-employed person and shall not be
entitled to any wage, salary, leave entitlements of any nature,
bonus, fringe benefit or other entitlement or benefit other than
. . ,,
commzsszon ... .
Another series of misrepresentations about the nature of the
engagement was made orally on behalf of New Image by another
employee, Rajesh Parmar, as follows:
a) Parmar said to Mr Elder, Ms Dodd, Ms Towns, Mr Mehdi and Mr
Turner (separately the time of the engagement of each) words to
the effect that they were required to obtain an Australian Business
Number;
b) Parmar said to Ms Towns orally in or about late March or early
April, 2011 that she would be engaged as an independent
contractor;
15. c) Parmar accepted from Ms Marshall the details of her Australian
Business Number;
d) Parmar said to Mr Mehdi in about April, 2011 words to the effect
that he was being engaged as an independent contractor; and
e) Parmar said to Mr Turner orally in about March, 20 11 words to
the effect that he was being engaged as an independent contractor.
Further, other misrepresentations were made orally on behalf of New
Image by another employee, Antonia Young, who Mr Bedington
21. By letter dated 24 August, 2010 sent by the Fair Work Ombudsman to
New Image (as opposed to New Image Photographics Pty Ltd) and Mr
Bedington, the Fair Work Ombudsman formally cautioned New Image
and Mr Bedington and advised them to undertake corrective action to
ensure New Image did not continue to engage workers as independent
contractors when their working arrangements were more properly
characterised as an employment relationship.
22. Mr Bedington agrees that by reason of the letter of caution New Image
knew that when the representations set out above were made to the
employees they were in fact being engaged as employees and not as
independent contractors. Further, by reason of the letter of caution
New Image, at the time the representations were made to the
employees, was reckless as to whether the contracts were contracts of
employment rather than contracts for services.
23. On 5 April, 2011 the Office of the Fair Work Ombudsman issued a
letter to New Image advising it that the Fair Work Ombudsman was
conducting a national compliance campaign in relation to sham
contracting to ensure compliance with Commonwealth workplace laws
and that the business has been selected for auditing. The letter
requested completion of an enclosed 'Entity information form' and
provision of documentation in relation to certain matters by 18 April,
2011.
24. On 5 May, 2011 the Office of the Fair Work Ombudsman issued a
Notice to Produce Records or Documents pursuant to s.712 of the Fair
Work Act to New Image and Mr Bedington requiring documents be
provided relating to contractors engaged by New Image by 20 May,
2011. Some documents were provided pursuant to the request.
25. On 12 August, 2011 the Office of the Fair Work Ombudsman issued a
'Notification of Outcome' letter to New Image and Mr Bedington
advising that it was not satisfied that New Image was complying with
the provisions of the Fair Work Act relating to sham arrangements. The
letter advised that further action would be taken. It required further
documents to be produced relating to all independent contractors
engaged by New Image by 2 September, 2011.
26. On 2 September, 2011 the Office of the Fair Work Ombudsman
received information in relation to the engagement of Samantha Dodd,
Jessica Bradley, Natalie Towns, Esther Marshall, Muhammad Mehdi,
as well as some other people not the subject of this application.
27. On 31 October, 2011 the Office ofthe Fair Work Ombudsman issued a
letter to the Mr Bedington providing an offer for an interview with its
investigators. On 11 April, 2012 the Office of the Fair Work
Ombudsman issued a letter to Mr Bedington advising that the matter
was with the legal section, attaching a draft Statement of Claim and
providing the Mr Bedington with an opportunity to provide further
information, and (surprisingly) any legal advice, that may be relevant
by 19 April, 2012.
28. The parties were unable to resolve their differences and on 30 April,
2012 the Fair Work Ombudsman filed the Application and Statement
of Claim in this matter.
Agreed Conclusions
29. The parties agree that by reason of the matters set out above, the
representations made by New Image about the nature of the
engagement of each of the relevant employees, contravened s.357(1) of
the Fair Work Act.
30. The parties agree that the consequence of treating the above
particularised employees as employees rather than independent
contractors is that in respect of the employment of Ms Dodd, Ms
Marshall and Mr Turner, the Hair and Beauty Industry Award 2010
applied to cover their employment with New Image. The parties
further agree that at all material times Ms Dodd, Ms Marshall and Mr
Turner were employed in the 'Hair and Beauty Employee Level 2'
classification within the meaning of Schedule B of that Award. At the
time of the termination of their employment they were entitled to a
base rate of pay for ordinary hours of work of$16.94 per hour.
31. The employment of Ms Towns, Mr Elder, Ms Bradley and Mr Mehdi
was not covered by a modem award or other industrial instrument. The
parties agree that they were each entitled to be paid the national
minimum wage under the Fair Work Act.
32. At the time of the termination ofMs Town's employment the national
minimum wage was $15.00 per hour in accordance with s.287(1) of the
Fair Work Act.
33. At the time of the termination of Mr Elder's, Ms Bradley's and Mr
Mehdi's employment the national minimum wage was $15.51 per hour
in accordance with s.287(1) of the Fair Work Act.
34. Further, s.44 of the Fair Work Act provides that an employer must not
contravene a provision of the National Employment Standards (NES).
