FEDERAL COURT OF AUSTRALIA

United Voice v Phillip Cleaning Service Pty Ltd [2017] FCA 392

ORDERS

THE COURT ORDERS THAT:

1.    The applicants are to file and serve proposed directions within 14 days providing for the taking of all outstanding steps to bring this matter to completion.

2.    The respondents are to notify the applicants and the Court if they consent to the proposed directions within a further seven days thereafter.

3.    The proceeding will be listed for directions or hearing on a date to be notified to the parties as necessary having regard to the positions of the applicants and the respondents.

4.    The ACT District Registrar is to forward a copy of these reasons for judgment to the Director-General of the ACT Education Directorate.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

JAGOT J:

1    The applicants, the first of which is a union representing the interests of cleaners known as United Voice and the rest of whom are school cleaners employed or formerly employed by the first respondent, Phillip Cleaning Services Pty Ltd) (PCS), contend that PCS contravened various provisions of the Fair Work Act 2009 (Cth) (Fair Work Act) and that the second respondent, Angelo Di Dio, has also committed those contraventions as a person involved in them as defined in s 550(1) of that Act. Remedies, including declarations and the payment of wages and annual leave said to be owing and the imposition of pecuniary penalties, are sought. The issue of the imposition of penalties has been deferred pending the determination of liability of PCS and Mr Di Dio.

2    I have concluded that the whole of the applicants’ case, as ultimately pressed, should be accepted other than that it is unnecessary for me to decide whether the respondents engaged in a sham when seeking to interpose labour hire companies (three in total, two of which were liquidated owing substantial amounts of tax) between PCS and the employees. On the second day of the hearing the respondents accepted that PCS was the employer of the employees. I have made findings about Mr Di Dio’s state of mind below sufficient to enable consideration of the applicants’ application for costs thrown away as a result of the belated admission that PCS was the employer, but would prefer to resolve all issues of costs in respect of the hearing on liability at the one time, with all parties having had an opportunity to make submissions about those issues if they wish.

3    The only other observation I should make is that I did not need to be persuaded by the applicants that the case is important despite the fact that the amounts of money claimed are not large in the context of the kinds of litigation commonly pursued in this Court. The amount of money involved is not a good measure of the importance of a claim of this kind.

Background

4    PCS runs a school cleaning business in the Australian Capital Territory (ACT). It is a party to a deed with the ACT and to contracts under that deed which provide for it to clean 10 government schools.

5    Despite repeated denials followed by a belated admission made in the face of overwhelming evidence belying the denials, PCS admits that it employed or employs the applicants other than the first applicant, United Voice. The employment is (or was) on a permanent part-time basis. All but three of the applicants are members of the Karen ethnic minority from Burma. They spent two decades in refugee camps in Thailand before being re-settled in Australia. Their first language is S’gaw Karen.

6    Since 1 May 2011 the employment of the employees, other than the ninth applicant, has been subject to the Phillip Cleaning Services and LHMU Clean Start Union Collective Agreement 2010 for ACT Government Schools (the Agreement). Before this, the Cleaning Services Industry Award 2010 applied (and applies to the ninth applicant).

7    The contracts between PCS and the ACT prescribe not only an hourly rate to be paid by the ACT to PCS, but also the minimum amount which PCS must pay to employees. Payments by the ACT to PCS are based on a formula which provides for work to be carried out 5 days per week 52 weeks per year. In recent years the minimum rate of pay by PCS to employees prescribed by the contracts has exceeded the amount required to be paid under the Agreement. This is because the amount required to be paid under the Agreement has not increased since the nominal expiry date of the Agreement which was 1 July 2013.

Mr Di Dio’s evidence

8    Mr Di Dio was not a witness of credit. His evidence was repeatedly self-serving, internally inconsistent and unbelievable. It was difficult not to form the impression that Mr Di Dio was willing to say what he thought might assist the respondents’ case until the impossibility or extraordinary unlikelihood of his oral evidence was exposed, after which he would reformulate his evidence. As submitted for the applicants, this reformulated evidence gave every appearance of being mere invention to overcome the difficulty exposed with his oral evidence. For example:

(1)    He initially said and repeated when pressed that pay corrections he had made related only to cleaning during holiday periods. This was false. I consider that his initial evidence was a fabrication.

