Citation:		Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) [2010] FCA 1156
Parties:		FAIR WORK OMBUDSMAN v KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) and JIAN YANG ZHANG
File number:		WAD 127 of 2009
Judge:		MCKERRACHER J
Date of judgment:		27 October 2010
Catchwords:		INDUSTRIAL LAW - underpayment of workers - where workers recruited internationally - application of civil penalties - relevant principles PRACTICE AND PROCEDURE - where respondents did not appear at trial - where trial adjourned previously due to lack of representation for respondents and unavailability of respondents’ witnesses - where there is no adequate evidence for the reason of non-appearance or lack of representation - repeated warnings given
Legislation:		Federal Court of Australia Act 1976 (Cth) ss 51A, 52(2) Workplace Relations Act 1996 (Cth) ss 719, 722, 728 Federal Court Rules O 32 r 2, O 35 r 8
Cases cited:		Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 Fair Work Ombudsman v Kentwood Industries Pty Ltd (ACN 086 269 794) [2010] FCA 98 Hamilton v Whitehead (1988) 166 CLR 121 John Holland Pty Ltd v Maritime Union of Australia (No 2) (2010) 192 IR 431 Kelly v Fitzpatrick (2007) 166 IR 14 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Metropolitan Health Services Board v Australia Nurses Federation (2000) 99 FCR 95 Regional Express Holdings v Clark (2007) 165 IR 251 Stuart-Mahoney v CFMEU (2008) 177 IR 61 Textile, Clothing and Footwear Union v Givoni (2002) 12 IR 250 Yorke v Lucas (1985) 158 CLR 661 Zomba Production Music (Aust) Pty Ltd v Roadhouse Productions Pty Ltd (in liq) (2001) 53 IPR 520
Date of hearing:	12 April 2010
Date of last submissions:	2 September 2010
Place:	Perth
Division:	FAIR WORK DIVISION
Category:	Catchwords
Number of paragraphs:	255
Counsel for the Applicant:	R Hooker
Solicitor for the Applicant:	Corrs Chambers Westgarth
Counsel for the Respondents:	The Respondents did not appear

 

 

 

 

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION	WAD 127 of 2009

BETWEEN:	FAIR WORK OMBUDSMAN Applicant
AND:	KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) First Respondent   JIAN YANG ZHANG Second Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	27 OCTOBER 2010
WHERE MADE:	PERTH

 

 

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
FAIR WORK DIVISION	WAD 127 of 2009

 

BETWEEN:	FAIR WORK OMBUDSMAN Applicant
AND:	KENTWOOD INDUSTRIES PTY LTD (ACN 086 269 794) First Respondent   JIAN YANG ZHANG Second Respondent

 

JUDGE:	MCKERRACHER J
DATE:	27 October 2010
PLACE:	PERTH

REASONS FOR JUDGMENT

introduction

1                     The applicant contends that the first respondent Kentwood Industries Pty Ltd (Kentwood) engaged in a sustained course of unlawful underpayment to its employees.  A variety of forms of relief is sought. 

2                     Kentwood is a body corporate, incorporated under the Corporations Act 2001 (Cth), an employer within the meaning of s 6 of the Workplace Relations Act 1996 (Cth) (the WR Act) and a constitutional corporation within the meaning of s 6(1) of the WR Act by reason of its undertaking a substantial or significant amount of trading activities.  It operated a business involved in the sale of building materials and the carrying out of building and construction projects from premises in Malaga, Western Australia.

3                     It was contracted to construct a Chinese Garden of Remembrance in Kalgoorlie (Remembrance Project) from on or around July 2005; to perform miscellaneous building and construction jobs in and around Perth during 2006 and 2007 (Miscellaneous Jobs); and to construct a Chinese Temple at the Springvale Cemetery in Melbourne in or around 2006 (Springvale Cemetery Project).

4                     Kentwood employed to provide their services on one or more of the Remembrance Project, the Miscellaneous Jobs and the Springvale Cemetery Project: Mr Zhaolin Yuan (Mr Yuan), Mr Zheng Shun Zeng (Mr Zeng), Mr Jian Hang Qi (Mr Hang), Mr Zongxin Shen (Mr Shen), and Mr Jian Guo Qi (Mr Guo).

5                     By its defence, Kentwood accepts the following matters:

(a)                in respect of work performed by Mr Yuan on the Remembrance Project and/or the Miscellaneous Jobs in Western Australia, from January to 26 March 2006 that it was bound by the Western Australian Building Trades (Construction) Award 1987 (State Award); and

(b)               in respect of work performed by Messrs Yuan, Zeng, Shen and Guo on the Remembrance Project and/or the Miscellaneous Jobs in Western Australia, from 27 March 2006 that it was bound by the Notional Agreement Preserving the Western Australian Building Trades (Construction) Award 1987 (NAPSA) and by the terms of the preserved Australian Pay and Classification Scale derived from the State Award (preserved WA Pay Scale).

6                     By their defence the respondents take issue, at least with the following:

(a)        the content in material terms of the applicable contracts of employment;

(b)        the hours actually worked by each of the employees;

(c)        the means of discharge by Kentwood of its obligations to pay the employees, particularly by payment of certain sums to employment agents.

7                     The second respondent (Mr Zhang) denies he is a person involved in any contraventions of the applicable civil remedy provisions of s 728 of the WR Act.  The defence for the respondents also raised a positive case to the effect that Kentwood recruited twelve workers from China through Beijing Sunshine Aust-China Cultural Development Co. Ltd (Beijing Sunshine), a recruitment agent in China.  Each of those workers signed an ‘Entrust Agreement’ with Beijing Sunshine and an ‘Employment Contract’ with Kentwood before leaving China.  Kentwood says it remitted the workers’ salary to Beijing Sunshine at the request of the workers in accordance with their ‘Employment Contracts’.  Kentwood’s case as pleaded is that Beijing Sunshine then reimbursed the fees and services charges paid on behalf of the workers and remitted their salary to their respective Chinese bank accounts, again, according to their ‘Entrust Agreements’.

8                     The real dispute, Kentwood says, is that the workers now do not want to pay for the services provided by Beijing Sunshine including visa application fees, translation fees, airfares, accommodation, and food and living expenses in Australia.  It says that the employees agreed to pay these expenses.  It argues that there is in reality a dispute between the workers and Beijing Sunshine which should not be visited upon Kentwood.  Further, it says that the workers were paid in accordance with the working hours records provided by site managers who have now left the company and that the records provided by the workers are inconsistent with those retained in the company records as prepared by the site managers.  Kentwood contends there are many errors in the working hours records in respect of work carried out in both Melbourne and Perth.

9                     Those and other issues were to be ventilated at trial but as indicated in detail below the respondents did not appear at the trial and the trial proceeded in their absence.  This unusual procedure occurred only in circumstances where there had been ample opportunity and encouragement for Mr Zhang representing Kentwood as its Director, to put on admissible evidence to explain his non-appearance.

10                  It is necessary to examine the circumstances under which the trial proceeded in that manner.  I will outline an overview first before turning to the procedural history in detail.  As indicated in Fair Work Ombudsman v Kentwood Industries Pty Ltd (ACN 086 269 794) [2010] FCA 98 (Kentwood No 1), the trial was listed for December 2009.  The primary reasons for the adjournment of the trial in December 2009 was the unavailability of the respondents’ witnesses and the respondents’ lack of legal representation.  The history of developments following the vacation of trial dates in December 2009 is recorded in Kentwood No 1 at 11-14.

11                  On numerous occasions it was stressed to Mr Zhang that Kentwood must be represented by a solicitor.  There was no adequate evidence of proper steps taken in order to secure such representation.  Ultimately I determined that it was not in the interests of justice to continually adjourn the trial in the absence of proper evidence to that effect.  The trial was listed for hearing commencing Monday, 12 April 2010.

12                  On the Friday preceding the commencement of the trial, a communication was received from Mr Zhang indicating that he would not be attending the trial at this stage but hoped to attend at a later date.  While this indication was somewhat ambiguous, it may have referred to the fact that I had acceded to the application of the applicant for the trial to be conducted in two parts.  The first of those parts was for the applicant to open its case, adduce its evidence and call witnesses who would adopt earlier affidavits and make themselves available for cross-examination.  The desirability of taking that course was driven not only by the interests of finality of litigation but also because those witnesses were staying in Australia by reason only of extended visas.  Uncertainty as to future extension meant that it was important in the interests of justice that those witnesses have the opportunity to give their evidence. 

13                  The respondents, on the other hand, purported to have had difficulty in tracing their witnesses let alone having them travel from China to Australia.  Additional time to permit that course was allowed. 

14                  In the indication from Mr Zhang that he would not be attending at the commencement of this listing of the trial, he attached what purported to be a medical certificate explaining why he should not attend. 

15                  That certificate was an emailed document written in Mandarin.  At the commencement of the trial I treated the communication from Mr Zhang as being an application for an adjournment of the commencement of the trial.  I had the benefit of the translation of the medical certificate.  It was translated by a qualified interpreter thus:

Diagnosis Certificate
Hepingli Hospital, Beijing City

Medical File number:  110765

Name:                          ZHANG Jian Yang

Sex:                              Male

Age:                             53

Department:                  Shen – 24

Outpatient treatment:

Diagnosis and Advice:

Admission into the hospital based on a main complaint of “having paroxysmal dizziness for one month, * with numbness of limbs for one week”.  * investigation and active treatment are needed.  (The patient) is not suitable to go out for any activities now.

Seal:                 Medical Affairs Office, Hepingli Hospital, Beijing City

Doctor:             (Signed)

Date:                the 9^th of April 2010

Note from the translator:

* Illegible text in the original Chinese document. 

- END OF TRANSLATION -

…

16                  This third application for an adjournment of the trial was received at the latest possible moment.  There had been the clearest of warnings from the applicant that any application for an adjournment would be opposed and a warning from the Court that any application for an adjournment on medical grounds would need to be supported by admissible evidence in the proper form.  

17                  The application for adjournment (assuming it to be one) was opposed by Mr Hooker, counsel for the applicant.  At the same time, Mr Hooker applied pursuant to O 32 r 2(1)(d) of the Federal Court Rules (FCR) for leave to adduce the evidence of the applicant’s witnesses, several of whom had travelled from Melbourne in order to give evidence.  Additionally, extension of their visas was by no means certain. 

18                  Relevantly, O 32 r 2 FCR provides:

2          Absence of party

(1)        If, when a proceeding is called on for trial, any party is absent, the Court may:

(a)        order that the trial be not had unless the proceeding is again set down for trial, or unless such other steps are taken as the Court may direct;

(b)        adjourn the trial;

(c)        if the party absent is an applicant or cross-claimant dismiss the action or the cross-claim; or

(d)        proceed with the trial generally or so far as concerns any claim for relief in the proceeding.

(2)        Where the Court proceeds with a trial in the absence of a party, and at or at the conclusion of the trial an order is made, the Court may set aside or vary the order, and may give directions for the further conduct of the proceeding.

…

19                  Previous applications for adjournment of the trial, while successful, were not supported by proper admissible evidence.  Neither was this application.  I was far from satisfied that the medical certificate, such as it was, was sufficient to warrant the trial being further adjourned.  The possible unavailability of the applicant’s witnesses, the repeated warnings as to the possibility of judgment being given against the respondents as well as no proper application for an adjournment being before the Court led me to the conclusion that the ongoing absence of Mr Zhang in China was not something necessarily likely to change.  Steps taken by Mr Zhang to secure representation of any description, let alone legal representation, had been quite unconvincing.  No steps were taken to secure the presence in Court of any person, a solicitor or otherwise, in order to seek an adjournment or explain to the Court when it would be likely that Mr Zhang could appear at the trial.  In those circumstances, given the considerable delay and the lack of progress made in securing representation or providing proper evidence in the past, I concluded that the most appropriate course was to proceed with the trial in the manner expressly and directly foreshadowed to Mr Zhang in accordance with O 32 r 2(1)(d) of the Federal Court Rules consistently with the approach taken by Stone J in Zomba Production Music (Aust) Pty Ltd v Roadhouse Productions Pty Ltd (in liq) (2001) 53 IPR 520. 

20                  Accordingly, evidence was adduced for the applicant following which the trial was adjourned to facilitate each party giving notice to the other of any additional evidence or materials on which reliance was to be placed and for the re-listing of the trial during the week commencing 17 May 2010. 

PROCEDURAL HISTORY DETAIL

21                  The application was originally filed on 24 July 2009 and appearances were entered for the respondents by solicitors in Perth on 17 August 2009.  A detailed defence was filed and served by those solicitors on 30 September 2009.  I have referred in some detail to the content of that defence in Kentwood No 1 and in these reasons

22                  On 2 November 2009, the solicitors formerly acting for the respondents notified the Court that they had ceased to act for the respondents in accordance with the terms of their retainer.

23                  A week following that, the solicitors for the applicant forwarded a letter to the respondents requesting the details of any new legal representatives, if any had been arranged. 

24                  Mr Zhang filed an affidavit on 17 November 2009 and appeared by telephone on the following day at a directions hearing without representation.  (Directions hearings were conducted with the assistance of an interpreter).  The Court was informed on that occasion in response to a query raised that Mr Zhang was still looking for a lawyer who could speak Mandarin.  I enquired as to whether there was another officer of Kentwood in a senior position that could assist in obtaining legal representation by speaking English to solicitors.  Mr Zhang responded that there was a manager who spoke English and who was assisting.  At that stage, the application had been set down for trial in December 2009.  I informed Mr Zhang that I intended to maintain the trial dates for December and that the respondents should be ready to proceed.  I indicated, however, that if I was satisfied on affidavit that conscientious efforts had been made to secure legal representation, given that only very recently the respondents’ legal representation had withdrawn, and that no representation had been obtained or that such representation as had been obtained was not adequately prepared, I would reconsider the December trial dates. 

25                  I stressed on that occasion that it was important for Mr Zhang to be aware that if he had any questions that he wished to put to the applicant’s witnesses at the intended trial on 17 and 18 December 2009 or if their evidence was to be challenged in any way, that was the opportunity to do so.  I indicated that it was important for Mr Zhang to try very hard to get legal representation to assist.

26                  On 25 November 2009, witness affidavits from the respondents were sent by email to the Court but not to the applicant.  They were not properly signed or witnessed.  On 30 November 2009, the originals of the affidavits were couriered to the Court but not filed and, again, not provided to the applicant.