35. Pursuant to s.87(2) of the Fair Work Act (which is contained in the
NES), an employee's entitlement to paid annual leave accrues
progressively during a year of service according to the employee's
ordinary hours of work. Pursuant to s.90(2) of the Fair Work Act
(which is also contained in the NES), if, where the employment of an
employee ends, the employee has a period of untaken annual leave,
New Image must pay the employee the amount that would have been
payable to the employee had the employee taken that period of leave.
36. The relevant employees in this case did not take any annual leave
during the period of their respective employment with New Image.
Upon the tennination of their employment, none of them received any
payment in lieu of their accrued but untaken annual leave.
37. Moreover, cl.33.3 of the Hair and Beauty Industry Award 2010
provides that during a period of annual leave an employee will receive
a loading calculated on the rate of wage payable under the Award.
Annual leave loading is payable on accrued annual leave at the rate of
17.5%. Upon the termination of their employment Ms Dodd, Ms
Marshall, and Mr Turner were entitled to be paid leave loading on
payments for accrued but untaken annual leave. They did not receive
payment of that loading.
38. Upon the tennination of their employment the employees had accrued
annual leave, and were entitled to payments therefor (and in the
instances set out below, leave loading), as follows:
Employee
Daniel Elder
J essica Bradley
Natalie Towns
Muhammad
Mehdi
Samantha
Dodd
Kayne Turner
Esther
Marsh all
Entitlement Loading
Hours
accrued
Total
Underpayment
76
$1,178.76
$1,178.76
64.31
$997.41
$997.41
9.94
$149.08
$149.08
43.85
$680.05
$680.05
76
$1,287.44
$225.30
$1,512.74
108.74
$1,842.03
$322.35
$2,164.38
80.68
$1,366.67
$239.17
$1,605.84
Total
$8,288.26
39. New Image contravened s.90(2) of the Fair Work Act by failing to pay
the employees their accrued annual leave. In failing to comply with
s.90(2) of the Fair Work Act, New Image contravened s.44 of the Fair
Work Act, a civil remedy provision according to s.539(2) of the Fair
Work Act.
40. Further, New Image contravened cl.33.3 of the Hair and Beauty
Industry Award 2010 by failing to pay toMs Dodd," Ms Marshall and
Mr Turner their leave loading on accrued but untaken annual leave. In
failing to comply with cl.33.3 of the Hair and Beauty Industry Award
2010 New Image contravened s.45 of the Fair Work Act - a civil
remedy provision under s.539(2) of the Fair Work Act.
41. Further, the parties agree that by reason of the
Bedington and set out in paragraphs 5 and
Statement of Agreed Facts (set out in paragraph
he received the letter of caution, Mr Bedington
Fair Work Ombudsman v Bedington [2012] FMCA 1133 facts admitted by Mr
10 of the Amended
7 above) and because
was involved in New
Image's contravention as that term is defined in s.550(2)(c) of the Fair
Work Act, because he:
a) aided, abetted, counselled or procured;
b) induced; and/or
c) by way of his acts or omissions, was knowingly concerned in or a
party to;
the contraventions.
42. Mr Bedington is therefore to be treated as having himself contravened
ss.44, 45 and 357, of the Fair Work Act.
43. The parties agree that an appropriate approach in this case is to group
the contraventions together into three groups and to apply a total single
penalty in respect of all groups of contravention. The parties
recommend that after taking into account a discount of 20% on the
possible maximum penalty ($19,800), a penalty of 50% thereof
($7,920) be imposed.
That amount is less than the agreed
underpayments to the employees.
Consideration
44. As I pointed out in Director, Fair Work Building Industry Inspectorate
v Supernova Contractors Pty Ltd ACN 099 426 552 & Anor [2012]
FMCA 935 this Court reiterated much of the authority on the principles
concerning agreed penalty in Carr v CEPU [2007] FMCA 1526 at [6].
Those principles include that:
a) the Court bears ultimate responsibility for penalty, is not bound
by the parties' agreement, and must consider for itself what
constitutes an appropriate penalty;
b) determining the quantum of an appropriate penalty is not an exact
science, and within a permissible range a particular figure is not
necessarily more appropriate than another figure;
c) promoting settlement of litigation (pmiicularly lengthy litigation)
is in the public interest, and where the pmiies agree on facts and
penalty, they may present a statement of agreed facts, including a
view as to the effect of those facts, and submissions on penalty;
45. d) the view of the regulatory body is relevant, particularly where the
view concerns matters within the regulator's expertise, but not
determinative of penalty;
e) in determining an appropriate penalty the Court will examine all
the circumstances, including an agreed statement of facts, and, if
appropriate, may act on that statement; and
f) a jointly proposed penalty will not be rejected simply because the
Court might have chosen a different figure: it is sufficient if the
jointly proposed penalty is "within the permissible range" or
"broadly speaking" within that range.
More recently, in Fair Work Ombudsman v Bottcher [2010] FMCA
956 O'Sullivan FM observed:
85. In relation to the parties agreed position in NW Frozen
Foods Pty Ltd v ACCC [1996} FCA 1134; (1996) 71 FCR 285
the Federal Court noted that there is a public interest in
promoting settlement of litigation and to this end parties may
present to the Court joint submissions as to the recommended
penalty to be imposed.