(2)    He said that he made the pay corrections of his own initiative. In fact, he took this action after being notified by United Voice that PCS had been systematically underpaying the employees.

(3)    He gave inconsistent evidence about his practice of obtaining signatures of employees on their letter of appointment, and giving them an unsigned duplicate.

(4)    He said he would read out to the employee PCS’s occupation health and safety policies, which was untrue. When confronted with the extreme unlikelihood that he did any such thing given the length of the document he said he merely showed them where the policies were kept so the employee could access them if they wished. I consider that his initial evidence was a fabrication.

9    I do not accept that Mr Di Dio thought that a company other than PCS employed the employees at any time. I consider that the objective evidence discloses that Mr Di Dio knew at all material times that PCS employed the employees. At best, Mr Di Dio might have hoped that the structure he created using other companies might have shielded PCS from its obligations as an employer and that he was willing to see if this strategy would work if tested. If it worked, it would best serve his purposes and those of PCS to avoid legal obligations to the employers by PCS. If it did not work, PCS and he were in no different a position from that which they otherwise would have been in. In other words, Mr Di Dio’s use of labour hire companies in an attempt to shield PCS from its obligations as an employer is an example of opportunism which, I am satisfied, Mr Di Dio was willing to extend to the respondents’ defence of these proceedings.

10    When confronted with the overwhelming evidence establishing that Mr Di Dio must have known that the employees were employees of PCS at all material times, I infer that Mr Di Dio recognised the futility of his efforts. I do not accept that he was confused or misunderstood the real position, that PCS employed the employees. He understood that reality, but was willing to try to escape it. Notably, it did not suit him to try to escape reality at the time the Agreement was negotiated or at the time he sought to have the Agreement terminated. Nor did it suit him to do so in any of his dealings with the ACT, including for the purpose of obtaining financial support for trainee positions, during which he consistently represented to the ACT that PCS was the relevant employer. But it did suit him to do so in these proceedings at least until the maintenance of the contention became untenable.

11    As a result, I do not accept any evidence from Mr Di Dio unless it is against his or PCS’s interests or is independently corroborated. Further, in the event of any conflict between Mr Di Dio’s evidence and that of one of the employees, I would accept the evidence of the employee.

12    The evidence which he gave against his interest, which I accept, is that he is a director and manager of PCS. He is the person who “runs PCS”, “deals with the” ACT for PCS, is “the person who signs the services contracts between PCS and the Department”, is “the person who signed the panel deed between PCS and the territory as constituted by the Department”, “actually supervise[s] works on what’s described as the south side” for PCS, “hires workers” for PCS, and is the person to whom employees come with questions about their work for PCS.

Payment during holidays

13    The evidence establishes that PCS did not pay employees for school holiday periods unless PCS, at its discretion, directed employees to carry out work during the school holiday periods. Further, PCS directed those employees it wished to carry out work during the school holiday periods to do so during hours which differed from their usual hours (usually, but not always, being less than their usual hours) and at locations which differed from the usual locations at which they performed their work. As a result, some employees were paid nothing for school holiday periods (if they were not directed by PCS to work) and some were paid less than they would have been paid if they had worked their usual hours. It is also apparent that at the beginning of each long school holiday period in December/January PCS would pay to the employees their annual leave entitlements in a lump sum whether or not they proposed to take annual leave during that period.

14    Mr Di Dio said that this practice, which he decided upon and implemented for PCS, was necessary for PCS to be viable. Mr Di Dio did not appear to have given any real thought to whether, in so doing, PCS was complying with or contravening its legal obligations to the employees. I concluded from his evidence that Mr Di Dio felt entitled to run PCS as he thought fit irrespective of any legal obligations of PCS to its employees. In particular Mr Di Dio gave this evidence:

(1)    he decided which employees were given work during the school holiday periods and what work they were given, as well as where they should perform that work;

(2)    he did not provide a roster for holiday work but orally directed the employees where they should work and for how long from day to day as required;

(3)    how he ran PCS was “how it has to be done”; and

(4)    “[t]he work has to be shifted around to get the job done. That’s the only way it works”.