27                  On 11 December 2009, the respondents by Mr Zhang appeared by telephone again at a directions hearing and again without legal representation.  The primary issue discussed at that hearing was the issue of the respondents’ lack of representation.  No information was provided by the respondents as to why they were not represented by solicitors.  Certainly, there was nothing approaching an affidavit on that subject, notwithstanding my request of 18 November 2009 that there be an affidavit explaining clearly the steps that had been taken.  I asked Mr Zhang on that occasion specifically what steps had been taken to obtain legal representation and whether there would be any legal representation for the trial which was due to commence on the following Thursday.  Mr Zhang indicated through an interpreter that he was in contact with a lawyer but he was not one who specialised in labour law.  Mr Zhang indicated that the lawyer concerned had promised him that he would do his best to try and find someone suitable for Mr Zhang but he was not quite sure whether the respondents would have a legal representative by 17 December 2009. 

28                  It became clear that even if there was a legal representative for the respondents, having regard to the volume of materials generated in connection with this proceeding for the respondents, that such a representative would not be properly prepared for the 17 December 2009 trial.  The trial was adjourned, therefore, until 22 February 2010.  I advised Mr Zhang that he should have his witnesses in Perth for the trial.  Mr Zhang had previously referred to the fact that Chinese New Year was on 14 February 2010 and I indicated to him that I did not consider that was an adequate reason for the witnesses not to be in attendance and I would not be willing to lightly consider any further adjournment of the trial.

29                  On 21 December 2009, the Court was copied with a letter from the applicant’s solicitors to Mr Zhang confirming the orders made for the vacation of the December trial dates and emphasising the important dates for the filing of affidavits and requesting information on new legal representation, if it had been obtained. 

30                  On 29 January 2010, following a further request from the Court as to the progress in obtaining legal representation for the respondents, an email was received on behalf of the respondents indicating that they had not then secured legal representation.  At a directions hearing listed on 8 February 2010, which I listed in order to clarify the position concerning representation for the respondents and the availability of witnesses, I reminded Mr Zhang of the requirement under the Rules of the Federal Court that Kentwood be represented only by a solicitor.  I reminded him of the request made on several occasions that he indicate who would represent Kentwood.  I raised that question with him again at the directions hearing on 8 February 2010.

31                  Mr Zhang indicated that he had been in Perth and Melbourne looking for a lawyer and had ‘been through a lot of lawyers’.  He indicated that he had been looking for one with experience in labour law and who spoke Mandarin.  I indicated that it may be necessary for the respondents to do without a lawyer who speaks Mandarin as the evidence for all of the witnesses who were employees and his evidence, if he gave evidence, would have to be interpreted in any event.  At the end of the discussion with Mr Zhang I emphasised that I wanted him to make a very concerted effort to obtain a solicitor that week because time was running very short.  I asked that Mr Zhang enlist the help of his English speaking manager immediately following the directions hearing to locate a solicitor.  It should be noted that Mr Zhang has never indicated that his difficulty in finding a solicitor was due to economic hardship. 

32                  Mr Zhang then advised that he was not well and may not be able to attend the trial on 22 February 2010.  I advised that before considering any application for a further adjournment of the trial dates I would require an affidavit in admissible form dealing with the health problems and a letter from a medical practitioner explaining exactly what the medical problems were and why they would preclude Mr Zhang from travelling and attending Court.  I stressed that such documentation, if Mr Zhang chose to send it, should be received before the directions hearing on 12 February 2010 and that Kentwood was required to be represented by a solicitor at the directions hearing on 12 February 2010 in accordance with the Rules of the Federal Court. 

33                  On 9 February 2010, a letter from Mr Zhang was received indicating:

…

After the direction hearing on yesterday 8 February 2010, I sincerely ask the Justice to give extension on the future hearings due to the following reasons:

(1)        I came back from Inner Mongolia yesterday morning and may be due to prolong travelling and tiredness, I suddenly fainted and was sent to hospital by my friend.  After examined by doctor in P.L.A.  The Military General Hospital of Beijing.  I was diagnosed as intermittent whirling and was asked to stay in hospital for observation (please see doctors diagnosed certification attached).  I also did the Nuclear Magnetic  Resonance (NMR) and cervical examination in hospital and I am now waiting for the examination results for further treatment. 

(2)        About witnesses

There were about 18 staff working in the company in 2007, which include twelve 457 workers.  There were 3 managers in the company and 2 managers - MA Yong Bo and HUANG Jin Rong were responsible for attendance and work progress assessment for these 457 workers. Nearly all the staff in Kentwood had been threatened by YUAN Zhao Lin before, especially Jian Sun and MA Yong Bo.

Workplace Ombudsman did interview MA Yong Bo and Jian Sun in 2007. As requested in the "Response to Applicant's Index to Trial Bundle of Documents" on 14/12/09, I requested Workplace Ombudsman to provide the interview records of MA Yong Bo and Jian Sun in trial. As far as I understand, both witnesses told the Workplace Ombudsman in interview that they had been threatened by YUAN Zhao Lin. The worst case is even until 2nd May 2009 (Saturday morning). Yuan still had threatening behaviors to Jian Sun. YUAN did not leave Jian Sun's house until Jian Sun called police to come.

I have been to Inner Mongolia numerous times from mid 2009 to look for witness MA Yong Bo to present in trial. On December 2009, I prepared the 676 Australia visitors visa application form for MA Yong Bo and MA agreed to appear in the February 2010 trial. However, until around late January 2010. MA suddenly changed his mind and was not willing to attend the trial. He received unknown phone call to ask him not to involve in the case so much. Indeed, I myself also received unknown phone call from a Chinese guy on December 2009 saying his "big brother" is short of money now and want me to give him $30,000. Also, I was told that HUANG Jin Rong also has received unknown phone call similar to MA and he is also reluctant to appear in court.

In the meantime, I have to take medical treatment in hospital and also tried to look for more witnesses. As all the witnesses are in China and they are working all over the country, it is hard to find and persuade them to appear in court. I need to have more time to look for more witnesses.

(3)        About lawyer

I did not aware that it is a requirement for me to have a lawyer in court. Until present, 1 could not find a satisfactory lawyer who can speak good Mandarin and understand Workplace Law well. As all the previous employees have been threatened by YUAN Zhao Lin before, no one is willing to help to look for lawyer for this case. Also, as there is no one understands the case as much as me, it is hard for other people to look for lawyer for me. In the meantime, I have to look for lawyer by internet or through recommendation.

Therefore, I sincerely ask the Justice to give extension on future hearings due to the above grounds.

…

34                  On 12 February 2010, a directions hearing was held and the respondents did not appear at all.  In the absence of the respondents, I chose not to make any formal orders but I declined to adjourn the trial simply on the strength of the letter from Mr Zhang.  I invited him to file an affidavit in relation to the medical issues.  If the affidavit conformed with the requirements previously indicated, I was proposing to consider the request from Mr Zhang of a further adjournment.  I foreshadowed making a decision on the Thursday of that week.

35                  By this time, at least but possibly at an earlier date, all communications from Mr Zhang suggested that he was indefinitely residing in China.  His medical advice, for example, was apparently being received in Beijing. 

36                  On 12 February 2010, the applicant sent Mr Zhang a letter summarising the applicant’s proposed course of action in relation to the trial.  The applicant stressed that Mr Zhang would need to respond to the proposal raised by the applicant by close of business on Wednesday, 17 February 2010 in the form of a duly sworn affidavit. 

37                  On 18 February 2010, Mr Zhang forwarded to the Court an affidavit about his ill-health. 

38                  That affidavit was in these terms:

…

1.         I am physically ill and am unable to attend the trial on the week of 22/02/2010. I was diagnosed as intermittent whirling by the Professor Doctor in the VIP section of PLA The Military General Hospital of Beijing, which is a famous big hospital where many foreign Embassy staff have medication there.  Doctor required me to stay in hospital for further observation and examinations and is reluctant to allow me to have long flight back to Australia as I may have blackouts and she would not bear the responsibility for any accident happens.  In the meantime, I need to have further check-up after the Chinese New Year holidays on 22/02/10.

2.         I have felt dizzy and occasionally could not see things clearly in the last few months but only this time is more serious.  I also had the history of minor apoplexy in about 4 years ago.  My facial muscle was cramped and twisted and I went to see doctor in the Emergency Room in Royal Perth Hospital where the doctor diagnosed me as minor apoplexy and also something wrong in the “bell” in brain.  Due to my past physical history, I need to do NMR and cervical examination this time and will get the examination results later.

3.         I have been looking for legal representation since around end of November 2009 after Talbot & Olivier ceased to be my lawyers.  Indeed, I always had legal representations to represent me since the case started.   Su & Co. was my lawyer during the Workplace investigation period from February – October 2007.  I also had Talbot & Olivier from around August- November 2009 but only due to the facts that both lawyers could not speak Mandarin and are not Workplace lawyers, I could not communicate with them well.

4.         Since around end of November 2009, I have been looking for lawyers through local Chinese newspapers and internet.  Below is the list of some of the lawyers I looked for (the list is not complete as I could not remember all the lawyers names I looked for):

(a)Lawyer Liu Hong Tao                                               02- 9212-4820

(b) Shen Han Bing Solicitor Firm                                    02- 9267-6060

(c) Ausino Lawyer’s (Australia) Shanghai Office                        86-21-6467-4022

(d) Allens Arthur Robinson (Australia) Beijing Office      86-10-8515-0250

(e) Anna Chen & Associates                                         03-9642-1188

(f) Chua Tan & Associates                                            03-9602-3988

(g) Lawyer Zhang Min                                                  03-9471-8168

5.         The feedback of the enquires are:

(a)        Some lawyers do not deal with the Workplace Law,

(b)        The Beijing or Shanghai Office of the Australia law firms do not want to involve my court case in Australia,

(c)        Some lawyers need to have face-to-face consultation before accepting my case.

Currently, only Chua Tan & Associates said that Lawyer Cai of the firm will return back my call and I am still waiting for his call.

6.         Since the investigation of Workplace Ombudsman started in February 2007, I kept in contact with some of the witnesses.  However, the investigation stopped for 18 months from October 2007- April 2009 and all my witnesses have returned back China.  As these people are construction workers who will work in different places of China, it creates difficulties for me to look for them and persuade them to appear in court.  I did not delay time but it is the Workplace who delayed the investigation for about 2 years and creates difficulties on me.

7.         The Workplace Ombudsman has mentioned many times that the visa of their witnesses will expire (some would expire on September 2009 and Yuan would expire in December 2009 and now expire on end of February 2010) and so the trial should be commenced as soon as possible otherwise these witnesses cannot present in court.  However, the current fact seems is that, none of these witnesses seems have difficulties in staying in Australia until now even after their visas have expired.

8.         As I have previously mentioned, both Jian Sun and MA Yong Bo have been threatened by YUAN Zhao Lin before.  I myself also have been threatened by Yuan before.  I have requested in the “Response to Applicant’s Index to Trial Bundle of Documents” on 14/12/09 for Workplace Ombudsman to provide the interview records of MA Yong Bo and Jian Sun in trial.  As the two managers have been interviewed by Workplace Ombudsman twice in 2007 and their interview records are very important, the Workplace Ombudsman should provide these interview records to court.

9.         The 2 managers have told the Workplace Ombudsman that they have been threatened by Yuan in the interviews.  Also, I will provide to court another affidavit regarding the threatening behaviour of Yuan later. 

10.       Due to the my illness and  current status of my legal representation and witnesses, I still would like to ask the court to adjourn the trial so that I can have the chance to cross examine the witnesses in court.

…

39                  On receipt of that affidavit and for reasons set out in Kentwood No 1, I agreed, against opposition, to adjourn the trial dates.

40                  In that decision I vacated the trial dates of 22-26 February 2010 requiring that the matter be listed for a directions hearing on 22 February 2010 at 10.15 am for the fixing of early trial dates. 

41                  At [24]-[31] of that decision I said:

24        Although there is an obligation on a party to do everything possible to procure the attendance of his or her own witnesses (Wilson v Hunt (1984) 116 LSJS 20), I am unable to discern on the materials before me that there has been a failure on the part of the respondents to meet this obligation given the circumstances to which the correspondence and affidavit allude. 

25        There is some, but not compelling, evidence to support the ill-health contention raised by Mr Zhang.  I will accept that indication at face value for present purposes as it appears to come from a medical practitioner. 

26        The greatest concern however is that the respondents, facing a language barrier and ill-health would be exposed without legal representation and without witnesses to a complex hearing which may give rise, if the applicant succeeds, to penalties as well as other relief, including damages and costs. 

27        No application has been made for leave for Mr Zhang to represent Kentwood and on the basis of the material presently available, it is difficult to see that there would be a persuasive argument to permit that course.  As has been observed in a number of decisions (such as Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241), the advantages of operating under a corporate banner also carry with them certain responsibilities and obligations including the requirement that the company in Court proceedings be represented by a solicitor unless leave of the Court is otherwise obtained.  I have made it very clear to Mr Zhang that the company must be legally represented unless leave is otherwise given. 

28        Although Mr Zhang has maintained that he has been anxious to find a solicitor familiar with industrial law who also speaks Mandarin, I have made it clear to him that as a large portion of the trial will have to be translated in any event (most of the applicant’s witnesses speak only Chinese and Mr Zhang fluently speaks only Chinese).  None of the solicitors nor the Court will be able to proceed without translation.  The more important requirement therefore is that he obtain a solicitor able to represent him in litigation of this nature.  He appears to accept that this is so. 

29        Constant adjournments of trials of any nature are highly undesirable.  As against that, it is, in my view, (while applying the observations in Aon) even less desirable to proceed to trial in 6 business days time given the prejudice with which the respondents would inevitably be confronted in the absence of legal representation, illness and lack of witnesses.  This would include a split trial where only the applicant’s evidence is called. 

30        The applicant quite rightly suggests that the respondents may be tempted to treat this further adjournment as indicating that the matter can be deferred indefinitely.  They should not do so.  I wish to make it very clear that the trial will proceed within a short period of time and I have in mind, subject to the convenience of the parties, within as soon as reasonably possible after a period of four weeks, which should enable Kentwood to obtain legal representation and for that representation to be reasonably informed.  Moreover, if my optimism as to the likely availability of the applicant’s witnesses for a modest period of time is misplaced, I would expect the applicant to apply to the Court urgently so that special arrangements to take their evidence may be considered. 