86. There is also the decision in Wells v Locamo Management
Pty Ltd [2008} FCA 1034 at 23 where Jessup J said:
"The predictability involved in the resolution of penal
proceedings in accordance with a pre-trial agreement reached by
the parties is something which should as a matter of public policy
be regarded as beneficial."
87. I accept as was said in Minister for Industry, Tourism &
Resources v Mobil Oil Australia Pty Ltd [2004} FCAFC 72 at
paragraph [53} that:
((
(iii) There 1s a public interest in promoting settlement of
litigation...
(vi) Where the parties have jointly proposed a penalty, it will
not be useful to investigate whether the Court would have arrived
at that precise figure in the absence of agreement. The question is
whether that figure is, in the Court's view, appropriate in the
circumstances of the case. In answering that question, the Court
will not reject the agreed figure simply because it would have
been disposed to select some other figure. It will be appropriate if
within the pem1issible range."
46. In Fair Work Ombudsman v Roselands Fruit Market Pty Ltd [2010]
FMCA 599 at paragraphs [22] to [26], Driver FM summarised the
approach the Court should follow in an application for the imposition
of a pecuniary penalty for a contravention of the Workplace Relations
Act 1996 (Cth) as follows:
22. The first step for the Court is to identify the separate
contraventions involved. Each breach ofeach separate obligation
found in the AFPCS, the NAPSA is a separate contravention of a
term ofan applicable provision for the purposes ofs. 719.
23. However, s. 719(2) provides for treating multiple breaches,
involved in a course ofconduct, as a single breach.
24. Secondly, to the extent that two or more contraventions have
common elements, this should be taken into account in
considering what is an appropriate penalty in all the
circumstances for each contravention. The respondents should
not be penalised more than once for the same conduct. The
penalties imposed by the Court should be an appropriate
response to what the respondent did. This task is distinct from
and in addition to the final application ofthe "totality principle".
25. Thirdly, the Court will then consider an appropriate penalty
to impose in respect of each course of conduct, having regard to
all ofthe circumstances ofthe case.
26. Fourthly and finally, having fixed an appropriate penalty for
each group of contraventions or course of conduct, the Court
should take a final look at the aggregate penalty, to determine
whether it is an appropriate response to the conduct which led to
the breaches. The Court should apply an "instinctive synthesis"
in making this assessment. This is what is known as an
application ofthe "totality principle".
47.
The principles applicable to the determination of penalties for
contravention of the civil remedy provisions such as those under
consideration in this case were summarised by Mowbray FM in Mason
v Harrington Corporation Limited [2007] FMCA 7 and adopted by
Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14. In Kelly Tracey J
considered authorities relevant to contraventions of the Trade Practices
Act 1974 (Cth) as well as those concerning contraventions of
Workplace Relations Act 1996 (Cth).
48. In Fair Work Ombudsman v Centennial Financial Services Pty Ltd
[20 11] FMCA 459 at [32], Cameron FM set out considerations relevant
to the consideration of penalties under the sham contracting provisions
of the Workplace Relations Act 1996 as they appeared to his Honour in
that case. His Honour suggested that the matters relevant to the
determination of the appropriate penalty (in the case before him)
included:
a) the nature and extent of the conduct relevant to the breach;
b) the circumstances of the breach;
c) the damage resulting from the breach;
d) whether there had been similar prior conduct by the respondent;
e) whether there was a pattern of conduct or an isolated instance of a
breach;
f) the size of the respondents' business;
g) whether senior managers were involved in the breach;
h) whether there had been contrition, restitution and co-operation
with the regulatory authority;
i) whether the respondent had a culture of compliance; and
j) the need for specific and general deterrence.
49. In Supernova Contractors (above) I accepted that those considerations
were generally relevant, and that also relevant are:
a)
the purpose of the statutory provision that has been breached;
b) the maximum penalty that the legislature has set for the
contravention; and
c) 50. whether there has been defiance of the law by the respondent, or
genuine misunderstanding as to its operation.
The above listed considerations are not exhaustive. The principles are
for guidance and do not fetter the Court's discretion as to the matters
that should be considered in setting a penalty: Sharpe v Dogma
Enterprises Pty Ltd [2007] FCA 1550 at [11], A & L Si/vestry Pty
Limited v Construction, Forestry, Mining and Energy Union [2008]
FCA 466 at [6]. Some of the matters referred to may be more
important than others and each of them must be weighed in the
'instinctive synthesis' that is necessarily part of the process of
determining penalty: Australian Ophthalmic Supplies Pty Ltd v
McAlary-Smith (2008) 165 FCR 560 and Mornington Inn Pty Ltd v
Jordan (2008) 168 FCR 383 at [60]- [63].
Grouping of contraventions
51. The parties agree that it is open to the Court to group separate
contraventions together where the contraventions may be said to
overlap with each other or involve the potential punishment of Mr
Bedington for the same or substantially similar conduct. The Fair
Work Ombudsman accepts that some of the contraventions have
common elements and this should be taken into account in considering
an appropriate penalty to ensure that the Mr Bedington is not punished
more than once for the same or substantially similar conduct.
