FEDERAL COURT OF AUSTRALIA

Textile, Clothing & Footwear Union of Australia v Bellhop [1999] FCA 1095

INDUSTRIAL LAW – whether respondent company obliged to make superannuation contributions in accordance with relevant Commonwealth legislation and applicable award – whether appropriate to impose penalty on the respondents.

Workplace Relations Act 1996 (Cth)ss178, 356(b).

TEXTILE, CLOTHING & FOOTWEAR UNION OF AUSTRALIA v BELLHOP PTY LTD (ACN 006 964 683) and JACQUELINE YVONNE JOOSSE and WOLTER JOOSSE

V 192 of 1999

MARSHALL J

23 JULY 1999

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 192 OF 1999

BETWEEN:	TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA Applicant
AND:	BELLHOP PTY LTD (ACN 006 964 683) First Respondent JACQUELINE YVONNE JOOSSE Second Respondent WOLTER JOOSSE Third Respondent
JUDGE:	MARSHALL J
DATE OF ORDER:	23 JULY 1999
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. It is declared that the first respondent has committed breaches or non‑observances of cl 50 of the Textile Industry Award (1994) (“the Award”) by failing to make contributions to the Australian Retirement Fund ("the ARF") in respect of each of the persons named in the schedule attached hereto for the periods referred to therein.

2. A penalty of $2500 be imposed on the first respondent in respect of the breaches or non-observances of cl 50 of the Award referred to in paragraph 1 above.

3. It is declared that the second and third respondents have each committed breaches or non-observances of the order of the Australian Industrial Relations Commission dated 5 February 1999 and contained in Print R1646 ("the Order of the Commission").

4. A penalty of $50 be imposed on the second respondent for the breaches or non-observances of the Order of the Commission.

5. A penalty of $3450 be imposed on the third respondent for breaches or non-observances of the Order of the Commission.

6. Pursuant to s 356(b) of the Act each penalty referred to in paragraphs 2, 4 and 5 hereof be payable to the Union within 21 days of the date of this Order.

7. The first respondent shall, within 21 days of the making of this Order, make a payment to the ARF in respect of each of the persons listed in Schedule A to this Order for the purpose of restoring each such person, as far as is practicable, to the position in which they would have been in had the first respondent not failed to make contributions to the ARF in respect to each of them. Such payments shall be made in accordance with the first set of calculations contained in Exhibit B in this proceeding which is reproduced at Schedule B to this Order.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 192 OF 1999

BETWEEN:

TEXTILE CLOTHING & FOOTWEAR UNION OF AUSTRALIA

Applicant

AND:

BELLHOP PTY LTD (ACN 006 964 683)

First Respondent

JACQUELINE YVONNE JOOSSE

Second Respondent

WOLTER JOOSSE

Third Respondent

JUDGE:	MARSHALL J
DATE:	23 JULY 1999
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 This is an application pursuant to s178 of the Workplace Relations Act 1996 (Cth) (“the Act”) in which the applicant, the Textile Clothing & Footwear Union of Australia, (“the Union”) has sought the imposition of penalties upon the respondents. These reasons for judgment should be read in conjunction with the ex-tempore reasons for judgment delivered on 12 July 1999. In those reasons the Court amended the application and statement of claim and also ordered that certain paragraphs of the respondent's defence be struck out.

2 On 12 July 1999 the Court also declined to refer to the Attorneys a purported Notice of Constitutional Matter on the basis that it wasn't the view of the Court that the Notice truly raised issues going to the interpretation of the Constitution or its operation. A purported Notice of Appeal has been filed in respect of the decision not to refer the purported Notice of Constitutional Matter to the Attorneys. Leave to appeal has not been sought in respect of that interlocutory judgment. When the matter came on for hearing this morning there was no application to adjourn the proceeding on the basis of the purported Notice of Appeal.