15    PCS’s pleaded defence to the claim that its practices in respect of school holiday periods breached the Agreement and Fair Work Act was that it had given the employees a stand down notice in accordance with cl 14 of the Agreement. Apart from the fact that cl 14 applies only to contracts made before the Agreement (cl 14.3.1), the evidence of the employees and Mr Di Dio is to the effect that the employees were not given any notice of a stand down, let alone six weeks’ notice as required by cl 14.3.6. Clause 14, accordingly, is irrelevant.

16    PCS’s case during the hearing was that the employees (except for the eighth, tenth and twentieth applicants) were not ready, willing and able to work during the school holiday period. PCS did not ultimately proffer a defence against the claims of eighth, tenth and twentieth applicants that they had been underpaid for the school holiday periods. To this extent, the claims of these applicants must succeed.

17    There are legal and factual problems confronting PCS’s defence of the claims of the other applicants. Whether or not the Agreement operates to the exclusion of the letters of appointment which PCS gave to each employee at the start of their employment, it is clear that PCS did not comply with the requirements of the Agreement to give at least seven days’ notice of the location of work (cll 16.1.2 and 23.1). Instead, on the last day of the school term Mr Di Dio directed the employees whom he had chosen to work during school holiday periods where to turn up the following Monday and, thereafter, directed them about where they were working from day to day.

18    As submitted for the applicants, the concept of being ready, willing and able to work does not operate at large, unconfined by the bounds of the legal rights and obligations of the parties to the contract of employment. The employees were bound to be ready, willing and able to work only in accordance with their legal obligations, on the present assumption, under the Agreement alone. None of them were bound to be ready, willing and able to work at any location without the required notice of seven days. As no employees were given such notice, it cannot be the case that any employee may be found not to have been ready, willing and able to work during any school holiday period by not accepting PCS’s unlawful directions.

19    I do not consider, however, that the contract of employment between PCS and each employee was constituted by the Agreement alone. PCS relied on cl 6.1 of the Agreement to support this contention. Clause 6.1 provides that the Agreement is a “comprehensive Agreement that operates to the exclusion of any awards or other Agreements”. I do not accept that this provision means that the letters of appointment which PCS gave to each employee do not form part of the contracts of employment. As submitted for the applicants, cl 6.1 operates to exclude the operation of awards and other industrial agreements. The letters of appointment are not of this nature. Clause 16 of the Agreement requires a letter of appointment containing information about basic job obligations. In my view, cl 16 of the Agreement itself contemplates that the letter of appointment will have contractual effect. So much seems apparent from cl 16.3.1 which prohibits unilateral variation of the letter of appointment by the employer other than a variation of the location of work which requires seven days’ notice under the Agreement. From this it seems clear that the Agreement expressly contemplates that the letter of appointment must prevail over any direction by an employer by reason of cl 16.3.1, subject only to variation of the location of work provided seven days’ notice is given.

20    All of the letters of employment specify the number of hours each employee is to work each week, the time during which that work is to take place, and the location of work (which, as noted, was a location which could be changed on seven days’ notice). PCS disregarded those provisions when it refused to permit certain employees to work and required those whom it was willing to allow to work, to work different hours from those in the letter of appointment and at different locations without seven days’ notice. The requirements of the contracts between PCS and the ACT, which refer to vacation duties being carried out in daylight hours if possible, do not provide a valid basis for PCS to ignore the contract between it and each employee. As a result, it is not open to PCS to contend that any employee was not ready, willing and able to work in accordance with their legal obligations during any school holiday period. PCS effectively denied every employee the opportunity to work, in accordance with their legal obligations, during every school holiday period. As the submissions for the applicants put it, the fact that some employees did not accept work on the terms unlawfully dictated by PCS does not disentitle them from payment during the school holiday periods.

21    What then of the fact that two employees, the ninth and fourteenth applicants, were not available for cross-examination, with the result that their affidavits were not read? In my view, this does not mean that their claims are bound to fail. The evidence of Mr Di Dio about PCS’s practices applied to all employees. The letters of appointment and pay slips for these employees were in evidence. From this evidence I am satisfied that these employees were also subject to PCS’s unlawful directions and practices. To the extent that either employee was not paid for a school holiday period, their claim is made good.