52. The parties consider that grouping is appropriate in this case and they
suggest that the Mr Bedington' s contraventions could be grouped into
the following three categories:
a) A contravention of s.357 of the Fair Work Act for
misrepresenting to each of the employees that their contract of
employment was a contract for services under which each of them
was to perform work as an independent contractor. Although
there are seven employees involved and each occasion of
misrepresentation is a contravention of the Fair Work Act, it is
said that this series of contraventions should be treated as one
arising out of the same course of conduct pursuant to s.557(1) of
the Fair Work Act and should attract a maximum penalty of
$6,600;
b) A contravention of s.44 of the Fair Work Act 2009 (by virtue of
failing to pay the employees their accrued annual leave at
termination pursuant to s.90 of the Fair Work Act) (maximum
penalty $6,600); and
c) In contravention of s.45 of the Fair Work Act (by virtue of failing
to pay Ms Dodd, Ms Marshall and Mr Turner their accrued
annual leave loading at termination pursuant to cl.33.3 of the
Award) (maximum penalty $6,600).
53. In her written submissions, the solicitor for Mr Bedington argues that
the categories could be collapsed into two and the second and third
categories set out above could be dealt with as one.
54. Neither party's submissions seek to draw a distinction between the
contraventions alleged and admitted, and the process of assessing a
penalty for those contraventions. As I have just set out, the Fair Work
Ombudsman argues that the first category of contraventions arising out
of the misrepresentations as to the nature of the relevant engagements
should be seen as a single contravention ofs.357 ofthe Fair Work Act.
The orders that the parties agree the Court should make bear that out.
But in my view, that approach is erroneous.
55. Relevantly s.557(1) of the Fair Work Act is in the following terms:
557 Course ofconduct
(I) For the purposes of this Part, 2 or more contraventions of a
civil remedy provision referred to in subsection (2) are, subject to
subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person;
and
(b) the contraventions arose out of a course of conduct by
the person.
Fair Work Ombudsman v Bedington [2012] FMCA 1133 Reasons fm Judgment: Page 16
56. Section 357 of the Fair Work Act is not specified in s.557(2) of the Fair
Work Act. Accordingly, s.557(1) can have no application to the
multiple contraventions of s.357 of the Fair Work Act.
57. Section 357 of the Fair Work Act is in the following terms:
357 Misrepresenting employment as independent contracting
arrangement
(1) A person (the employer) that employs, or proposes to employ,
an individual must not represent to the individual that the
contract of employment under which the individual is, or would
be, employed by New Image is a contract for services under
which the individual performs, or would perform, work as an
independent contractor.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) Subsection (1) does not apply if New Image proves that, when
the representation was made, the employer:
(a) did not know; and
(b) was not reckless as to whether; the contract was a
contract ofemployment rather than a contract for services.
58. Assuming for the moment that in respect of each of the seven relevant
employees there was only one misrepresentation (made in writing by
the letter of offer each received), there have been seven contraventions.
For the purposes of making a declaration about the relevant
contraventions (as the parties seek), there is no warrant in the Fair
Work Act to simply declare that New Image contravened s.357 of the
Fair Work Act by misrepresenting to each of the employees that the
contract of employment under which each of them was employed was a
contract for services under which each of them was to perform work as
an independent contractor. A declaration in such tenns would do little
to "clearly identifY the contravening conduct" as the Fair Work
Ombudsman submits.
59. Having regard to the allegations in paragraphs 32 and 33 of the
statement of claim filed on 30 April, 2012 it is apparent that there are at
a minimum seven contraventions and perhaps as many as 18
contraventions of s.357 of the Fair Work Act alleged. It is apparent
from the Amended Statement of Agreed Facts that the allegations in
paragraphs 32 and 33 of the statement of claim are admitted by Mr
Bedington.
60. For the purposes of identifying the relevant contraventions, in my view
it is not open to treat all of the alleged contraventions of s.357 of the
Fair Work Act as one contravention. That says nothing about how the
Court approaches the task of assessing the penalty for the identified
breaches, but it is necessary, as a first step, to identify the relevant
contraventions.
61. Section 557(2) of the Fair Work Act specifies the civil remedy
provisions to which s.557(1) applies. Sections 44 and 45 of the Fair
Work Act are specified in s.557(2), and so, it is permissible to treat the
multiple contraventions of ss.44 and 45 of the Act (non-payment of
annual leave and, where appropriate annual leave loading, for each of
the employees - a total of 10 possible contraventions) as single
contraventions of each section. Each of those contraventions was
committed by the same person and, I accept, arose out of a course of
conduct by that same person. They should be taken to constitute a
single contravention of each of ss.44 and 45 of the Fair Work Act.
62. However, in my view it is not appropriate to collapse the breaches of
s.44 and s.45 of the Fair Work Act together as a single contravention as
Mr Bedington argues. By its tenns, s.557(1) applies to 2 or more
contraventions of a civil remedy provision. In my view, that means the
same civil remedy provision. Sections 44 and 45 are separate and
distinct civil remedy provisions.