Background facts

3 The Union is an organisation of employees registered under the Act. The first respondent, Bellhop Pty Ltd (“Bellhop”) is a company incorporated pursuant to the Corporations Law. Bellhop manufactures knitted garments at a textile mill in Seaford. Mr Antonio Cavalcante was employed by Bellhop from September 1995 until 3 September 1998 as a machine operator. Ms Barbara Siliga was employed by Bellhop from June 1997 until 3 July 1998 as a sewing machinist. Ms Jennifer Morris was employed by Bellhop from February 1997 until November 1998 as a machinist. Ms Pauline Bailey was employed by Bellhop as a sewing machinist from 19 February 1997 until 3 September 1998. Ms Sonia Ottaway has been employed by Bellhop as a storeperson and packer from about 12 February 1997. Ms Judith Beynon has been employed by Bellhop as a quasar operator from about 7 March 1997.

4 Mr Patrick Dolan works for Bellhop as a storeman. He has been continuously employed by Bellhop since January 1997 when Bellhop moved to its Seaford mill from a previous location in Brunswick Street, Fitzroy. Mr Dolan commenced work at the Fitzroy premises for a predecessor company to Bellhop in or about April 1990. Ms Maria Gelfand commenced work at the Fitzroy premises in or about May 1995 as a machinist. She has worked for Bellhop at Seaford since January 1997. Ms Donna Sims has worked for Bellhop since 12 March 1997 as a presser. Mr Mario Iacovelli has worked for Bellhop at Seaford since January 1997. Prior to then he worked at the Fitzroy premises from 31 July 1989. He is a textile mechanic.

5 Each of the persons referred to in the previous paragraph have been continuously employed by Bellhop or companies, the relevant business of which has been transmitted or assigned to Bellhop. Each such person is or was at all material times a member of the Union.

6 Bellhop is bound by the Textile Industry Award (1994) (“the Award”). When the Award was made by the Australian Industrial Relations Commission (“the Commission”), David Keys (Australia) Pty Ltd (“David Keys”) was named as respondent. On or about 10 August 1994 David Keys changed its name to Bellhop.

7 The third respondent, Mr Joosse, is and was at all material times a director of Bellhop. Mrs Joosse, the second respondent, was a director of Bellhop at all material times up to 7 April 1999.

Failure to pay into superannuation fund

8 Clause 50 of the Award is headed Superannuation. Clause 50(e) compels employers bound by the Award to make contributions to a fund known as the Australian Retirement Fund (“the ARF”) in respect of each of the employees of such employers in compliance with relevant Commonwealth legislation dealing with superannuation unless an exemption has been obtained. The full text of cl 50 of the Award is as follows:

“50 ‑ SUPERANNUATION

[50 substituted by VO10 ppc 17May95]

(a) Preamble

Superannuation Legislation

(i) The subject of superannuation is dealt with extensively by legislation including the Superannuation Guarantee (Administration) Act 1992, the Superannuation Guarantee Charge Act 1992, the Superannuation Industry (Supervision) Act 1993 and the Superannuation (Resolution of Complaints) Act 1993. This legislation, as varied from time to time, governs the superannuation rights and obligations of the parties.

(ii) Notwithstanding (i) above, the following provisions shall also apply:

(b) Definitions

"The Fund” for the purpose of this clause shall mean the:

(i) Australian Retirement Fund established and governed by a trust deed 11 July 1986, as may be amended from time to time, and includes any superannuation scheme which may be made in succession thereto; or

(ii) Subject to the agreement of the relevant State Secretary of the Union and its members, an employer sponsored fund established prior to 1 July 1987, which complies with the Superannuation Industry (Supervision) Act 1993 as amended from time to time, and set out in sub‑clause (g)(ii) of this clause.

"Ordinary Time Earnings" for the purposes of this Clause, all references to "Ordinary Time Earnings" shall mean and include:

(i) award skill level or classification rate;

(ii) supplementary payment (where relevant);

(iii) over‑award payment;

(iv) shift loading ‑ including weekend and public holiday penalty rates earned by shift employees on normal rostered shifts forming the ordinary hours of duty not when worked as overtime;

(v) the payment for work performed by weekend employees exclusively and wholly during their ordinary hours on Saturdays and Sundays;

(vi) payment by results earnings;

(vii) all non reimbursable allowances payable under the award.