31        I note that the applicant has helpfully undertaken to forward to the respondents a list of solicitors in Victoria who speak Mandarin and purport to have experience and capacity in industrial law or workplace law.

42                  Again, there was no appearance for the respondents at the directions hearing listed for 22 February 2010, apparently due to ill-health.  On that occasion, the applicant undertook to contact the Law Society of Western Australia and the Law Institute of Victoria to obtain a list of suitable lawyers to offer to represent the respondents. 

43                  On 8 March 2010, the applicant wrote to Mr Zhang once again on the topic of legal representation saying:

You have since 18 November 2009, some 3 1/2 months ago, been repeatedly instructed by his Honour to obtain legal representation for both yourself and Kentwood.  We note that it has been two weeks since the last directions hearing on 22 February 2010 and we have not been contacted by your new legal representative.  As the trial commences five weeks from today, in order to enable your legal representative to effectively represent you and Kentwood at trial, you should be briefing them now. 

We put you on notice that any application by you/Kentwood, or your legal representative, for any adjournment of the trial on the ground that you/Kentwood have no legal representation, or your legal representative requires more time to prepare for the trial, will be opposed.  Further, should any such application be made, we will require both you and any other person on whose testimony you/Kentwood may seek to rely to support such application, to attend Court to be cross-examined. 

44                  On 10 March 2010, an affidavit was received from Mr Zhang in relation to a submission concerning costs which was made by the applicant. 

45                  On 15 March 2010, my Associate emailed Mr Zhang seeking a further update about legal representation for Kentwood.  On the following day, Mr Zhang replied indicating that he was sending information to identified solicitors in Perth.

46                  On 29 March 2010, by telephone, Mr Zhang appeared at a further directions hearing but without legal representation.  He informed the Court that he was still trying hard to find a solicitor and that there had been interest expressed from another firm.  It came to light in the directions hearing, however, that the other firm represented one of the witnesses for the applicant and was, therefore, excluded by a conflict.  On this occasion I made orders as follows:

(1)        The trial listed to commence on 12 April 2010 proceed to the extent of the applicant presenting an opening address and its evidentiary case, and the respondents cross-examining those of     the applicant’s witnesses whom it chooses to cross-examine and whom the second respondent chooses to cross-examine to the extent reasonably possible;

(2)   The first respondent will have leave pursuant to order 9, rule 1(3) to be presented by the second respondent for the purpose of the trial proceeding to the extent described in the first order if no legal representation has been secured by the date of commencement of the trial.

(3)        There be liberty for any party to apply on short notice.

47                  I emphasised that Mr Zhang was required to attend in person for the trial commencing on 12 April 2010.  It was explained by counsel for the applicant that if Mr Zhang did not appear on 12 April 2010, the applicant may move for judgment.  I noted that such a motion would have to be considered on its merits (in the end, correctly in my view, no motion in those terms was pursued). 

48                  On 9 April 2010, Mr Zhang filed an affidavit advising that he would not be attending the trial on 12 April 2010 because of his health concerns.  He attached a ‘diagnosis certificate’ which when translated recorded:

Admission into the hospital based on a main component of “having paroxysmal dizziness for one month, … with numbness of limbs for one week”.  Investigation and active treatment are needed.  (The patient) is not suitable to go out for any activities now.

49                  On the same day, 9 April 2010, an email was forwarded by my Associate to Mr Zhang reminding him, in advance, that any further application for an adjournment would not be countenanced without an affidavit from a medical practitioner and an application in the appropriate form and also reminding him of the motion foreshadowed by counsel for the applicant.  There was a response on the same day, enclosing a diagnosis certificate from the hospital and explaining that an affidavit from a doctor would not be forthcoming.

50                  On 12 April 2010, being the first day of trial for the re-rescheduled trial, there was no appearance by the respondents.  On this occasion, the applicant presented its evidence by calling its witnesses.  Those witnesses adopted their witness statements (which had been previously forwarded to the respondents).  There was some expansion on the evidence in chief of the evidence in the witness statements.

51                  I adjourned the balance of the trial to 18 and 19 May 2010 so that the respondents could present, if they chose to do so, their evidence and so that the applicant could call any other evidence which was not subject to the constraint of the possible expiry of visas.

52                  On 14 May 2010, a letter was sent by the applicant to Mr Zhang concerning the continuation of the trial on 18 and 19 May 2010 and reminding him that it was the last opportunity for him to present his case. 

53                  On 14 May 2010, an affidavit from Mr Zhang was received saying that he would not be attending the trial because of ill-health and that he still had no legal representation.  A certificate was received later in the day.  The affidavit was in these terms:

1.         I am unable to attend the trial on 18-19 May 2010 due to my continuous health problem.  I need to go (sic-to) hospital on and off for treatments and I am unable to take long flight, under pressure and have outdoor activities.

2.         After talking to 2 Perth mandarin speaking lawyers, Tan & Tan and Lex Legal on March 2010 they were unable to represent me in court.  In the meantime, I was not able to find another Mandarin speaking lawyers (sic-lawyer) who will accept my case.

3.         Due to my health condition I was not able to arrange MA Yong Bo and other witnesses to go to Australia and attend trial. 

…

54                  On this occasion the diagnosis certificate accompanying the affidavit provided that the diagnosis was:

Insufficient blood supply of the cerebral arteries

Group 2 of Hypertension (High Risk Group)

Patient was hospitalised in our hospital from 09/04/2010 till 12/04/2010 for treatment.

…

55                  On the resumed date of the trial, 18 May 2010, there was, again, no appearance for the respondents.  An email was sent by my Associate to Mr Zhang on 2 June 2010 in the following terms:

…

Dear Mr Zhang

 

I refer to the hearing of this matter which resumed on 18 May 2010.

 

You did not attend, or instruct a solicitor to attend the hearing, so the hearing took place without you. It has now concluded subject to order 1 below.

 

The respondents chose not to lead any evidence in support of their case. The evidence is now closed. His Honour made orders concerning the future conduct of the matter. For your convenience, I have included the text of those orders below.

 

Please note that if you wish to reopen your case, you will need to make a formal application, and such application will need to be heard before 18 June 2010. In addition, in support of your application a medical practitioner will be required to  attend court to give oral evidence as to  why the state of your health has precluded and or will preclude your attendance at court and participation in the trial. 

 

You will, if you seek to apply to reopen your case, be required to attend the hearing of such application in person, or to instruct a solicitor to attend.

 

Subject to you applying to the Court to reopen your case, the parties have an opportunity to provide final detailed written submissions to the Court. The applicant will have until 30 June 2010 to file its written submissions. The respondents will then have until 30 July 2010 to file written submissions in reply. Following receipt of the respondents' written submissions, the parties will have 14 days within which to apply to supplement their written submissions with oral submissions.

 

The filing of final submissions is the last opportunity for the parties to state their case to the Court. After this time, judgment will be reserved and the Court will not be in a position to accept any further information about the case from the parties.

 

His Honour's orders made on 18 May 2010 are as follows:

 

The Court ordered that:

 

1.         The respondents have leave to apply to reopen their closed case on the condition that any such application is supported by oral evidence from a medical practitioner as to the health of the second respondent, and on condition that steps to effect the listing of such an application and the listing of the application itself are  all  implemented and the application is heard, by Friday 18 June 2010, failing which  leave to make  such an application will lapse.

2.         The applicant file detailed written submissions  addressing  the matters of law and fact arising in the proceedings on or before close of business 30 June 2010.

3.         The respondents, on or before 30 July 2010, file any written submissions in reply.

4.         Either party has liberty to apply to supplement the written submissions with oral submissions if such application is made within 14 days of receipt of the written submissions of the respondents.

5.         The costs of today will be reserved.

 

Kind regards

…

56                  On 18 June 2010, an affidavit and diagnosis certificate was sent by Mr Zhang to the Court indicating that oral evidence from a medical practitioner could not be provided and only a ‘diagnosed certificate’ could be provided as written evidence.  Advice was also received that Mr Zhang was unable to arrange for witnesses to go to Australia due to his ill-health and the need for him to attend hospital frequently for treatment.  In the diagnosis certificate on this occasion, it was provided that:

… This is to certify that the patient was admitted to our hospital for treatment for *“acute cerebral*” …

57                  The respondents did not apply to reopen their case.  Mr Zhang had expressed his intentions early in the matter to call Mr Ma Yong Bo (Mr Ma) as a witness.  That did not occur and Mr Ma’s evidence was not adduced in any admissible form.  On 30 June 2010, in accordance with the timetable set at the closing of the respondents’ case, the applicant’s closing submissions were filed.

58                  On 30 July 2010, the respondents filed a document titled ‘Respondent’s Written Closing Submissions’.  This document was in the following terms:

1.         I am in no position to respond to this final submission as I have been sick for some time.  I am now suffering from stroke and I am not sure when will I return to Australia at this point of time.

2.         Whatever I stated in my defence and all my previous submissions still stand at this point of time.  All the documents I provided are genuine.

Jian Yang Zhang

30 July 2010

59                  On 18 August 2010, additional time was given to Mr Zhang to provide more detailed written closing submissions if he wished.  A further two weeks was provided.

60                  More detailed written closing submissions were provided by Mr Zhang on 1 September 2010.  The applicant indicated it did not wish to respond to them. 

THE CASE AGAINST THE RESPONDENTS

61                  I should make it clear that in the absence of evidence or any appearance from the respondents, the detail which follows does draw substantially from the applicant’s evidence and written submissions.  The written submissions for the respondents, as indicated above, was confined to affirming the content of the defence which is discussed below.

62                  Evidence was given by each of the Employees, Mr Zeng, Mr Hang, Mr Shen, Mr Guo, Mr Yuan and Mr Terry Buckingham, Assistant Commissioner of Professional Standards at the Department of Corrective Services for the Western Australia State Government. 

63                  As indicated above, a detailed defence prepared by an experienced legal practitioner was filed for the respondents from which a number of basic matters were admitted.  I will refer to those matters first. 

64                  It is common ground that relevant provisions of the State Award (until 26 March 2006) and the NAPSA (from 27 March 2006) provided that:

(a)                all hours worked in excess of eight hours per day or outside the ordinary spread of hours (7.00am – 6.00pm Monday to Friday) or on weekends are paid for at overtime rates;

(b)               all overtime worked on weekdays or on Saturday up to 12 noon is paid for at the rate of time and one half for the first two hours and double time thereafter;

(c)                all overtime worked after 12 noon on Saturday or at any time on Sunday is paid for at the rate of double time;

(d)               when overtime is worked on a Saturday, a minimum of three hours is to be worked or paid for;

(e)                when overtime is worked on a Sunday a minimum of four hours is to be worked or paid for;

(f)                 all work performed on a public holiday shall be paid for at the rate of double time and a half and, when an employee is required to work on a public holiday, a minimum of four hours is to be worked or paid for;

(g)                0.4 of one hour of each day worked accrues as an entitlement to take the fourth Monday in each four week cycle as a day off paid as though worked (Rostered Day Off);

(h)                work performed on a Rostered Day Off shall be paid for at the overtime rate applicable to Saturday work;

(i)                  an employee required to work overtime for at least one and a half hours after working ordinary hours shall be paid an amount of $10.20 to meet the cost of a meal.

65                  Kentwood was, in respect of work performed by Messrs Yuan, Guo and Hang on the Springvale Cemetery Project in Victoria, bound by the terms of the preserved Australian Pay and Classification Scale derived from the National Joinery and Building Trades Products Award 2002 (preserved Federal Award Pay Scale).

66                  Kentwood was, in respect of work performed by Messrs Zeng and Shen on the Springvale Cemetery Project in Victoria, bound by the terms of the preserved Australian Pay and Classification Scale derived from the Construction Industry Sector – Minimum Wage Order – Victorian 1997 (preserved MWO Pay Scale).

67                  Kentwood was, in respect of work performed by the Employees on the Springvale Cemetery Project in Victoria, bound by the Australian Fair Pay and Conditions Standard (Standard).

68                  By operation of s 189(1)(d) of the WR Act, where an employee covered by a Pay Scale has a contract of employment which contains frequency of payment provisions that provide for payment of wages at least monthly, the employer must comply with the contractual obligation as to frequency of payment of wages.

69                  Mr Yuan’s Contract of Employment provided that he would be paid monthly.

Effect of material transitional provisions

70                  Pursuant to cl 11(1) of Pt 3 of Sch 2 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act), the WR Act continues to apply on and after ‘the WR Act repeal day’ in relation to conduct that occurred before that day.

71                  The WR Act repeal day was 1 July 2009.

72                  Pursuant to cl 21 of Pt 5 of Sch 17 to the Transitional Act, jurisdiction is conferred on the Court in relation to any matter arising under the WR Act as it continues to apply because of the Transitional Act.

73                  The application in this proceeding was made under the WR Act as it continued to apply because of the Transitional Act.

74                  Pursuant to cl 13(1) of Pt 3 of Sch 18 to the Transitional Act, for the purposes of the application of the WR Act in relation to conduct that occurred prior to 1 July 2009, an application that could have been made by a workplace inspector (disregarding cl 12 of Pt 3 of Sch 18) may be made after 1 July 2009 by a Fair Work Inspector.

75                  A workplace inspector could have made an application in relation to the conduct of Kentwood and Mr Zhang that occurred prior to 1 July 2009 pursuant to:

(a)        section 169 of the WR Act which provides that a workplace inspector may exercise powers for the purpose of determining whether any of the following have been observed:

(A)       workplace agreements;

(B)       awards;

(C)       the Standard;

(D)       minimum entitlements and orders under Pt 12 of the WR Act; or

(E)       the requirements of the WR Act.