63. Section 539(2) of the Fair Work Act prescribes that the maximum
penalty that may be imposed by this Court for a contravention of ss.44,
45 and 357 of the Fair Work Act is 60 penalty units. Section 546(2) of
the Fair Work Act prescribes that a pecuniary penalty imposed by the
Court on an individual must not be more than the maximum number of
penalty units provided for in s.539(2). A penalty unit is equivalent to
$110.00. Therefore, the maximum penalty that may be imposed by the
Court on Mr Bedington for each contravention of the Fair Work Act is
$6,600.
64. In my view, the maximum penalties that might be irnposed upon Mr
Bedington are as follows:
Contravention Employee
Paragraphs of Maximum
statement
of Penalty
claim
s.357
32
$6,600
33a)
$6,600
Jessica Bradley
32
$6,600
Natalie Towns
32
$6,600
33a)
$6,600
33c) .
$6,600
33d)
$6,600
32
$6,600
33a)
$6,600
33e)
$6,600
32
$6,600
33a)
$6,600
32
$6,600
33a)
$6,600
33f)
$6,600
32
$6,600
33b)
$6,600
33c)
$6,600
Daniel Elder
Muhammad
Mehdi
Samantha Dodd
Kayne Turner
Esther Marshall
s.44
All employees
$6,600
s.45
All employees
$6,600
Total
65. $132,000
To the extent that two or more contraventions have common elements,
this should be taken into account in considering what is an appropriate
penalty in all the circumstances for each contravention or course of
conduct. It is open to the Court to group separate contraventions
together, where various contraventions may be said to overlap with
each other, and involve potential punishment of Mr Bedington for the
same or substantially similar conduct. The penalties imposed by the
Court should be an appropriate response to what Mr Bedington did.
This task is distinct from and in addition to the final application of the
"totality principle" (see Fair Work Ombudsman v Roselands Fruit
Market Pty Ltd (above)).
66. The parties submit that I should group the contraventions of s.357
together as one contravention. As I have pointed out above, in my
view, s.557(1) of the Act does not permit such a course. Nonetheless, it
is "open to the Court in an appropriate case to take into account, as a
matter of discretion, the circumstance that the same acts or omissions
had resulted in multiple contraventions by multiple breaches of terms
cast in similar language in each of the multiple agreements by
imposing a lesser penalty or even no penalty in respect of breaches of
some terms, while imposing a substantial penalty in respect ofbreaches
of other terms" (QR Ltd v Communications, Electrical, Electronic,
Energy, Information, Postal, Plumbing and Allied Services Union of
Australia [2010] FCAFC 150).
67. In my view, to treat all of the breaches of s.357 of the Act as arising out
of the same course of conduct would be to disregard the fact that a
separate course of offending conduct occurred in respect of each
employee. As a generality it might be said that the conduct in respect
of each employee was the same of the same character, but that does
nothing to recognise that the conduct was repeated multiple times in
respect of each employee, seemingly on different occasions and in
different contexts. The multiple misrepresentations said to have been
made during the recruitment of each employee to him or her might
properly be treated as a single contravention. But in my view it would
be erroneous to treat as a single contravention · all of the
misrepresentations to all of the employees irrespective of the individual
circumstances attendant upon the recruitment of each employee.
68. The contraventions in this application as they relate to separate
employees do not arise out of the same acts or omissions ofNew Image
or Mr Bedington. The contraventions of s.357 of the Act in respect of
each employee should be treated separately. As was pointed out by
Bumett FM in Fair Work Ombudsman v Contracting Plus Pty Ltd
[2011] FMCA 191 at [80]- [81]
80. In this case it is agreed between the applicant and
respondents that there have been jive separate contraventions of
s. 900(1) of the Act in respect of each of the jive employees that I
have earlier identified. However, while it is accepted the Court
retains a discretion to consider whether the conduct giving rise to
the jive identified breaches stem from the course of conduct, the
applicant submitted that the better view is that each of the
breaches amounts to a separate and distinct course of conduct. I
think that is appropriate in this case. In particular, I consider it
appropriate because in this instance each individual was engaged
on different terms and conditions at different times and involved
the respondents' exercise of distinct and discrete powers in
relation to their engagement.
81. In my view, the breaches clearly did not stem from one
course ofconduct. It may have been different if each individual
had been engaged at the same time or all on the same terms and
conditions. That might invite an inference that there was one
course ofconduct. However, in this instance the evidence clearly
demonstrates that on each occasion the respondent turned its
mind discretely to the issue ofengagement and in each instance, it
seems to me, each engagement constituted a distinct and separate
contravention. On that basis, I am satisfied that each of the jive
sham contracting provisions should be considered discretely
(my emphasis)
69.
For similar reasons expressed by Bumett FM, I shall group the
contraventions of s.357 of the Act into seven groups being one
grouping for each employee.
Penalty
70. I accept that the contraventions in this matter represent a failure to
provide basic and important entitlements under workplace relations
legislation. The purpose of the legislation is to provide a safety net
which ensures adequate minimum entitlements to employees,
particularly those who are vulnerable or on low income roles. The
legislation is also designed to provide an even playing field for all
employers with regard to employment costs. I accept that the
contraventions of these fundamental entitlements undermine the
workplace relations regime as a whole and demonstrate a disregard for
the statutory obligations cast upon New Image and Mr Bedington who
controlled it.