(i) A respondent employer shall make application to the Fund to become a participating employer in the Fund and shall become a participating employer upon acceptance by the Trustee of the Fund.

(ii) A respondent employer shall provide each employee who is not a member of the Fund with a membership application form upon commencement of this clause and thereafter upon commencement of employment.

(iii) Each employee shall be required to complete the membership application and the employer shall forward the completed application to the Fund by the end of the calendar month of commencement of this clause or commencement of employment.

(d) Eligibility of Employees

(i) Each employee shall be eligible to join the Fund upon commencement of employment.

(ii) Each employee shall be eligible to receive contributions from the date of eligibility, notwithstanding the date the membership application prescribed in subclause (c)(iii) was forwarded to the Fund.

(e) Employer Contributions on Behalf of Each Employee

(i) A respondent employer shall contribute to the Fund in respect of each employee such contributions as required to comply with the Superannuation Guarantee (Administration) Act 1992 and Superannuation Guarantee Charge Act 1992 as amended from time to time. Failure to comply with this sub paragraph shall constitute a distinct and separate breach of this sub‑paragraph.

In accordance with the requirements of the relevant Acts, as mentioned, a respondent employer shall not be required to pay superannuation contributions in respect of employees who earn less than $450.00 in a calendar month or upon reaching the age of 65.

(ii) Such contributions shall be made monthly by the last day of the month following, the total of the weekly contribution amounts accruing in the previous month in respect of each employee.

The amount of contributions to the fund shall be calculated to the nearest ten cents, and any fraction below five cents shall be disregarded.

(iii) The Fund and the amount of contributions paid in accordance with this sub-clause and sub‑clause (f) shall be included in pay advice notices provided by employers to each employee.

(iv) Contributions shall continue to be paid in accordance with this sub‑clause during any period in respect of which an employee is entitled to receive Accident Pay in accordance with clause 27 of this Award.

(v) Unpaid Absences

Except as where specified in the rule of the Fund, contributions by respondent employers in respect of unpaid absences will be proportional to the wage received by the employee concerned in a particular pay period. For the purposes of this clause, each pay period will stand alone. Accordingly, unpaid absences in one pay period will not carry over to another pay period.

(vi) Cessation of Contributions

A respondent employer's obligation to make contributions on behalf of the employee ceases on the last day of employment of the employee with the employer.

(f) Employee Contributions

(i) An employee may make contributions to the Fund in addition to those made by the respondent employer under sub‑clause (e).

(ii) An employee who wishes to make additional contributions must authorise the respondent employer in writing to pay into the Fund, from the employee's wages, amounts specified by the employee in accordance with the Fund Trust Deed and Rules.

(iii) An employer who receives written authorisation from the employee, must commence making payments into the Fund on behalf of the employee within 14 days of receiving the authorisation.

(iv) An employee may vary his or her additional contributions by a written authorisation and the employer must alter the additional contributions within 14 days of receiving the authorisation. An employee may only vary his or her additional contributions once each month.

(v) Additional employee contributions to the Fund requested under this sub-clause shall be expressed in whole dollars.

(g) Exemptions

(i) A respondent employer may make application for exemption from sub‑clause (e) in respect of contributions to the Fund for employees who are not members of the Union.

Applications for exemption shall be determined in accordance with the Superannuation Test Case [Print L5100] or any decision made in succession thereto.

(ii) It is recorded that the scheme specified in the first column hereunder is a scheme to which this paragraph applies and that the agreement of the Union and its members has effect on and after the date correspondingly set out in the third column hereunder:

(1) (2) (3)

Name of Scheme Covered Date of effect of Union

agreement

Edwardstown Carpets 1 January 1988

Superannuation fund

Pacific Dunlop 6 August 1987

Superannuation fund”

9 Mr Noel Lacey is the Administration Manager of the ARF. He caused a search of the ARF's records to be conducted in respect of contributions made on behalf of any of the ten relevant employees referred to in these reasons for judgment. That search reveals that no contributions were made on behalf of any of them in the period 30 June 1997 to 22 June 1999. The third respondent represented himself before the Court this morning and conceded that no such payments have been made and that no payments have been made subsequent to 22 June 1999.