(b)        section 718 of the WR Act which provides that a workplace inspector has standing to apply for a penalty or other remedy under Div 2 of Pt 14 of the WR Act in relation to a contravention of an ‘applicable provision’;

(c)        section 719 of the WR Act which provides that the Court, as an ‘eligible court’ within the meaning of the definition in s 717 of the WR Act, may impose a penalty in accordance with Div 2 of Pt 14 of the WR Act on a person, if the person is bound by an applicable provision and the person contravenes the provision;

(d)        section 717 of the WR Act which defines ‘applicable provision’ to include a  term of an award, a term of a collective agreement, and a term of the Standard; and

(e)        clause 43 of Sch 8 of the WR Act which provides that a workplace inspector may enforce a Notional Agreement Preserving State Awards as defined by cl 31 of that schedule (Notional Agreement) as if it were a collective agreement and a workplace inspector has the same functions and powers in relation to a Notional Agreement as it has in relation to a collective agreement.

76                  The applicant is, by force of s 701 of the Fair Work Act 2009 (Cth), a Fair Work Inspector.

Mr Zhang

77                  Mr Zhang was the managing director and company secretary of Kentwood and owned 50% of the issued share capital of Kentwood.

Beijing Sunshine

78                  Beijing Sunshine is a company registered in China.

79                  Mr Zhang owned Beijing Sunshine together with another person, Mr Zhang Jian Guo, and was a co-director of Beijing Sunshine.

Mr Yuan

80                  Mr Yuan was employed fulltime throughout his employment with Kentwood.  He worked on the Remembrance Project in Kalgoorlie in January 2006 and for the remainder of his employment at various construction sites in and around Perth, apart from the period 20 September 2006 to 9 October 2006 when he worked on the Springvale Cemetery Project in Melbourne.  Mr Yuan was a builders’ labourer and/or a carpenter and joiner and/or performed construction work within the meaning of the State Award until 26 March 2006 and from 27 March 2006 within the meaning of the NAPSA.

81                  While employed on the Springvale Cemetery Project Mr Yuan performed carpentry work, roof tiling and construction work within the meaning of the preserved Federal Award Pay Scale.

82                  While employed by Kentwood he was entitled to the following rates of pay under the following instruments:

Period	Instrument	Hourly rate
2 January – 26 March 2006	State Award	$17.09 – Perth $17.29 - Kalgoorlie
27 March – 30 November 2006	preserved WA Pay Scale	$17.09
1 December 2006 – 2 February 2007	preserved WA Pay Scale	$17.84
20 September – 9 October 2006	preserved Federal Award Pay Scale	$15.22

Mr Zeng

83                  Mr Zeng is a qualified roof tiler.  He arrived in Melbourne on or about 27 April 2006 with Mr Huang Jin Rong (Mr Huang), an employee of Kentwood.

84                  During his period of employment by Kentwood, Mr Zeng worked in Melbourne, except for the period 18 June – 12 July 2007, when he worked on a house in Perth plastering walls as directed by Mr Zhang on behalf of Kentwood.

85                  Except for the period 18 June – 12 July 2007 Mr Zeng was transported from his accommodation at 16 Boronia Avenue, Dandenong North, Victoria to the Springvale Cemetery and back again each work day in a motor vehicle driven by an employee supervisor of Kentwood, Mr Liu Da Hui.

86                  From 26 February 2007 Mr Zeng worked eight hours per day, Monday to Friday.

87                  While employed by Kentwood on the Springvale Cemetery Project Mr Zeng performed various general construction duties, including tiling, within the meaning of ‘Construction Worker Level 5’ in the preserved MWO Pay Scale.  He performed the duties of a builders’ labourer and/or a construction worker and/or a plasterer within the meaning of the NAPSA and was entitled to the following rates of pay under the following instruments:

Period	Instrument	Hourly rate
2 May – 30 November 2006	preserved MWO Pay Scale	$14.43
1 December 2006 – 17 June 2007	preserved MWO Pay Scale	$15.15
18 June – 12 July 2007	preserved WA Pay Scale	$16.35

Mr Hang

88                  Mr Hang is a qualified carpenter.  He arrived in Melbourne on or about 27 April 2006 with Mr Huang and commenced work with Kentwood on or about 2 May 2006 on the Springvale Cemetery Project where he worked on a fulltime basis for the entire period of his employment with Kentwood.

89                  From 26 February 2007 Mr Hang worked eight hours per day, Monday to Friday.

90                  While employed on the Springvale Cemetery Project he performed carpentry work and construction work within the meaning of the preserved Federal Award Pay Scale and was entitled to the following rates of pay under the following instruments:

Period	Instrument	Hourly rate
2 May – 30 November 2006	preserved Federal Award Pay Scale	$15.22
1 December 2006 – 25 July 2007	preserved Federal Award Pay Scale	$15.94

Mr Guo

91                  Mr Guo is a qualified carpenter.  He arrived in Melbourne on or about 27 April 2006 with Mr Huang.  During his period of employment by Kentwood, he worked in Melbourne, except for the period 18 June – 12 July 2007, where he worked on a house in Perth plastering walls.

92                  Except for the period 18 June – 12 July 2007 Mr Guo was transported from his accommodation at 16 Boronia Avenue, Dandenong North, Victoria to the Springvale Cemetery and back again each work day in a motor vehicle driven by Mr Huang or Mr Hui.

93                  While employed by Kentwood on the Springvale Cemetery Project Mr Guo performed carpentry work and construction work within the meaning of the preserved Federal Award Pay Scale.

94                  While employed by Kentwood in Western Australia Mr Guo performed the duties of a carpenter within the meaning of the NAPSA and was entitled to the following rates of pay under the following instruments:

Period	Instrument	Hourly rate
2 May – 30 November 2006	preserved Federal Award Pay Scale	$15.22
1 December 2006 – 25 July 2007	preserved Federal Award Pay Scale	$15.94
18 June – 12 July 2007	preserved WA Pay Scale	$17.84

Mr Shen

95                  Mr Shen is a qualified builder who arrived in Melbourne in September 2006.  He commenced work with Kentwood on or around 30 September 2006 on the Springvale Cemetery Project and ceased employment on or around 12 July 2007.

96                  During his period of employment by Kentwood, Mr Shen worked in Melbourne, except for the period 18 June – 12 July 2007, where he worked on a house in Perth plastering walls.

97                  While employed by Kentwood on the Springvale Cemetery Project Mr Shen performed plastering, rendering, roof tiling, bricklaying and construction work within the meaning of ‘Construction Worker Level 5’ in the preserved MWO Pay Scale.

98                  While employed by Kentwood in Western Australia Mr Shen was a builder’s labourer and/or construction worker and/or a plasterer within the meaning of the NAPSA and was entitled to the following rates of pay under the following instruments:

Period	Instrument	Hourly rate
30 September – 30 November 2006	preserved MWO Pay Scale	$14.43
1 December 2006 – 17 June 2007	preserved MWO Pay Scale	$15.15
18 June – 12 July 2007	preserved WA Pay Scale	$16.35

Matters in dispute

99                  The following matters were not admitted by the respondents but were proven at trial by uncontested evidence adduced by the employees.  I accept their evidence. 

Facts common to all Employees (not admitted by the Respondents)

100               Each Employee was a Chinese citizen and holder of a Temporary Business (Long Stay) – Standard Business Sponsorship (Subclass 457) visa (Subclass 457 visa), sponsored by Kentwood to work in Australia.  While in China each Employee was offered employment with Kentwood and accepted employment with Kentwood.

101               Each Employee had to make a payment prior to being offered a position with Kentwood which included payment for his visa to Australia:

(a)        Mr Yuan paid Mr Xiao Jun Zhang (Jun) 2,500 Renminbi (RMB) and was told by Jun that this money would be paid to Mr Zhang and was for his visa to Australia;

(b)        Messrs Zeng, Hang and Guo each paid Mr Xu Zhao Gan (Mr Xu) 15,000 RMB in or around April 2006 to secure employment with Kentwood and each was told by Mr Xu that this payment included payment for obtaining his visa to Australia;

(c)        Mr Shen paid Mr Xu 15,000 RMB in August 2006 to gain employment with Kentwood.

102               Each Employee’s contract of employment with Kentwood was partly oral and partly written.  The written employment agreement provided to each of the Employees on behalf of Kentwood was not consistent with the oral terms of employment that were offered to, and accepted by the Employees.       For some of the Employees the written agreements provided by the respondents’ solicitors on 7 March 2007 to the applicant in response to the applicant’s Notice to Produce Documents dated 16 February 2007 are not the same written agreements initially provided to the Employees by the respondents for signing (Purported Written Agreements):

(a)        The first time that Mr Yuan saw the Chinese version of the employment agreement and the Beijing Sunshine agreement purportedly signed by him on 7 December 2005 was in August 2008 when an officer of the then Workplace Ombudsman gave them to him at his request.  Mr Yuan believes that amendments were made to the documents signed by him after he had signed them;

(b)        The first time that Mr Shen saw the Chinese version of  the employment agreement purportedly signed by him on 25 August 2006 was on 3 December 2007 when an inspector from the then Workplace Ombudsman showed it to him.  Mr Shen noted that there were differences between the two documents;

(c)        The first time that Mr Hang saw the Chinese version of the employment agreement purportedly signed by him on 21 April 2006 was on 5 December 2007 when an inspector from the then Workplace Ombudsman showed it to him.  Mr Hang noted that, whilst it looked similar to the one he had signed in China, there were differences.

103               The material terms of each Employee’s contract of employment included terms that:

(a)        the Employee would be paid a wage or salary expressed in RMB:

(A)       in Yuan’s case a base annual salary of 39,100 RMB;

(B)       in Zeng’s case 3,600 RMB per month;

(C)       in Hang’s case 120 RMB per day;

(D)       in Guo’s case 120 RMB per day;  and

(E)       in Shen’s case 3,600 RMB per month.

(b)        Messrs Yuan, Zeng and Hang would be paid monthly;

(c)        the Employee would work nine hours per day, six days per week, plus overtime as required;

(d)        overtime would be paid after nine hours on any day Monday – Saturday and for all hours worked on Sunday in cash at the rate of $20 for six hours or 20 RMB per hour;

(e)        food, accommodation, medical expenses, the cost of the visa to Australia and translation services would be paid by Kentwood, not by the Employee.

104               None of the Employees authorised Kentwood to deduct or withhold any money from their salary.

105               Each Employee was employed on a fulltime basis and worked exclusively for Kentwood.

106               Each Employee from the commencement of his employment until, in the case of Mr Yuan, the termination of his employment and, in the case of the other four Employees, 25 February 2007, generally worked 10-11 hours per day for 6-7 days per week, as set out in detailed schedules to the statement of claim.

107               In February 2007 the Employees working at the Springvale Cemetery Project were instructed to only work eight hours per day for five days per week shortly after a person from the Department of Immigration and Citizenship (DIAC) visited the site, with an interpreter, to speak with some of Kentwood’s workers.

108               While working on the Springvale Cemetery Project Messrs Zeng, Hang, Guo and Shen were transported together from their accommodation at 16 Boronia Avenue, Dandenong North, Victoria to the Springvale Cemetery and back again each work day in a motor vehicle driven by a representative of Kentwood (either Mr Huang or Mr Hui).

109               On 26 February 2007 Messrs Zeng, Hang and Guo were asked by Mr Yim Ching Yee, who was sitting inside a car, while Mr Zhang walked around outside it, to sign a document (Purported Record) which purported to record the hours each of them had worked each week for Kentwood from the commencement of their employment (Signing of Purported Record Incident).  Mr Shen does not give evidence of this.

110               Messrs Zeng, Hang and Guo all refused to sign the Purported Record because it was inaccurate.

111               There is also a Purported Record showing Mr Yuan’s hours of work which Mr Yuan was made aware of for the first time on 28 November 2007.  I accept that this Purported Record is inaccurate.

112               Mr Yuan was not paid for the first five months of his employment.  Messrs Zeng, Hang and Guo were not paid for the first three months of their employment.  Thereafter, they were paid monthly as was Mr Shen from the commencement of his employment. 

113               Wages were paid to each Employee by a direct deposit into their Chinese bank accounts.

114               When Employees worked overtime, they were paid cash at the rate of $20 for six hours.

115               None of the Employees were paid their annual leave entitlements with the exception of Mr Yuan who received a partial payment of $2,600 in June 2007, following intervention by the applicant.

116               Messrs Yuan, Shen and Guo were not given any rostered days off and were not paid the penalty rates for working on rostered days off pursuant to cl 13 of the NAPSA. 

117               None of the Employees received any paid time off work.  If they did not work, they were not paid.

118               Each Employee was requested by representatives/employees of Kentwood to open a bank account with the Commonwealth Bank of Australia (CBA), which they did, some without realising they had done so.  None of the Employees were given the key card for their account or knew the PIN and none of the Employees made deposits to or withdrawals from their account except for receiving the balance of their account when they closed it.

(a)        Mr Guo was taken to a CBA branch in Melbourne in September 2006 by Mr Hui and told to apply for a bank account.  Mr Guo received the key card but did not know the PIN.  Mr Guo received approximately $1,600 when he closed the account in July 2007 but otherwise did not use the account.

(b)        Mr Hang was taken to a CBA branch in Melbourne in September 2006 by Mr Hui and told to apply for a bank account.  Mr Hang received the key card in March 2007 but never knew the PIN.  Mr Hang received approximately $440 when he closed the account in July 2007 but otherwise did not use the account.

(c)        Mr Shen was taken to a CBA branch in Melbourne not long after arriving in Australia by Mr Hui and told to apply for a bank account.  Mr Shen received $1,085 when he closed the account in July 2007 but otherwise did not use the account.

(d)        Mr Zeng was taken to a CBA branch in Melbourne in August 2006 by Mr Hui and told to apply for a bank card so he could pay tax in Australia.  Mr Zeng received the key card in February 2007 but never knew the PIN and did not use the account.

(e)        Mr Yuan was taken to a CBA branch in Melbourne in October 2006 by Mr Hui and told to apply for a bank card so he would not have to pay tax in China, only in Australia.  Mr Yuan was never given the key card and never knew the PIN.  He received $8.02 when he closed the account in February 2007 but, other than this transaction and the transaction referred to in (f) below, did not use the account.

(f)         Mr Yuan was taken to the Malaga branch of the CBA in October 2006 by Mr Ching Yee Yim so he could deposit a cheque made out to him by the Australian Taxation Office (ATO) for $1,845 which was his refund for the 2005/06 year.  Mr Yuan did not realise at the time he was depositing a cheque.  Mr Ching Yee Yim retained the key card after the deposit had been made.