22    What of the fact that some employees took annual leave during the long school holiday period starting in December or, as in the case of the fourth applicant, was only willing to work his normal hours and otherwise wanted to spend time with his girlfriend? For the reasons given, the fourth applicant and all of the employees were entitled to work only their normal hours as specified in their letters of appointment. They were entitled, moreover, to work at their usual place of work as specified in their letter of appointment unless given seven days’ notice of a change of location. No employee was given the opportunity to work in accordance with their legal rights. Given also the fact that they were all paid out their annual leave entitlements on the first day of the long school holiday in December, whether they wanted to take annual leave or not, it is not surprising that some of the employees declined to work at different locations, for different hours, given that they had other commitments including, in many cases, second jobs which they worked outside their usual hours as specified in their letters of appointment. Nor is it surprising that some of them in fact went on holiday on occasion during December.

23    For these reasons, the submissions of the respondents about the readiness, willingness and ability of the employees to work during school holiday periods are beside the point. As the closing submissions for the applicants put it, the respondents’ case is patently unsustainable as:

The notion that an employer could, for 16 weeks of the year, simply decide that it would roster its permanent employees ad hoc and withhold payment to those who were unwilling to work on that basis is antithetical to any proper understanding of the concept of permanent employment. Unpredictability of working hours and uncertainty of income is the burden of casual employees, and a burden offset by payment of a 25% casual loading. Permanent employees are in an entirely different category.

24    PCS, however, treated its permanent part-time employees, as if they were causal employees, albeit without the 25% loading required by cl 33 of the Agreement. In so doing PCS contravened numerous provisions of the Agreement but not, I consider, cl 31 (specified by the applicants) because this provision relates only to rates of pay which have been overtaken by the contract between PCS and the ACT. The relevant contraventions were not of the obligation on PCS to pay certain rates (although it did underpay employees whom it directed to work in the school holiday periods, and then sought to rectify this by the pay corrections) but result from Mr Di Dio’s view that on behalf of PCS he could direct employees not to work during holiday periods, unilaterally change their hours from that contained in the letters of appointment, and change their locations of work as also set out in those letters without seven days’ notice. This conduct contravened at least cll 16.3.1 and 23.1 and 23.2 of the Agreement and was in breach of the contract of employment as documented in the letters of appointment. As such, the conduct also contravened s 50 of the Fair Work Act (“[a] person must not contravene a term of an enterprise agreement”). Whether the conduct also contravened s 323 of that Act (“[a]n employer must pay an employee amounts payable to the employee in relation to the performance of work”) involves the question whether the phrase “in relation to the performance of work” includes an employee who was unlawfully denied the right to work. The submissions for the applicants did not deal with s 323 but were in these terms:

71.    A permanent employee is entitled to be paid the amount due in respect of ordinary hours each week. Unlike casual employees, the employer was not entitled to pay them only for hours actually worked. Setting aside cases of properly authorised stand downs, an employee is entitled to wages for attending work even if no work is available: Coal & Allied Mining Services Pty Ltd v MacPherson [2010] FCAFC 83; 185 FCR 383 at [15]; Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust) Pty Ltd (1966) 8 FLR 70 at 74-75. That is the privilege of permanent workers and is part of the quid pro quo for lower wages associated with permanent work.

72.    To the extent that an employer relies on an exception to the general obligation to pay wages—by reason of stand down or otherwise—it bears the onus of proof that the exception applies: Townsend v General Motors Holden (1983) 4 IR 358. That is a particular manifestation of the general principle that a person seeking to rely on an exception to a general obligation bears the onus of proving that the exception applies.

25    I accept these submissions. PCS did not establish any exception to its obligation to pay its employees during school holiday periods for their ordinary hours of work. This does not answer the question of contravention of s 323, however. Given that I received no submissions about this issue, and I am satisfied that the conduct involves a contravention of s 50 of the Fair Work Act, it may not be necessary to resolve the additional question about contravention of s 323, but as the issue of penalties remains for determination I will permit the parties to make submissions about this issue in that context.