10 Contributions on behalf of Mr Cavalcante were required to be paid into the ARF by Bellhop from 30 June 1997 to 3 September 1998. The relevant period for Ms Siliga was 30 June 1997 to 3 July 1998. For Ms Morris it was 30 June 1997 until 1 November 1998. For Ms Bailey it was from 30 June 1997 until 3 September 1998. Ms Ottaway, Ms Beynon, Mr Dolan, Ms Gelfand, Mr Iacovelli and Ms Sims were entitled to have contributions paid into the ARF by Bellhop for the entire period referred to in Mr Lacey's evidence, that is, 30 June 1997 to 22 June 1999 and continuing.

11 In the circumstances it is appropriate to order that pursuant to s 178(6A) of the Act, the first respondent shall make a payment to the ARF in respect of each of the ten persons referred to in the preceding paragraph for the purpose of restoring those persons, as far as is practicable, to the position in which they would have been but for the non-payment from 30 June 1997. Exhibit B in the proceeding contains two alternative calculations of amounts which the first respondent should have paid into the ARF. I will make reference to the first such calculation in the Court's order as I accept that the evidence supports the lack of such payments by Bellhop from 1 July 1997 in respect of each of the ten relevant employees.

12 It is primarily appropriate to order that a penalty be imposed on the first respondent for its breach or non-observance of cl 50(e) of the Award for failing to make contributions to the ARF in respect of each of the following employees:

1. Judith Beynon

2. Patrick Dolan

3. Maria Gelfand

4. Sonia Ottaway

5. Mario Iacovelli

6. Jennifer Margaret Morris

7. Pauline Brenda Bailey

8. Donna Sims

9. Barbara Siliga

10. Antonio Cavalcante

13 In respect of the following periods:

1. 30 June 1997 and continuing

2. 30 June 1997 and continuing

3. 30 June 1997 and continuing

4. 30 June 1997 and continuing

5. 30 June 1997 and continuing

6. 30 June 1997 – 1 November 1998

7. 30 June 1997 – 3 September 1998

8. 30 June 1997 and continuing

9. 30 June 1997 – 3 July 1998

10. 30 June 1997 – 3 September 1998

14 No excuse has been offered by Bellhop for its breach of the Award save that the third respondent submitted that the first respondent was unable to afford to comply with the Award. The breach appears to be deliberate and defiantly made. A substantial penalty is appropriate, although the amount will be tempered by the lack of evidence of previous award breaches by Bellhop and the Union's desire not to prejudice the continuing operation of the first respondent which still employs a number of its members. The ten sets of breaches in respect of the ten employees should be considered as a single course of conduct under s 178(2) of the Act. The penalty the Court will impose is $2500. It will be payable to the Union within 21 days pursuant to s 356(b) of the Act. The Court has determined this to be an appropriate course given costs the Union has incurred in seeking to enforce the Award together with the public interest in ensuring observance of awards of the Commission.

Commission proceedings

15 On 5 February 1999 the Commission made the following order:

“A.

(a) Bellhop Pty Ltd (the company) of 6 Aspley Place Seaford Victoria and any director or employee of the company shall not, whether directly or indirectly, be a party to or be concerned in conduct which hinders, prevents or discourages the observance of clause 50 of the Clothing Trades Award 1982.

(b) The company and any director or employee shall commit a new and separate breach of this order on each and every day on which the company and any director or employee is or are directly or indirectly concerned in or is a party to, conduct as described in sub-clause (a) hereof.”

16 Despite the order of the Commission the directors of Bellhop, Mr and Mrs Joosse, have failed to ensure that superannuation contributions were paid into the ARF in respect of at least Ms Ottaway, Ms Beynon, Mr Dolan, Ms Gelfand, Mr Iacovelli and Ms Sims. Mrs Joosse's culpability is minimal given that she resigned as a director a day after the order became operative.