119               None of the Employees received any notice of termination of their employment:

(a)        Mr Yuan’s last day of work for Kentwood was 2 February 2007.  Mr Zhang did not communicate to Mr Yuan that his employment was terminated on this day, or any other day.  Mr Zhang refused to provide Mr Yuan with any further work after this date because Mr Yuan had queried with Mr Zhang whether he was receiving all of his entitlements as he had recently become aware that he was in Australia on a Subclass 457 visa and was entitled to a minimum salary of $39,100, not 39,100 RMB, which, depending on exchange rates, might be equivalent to only AUD$6,500.

(b)        Mr Yuan was not given any notice of the termination of his employment and did not see the unsigned ‘notice to terminate’ dated 2 February 2007 until 9 March 2007.

(c)        In July 2007 DIAC advised Kentwood that all existing sponsorships of Subclass 457 visa-holders were cancelled.

(d)        In July 2007 Mr Zhang advised Messrs Zeng, Guo and Shen, who were at that time working in Perth, they could no longer work for him.  Their last day of work for Kentwood was 12 July 2007.  They returned to Melbourne.

(e)        In July 2007 Mr Hang received a letter from DIAC advising him that he could no longer work for Kentwood.  His last day of work for Kentwood was 25 July 2007.

Specific facts pertaining to Mr Yuan

120               The evidence of Mr Yuan, which I accept, was to this effect.  He was introduced to Mr Zhang through a colleague, Jun.

121               Mr Zhang verbally offered Mr Yuan employment with Kentwood on or about 7 December 2005.

122               Mr Zhang asked Mr Yuan to sign two separate written agreements which he provided to Mr Yuan on or about 7 December 2005.

123               Mr Yuan signed a written employment agreement with Kentwood on or about 7 December 2005 (Mr Yuan’s Written Employment Agreement).

124               Mr Yuan signed a written agreement with Beijing Sunshine on or about 7 December 2005 (Mr Yuan’s Beijing Sunshine Agreement).

125               Material terms of Mr Yuan’s Beijing Sunshine Agreement included terms that Beijing Sunshine would be responsible for making arrangements to obtain Mr Yuan’s visa, providing translation services and providing goods and services to Mr Yuan in Australia such as food, accommodation and medical insurance and that Beijing Sunshine would charge an unspecified fee for its services. 

126               Mr Yuan sought clarification of the terms in his Written Employment Agreement regarding who was responsible for meeting his living costs in Australia.  Mr Gang Chen, Mr Zhang’s business partner, amended the Written Employment Agreement to provide that Kentwood would be responsible for all the fees incurred by Beijing Sunshine in relation to Mr Yuan’s food, accommodation, medical expenses, visa and translations.

127               Mr Yuan was never told, and did not expect, that he would be paid $39,100 per annum and never signed a contract to this effect.

128               Yuan commenced employment on or around 2 January 2006.  He kept two diaries in which he recorded his hours of work and other comments.

129               Mr Ma Yong Bo, a Kentwood supervisor, kept a record of the hours worked by Mr Yuan and other workers in Perth which were signed by each worker.  Mr Ma Yong Bo’s entries for hours worked by Mr Yuan are consistent with Mr Yuan’s record of hours in his diaries.

130               Mr Yuan worked in Perth throughout his employment with Kentwood apart from a period of 23 days in January 2006 when he worked in Kalgoorlie on the Remembrance Project and 20 days in September-October 2006 when he worked in Melbourne on the Springvale Cemetery Project.

131               Mr Huang made a note of the hours worked by Mr Yuan on the Springvale Cemetery Project.

132               A schedule to the statement of claim sets out

(a)        the ordinary hours and the overtime hours worked by Mr Yuan in Western Australia;

(b)        the hours worked by Mr Yuan on a public holiday in Western Australia;

(c)        the hours worked by Mr Yuan on a Rostered Day Off in Western Australia;

(d)        Mr Yuan’s entitlements to a meal allowance while working in Western Australia;

(e)        the hours worked by Mr Yuan on the Springvale Cemetery Project.

133               Mr Yuan was not paid for the first five months of his employment. The first wages received by him were paid into his bank account in China on 14 June 2006. 

134               For the duration of his employment by Kentwood Mr Yuan received a total payment of $9,805 from either Beijing Sunshine on behalf of Kentwood or Kentwood comprising:

(a)        wages of 35,700 RMB (or $5,950).  Beijing Sunshine deposited the following amounts into Mr Yuan’s Chinese bank account on behalf of Kentwood:

14 June 2006	7500 RMB
7 July 2006	5000 RMB
16 August 2006	4000 RMB
7 September 2006	4000 RMB
12 October 2006	4000 RMB
13 November 2006	4000 RMB
7 December 2006	3600 RMB
12 January 2007	3600 RMB

(b)        a cash payment of $1,600 paid to Mr Yuan on 13 February 2007 by Kentwood; and

(c)        a total of $2,255 paid to Mr Yuan in cash at various times by Kentwood or Mr Zhang for overtime.

135               For the period 2 January – 26 March 2006 Mr Yuan was entitled to be paid $18,728.24.  The sum received by Mr Yuan of $9,805 is offset against this liability and the applicant is not seeking an order from the Court that the balance owing should be paid to Mr Yuan.

136               For the period from 27 March 2006 until the termination of his employment Mr Yuan was entitled to be paid:

(a)        $65,804.19 in respect of his employment in Western Australia;

(b)        $2,876.58 in respect of his employment in Victoria; and

(c)        $3,431.27 in respect of his annual leave and leave loading.

137               In June 2007, following the intervention of the applicant, Mr Yuan was paid $2,600 in payment for his accrued annual leave.  The remaining total underpayment in respect to Mr Yuan by Kentwood for the period of his employment from 27 March 2006 is $69,512.04. 

Specific facts pertaining to the recruitment of Messrs Zeng, Hang, Guo and Shen

138               Mr Xu worked for Jiangsu County Overseas Labour Training Centre, a business which operates in China and finds employment overseas for Chinese nationals.

139               In 2005-2006 Mr Xu recruited employees for Kentwood including Messrs Zeng, Hang, Guo and Shen.

140               Each of Messrs Zeng, Hang, Guo and Shen paid Mr Xu a sum of money for the opportunity to be considered for and/or to secure employment with Kentwood:

(a)        Messrs Zeng, Hang and Guo each paid Mr Xu 15,000 RMB in or around April 2006 to secure employment with Kentwood and each was told by Mr Xu that this payment included payment for obtaining his visa to Australia and skills testing and that, upon ceasing employment with Kentwood, if he complied with all relevant rules etc, he would receive a partial refund of 7,000 RMB; 

(b)        Mr Shen paid Mr Xu 15,000 RMB in August 2006 to gain employment with Kentwood and was told that upon his return to China, if he complied with all relevant rules etc, he would receive a partial refund of 7,000 RMB.

141               In 2006 Mr Xu arranged for each of Messrs Zeng, Hang, Guo and Shen to be interviewed by, and assessed for employment with, Kentwood:

(a)        Messrs Zeng, Hang and Guo were each interviewed and assessed separately by Mr Xu and Mr Huang, an employee of Kentwood, in Mr Xu’s office in April 2006;

(b)        Mr Shen was interviewed and assessed by Mr Xu and Mr Huang in Mr Xu’s office in August 2006.

142               Mr Xu offered each of Messrs Zeng, Hang, Guo and Shen employment with Kentwood on behalf of Kentwood:

(a)        Mr Xu and/or Mr Huang explained the material terms of Messrs Zeng’s, Hang’s and Guo’s employment with Kentwood to each of them in April 2006;

(b)        Mr Xu and/or Mr Huang explained the material terms of Mr Shen’s employment with Kentwood to him in August 2006.

143               Mr Xu arranged for each of Messrs Zeng, Hang, Guo and Shen to enter into a written contract of employment with Kentwood:

(a)        In April 2006 Mr Xu gave Messrs Zeng, Hang and Guo a written employment agreement with Kentwood which he asked each of them to sign and which each of them did sign; (referred to as their written Employment Agreement);

(b)        Mr Xu gave Mr Shen a written employment agreement with Kentwood which he asked him to sign and which he did sign (written Employment Agreement);

144               The written Employment Agreements were not consistent with the terms and conditions of employment referred to by Mr Xu and Mr Huang.

145               Messrs Zeng, Hang and Guo travelled to Melbourne together with Mr Huang, arriving on or about 27 April 2006.  Their first day of work was 2 May 2006.

146               Mr Shen arrived in Melbourne on or about 22 September 2006 and was met by Mr Hui.  Mr Shen’s first day of work was 30 September 2006.

147               While living in Melbourne Messrs Zeng, Hang, Guo and Shen shared a house rented by Kentwood with other employees of Kentwood, living 2-3 to a bedroom.  Sometimes they had to sleep on the floor.

Specific facts pertaining to the employment of Mr Zeng

148               Mr Zeng kept a record of his hours of work in a diary.  A schedule to the statement of claim sets out Mr Zeng’s hours of work in Victoria and Western Australia, including in relation to Western Australia, hours worked on rostered days off, public holidays, Saturdays and Sundays. 

149               For the duration of his employment by Kentwood Mr Zeng received a total payment of $9,789.20 from either Beijing Sunshine on behalf of Kentwood or Kentwood comprising:

(a)        wages of 49,600 RMB (or AUD$8,267).  Beijing Sunshine deposited the following amounts into Zeng’s Chinese bank account on behalf of Kentwood:

18 August 2006	10,000 RMB
7 September 2006	3600 RMB
12 October 2006	3600 RMB
13 November 2006	3600 RMB
7 December 2006	3600 RMB
12 January 2007	3600 RMB
7 February 2007	3600 RMB
12 March 2007	3600 RMB
6 April 2007	3600 RMB
10 May 2007	3600 RMB
8 June 2007	3600 RMB
17 July 2007	3600 RMB

(b)        overtime payments of AUD$1,531.20 paid in cash from time to time. 

150               For the period from 2 May 2006 until the termination of his employment Mr Zeng was entitled to be paid:

(a)        $3,747.05 in respect of his employment in Western Australia;

(b)        $50,818.16 in respect of his employment in Victoria; and

(c)        $2,867.46 for accrued but unpaid annual leave.

151               The total underpayment in respect to Mr Zeng by Kentwood for the period of his employment is $47,634.47. 

Specific facts pertaining to the employment of Mr Hang

152               Mr Hang did not enter into any agreement with Beijing Sunshine.  He ceased employment with Kentwood on or about 25 July 2007, but while employed kept a record of his hours of work in a diary.  A schedule to the statement of claim sets out his hours of work in Victoria.

153               For the duration of his employment by Kentwood Mr Hang received a total payment of $9,119.80 from either Beijing Sunshine on behalf of Kentwood or Kentwood comprising:

(a)        wages of 49,600 RMB (or AUD$8,267).  Beijing Sunshine deposited the following amounts into Mr Hang’s Chinese bank account on behalf of Kentwood:

18 August 2006	10,000 RMB
7 September 2006	3600 RMB
12 October 2006	3600 RMB
13 November 2006	3600 RMB
7 December 2006	3600 RMB
12 January 2007	3600 RMB
7 February 2007	3600 RMB
12 March 2007	3600 RMB
6 April 2007	3600 RMB
10 May 2007	3600 RMB
8 June 2007	3600 RMB
17 July 2007	3600 RMB

(b)        overtime payments of $852.80 paid in cash from time to time. 

154               For the period from 2 May 2006 until the termination of his employment Mr Hang was entitled to be paid:

(a)        $55,008.49 in respect of his employment in Victoria; and

(b)        $2,982.06 for accrued but unpaid annual leave.

155               The total underpayment in respect to Mr Hang by Kentwood for the period of his employment is $48,870.75. 

Specific facts pertaining to the employment of Mr Guo

156               During his period of employment by Kentwood, Mr Guo worked in Melbourne, except for the period 18 June – 12 July 2007, where he worked on a house in Perth plastering walls.  Schedule 5 to the statement of claim sets out Mr Guo’s hours of work in Victoria and Western Australia, including hours worked on rostered days off, public holidays, Saturdays, Sundays and ordinary days. 

157               Mr Guo ceased employment with Kentwood on or about 12 July 2007.  A schedule to the statement of claim sets out Mr Guo’s hours of work.

158               For the duration of his employment by Kentwood Mr Guo received a total payment of $9,119.80 from either Beijing Sunshine on behalf of Kentwood or Kentwood comprising:

(a)        wages of 49,600 RMB (or AUD8267).  Beijing Sunshine deposited the following amounts into Mr Hang’s Chinese bank account on behalf of Kentwood:

18 August 2006	10,000 RMB
7 September 2006	3600 RMB
12 October 2006	3600 RMB
13 November 2006	3600 RMB
7 December 2006	3600 RMB
12 January 2007	3600 RMB
7 February 2007	3600 RMB
12 March 2007	3600 RMB
6 April 2007	3600 RMB
10 May 2007	3600 RMB
8 June 2007	3600 RMB
17 July 2007	3600 RMB

(b)        overtime payments of $852.80 paid in cash from time to time. 

159               For the period from 2 May 2006 until the termination of his employment Mr Guo was entitled to be paid:

(a)        $49,852.16 in respect of his employment in Victoria;

(b)        $4,355.61 in respect of his employment in Western Australia; and

(c)        $3,128.78 for accrued but unpaid annual leave.

160               The total underpayment in respect to Mr Guo by Kentwood for the period of his employment is $48,216.75.

Specific facts pertaining to the employment of Mr Shen

161               A schedule to the statement of claim sets out Mr Shen’s hours of work, including in relation to Western Australia, hours worked on rostered days off, public holidays, Saturdays and Sundays. 

162               For the duration of his employment by Kentwood Mr Shen received a total payment of $7,502.80 from either Beijing Sunshine on behalf of Kentwood or Kentwood comprising:

(a)        wages of 39,600 RMB (or AUD $6,600).  Beijing Sunshine deposited the following amounts into Mr Shen’s Chinese bank account on behalf of Kentwood:

September 2006	3600 RMB
October 2006	3600 RMB
November 2006	3600 RMB
December 2006	3600 RMB
January 2007	3600 RMB
February 2007	3600 RMB
12 March 2007	3600 RMB
6 April 2007	3600 RMB
10 May 2007	3600 RMB
8 June 2007	3600 RMB
17 July 2007	3600 RMB

(b)        a bonus payment of $50 in December 2006;

(c)        overtime payments of $852.80 paid in cash from time to time. 