71. The parties agree that New Image and Mr Bedington were advised by
letter dated 24 August, 2010 that the Fair Work Ombudsman had
determined a former worker to be an employee rather than an
independent contractor and that an audit would be scheduled to ensure
corrective action has been taken.
72. On 5 April 2011, the Fair Work Ombudsman issued a letter to New
Image advising that it had been selected for auditing in relation to sham
contracting to ensure compliance with Commonwealth workplace laws.
Mr Bedington's conduct in contravention of the Fair Work Act spanned
a period of approximately 11 months (between about 20 January, 2011
and 1 December, 2011) and involved seven employees. The sham
arrangements were in place for the entire period of each of the
respective employees' employment. I accept the Fair Work
Ombudsman's submission that it is likely that the contraventions would
have continued had the employees' employment with New Image not
ceased.
73. Mr Bedington has received a benefit from the underpayment of
entitlements to the employees for a significant period of time. The
underpayment has not been rectified and New Image is now in
liquidation.
74. I accept the Fair Work Ombudsman's submission that the
underpayment of $8,288.26 that arose from the contraventions is
comparatively significant in the context of the employees' relatively
short period of employment.
75. Some of the employees were relatively young when they were engaged
by New Image. I have set out their ages above.
76. Mr Mehdi was a Pakistani national and held a subclass 485 Skilled
Graduate (Temporary) Visa which allowed him to work in Australia.
77. I accept that some of the employees were vulnerable by reason of their
age or background and that this is a significant factor in determining
penalty: Workplace Ombudsman v Saya Cleaning Ply Ltd [2009]
FMCA38.
78. Mr Bedington was responsible for day to day management, direction
and control of New Image's operations and business. He was
responsible for determining the terms and conditions upon which
workers were engaged in the business and responsible for
implementing a system of work whereby workers were engaged in the
business as independent contractors. I accept that Mr Bedington 's
conduct was intrinsically linked to New Image's contraventions of the
Act.
79. I have already recorded that in the context of the employees' periods of
employment with New Age, the underpayment of entitlements is of
some significance. The underpaid amounts remain outstanding and the
employees have been without the benefit of their entitlements for a
considerable period.
80. As a result of previous contraventions identified by the Fair Work
Ombudsman, the letter dated 24 August, 201 0 formally cautioned New
Image and Mr Bedington to undertake corrective action to ensure they
did not continue to engage workers as independent contractors when
their working arrangements were more properly categorised as
employment. The contraventions which are subject to these
proceedings occurred after this date.
81. The parties have proceeded on the basis that New Image was, at the
relevant times, a small business. It is now in liquidation. Mr
Bedington has had the opportunity to file submissions and evidence for
the purposes of this hearing, but no evidence has been placed before
the Court on this issue.
82. Nonetheless, the factor is of little significance. Employees of small
concerns are as much entitled to the protections of the Fair Work Act as
employees of large concerns. There is no evidence before me of the
financial circumstances of Mr Bedington.
83. I am driven to the conclusion that by reason of the letter dated 24
August, 2010 New Image knew that when the representations were
made to the employees the misrepresentations were false. At the very
least, New Image and Mr Bedington had been put on notice by the Fair
Work Ombudsman that the engagement arrangements were not likely
to withstand scrutiny. To continue in the same way in light of that
information was at the very least reckless as to whether the contracts
were contracts of employment rather than contracts for services.
84. At the time of the contraventions, Mr Bedington was the sole director
and secretary of New Image and majority shareholder of Bryna Pty
Ltd, the sole shareholder of New Image. I accept that he was the
"directing mind and will" ofNew Image.
85. Mr Bedington has admitted to his involvement m New Image's
contraventions of the Act, as alleged by the Fair Work Ombudsman in
the Statement of Claim.
86. There is no evidence before the Court that the contraventions were
attributable to any other person or agent. I accept that the involvement
ofMr Bedington equates to involvement by senior management.
87. The cases indicate that a discount on the penalty to be imposed is
appropriate where there has been co-operation and admissions early in
the course of an investigation or soon after the commencement of
proceedings. Such discounts range as high as 30% in some cases.
However, consistent with the decision in Mornington Inn Pty Ltd v
Jordan (2008) 168 FCR 383 at [74]-[76]:
[74] It is important to note that it is not a sufficient basis for a
discount that the plea has saved the cost ofa contested hearing
that would discriminate against a person who exercised a right to
contest the allegations. A discount may be justified, however, if
the plea is properly to be seen as willingness to facilitate the
course of justice. Remorse and an acceptance of responsibility
also merit consideration where they are shown.
[75] A conventional consideration in assessing a discount in a
criminal case for a plea ofguilty is the stage in theproceedings at
which the plea is entered. Normally, the maximum discount for
this factor, sometimes thought to be 25%, is reserved for a plea
made at the first reasonable opportunity, although, as was
indicated in Cameron (at [23]-[24}), there is no obligation to
make an early plea to a charge which wrongly particularises the
substance to which the charge relates.