17 The order became operative on 6 April 1999. As at today's date, given the terms of par (b) thereof and the third respondent's failure to remedy the non-observance of cl 50 of the Award, some 109 breaches of the order have occurred up until now, having regard to s 178(4)(a)(i) of the Act. It is appropriate in the circumstances to order that a substantial penalty be imposed on the third respondent. The Court will order that the third respondent pay a penalty of $3450 and that such penalty be made payable to the Union in accordance with s 356(b) of the Act. The second respondent ceased to be a director the day after the Commission's order therefore a nominal penalty only should be imposed on her. The Court will order that the second respondent pay a penalty of $50. That penalty will also be made payable to the Union under s 356(b) of the Act.

Orders:

2. A penalty of $2500 be imposed on the first respondent in respect of the breaches or non-observances of cl 50 of the Award referred to in paragraph 1 above.

4. A penalty of $50 be imposed on the second respondent for the breaches or non-observances of the Order of the Commission.

5. A penalty of $3450 be imposed on the third respondent for breaches or non-observances of the Order of the Commission.

6. Pursuant to s 356(b) of the Act each penalty referred to in paragraphs 2, 4 and 5 hereof be payable to the Union within 21 days of the date of this Order.

Counsel for the Applicant:	Mr A Lawrence

Solicitor for the Applicant:	Textile, Clothing & Footwear Union of Australia

There was no appearance for the first and second respondents.

Mr W Joosse, appeared for himself

Date of Hearing:	23 July 1999

Date of Judgment:	23 July 1999 (ex-tempore as revised from the transcript)

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate:

Dated: 23 July 1999

SCHEDULE A

1. Judith Beynon 30 June 1997 and continuing

2. Patrick Dolan 30 June 1997 and continuing

3. Maria Gelfand 30 June 1997 and continuing

4. Sonia Ottaway 30 June 1997 and continuing

5. Mario Iacovelli 30 June 1997 and continuing

6. Jennifer Margaret Morris 30 June 1997 – 1 November 1998

7. Pauline Brenda Bailey 30 June 1997 – 3 September 1998

8. Donna Sims 30 June 1997 and continuing

9. Barbara Siliga 30 June 1997 – 3 July 1998

10. Antonio Cavalcante 30 June 1997 – 3 September 1998

SCHEDULE B

VG 192 of 1999

TC1711A ‑and‑ Bellhop Pty Ltd & Ors.

CALCULATIONS OF BACKPAYMENT OF SUPERANNUATION CONTRIBUTIONS AND INTEREST

Name 97/98 98/9 Total

Weekly rate X 52.4 weeks 6% Super Interest 7% Super Interest

Judith Beynon 455 23842.00 1430.52 67.95 1308.1 281.93 3088.50

Patrick Dolan 480 25152.00 1509.12 71.68 1628.17 313.17 3522.15

Maria Gelfand 433.5 22715.40 1362.92 64.74 1573.23 289.36 3290.25

Sonia Ottaway 480 25152.00 1509.12 71.68 1771.44 322.27 3674.51

Mario lacovelli 595.49 31203.68 1872.22 88.93 1584.68 343.93 3889.76

Rose Zhao 510 26724.00 1603.44 76.16 1535.59 305.35 3520.54

Jennifer Morris 433.5 22715.40 1362.92 64.74 555.31 214.18 2197.15

Pauline Bailey 433.5 22715.40 1362.92 64.74 312.55 199.49 1939.70

Donna Sims 433.5 22715.40 1362.92 64.74 312.55 199.49 1939.70

Barbara Siliga 433.5 22715.40 1362.92 64.74 180.58 1608.24

Antonio Cavalcante 506.9 26561.56 1593.69 75.70 365.19 233.25 2267.83

*The following formula has been used to calculate 97/98 interest:

(Superannuation contributions for 97/98) / 2 X 9.5%

** The following formula has been used to calculate 98/99 interest

Former employees:

(97/98 interest + (Superannuation contributions for 97/98 + 97/98 interest) + (Superannuation contributions for 98/99 / 2)) X 12.1%

Current employees

(97/98 interest + (Superannuation contributions for 97/98 + 97/98 interest) + (Superannuation contributions for 98/99 / 2)) X 12.1 %

/ 365 * 383

Interest calculations are based on actual returns made on ARF accounts over the relevant periods.

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