163               For the period from 30 September 2006 until the termination of his employment Mr Shen was entitled to be paid:

(a)        $29,970.39 in respect of his employment in Victoria;

(b)        $3,992.27 in respect of his employment in Western Australia; and

(c)        $1,911.64 for accrued but unpaid annual leave.

164               The total underpayment in respect to Mr Shen by Kentwood for the period of his employment is $28,371.50.

165               Although the respondents deny it, I accept the evidence that Mr Yuan was not paid for the first five months of his employment.  Thereafter Mr Yuan was paid monthly.  Mr Zeng’s contract of employment provided that he would be paid monthly.  Mr Zeng was not paid for the first three months of his employment.  Thereafter Mr Zeng was paid monthly.  Mr Hang’s contract of employment provided that he would be paid monthly.  Mr Hang was not paid for the first three months of his employment.  Thereafter Mr Hang was paid monthly.  Mr Guo was not paid for the first three months of his employment and thereafter he was paid monthly.

Annual leave for the Employees

166               On the termination of his employment Mr Yuan was entitled to be paid $3,431.27 for accrued annual leave and leave loading.  On or about 20 June 2007, in response to intervention by the applicant, he was paid $2,600 for accrued annual leave. 

167               During his employment Mr Zeng did not take any days of paid annual leave.  Upon the termination of his employment he had accrued 175.38 hours’ annual leave which equates to a payment of $2,867.46.

168               During his employment Mr Hang did not take any days of paid annual leave.  Upon the termination of his employment, he had accrued 187.087 hours’ annual leave which equates to a payment of $2,982.06.

169               During his employment Mr Shen did not take any days of paid annual leave.  Upon the termination of his employment he had accrued 116.92 hours’ annual leave which equates to a payment of $1,911.64. 

170               During his employment Mr Guo did not take any days of paid annual leave.  Upon the termination of his employment he had accrued 175.38 hours’ annual leave which equates to a payment of $3,128.78. 

171               Although the respondents deny it, I accept the evidence that neither Mr Zeng, Mr Hang, Mr Shen nor Mr Guo were paid any amount for accrued annual leave upon termination of their employment. 

Frequency of payment provisions

172               By operation of s 189(1) of the WR Act, Kentwood was required to pay Messrs Yuan and Hang monthly.  Messrs Yuan and Hang’s contract of employment provided that they would be paid monthly.  I have accepted that Mr Yuan was not paid for the first five months of his employment but was paid monthly thereafter and that Mr Hang was not paid for the first three months of his employment but was paid monthly thereafter. 

173               By operation of s 189(1) of the WR Act and the preserved Federal Award Pay Scale, Kentwood was required to pay Mr Guo weekly, but Mr Guo’s contract of employment did not contain a frequency of pay provision.  I have accepted that Mr Guo was not paid for the first three months of employment and then was paid only monthly. 

174               By operation of s 189(2) of the WR Act, Kentwood was required to pay Mr Zeng monthly.  Mr Zeng’s contract of employment provided that he would be paid monthly.  He was not paid for the first three months of employment and thereafter was paid monthly. 

175               No contravention of the frequency of pay provisions is asserted with respect to Mr Shen.  He was paid monthly.

THE RESPONDENTS’ CASE

176               In their defences, the respondents raise a number of matters as to which there is no evidence.  For example, there is no evidence to support the conclusion as to the hours worked and payments made.  The only evidence, which I accept, is to the contrary.  The respondents plead the following facts:

Mr Yuan

177               Mr Yuan’s terms and conditions of employment with Kentwood provided that he:

(a)        would be paid $39,100 per annum.

(b)        was liable to Beijing Sunshine for a service fee.

178               Mr Yuan worked the hours set out in the schedule to the respondents’ defence (seven or eight hours per day, Monday to Friday, exclusive of a two-three hour lunch break).

179               Kentwood remitted income tax of $9,223 to the ATO in respect of wages earned by Mr Yuan and paid Mr Yuan $4,255 in cash as part of his gross wages at Mr Yuan’s request.  Kentwood paid the balance of Mr Yuan’s net wages (after tax) of $29,472.60 to Beijing Sunshine via another company, Guangdon Sky Bright Import & Export (Guangdon Sky).  Beijing Sunshine acknowledged receipt of and accounted to Kentwood for this amount.

Mr Zeng

180               Mr Zeng’s terms and conditions of employment with Kentwood provided that he would be paid $31,280 per annum and overtime at the rate of 20 RMB per hour and that Beijing Sunshine would be responsible for his board and lodging, medical treatment, visa, interpreting/translation and other arrangements.

181               The respondents contend Mr Zeng worked the hours set out in the schedule to the respondents’ defence, again being eight hours per day, Monday to Friday, exclusive of a two hour lunch break.

182               Kentwood remitted income tax of $8,146 to the ATO in respect of wages earned by Mr Zeng and paid Mr Zeng $2,698.19 in cash as part of his gross wages at his request.

183               Kentwood paid the balance of Mr Zeng’s net wages and annual leave entitlements (after tax) of $39,331.20 were paid by Kentwood to Beijing Sunshine via Guangdon Sky.  Beijing Sunshine acknowledged receipt of and accounted to Kentwood for this amount.

Mr Hang

184               Mr Hang’s terms and conditions of employment with Kentwood provided that:

(a)        he would be paid $39,100 per annum;

(b)        Beijing Sunshine was responsible for his board and lodging, medicare, visa and interpretation service; and

(c)        he authorised Kentwood to send his wages to Beijing Sunshine.

185               The respondents assert that Mr Hang worked eight hours per day, Monday to Friday, exclusive of a two hour lunch break.

186               Kentwood remitted income tax of $8,146 to the ATO in respect of wages earned by Mr Hang and paid Mr Hang $2,348.12 in cash as part of his gross wages at his request.  The balance of Mr Hang’s net wages and annual leave entitlements (after tax) of $39,681.28 was paid to Beijing Sunshine via Guangdon Sky.  Beijing Sunshine acknowledged receipt of and accounted to Kentwood for this amount.

Mr Shen

187               Mr Shen’s terms and conditions of employment with Kentwood provided that:

(a)        he would be paid $42,000 per annum;

(b)        Beijing Sunshine was responsible for his board and lodging, medicare, visa and interpretation service;

(c)        he authorised Kentwood to send his wages to Beijing Sunshine; and

(d)        he was liable to Beijing Sunshine for a service fee.

188               The respondents assert that Mr Shen worked the hours set out in a schedule to the respondents’ defence again being usually eight hours per day, Monday to Friday, exclusive of a two hour lunch break.

189               Kentwood remitted income tax of $7,026 to the ATO in respect of wages earned by Mr Shen and paid Mr Shen $2,295.83 in cash as part of his gross wages at his request.  The balance of Mr Shen’s net wages and annual leave entitlements (after tax) of $27,114.67 were paid to Beijing Sunshine via Guangdon Sky.  Beijing Sunshine acknowledged receipt of and accounted to Kentwood for this amount.

Mr Guo

190               Mr Guo’s terms and conditions of employment with Kentwood provided that:

(a)        he would be paid $39,100 per annum.

(b)        Beijing Sunshine was responsible for his board and lodging, medicare, visa and interpretation service; and

(c)        he authorised Kentwood to send his wages to Beijing Sunshine.

191               Once again, the respondents assert that Mr Guo worked the hours set out in a schedule to the respondents’ defence (usually eight hours per day, Monday to Friday, exclusive of a two hour lunch break).

192               The respondents assert in their defence that Kentwood remitted income tax of $8,146 to the ATO in respect of wages earned by Mr Guo and paid Mr Guo $3,486.26 in cash as part of his gross wages at his request.  Kentwood then paid the balance of Mr Guo’s net wages and annual leave entitlements (after tax) of $38,543.14 (sic) to Beijing Sunshine via Guangdon Sky.  Beijing Sunshine acknowledged receipt of and accounted to Kentwood for this amount.  One or more of these amounts is obviously not correct.  There is no documentary evidence before the Court, other than that put on by the applicant and it is impossible to make any assessment of the respondents’ figures other than that, on their face, they are incorrect. 

Interaction between contracts of employment and industrial instruments

193               Thus, in denying the alleged underpayments the respondents assert that for each of the Employees it paid certain amounts to them as wages or other entitlements, remitted certain amounts to the ATO, and paid the balance to Beijing Sunshine.  The assertion appears to be that such remittal extinguished Kentwood’s liability to comply with the legal obligations on it to pay the amounts pleaded to the Employees.  I repeat that these assertions are not supported by any evidence led by the respondents.

194               Further, and in argument, I accept the applicant’s submission that pursuant to s 173 of the WR Act a term of any contract that purports to exclude the Standard or any part of it, is of no effect; the NAPSA applies on its terms according to cl 38 of Sch 8 of the WR Act and will continue to bind an employer that is bound by it, regardless of any contract entered into by the employer.  Where a statutory instrument confers minimum entitlements on an employee, it is not possible to contract out of those minimum entitlements.  An agreement collateral to the instrument may only validly confer additional benefits over and above the minimum entitlements.  (Regional Express Holdings v Clark (2007) 165 IR 251 at [44] (and the cases cited therein), Metropolitan Health Services Board v Australia Nurses Federation (2000) 99 FCR 95 at [20]-[24]), Textile, Clothing and Footwear Union v Givoni (2002) 12 IR 250 at [23]-[33]. 

195               The respondents further assert that an agreement signed by Messrs Yuan and Shen (but not by Messrs Zeng, Hang or Guo) with Beijing Sunshine provides that those former two Employees were liable to Beijing Sunshine for certain ‘service fees’.  This assertion, likewise, is unproven.  Further, any such alleged liability on the part of Messrs Yuan or Shen, for like reasons, would not serve to reduce Kentwood’s legal obligation to pay the amounts pleaded as owed to those employees

196               On the basis of these facts, Kentwood has contravened both the NAPSA and the Standard. 

Accessorial liability of Mr Zhang

197               The applicant’s pleaded case asserts that Mr Zhang was at all material times a ‘person involved in a contravention of civil remedy provisions’ within the meaning of s 728 of the WR Act.  More specifically, in relation to the contraventions of Kentwood, it is said that Mr Zhang:

(a)        aided, abetted, counselled or procured the contraventions;

(b)        induced the contraventions;

further or alternatively

(c)        was knowingly concerned in the contraventions.

198               For accessorial liability sourced in s 728 of the WR Act to lie, it must be proven that the person sought to be made liable on that basis was sufficiently aware of all of the relevant facts going to the primary contraventions and, with that knowledge of those essential matters, committed acts or omissions which constitute aiding or abetting, counselling or procuring the contraventions, inducing the contraventions, or being knowingly concerned in the contraventions (as the case may be) (Yorke v Lucas (1985) 158 CLR 661 at [666]-[667]).

199               In Hamilton v Whitehead (1988) 166 CLR 121 Mason CJ, Wilson and Toohey JJ observed (at 128);

Indeed, the fundamental purpose of the … legislation – to ensure the protection of the public – would be seriously undermined if the hands and brains of a company were not answerable personally for breaches of the Code which they themselves have perpetrated. 

200               All of the admitted facts and unchallenged evidence, together with the way that Mr Zhang has appeared before and communicated with the Court and with the applicant during these proceedings, makes clear that Mr Zhang is the ‘hands and brains’ or guiding mind of Kentwood.  It has been through his human agency that the corporate personality of Kentwood has perpetrated all of the contraventions alleged by the applicant.  In particular and as admitted by the respondents:

(a)        Mr Zhang was at all material times the Managing Director and company Secretary of Kentwood and owned 50% of the issued share capital of Kentwood.

(b)        Mr Zhang had been employing Chinese nationals to work in Australia under Subclass 457 visas since early 2005. 

(c)        Mr Zhang has operated his building and construction business in Western Australia for approximately nine years. 

(d)        As at 1 January 2006 the minimum salary level payable to employees engaged to work as tradespersons in Australia under Sub-class 457 visas under the Migration Regulations 1994 (Cth) for a 38 hour week was $39,100, a matter which Mr Zhang knew at material times.

201               Additionally, as I have found in respect of Mr Yuan: 

(a)        Mr Yuan first met Mr Zhang on 30 October 2005 in the office of Beijing Sunshine to discuss opportunities for Mr Yuan to work in Australia, where he had not previously worked. 

(b)        Mr Zhang told Mr Yuan that he was the Chairman of both Kentwood and Beijing Sunshine and that his wife was in charge of finances for both companies.  Mr Zhang, together with Jun, told Mr Yuan that his annual salary in Australia would be 39,100 RMB and that overtime would be paid at the rate of 20 RMB per hour, (never speaking in Australian dollars).  Further, Mr Yuan was told that he would work six days a week for nine hours a day plus overtime after that. 

(c)        Both Mr Zhang and Jun told Mr Yuan that Mr Yuan’s employer would pay for his airline ticket to Australia and  that the job would be for two years with the option of a further two years if Mr Zhang was satisfied with Mr Yuan’s performance.  Mr Yuan was also told that if he worked well, Mr Yuan’s wife and daughter would be brought to Australia for a visit as a bonus.

(d)        At a subsequent meeting on 7 December 2005 at Mr Zhang’s office in Beijing, Mr Zhang gave Mr Yuan two agreements which Mr Yuan had not seen before and asked him to read them and sign them that afternoon.  Mr Yuan asked Mr Zhang for a copy of both of those agreements but was not given one.  He subsequently asked the receptionist at the office for a copy of them and received a blank unsigned copy of each of them.  At another meeting between Mr Yuan, three other workers and Mr Gang Chen (previously described by Mr Zhang to Mr Yuan as Mr Zhang’s business partner) on 31 December 2005, Mr Chen made handwritten amendments to Mr Yuan’s employment agreement. 

            When Mr Yuan arrived at the Perth Airport on 3 January 2006 together with others, Mr Zhang met those employees and drove them straight to Kalgoorlie.  On arrival in Kalgoorlie Mr Yuan gave Mr Zhang the amended typed employment agreement containing annotated amendments endorsed by Mr Chen.  Mr Zhang refused to take or sign this document, telling Mr Yuan ‘I don’t have to sign this because you have already signed an agreement in China’.