[76] As Branson J has pointed out (see Alfred v Wafter
Construction Group Ltd [2005] FCA 497) the rationale for
providing a discount for an early plea ofguilty in a criminal case
does not apply neatly to a case, such as the present, where a civil
penalty is sought and the case proceeds on pleadings.
Nevertheless, in our view, it should be accepted, for the same
reasons as given in Cameron, that a discount should not be
available simply because a respondent has spared the community
the cost ofa contested trial. Rathe1~ the benefit ofsuch a discount
should be reserved for cases where it can be fairly said that an
admission of liability: (a) has indicated an acceptance of
wrongdoing and a suitable and credible expression of regret;
and/or (b) has indicated a willingness to facilitate the course of
justice.
88. The Fair Work Ombudsman acknowledges that New Image and Mr
Bedington did partially cooperate with the Fair Work Inspectors during
the investigation in this matter. The Fair Work Ombudsman also
acknowledges that Mr Bedington has considerably shortened and
assisted the litigation process, and reduced costs to the public purse, by
admitting liability and reaching agreement about the facts to be placed
before the Court.
89. The Fair Work Ombudsman submits that Mr Bedington is entitled to a
discount in the penalty to be awarded as a result of his:
a) co-operation in the Fair Work Ombudsman's audit of the
employees and in the conduct of these proceedings; and
b) early acknowledgement of liability and entering into the
statement of agreed facts, which has shortened and assisted the
litigation process and reduced the costs to the public purse.
90. However, Mr Bedington has taken no corrective action and the
underpayments remain outstanding. There is no evidence of genuine
contrition on the part of Mr Bedington, other than what little can be
inferred from his agreement on liability and penalty. It is not clear to
me, either from the material relied upon by Mr Bedington, or the
submissions made on his behalf that it can be fairly said that his
admission of liability indicates an acceptance of wrongdoing and a
suitable and credible expression of regret or has indicated a willingness
to facilitate the course ofjustice.
91. In the circumstances, I am of the view that a modest discount of 10% is
appropriate in this case to reflect the co-operation that Mr Bedington
has afforded the Fair Work Ombudsman in its investigations.
92. It is well-established that the need for specific and general deterrence is
a factor that is relevant to the imposition of a penalty under the Act. It
is submitted by the Fair Work Ombudsman that there is a need for both
specific and general deterrence in this matter.
93. The role of general deterrence in determining the appropriate penalty is
illustrated by the comments of Lander J in Ponzio v B & P Caelli
Constructions Ply Ltd (2007) 158 FCR 543 at [93]:
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 1. 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. lf the penalty does not demonstrate an appropriate
assessment ofthe seriousness ofthe 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.
94. I accept the submissions of the Fair Work Ombudsman that it is
appropriate for the Court to send a clear message to persons in Mr
Bedington's position and industry in general that contraventions of the
Fair Work Act are serious and that persons bound by obligations
imposed by the Act need to take them seriously.
95. The Fair Work Ombudsman also submits that general deterrence IS
important in the present case as the contraventions involved 7
employees, some of who were vulnerable by reason of their age or
background. It is particularly important that the Court impose a penalty
that demonstrates to employers of such workers the importance of
complying with Commonwealth workplace laws. Regardless of the
size of New Image and its financial position, the law should mark its
disapproval of the conduct in question, and set a penalty which serves
as a warning to others. I accept that there is a need to send a message
to the community at large, and small employers particularly, that the
correct entitlements for employees must be paid and that steps must be
taken by employers (of all sizes) to properly ascertain and comply with
the Fair Work Act and its provisions relating to sham contracting and
minimum entitlements.
96. It is difficult to understand, therefore, how such a message is to be sent
when the penalty agreed between the parties falls below the level of
underpayment brought about by the contraventions of s.44 and 45 of
the Act. The underpayment is $8,288.26 and yet the agreed penalty is
only $7,920.00. In my view, an entirely inappropriate message is
conveyed by imposing a penalty that is less than the underpayments, in
circumstances where the underpayments remain outstanding and there
is no suggestion that they will be remedied. If I imposed the penalty
agreed between the parties the message would seem to be that it is
more cost effective to contravene the Act by underpaying employees
and meeting a pecuniary penalty than to comply with the obligations
imposed by the Act.
97. In my view, in this case the level of underpayment marks out the very
bottom of the range of an acceptable penalty. It follows that the agreed
penalty falls outside of that range.
98. Lest it be thought that I am attempting to enunciate any general
principle that a pecuniary penalty must always be higher than any
proved underpayments, I make it clear that I am not attempting to do
so. In my judgment, an appropriate penalty must fall within an
acceptable range which, on the facts of this case, must have as its
minimum the level of admitted underpayment.
99. Given that New Image is no longer trading or employing other staff at
present, the Fair Work Ombudsman submits that the need for specific
deterrence in this matter is not high. However, Mr Bedington continues
to be a sole director of another company involved in the photographic
services business that employs others in its business. Specific
deterrence is therefore of some relevance especially in light of the
caution issued by the Fair Work Ombudsman to Mr Bedington prior to
the relevant conduct that has led to these proceedings.