26    The upshot of all this, in my view, is that (apart from being satisfied that PCS contravened s 50 of the Fair Work Act repeatedly since 1 May 2011) every employee is entitled to payment for the hours they would have but did not work during every school holiday period. The employees who also claim an additional amount for the incorrect payment of annual leave during December 2015 (being the third, fourth, tenth, fourteenth, fifteenth and twenty-second applicants) should not be able to claim for the same periods, but otherwise there should be no deductions on account of annual leave. This is because no employee was given the opportunity to work as was their right during school holiday periods for their usual hours, albeit subject to seven days’ notice of the location of work, or to decide when they might wish to take their annual leave. In other words, the fact that an employee might have been on holiday, in the circumstances of this case, cannot be seen as evidence that the employee was not ready, willing and able to work during their usual hours and at their usual locations (subject to seven days’ notice of a change of location) because every employee was denied this right by PCS’s work practices. No employee should be out-of-pocket due to PCS’s unlawful work practices and if any employee, but for the third, fourth, tenth, fourteenth, fifteenth and twenty-second applicants who are also claiming an annual leave underpayment, decided to have a holiday while being denied the opportunity to work as they were entitled to do, then that is to be to the account of PCS, not the employee.

27    As a result, the only deduction which should be made from the employees’ right to be paid for the hours each was contracted to work as set out in their letters of appointment is the amount actually paid to each employee for work actually carried out during school holidays and the annual leave periods by the third, fourth, tenth, fourteenth, fifteenth and twenty-second applicants for which they separately claim underpayment. This calculation is complicated by the fact that Mr Di Dio, after being notified by United Voice that PCS was underpaying employees, paid some employees a top up amount (identified as a pay correction) partly for work during school holidays and partly for work during other periods. Mr Di Dio did not keep proper records of these pay corrections which makes it difficult to ascertain the amount relating to school holidays and otherwise. What is clear is that Mr Di Dio’s approach, deducting the whole of the pay corrections from the claim of each employee, is wrong. It was this difficulty which, I infer, caused the applicants to make a sensible offer that they would accept 75% of the claim for each applicant, with a 25% deduction across the board to take account of the pay corrections. The offer was not accepted but will be relevant to the issue of costs, as is the issue of the respondents’ abandonment of the case that PCS was not the employer.

28    Given that the respondents did not accept the offer made, it is necessary for the pay corrections relating to the school holiday periods to be calculated from the records, a time-consuming task. The costs of carrying out this task, so that orders may be made requiring PCS to pay the correct amounts to each employee, should be considered as part of any claim for costs by the applicants against PCS. Given the history of the matter it is reasonable for the applicants to wish to carry out this task, rather than accept whatever PCS might contend (which has proven to be repeatedly false or inaccurate), but it may be that the applicants also wish to claim as part of any adverse costs order against the respondents, the costs of so doing. I will leave that for future argument and consideration.

Preparation of the letter of appointment

29    Clause 16.1 of the Agreement concerns the letter of appointment. Clause 16.2, in particular, provides that in preparing the letter the employer will have regard to the language skills of the employee.

30    I am satisfied that in preparing the letters of appointment (a task which Mr Di Dio carried out on behalf of PCS) for the fourth to sixth and eighth applicants, for whom S’gaw Karen was their first language, PCS had no regard to the language skills of those employees and thus contravened cl 16.2 of the Agreement. This inference should be drawn because PCS provided the same letter in the English language to all employees, provided no translation into S’gaw Karen of any letter, did not request any employee who spoke S’gaw Karen who had better skills in the English language than their colleagues to provide any assistance in translation or interpretation, and did not adduce any evidence that any person within PCS gave any regard to this issue at any time or to the requirements of cl 16.2. PCS so conducted itself despite the vast majority of its workforce being Karen none of whom spoke English as their first language. While some of the Karen employees had better English language skills than others, none spoke English as their first language. Those who had better English language skills than others, I infer, could get by day to day in English but were unlikely to be fluent readers of English, particularly not when dealing with a document such as a letter of appointment.

31    For these reasons PCS also repeatedly contravened s 50 of the Fair Work Act by reason of this conduct.

Misrepresentations to employees

32    PCS did not ultimately proffer any defence against these claims on behalf of the fourth to sixth and eighth applicants.