(e)        Mr Yuan asked Mr Zhang on many occasions after he had started work in Australia when he would be paid and was always told by Mr Zhang on those occasions ‘don’t worry, you will be paid’.  When Mr Yuan started his first job for Kentwood in Kalgoorlie, working on the construction of the Chinese Garden there, Mr Zhang was present and gave Mr Yuan and the other employees directions from time to time on what work should be done. 

(f)         In Australia Mr Yuan had an arrangement with Mr Zhang under which he would work overtime and then receive cash advances of money from Mr Zhang which would be deducted from the balance of money owed to him by Kentwood for the overtime that he had worked.

(g)        When in Melbourne, Mr Zhang told Mr Yuan to go to the bank to get a card so that he (Mr Yuan) would not have to pay tax in China, only in Australia.  Mr Yuan was taken by Mr Hui, another employee to a branch of the CBA in Springvale, Melbourne on 6 October 2006.  He opened a bank account at that time but never received any card linked to that bank account. 

(h)        When on 16 December 2006, Mr Yuan asked Mr Zhang about the CBA cards, Mr Zhang acted like he had no knowledge of what was going on with them.  However, subsequently in Mr Zhang’s office in Perth in early January 2007 Mr Yuan found his bankcard together with 11 other bankcards. 

202               In respect of Mr Zeng:

(a)        Mr Zeng was recruited in China by Mr Xu.

(b)        At or around the time of Mr Zeng’s arrival in Australia on or about 28 April 2006, Mr Zeng met Mr Zhang for the first time.  Whilst driving Mr Zeng and other employees around Melbourne, Mr Zhang told Mr Zeng that it was not easy to come to Australia and that he must work hard. 

(c)        Soon after Mr Zeng’s arrival in Australia Mr Zhang told him that he would have to work nine hours per day, six days per week and that any hours worked after that would be paid as overtime at the rate of $10 for every three hours. 

(d)        Also at, or around that time in late April 2006, Mr Zeng saw Mr Zhang sign his Employment Agreement backdating it to 21 April 2006.

(e)        At or shortly after that time, Mr Zhang told Mr Zeng that Mr Huang was the boss on site for the work at Springvale Cemetery in Melbourne and must be listened to by Mr Zeng.  Mr Zeng saw Mr Zhang in Melbourne about five or six times but saw more of him when he worked in Perth.  When, after working three months  for Kentwood in Australia he had not been paid, Mr Zeng complained to Mr Hui telling him that if he was not paid he would not work.  Mr Hui responded with words to the effect that he was not the boss and would deliver the message to Mr Zhang. 

203               In respect of Mr Hang:

(a)        Mr Zhang signed Mr Hang’s Employment Agreement during the first week after his arrival in Australia on  25 April 2006.  After working for three months without being paid, Messrs Hang and Guo complained to Mr Huang that if they were not paid they would stop working.  Mr Huang said that he would talk to Mr Zhang. 

(b)        Whilst working at the Springvale Cemetery site, Mr Hang saw Mr Zhang on average once every two months, including for a period of one week during construction of a roof for the Springvale Cemetery Project when Mr Zhang spent that time instructing Mr Hang and others on how the job should be done.

(c)        Mr Hang was present during the Signing of Purported Record Incident on 26 February 2007.  Mr Hang did not sign the document because he did not really understand it.  While the Signing of Purported Record Incident was  occurring, Mr Zhang was present on the site, walking around the car that Mr Hang was in with Mr Zhang’s wife.

204               In respect of Mr Guo:

(a)        Mr Zhang signed Mr Guo’s written contract of employment on behalf of Kentwood about two or three days after Mr Guo arrived in Australia.

(b)        After Mr Guo complained to Mr Huang about having not been paid any wages for three months since starting work for Kentwood in Australia, Mr Huang told Mr Guo to keep working and that he (Mr Huang) would contact Mr Zhang.  Soon after that and without any explanation Mr Guo received 10,000 RMB from Kentwood.  From then on Mr Guo was paid monthly, albeit manifestly inadequately.

(c)        From when Mr Guo started working at the Springvale Cemetery site Mr Zhang would attend for two-three days per month and give the employees directions in the duties they performed.

(d)        Mr Guo was present for the Signing of Purported Record Incident, during which Ms Ching (Mr Zhang’s wife) asked Mr Guo and other employees (in Mr Guo’s presence) to sign a record of hours purportedly worked by the employees which was an incorrect record.  Mr Zhang was present outside his car while that occurred, complaining in an angry tone about the employees declining to sign the document.

205               Mr Zhang, in his capacity as managing director and company secretary, exercised overriding control over Kentwood’s activities in Australia and, in particular, the acts and omissions as found.   This is reinforced by the fact that, since the respondents’ former solicitors ceased to be on the record in November 2009, all court appearances on behalf of Kentwood have been undertaken by Mr Zhang.  Despite occasional vague references to certain managers or employees potentially being called to give evidence, there is no basis to conclude other that Kentwood’s affairs have been controlled by any human agent other than Mr Zhang.

206               Mr Zhang has admitted that he knew of the minimum salary payable to holders of Subclass 457 visas.  I accept that he was aware of each of the essential matters which go to make up the contraventions by Kentwood.

207               It follows that Mr Zhang was involved in Kentwood’s contraventions of the NAPSA and the Standard.

ORDERS AND DECLARATIONS

208               In addition to the imposition of a penalty, relief sought by the applicant in these proceedings includes:

(a)        Declarations that Kentwood and Mr Zhang committed those breaches found by the Court to have occurred.

(b)        Orders to the direct benefit of the Employees who have suffered detriment by the respondents’ acts and omissions, remedying the detriment to the extent of the respective underpayments;

(c)        Ancillary relief for the payment of pre-judgment interest on the amounts of the respective underpayments; and

(d)        Costs.

209               Section 719 and s 722 of the WR Act provide:

719       Imposition and recovery of penalties

(1)        An eligible court may impose a penalty in accordance with this Division on a person if:

(a)        the person is bound by an applicable provision; and

(b)        the person breaches the provision.

(2)        Subject to subsection (3), where:

(a)        2 or more breaches of an applicable provision are committed by the same person; and

(b)        the breaches arose out of a course of conduct by the person;

the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.

(3)        Subsection (2) does not apply to a breach of an applicable provision that is committed by a person after an eligible court has imposed a penalty on the person for an earlier breach of the provision.

(4)        The maximum penalty that may be imposed under subsection (1) for a breach of an applicable provision is:

(a)        60 penalty units for an individual; or

(b)        300 penalty units for a body corporate.

(5)        If, in a proceeding under this section in relation to an AWA, it appears to the eligible court that a party to the AWA has suffered loss or damage as a result of a breach of the AWA by the other party, the court may order the other party to pay the amount of the loss or damage to the first-mentioned party.

(6)        Where, in a proceeding against an employer under this section, it appears to the eligible court that an employee of the employer has not been paid an amount that the employer was required to pay under an applicable provision (except a term of an AWA), the court may order the employer to pay to the employee the amount of the underpayment.

(7)        Where, in a proceeding against an employer under this section, it appears to the eligible court that the employer has not paid an amount to a superannuation fund that the employer was required, under an applicable provision (except a term of an AWA), to pay on behalf of a person, the court may order the employer to make a payment to or in respect of that person for the purpose of restoring the person, as far as practicable, to the position that the person would have been in had the employer not failed to pay the amount to the superannuation fund.

(8)        Without limiting the generality of subsection (7), the eligible court may order that the employer pay to the superannuation fund referred to in subsection (7), or another superannuation fund, an amount equal to the amount (in this subsection called the unpaid amount) that the employer failed to pay together with such additional amount as, in the opinion of the court, represents the return that would have accrued in respect of the unpaid amount had it been duly paid by the employer.

(9)        An order must not be made under subsection (6) or (7) in relation to so much of an underpayment as relates to any period more than 6 years before the commencement of the proceeding.

10)       A proceeding under this section in relation to a breach of an applicable provision must be commenced not later than 6 years after the commission of the breach.

722      Interest up to judgment

(1)        In exercising its powers under subsection 719(5) or (6) or in a proceeding under section 720 or 721, the eligible court must, upon application, unless good cause is shown to the contrary, either:

(a)        order that there be included in the sum for which an order is made or judgment given, interest at such rate as the Court or court of competent jurisdiction, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date on which the order is made or judgment entered; or

(b)        without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which an order is made or judgment given, a lump sum instead of any such interest.

(2)        Subsection (1) does not:

(a)        authorise the giving of interest upon interest or of a sum instead of such interest; or

(b)        apply in relation to any debt upon which interest is payable as of right whether by virtue of an agreement or otherwise; or

(c)        authorise the giving of interest, or a sum instead of interest, otherwise than by consent, upon any sum for which judgment is given by consent.

DECLARATION

210               There may be a public interest in the granting of declaratory relief in regulatory proceedings to record the contraventions’ seriousness and to explain the basis for the imposition of pecuniary penalties and other relief.  A declaration in this case may indicate the importance of compliance with statutory standards, particularly in the employment of low paid and/or vulnerable employees.  I will grant declaratory relief. 

211               Section 719(6) of the WR Act empowers the Court to make an order that an employer pay an employee an amount of an underpayment.  The applicant argues that in this case, such orders are warranted in the administration of justice, compatibly with the protective purpose of the statutory framework of the WR Act.

212               Based on the evidence provided to the Court, the Applicant seeks orders for payments of the amounts specified below to the respective Employees:

Mr Yuan	$69,512.04
Mr Zeng	$47,634.47
Mr Hang	$48,870.75
Mr Shen	$28,371.50
Mr Guo	$48,216.75

213               Where such an order is made under s 719(6), s 722(1) of the WR Act it requires the inclusion of pre-judgment interest in the total judgment sum unless good cause is shown to the contrary.  No good cause exists for the ancillary relief contemplated by s 722(1) not to be granted.  Pre-judgment interest will be added to the amounts to be paid to the Employees at the rate of 6% per annum.  

214               Section 51A of the Federal Court of Australia Act 1976 (Cth) (FCA) provides:

51A     Interest up to judgment

(1)        In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either:

(a)        order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or

(b)        without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.

(2)        Subsection (1) does not:

(a)        authorize the giving of interest upon interest or of a sum in lieu of such interest;

(b)        apply in relation to any debt upon which interest is payable as of right whether by virtue of an agreement or otherwise;

(c)        affect the damages recoverable for the dishonour of a bill of exchange;

(d)        limit the operation of any enactment or rule of law which, apart from this section, provides for the award of interest; or

(e)        authorize the giving of interest, or a sum in lieu of interest, otherwise than by consent, upon any sum for which judgment is given by consent.

(3)        Where the sum for which judgment is given (in this subsection referred to as the relevant sum) includes, or where the Court in its absolute discretion, or a Judge in that Judge’s absolute discretion, determines that the relevant sum includes, any amount for:

(a)        compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest or claiming a sum in lieu of interest;

(b)        compensation for loss or damage to be incurred or suffered after the date on which judgment is given; or

(c)        exemplary or punitive damages;

interest, or a sum in lieu of interest, shall not be given under subsection (1) in respect of any such amount or in respect of so much of the relevant sum as in the opinion of the Court or the Judge represents any such amount.

(4)        Subsection (3) shall not be taken to preclude interest or a sum in lieu of interest being given, pursuant to this section, upon compensation in respect of a liability of the kind referred to in paragraph (3)(a) where that liability has been met by the applicant, as from the date upon which that liability was so met.

215               No specific interest rate is prescribed under the FCA.  Section 52(2) FCA provides in relation to post-judgment:

52        Interest on Judgment

…

(2)

(a)        at such rate as is fixed by the Rules of the Court; or

(b)        if the Court, in a particular case, thinks that justice so requires – at such lower rate as the Court determines.

216               The FCR for post judgment interest by O 35 r 8 provides:

8          Interest on judgment

The prescribed rate at which interest is payable under paragraph 52 (2) (a) of the Act is:

(a)        in respect of the period from 1 January to 30 June in any year  — the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced; and

(b)        in respect of the period from 1 July to 31 December in any year  — the rate that is 6% above the cash rate last published by the Reserve Bank of Australia before that period commenced.

Note   Subsection 52 (2) of the Act provides that interest is payable:

(a)           at such rate as is fixed by the Rules of Court; or

(b)           if the Court, in a particular case, thinks that justice so requires — at such lower rate as the Court determines.

217               In my view the appropriate rate at which interest should accrue post judgment is 10.5% per annum.  However, different considerations govern the rate of interest in these two situations.  A higher rate post judgment operates as an incentive for satisfying the judgment.  Prior to judgment there may be many variables including delay, for which the judgment debtor may not be totally responsible.  I consider 6% is a more appropriate figure and in the minute of orders that I will ask the applicant to prepare, the calculation of interest up until judgment should be computed at 6% per annum or 0.0164383% per day. 

PENALTY

218               Subsection 719(1) of the WR Act enables the Court to impose a penalty in respect of a contravention of an applicable provision by a person bound by the provision.  Relevantly, ‘applicable provision’ is defined to include:

(a)        a term of the Standard; and

(b)        a term of a collective agreement.

219               Pursuant to cl 31 of Sch 8, on 27 March 2006, the NAPSA came into operation.  Under cl 43 of Sch 8, a term of the NAPSA may be enforced as if it were a term of a collective agreement, and therefore an ‘applicable provision’ for the purposes of s 719(1).

220               Subsection 719(2) provides that where two or more contraventions of an applicable provision are committed by the same person, and the contraventions arose out of a course of conduct by the person, the contraventions shall, for the purposes of s 719, be taken to constitute a single contravention of the provision.

221               Pursuant to s 719(4)(b), the maximum penalty that may be imposed by the Court on Kentwood in respect of each of the contraventions is 300 penalty units.  The maximum penalty that may be imposed on Mr Zhang in respect of each of the contraventions is 60 penalty units.

222               A penalty unit is separately defined under s 4AA of the Crimes Act 1914 (Cth) to be $110.  Accordingly, the maximum penalty that may be imposed by this Court for each contravention of the Standard or the NAPSA by Kentwood is $33,000, and for each contravention of the Standard or the NAPSA by Mr Zhang is $6,600.

A Structured Approach for the Court in Determining Penalty

223               The applicant submits that the Court should take a four step approach to determining an appropriate penalty. 