The Penalties
100. The Fair Work Ombudsman submits that a mid-range penalty of 50%
of the maximum is appropriate in the circumstances, discounted by a
further 20% for Mr Bedington 's co-operation. By dint of the
agreement on penalty, Mr Bedington must agree with those
propositions.
101. In my view the more appropriate starting point is a mid-range penalty
of 40%, but in my view, the discount to be applied is 10% so that a
penalty of30% ofthe maximum is appropriate.
102. The seven contraventions of s.357 of the Act attract a penalty of 30%
of the maximum available for each contravention. That is a penalty of
$1,980 for each of the seven contraventions.
103. In respect of the contraventions of s.44 and 45 of the Act, the penalty
should be fixed at 30% ofthe maximum or $1,980 each.
104. The aggregate penalty for the breaches of s.357 of the Act is $13,860.
Aggregated with the penalties for the other two breaches, the total
penalty is $1 7,820.
105. Having regard to the totality principle I am satisfied that the aggregate
penalty is just and appropriate in all the circumstances. In Kelly
(supra), Tracey J said at [30]:
Another factor which must be taken into account in fixing the
pecuniary penalties for multiple breaches ofstatutory stipulations
is the totality principle. The principle is designed to ensure that
the aggregate of the penalties imposed is not such as to be
oppressive or crushing. Different views have been expressed as to
the manner in which the principle ought to be applied. On one
view, the starting point should be the determination of an
appropriate total penalty. That figure would then be divided by
the number ofbreaches to produce a penalty for each breach.
The orthodox position, however, which I consider should be
adopted is that the starting point is the determination of the
appropriate penalties for each contravention of the statut01y
norm. The aggregate figure is then considered, with a view to
ensuring that it is an appropriate response to the conduct which
led to the breaches.
106. In my view the total penalty is appropriate in the circumstances. It
represents a just and appropriate response to the conduct as a whole,
involving as it does contravening conduct in respect of seven
employees over a period of time and a significant underpayment to
those employees. There is nothing in the evidence to suggest that the
penalty is likely to be crushing.
107. I have considered the decision of J essup J in Wells v Locarno
Management Pty Ltd [2008] FCA 1034 at [23] where his Honour said:
[23} The court is not bound by the agreement of the parties as to
the level ofpenalty which should be imposed in a case such as the
present. However, the court will not depart from an agreed figure
merely because it might otherwise have been disposed to award
some other figure. The predictability involved in the resolution of
penal proceedings in accordance with a pre-trial agreem,ent
reached by the parties is something which should, as a matter of
public policy, be regarded as beneficial. Only where the agreed
penalty falls outside the permissible range should the court
depart from the figure agreed by the parties. In this context, the
permissible range is the range which would be permitted by the
court, that is, a range within which the penalty is neither
manifestly inadequate nor manifestly excessive. See NW Frozen
Foods Pty Ltd v Australian Competition and Consumer
Commission (1996) 71 FCR 285 at 290-91; Minister for
Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd
[2004} ATPR 41-993, [53],· Ponzio v B & P Caelli Constructions
Pty Ltd (2007) 158 FCR 543 at 565,· and Hills v Sutton (2007)
169IR 327 at 329.
108. My conclusion however 1s that the agreed penalty is manifestly
inadequate and outside of the permissible range, largely because it was
calculated by the parties on the basis that the breaches of s.357 of the
Act should appropriately be treated as one contravention. For the
reasons I have expressed above, I disagree with that view.
109. Finally, by supplementary written submission delivered on 27
November, 2012, Mr Bedington submits that if the Court is not
prepared to assess the penalty in the sum agreed by the parties, he
seeks to withdraw from the agreement reached about the disposition of
the application. He bases his argument upon a contractual right to do
so arising from an innocent misrepresentation or common mistake
between the parties.
Essentially he argues that he agreed to
compromise the proceedings because the Fair Work Ombudsman
represented that the contraventions could be dealt with in three groups
and that the maximum penalty that could be imposed was $19,800. He
says that the representations proved to be false. Alternatively he says
that the parties made a common mistake of law as to how the
contraventions could be dealt with.
110.
In my view neither argument would lead to the conclusion that Mr
Bedington could withdraw from the agreement that the parties reached
on the facts of the matter. As the passage from Wells v Locarno
Management Pty Ltd (above) commences: "The court is not bound by
the agreement of the parties as to the level ofpenalty which should be
imposed in a case such as the present". It is not suggested that either
party was unaware of that proposition.
Indeed their principle
submissions on penalty are alive to that proposition:. In those
circumstances Mr Bedington must have made some assessment of the
likelihood of the Court accepting that the agreed penalty was
appropriate. As it turns out, his judgment on that issue was awry.
111.
To the extent that Mr Bedington's submissions filed on 27 November,
2012 represent an application to withdraw from the agreement, that
application is refused.
112.
Orders are sought that there be payments of the penalty, on a pro rata
basis, made to the employees. I make an order in those terms and any
balance after payment to the employees shall be paid to the
Commonwealth.
113.
I direct the sum be paid within 28 days.
I certify that the preceding one hundred and thirteen (113) paragraphs are
a true copy of the reasons for judgment of Jarrett FM
Associate:
~""'---'
Date: 29 November 2012

Fair Work Ombudsman v Bedington

Transcription

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