33    Each letter of appointment said that the terms and conditions of employment were regulated by the Cleaning Services Award 2010 whether or not the letter was issued before or after the coming into force of the Agreement on 1 May 2011. To the extent that any letter was issued on or from 1 May 2011 (relevantly, to the fourth to sixth and eighth applicants) the letter thus misrepresented the “workplace rights” of those employees because there is such a workplace right if, relevantly, the employee has the benefit of an industrial instrument such as the Agreement (s 341(1)(a) of the Fair Work Act). The misrepresentation was made knowingly by PCS because Mr Di Dio, the director and principal of PCS who prepared the letters, knew that the terms and conditions of employment were regulated by the Agreement and knew that the letters of appointment on and after 1 May 2011 continued to refer to the Cleaning Services Award 2010.

34    It is not necessary that an employee be a fluent reader of English for s 345(2) of the Fair Work Act to be satisfied. Section 345(2) provides that s 345(1) does not apply if the person to whom the representation is made would not be expected to rely on it. The Karen employees mostly knew each other and I infer any employee who could not read English would have been able to request assistance from a colleague and, as such, would be expected to rely on the false representation.

35    Mr Di Dio’s explanations of mistake, oversight or error on his part may be accepted to the extent that he knew the information in the letters was wrong from 1 May 2011 but did not change the information because he did not bother to focus on the error and correct it until recently. This would be consistent with Mr Di Dio’s overall approach to the obligations of PCS, it being clear from Mr Di Dio’s evidence that although he knew and understood the Agreement, he operated PCS as he saw necessary in the sole interests of PCS no matter what might be in the Agreement, buttressed in part by an unsubstantiated but strongly held belief that provisions had been included in the Agreement without his knowledge.

36    Accordingly, PCS contravened s 345 of the Fair Work Act by knowingly making a false and misleading representation about the employees’ workplace rights.

Inductions

37    Clause 17 of the Agreement provides as follows:

17.1    Off-site Induction

17.1.1     The employer will provide all new and prospective employees with at least a one hour induction that is to occur before the commencement of on-the-job duties or training. This induction will be held on a group basis (where practicable) and provide training and information on:

17.1.1.1     The employers employment policies;

17.1.1.2     Conditions of employment and service, including grievance procedures;

17.1.1.3     Lines of authority and accountability;

17.1.1.4    The specific tasks expected of each employee and how they are to be completed in practice; and

17.1.1.5     The occupational health and safety policies of the employer, particular hazards associated with the job, control measures applicable to each hazard and procedures for controlling and preventing hazards in the workplace.

17.1.2    The employer will conduct the inductions on a group basis (where practicable) to include all employees who are to commence on the job duties at the various sites where the employer operates.

17.1.3    In preparing the induction presentation and materials, the employer shall have regard to the language skills of each employee.

17.2    On the job training

17.2.1    The employer will ensure that all employees commencing at a new site will be provided with paid on the job training.

38    It is apparent from the evidence that no employee was provided with an off-site induction. The applicants contend that there was no induction provided at all, but the respondents contend that employees were provided with an induction on-site.

39    I can see no reason not to give effect to the heading of clause 17.1 which refers to off-site inductions. The need for the induction to be off-site is supported by the reference to the inductions being held on a group basis where practicable. This indicates an intention for a group of new employees to be inducted as required by the clause which would be unlikely to be practicable on a work site itself. It is also supported by both cl 17.1.2 which refers to “the various sites where the employer operates” in distinction from, I infer, the off-site induction location, and cl 17.2.1 which refers to on the job training which, by definition, will occur on-site. There is no justification for reading cl 17 as if it were a statute or document in which headings should not be given effect. There is no inconsistency between the heading to cl 17 and the text so no room for any construction such as occurred in Harbour City Real Estate Pty Ltd t/as Re/Max Harbour City Real Estate (ACN 111 210 023) v Cargill (No 3) [2009] FCA 669; (2009) 186 IR 260 at [42].

40    For these reasons I am satisfied that there were no off-site inductions for any employee, in contravention of cl 17 of the Agreement and s 50 of the Fair Work Act.

41    If it were necessary to make any further finding, which it is not, I would conclude that there were no inductions at all which complied with cl 17.1 of the Agreement. Mr Di Dio himself ultimately conceded that all he told employees about PCS’s occupational health and safety policies was they could find PCS’s occupational health and safety policies in a room on the site. This can hardly be said to comply with cll 17.1.1 and 17.1.1.5 of the Agreement. To the extent that he said more was involved than this I would prefer the evidence of the employees. From the employees’ evidence it is apparent that employees were simply shown how to do their cleaning task usually by the person from whom they were taking over, sometimes for no pay, and in no case in accordance with the induction requirements of cl 17.

Payslips

42    PCS did not ultimately proffer any defence against these claims.

43    PCS’s approach to providing employees with payslips was as haphazard and self-interested as its overall approach to its industrial obligations. The payslips (not given in a timely manner) identified the purported employer as one of the “labour hire companies” Mr Di Dio sought to use to separate PCS from its employment obligations rather than PCS in three periods, 26 October 2010 and 19 December 2011, August 2012 and June 2013, and 2 December 2014 and 24 February 2015.

44    This conduct contravened s 536(2)(b) of the Fair Work Act which provides that the payslip must include any information prescribed by the regulations. Regulation 3.46(1)(a) of the Fair Work Regulations 2009 (Cth) requires payslips to specify the employer’s name and r 3.46(1)(h) the employer’s Australian Business Number (ABN). The employer was always PCS. For the periods set out above, PCS contravened s 536(2)(b) of the Fair Work Act by failing to specify PCS as the employer and its ABN on the payslips.

Leave Loading

45    In contrast to the balance of the alleged contraventions by PCS, this contention was one in which the relevant applicants (the third, fourth, tenth, fourteen, fifteenth and twenty-second applicants) accepted that there may be some ambiguity in the operation of the Agreement. The ambiguity arises from cl 41 which requires in cl 41.3.1 a loading of 17.5% on top of “ordinary pay as defined in clause 12”. Ordinary pay as defined in cl 12.8 is the remuneration for the employee’s normal weekly number of hours worked calculated at the ordinary time rate of pay including over Agreement payments (if any) for ordinary hours of work and shift work premiums, amongst other things. It is clear from this that cl 12 defines “ordinary pay” by reference to the amount an employee is actually paid, not the minimum amount the employee must be paid under the Agreement.

46    Despite this, PCS paid the relevant applicants a rate for annual leave which was less than their ordinary pay on the basis that cl 41.3.2 would be unlikely to have any work to do if cl 41.3.1 applied to ordinary pay as defined in cl 12. I do not accept that cl 41.3.1 should be given a different meaning merely because the effect might be that cl 41.3.2 might have no work to do given that the actual rate of pay employees are paid has increased beyond the rates in the Agreement as a result of the terms of the contracts between PCS and the ACT. Clause 41.3.1 refers to the “ordinary pay as defined in clause 12” which refers to “remuneration for the normal weekly number of hours worked calculated at the ordinary time rate of pay including” the specified matters. This remuneration means the actual remuneration paid. Employees are entitled to a 17.5% annual leave loading on this amount. The third, fourth, tenth, fourteenth, fifteenth and twenty-second applicants were underpaid their annual leave as claimed in contravention of cl 41.3.1 of the Agreement and s 50 of the Fair Work Act. The respondents accepted that the amounts set out in para 46 of the statement of claim were correctly calculated and thus an order should be made for the third, fourth, tenth, fourteenth, fifteenth and twenty-second applicants to be paid the amounts claimed.

Accessorial liability

47    The issue is whether Mr Di Dio was “involved in” PCS’s contraventions of the civil penalty provisions as set out above (each contravention being in respect of a civil penalty provision) within the meaning of s 550 of the Fair Work Act. Mr Di Dio sought to avoid potential liability on the spurious ground that the “charges” against Mr Di Dio were duplicitous or the case against him had not been fairly pleaded. I disagree. There are no charges against Mr Di Dio. There is a statement of claim in a civil proceeding which identifies the allegations that Mr Di Dio was involved in the contraventions of the Fair Work Act by PCS and liable to civil penalties as a result, to which a defence was filed without objection.

48    Nor do I accept the submission for Mr Di Dio that his involvement in all of the contraventions by PCS was not fairly put to him in cross-examination. It is not necessary that a person know that conduct constitutes an element of a contravention in order to be “… by act or omission, directly or indirectly, knowingly concerned in or party to the contravention” (Fair Work Act, s 550(c)). It is necessary only that the person be knowingly concerned in each act or omission which, together, constitutes the contravention. In the present case, there is no merit to any suggestion that Mr Di Dio was not, directly, knowingly concerned in PCS’s contraventions. As his evidence disclosed, PCS, at all times, acted under and at his sole direction in all respects including preparing letters of appointment, providing such letters to employees, instructing employees how to do their job, inducting (or not) employees, directing employees not to work or to work during school holidays and directing them as to their hours and locations of work, and deciding what to pay employees.

49    There can be no doubt that Mr Di Dio was “involved in” PCS’s contraventions. As the submissions for the applicant put it:

(1)    “In order for a person to be knowingly involved in the contravention, they must be “intentional participant[s], the necessary intent being based upon knowledge of the essential elements of the contravention”: Yorke v Lucas (1985) 158 CLR 661 at 670; generally, Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 at [227]-[234]”.

(2)    “The evidence, including the evidence of Mr Angelo Di Dio himself, demonstrates that he was … intimately involved in every aspect of the management of PCS. He was involved in the making of the Agreement, the engagement of the Employees, the establishment of the Interposed Entities, the creation and issue of letters of appointment, supervision of Employees’ work, distribution of payslips, addressing employees’ pay and conditions queries and concerns, and a variety of other matters. He was plainly involved in each of the PCS’ contraventions”.

(3)    Mr Di Dio had “complete knowledge” of all relevant facts including:

“(a)    the existence of the Agreement;

(b)    the content of the Agreement;

(c)    the content of the letters;

(d)    the fact that the employer had not had regard to the language skills of the Employees;

(e)    the fact that no off-site inductions, or inductions of any kind, had occurred;

(f)    the content of the payslips;

(g)    the Employees’ work patterns; and

(h)    the wages paid to the Employees”.

(4)    “Mr Di Dio was party to each contravention alleged against PCS, was knowingly concerned in each contravention, and aided, abetted, counselled and procured each contravention. By virtue of s550(1) of the FW Act he is taken to have committed the contraventions”.

Conclusions

50    For the reasons given, PCS and Mr Di Dio have each contravened:

(1)    s 50 of the Fair Work Act by:

(a)    failing to pay employees their ordinary rate of pay for their usual hours worked during each period of school holidays;

(b)    failing to have regard to the language skills of the fourth to sixth and eighth applicants in preparing their letters of appointment;

(c)    not providing any employee with an off-site induction; and

(d)    not paying the third, fourth, tenth, fourteen, fifteenth and twenty-second applicants a 17.5% loading on their ordinary pay in respect of the annual leave which they took in December 2015,

in breach of a provision or provisions of the Phillip Cleaning Services and LHMU Clean Start Union Collective Agreement 2010 for ACT Government Schools which is an enterprise agreement within the meaning of s 50 of the Fair Work Act;

(2)    s 345 of the Fair Work Act by knowingly making a false and misleading representation to the fourth to sixth and eighth applicants in their letters of appointment about their workplace rights;

(3)    s 536(2)(b) of the Fair Work Act by not providing employees with a payslip identifying their employer and employer’s ABN in the periods of about 26 October 2010 and 19 December 2011, August 2012 and June 2013, and 2 December 2014 and 24 February 2015.

51    I am willing to make declarations to this effect and orders for payment of the required amounts calculated as set out above (including the annual leave loading), but would prefer to do so on a single occasion (that is, when the relevant amounts are calculated by the applicants).

52    As noted, I would be willing to hear further submissions about:

(1)    whether the conduct of PCS and Mr Di Dio in not paying employees for school holiday periods also constituted a contravention of s 323 of the Fair Work Act;

(2)    any order for costs against PCS and Mr Di Dio in connection with:

(a)    costs thrown away by the belated admission that PCS was the relevant employer at all material times;

(b)    the exercise which will be necessary to calculate the amounts owing given Mr Di Dio’s failure to keep an adequate record of the pay corrections made for school holiday periods;

(3)    the imposition of civil penalties for the contraventions on Mr Di Dio and PCS.

53    Directions will be made to these ends.

54    The only other direction which I consider appropriate is for the ACT District Registrar to be directed to forward a copy of these reasons for judgment to the Director-General of the ACT Education Directorate who should be aware of the issues to which this case has given rise.

Associate:

Dated:    21 April 2017

SCHEDULE OF PARTIES