1.                  First, each contravention of each separate obligation sourced in the Standard or the NAPSA is a separate contravention of an applicable provision for the purposes of s 719 of the WR Act.  However, pursuant to ss 719(2), a court may treat multiple contraventions of the same applicable provision as a single contravention, if the Court considers them to be part of a single ‘course of conduct’.  It is then necessary to identify the maximum penalty for each separate contravention.

2.                  Second, it is necessary next to consider an appropriate penalty to impose in respect of each contravention (whether a single contravention alone or as part of a course of conduct), having regard to all of the circumstances of the case.

3.                  Next, to the extent that two or more contraventions have common elements, this may 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 the respondents’ actions. 

4.                  Finally, having fixed an appropriate penalty for each separate contravention, group of contraventions or course of conduct, a final review of the aggregate penalty is necessary to determine whether it is an appropriate response to the conduct which led to the contraventions.  Put another way, a court may apply an overall ‘instinctive synthesis’ (Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [46] per Graham J). 

Identifying the contraventions

224               As set out above, in relation to the work undertaken by the Employees in Western Australia, the respondents contravened the following provisions of the NAPSA:

(a)        cl 13 – rostered days off (in respect of Messrs Yuan, Shen and Guo); (at [116])

(b)        cl 15 - payment of overtime in relation to hours worked Monday-Friday and to noon on Saturdays (in respect of Messrs Yuan, Shen and Guo); (at [131]-[147])

(c)        cl 16 – payment of overtime in relation to hours worked on Sundays and after noon on Saturdays (in respect of Messrs Yuan, Shen and Guo);

(d)        cl 17 – public holiday rates (in respect of Mr Yuan); (at [131])

(e)        cl 20 – meal allowance for overtime (in respect of Mr Yuan); (at [131])

(f)         cl 22(7)(b) – annual leave loading (in respect of Mr Yuan). (at [166])

225               The respondents have contravened the following provisions of the Standard:

(a)        s 182(1) of the WR Act guaranteed basic periodic rates of pay (in respect of Messrs Yuan, Zeng, Hang, Shen and Guo);

(b)        s 189(1) of the WR Act – guaranteed frequency of payment where provided in an APCS (in respect of Messrs Yuan, Hang and Guo);

(c)        s 189(2) of the WR Act – guaranteed frequency of payment where not provided in an APCS (in respect of Mr Zeng);

(d)        s 235(2) of the WR Act – payment of accrued annual leave on termination (in respect of Messrs Yuan, Zeng, Hang, Shen and Guo).

Whether any multiple contraventions should be treated as a single contravention?

226               On this topic the applicant submits:

(a)        where the same person commits multiple contraventions of the same civil remedy provision, those contraventions will be treated as a single contravention if they arise out of a single course of conduct: s 719(2).  This course of conduct analysis has no application to contraventions of separate civil remedy provisions.  To determine whether multiple contraventions of the same civil remedy provision arose from a single course of conduct, a court may have regard to the respondents’ discrete decision-making points which resulted in the respective contraventions of that provision.  Several issues arise on such an analysis in this case.

(b)        First, as the Employees were employed by Kentwood at different times (though their various periods of employment overlapped).  Kentwood made a decision to employ the Employees at three separate points in time: Mr Yuan in December 2005, Mr Zeng, Mr Hang and Mr Guo in April/May 2006, and Mr Shen in August/September 2006. 

(c)        However, the applicant acknowledges that the terms and conditions of employment were effectively decided by Kentwood, under the direction of Mr Zhang, in December 2005 (when entering into an employment contract with Mr Yuan) to employ Chinese citizens as sponsored Subclass 457 visa workers.  The respondents’ subsequent implementation of that decision by employing the remainder of the Employees pursuant to those terms and conditions of employment may properly be characterised as arising from a single course of conduct, despite the separate commencement dates of the respective Employees.

(d)        Hence, the applicant acknowledges that, although the respondents’ committed contraventions separately in relation to each Employee, this does not preclude the making of findings as to a course of conduct in respect of each civil remedy provision contravened in this matter.

(e)        Secondly, in February 2007, although the respondents significantly reduced the Employees’ hours, they continued to implement the initial payment arrangements, thereby remaining in contravention of the NAPSA and the Standard.   The reason for this occurring is not entirely clear on the evidence, although there is some suggestion that it may have been in response to the respondents having been alerted to an investigation by DIAC into the respondents’ employment practices.  

(f)         Whatever the foundation for, or reason behind, the uniform changes to the Employees’ hours of work, the Court is entitled to characterise the respondents’ adjustment of arrangements on or about 26 February 2007 as a distinct event.  Hence it is appropriate to recognise the contraventions after that date as giving rise to a separate course of conduct flowing from that decision, rather than merely forming part of an overall course of conduct together with the contraventions which preceded that date. 

(g)        Thirdly, although Kentwood contravened one provision concerning the Employees’ base rate of pay, that is s 182(1) of the WR Act (guaranteed basic periodic rates of pay) in respect of each Employee, the relevant basic rates of pay were derived from different industrial instruments (which were all Australian Pay and Classification Scales (Pay Scales) under the WR Act):

(i)         the preserved WA Pay Scale (for all work undertaken in Western Australia);

(ii)        the preserved Federal Award Pay Scale (for carpentry work undertaken by Messrs Yuan, Hang and Guo in Victoria); and

(iii)       the Preserved MWO Pay Scale (for construction work undertaken by Zeng and Shen in Victoria).

(h)        Despite the different sources from which the Pay Scales were derived, the obligation contravened by the respondents for all Employees concerning base rates of pay was contained in one ‘applicable provision’ of the Standard, that is, s 182(1) of the WR Act.  The applicant acknowledges that the course of conduct principles apply such that the respondents should be treated as having committed one contravention of s 182(1) for each relevant period (for example, pre and post February 2007).

The maximum penalties

227               The applicant submits that the maximum penalty the Court could reasonably impose on Kentwood is $462,000 (14 x $33,000) constituted as follows:

(a)        two contraventions of cl 13 of the NAPSA – rostered days off (one in relation to Mr Yuan prior to February 2007; one in relation to Messrs Shen and Guo in June/July 2007);

(b)        two contraventions of cl 15 of the NAPSA - payment of overtime in relation to hours worked Monday-Friday and to noon on Saturdays (one in relation to Mr Yuan prior to February 2007; one in relation to Messrs Shen and Guo in June/July 2007);

(c)        two contraventions of cl 16 of the NAPSA – payment of overtime in relation to hours worked on Sundays and after noon on Saturdays (one in relation to Mr Yuan prior to February 2007; one in relation to Messrs Shen and Guo in June/July 2007);

(d)        one contravention of cl 17 of the NAPSA – public holiday rates (in relation to Mr Yuan);

(e)        one contravention of cl 20 of the NAPSA – meal allowance for overtime (in relation to Mr Yuan);

(f)         one contravention of cl 22(7)(b) of the NAPSA – annual leave loading (in relation to Mr Yuan);

(g)        two contraventions of s 182(1) of the WR Act guaranteed basic periodic rates of pay (one in relation to all the employees before February 2007; one in relation to all the employees except Mr Yuan after February 2007);

(h)        one contravention of s 189(1) of the WR Act – guaranteed frequency of payment where provided in an APCS;

(i)         one contravention of s 189(2) of the WR Act – guaranteed frequency of payment where not provided in an APCS;

(j)         one contravention of s 235(2) of the WR Act – payment of accrued annual leave on termination.

228               Similarly, the applicant submits that the maximum penalty the Court could reasonably impose on Mr Zhang is $92,400 (14 x $6,600) constituted as follows:

(a)        two contraventions of cl 13 of the NAPSA – rostered days off (one in relation to Mr Yuan prior to February 2007; one in relation to Messrs Shen and Guo in June/July 2007);

(b)        two contraventions of cl 15 of the NAPSA - payment of overtime in relation to hours worked Monday-Friday and to noon on Saturdays (one in relation to Mr Yuan prior to February 2007; one in relation to Messrs Shen and Guo in June/July 2007);

(c)        two contraventions of cl 16 of the NAPSA – payment of overtime in relation to hours worked on Sundays and after noon on Saturdays (one in relation to Mr Yuan prior to February 2007; one in relation to Messrs Shen and Guo in June/July 2007);

(d)        one contravention of cl 17 of the NAPSA – public holiday rates (in relation to Mr Yuan);

(e)        one contravention of cl 20 of the NAPSA – meal allowance for overtime (in relation to Yuan);

(f)         one contravention of cl 22(7)(b) of the NAPSA – annual leave loading (in relation to Yuan);

(g)        two contraventions of s 182(1) of the WR Act   guaranteed basic periodic rates of pay (one in relation to all the employees before February 2007; one in relation to all the employees except Mr Yuan after February 2007);

(h)        one contravention of s 189(1) of the WR Act – guaranteed frequency of payment, where provided in an APCS;

(i)         one contravention of s 189(2) of the WR Act – guaranteed frequency of payment, where not provided in an APCS;

(j)         one contravention of s 235(2) of the WR Act – payment of accrued annual leave on termination.

229               However, some of the contraventions have common elements (as the applicant accepts) and this should be taken into account in considering an appropriate penalty to ensure that the respondents are not punished more than once for the same or substantially similar conduct.

Factors relevant to determining an appropriate penalty

230               A non-exhaustive list of factors potentially relevant to the imposition of a penalty under the WR Act includes:

(a)        the nature and extent of the conduct which led to the contraventions;

(b)        the circumstances in which that conduct took place;

(c)        the nature and extent of any loss or damage sustained as a result of the contraventions;

(d)        whether there has been similar previous conduct by the respondent;

(e)        whether the contraventions were properly distinct or arose out of the one course of conduct;

(f)         the size of the business enterprise involved;

(g)        whether or not the contraventions were deliberate;

(h)        whether senior management was involved in the contraventions;

(i)         whether the party committing the contraventions has exhibited contrition;

(j)         whether the party committing the contraventions has taken corrective action;

(k)        whether the party committing the contraventions has co-operated with the enforcement authorities;

(l)         the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

(m)       the need for specific and general deterrence (see Kelly v Fitzpatrick (2007) 166 IR 14 at [14] applying Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [26]-[29]; Stuart-Mahoney v CFMEU (2008) 177 IR 61 and John Holland Pty Ltd v Maritime Union of Australia (No 2) (2010) 192 IR 431 per Graham J at [27]).  .

231               The summary is a convenient checklist, but does not prescribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion.  The task of the Court is to fix penalties which pay appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. 

232               The contraventions of both Kentwood and Mr Zhang were extensive and demonstrate little regard for the obligations of an employer under Commonwealth workplace law.  They involved a failure to provide the most basic remuneration entitlements under the WR Act and the NAPSA over a lengthy period.

233               The contraventions resulted in significant underpayments to five of Kentwood’s Employees, to the point that Kentwood only paid the Employees approximately one-fifth of their statutory minimum entitlements to remuneration throughout their employment.  Significantly, Kentwood failed to pay Messrs Zeng, Hang and Guo any money at all for the first three months of their employment, or Mr Yuan for the first five months of his employment. 

234               Kentwood’s failure, under the direction and control of Mr Zhang, to pay the Employees their entitlements for annual leave and overtime, constituted harsh treatment of the Employees.  The respondents denied the Employees any real opportunity to take time off work or to decline to work overtime.  This was particularly onerous given that the Employees all worked 10-11 hours per day for six-seven days per week until February 2007 when the work practices were moderated following and inferentially in consequence of the visit to Kentwood’s worksites by DIAC and the then Workplace Ombudsman earlier that month.  There is no evidence that the moderation in work practices would have occurred had it not been made clear that Kentwood was the subject of scrutiny by a Commonwealth government authority.

235               Kentwood (and hence Mr Zhang) derived a significant benefit from the underpayments.  They continue to receive that benefit, not having repaid any of the amounts owed.

236               Mr Zhang also asked in February 2007 some of the Employees to each sign a sham record of hours worked to conceal the respondents’ contraventions in relation to failure to pay overtime.  

Circumstances in which the conduct took place

237               The respondents’ conduct concerned employees who were particularly vulnerable, in circumstances where their vulnerability was at all material times known to Kentwood and to Mr Zhang.  As Subclass 457 visa migrant workers, the Employees were highly reliant on Kentwood (and hence Mr Zhang) while in Australia.  Kentwood recruited the Employees in China and organised their visas to work in Australia.  In the case of Mr Yuan, Mr Zhang personally recruited his services; third party agents were used by Kentwood and Mr Zhang to recruit the remainder of the Employees.  Four of the Employees were required to pay an up-front fee of 15,000 RMB to Kentwood or its agent for organising a visa.   This amount was the equivalent of up to four months’ wages at the rate specified in the Employees’ employment contracts.  The Employees were not fluent in English and had not previously worked in Australia.  It is reasonable to infer that they had limited knowledge, if any, as to how to exercise their rights under relevant industrial instruments and standards.

238               There is no evidence that either of Kentwood or Mr Zhang took any steps to ensure the Employees were aware of the full scope of their employment entitlements under Australian law.  Nor is there any evidence that either Kentwood or Mr Zhang took any steps to even try to ensure that they achieved compliance with their statutory employment obligations. 

Nature and extent of loss or damage

239               The underpayments in this case total approximately $240,000.

240               The magnitude of the underpayments is particularly dramatic since the Employees affected were reliant on statutory minimum entitlements throughout the period of the contraventions, and by reason of their visa status, Australian work experience and poor English skills, had limited capacity to mitigate the impact of the contraventions.

241               The decision of Kentwood, under the direction of Mr Zhang, to pay the Employees only a very small sum during their employment had significant consequences for the Employees.  By reason of the respondents’ contraventions, the Employees experienced (and, it may be inferred, continue to experience) not insubstantial financial hardship.

242               The applicant argues that Kentwood is a business enterprise of some significance and sophistication.  This is evidenced by the fact that it carries on operations over multiple worksites spread over a number of states of Australia.  In addition, Kentwood employed approximately 12-15 employees at any given time.  Further, the sophistication of Kentwood’s operations is demonstrated by its ability to utilise a relatively sophisticated recruitment process implementing Subclass 457 visa arrangements to source labour for its operations.  I must, on this topic, say that it is not clear to me that Kentwood is particularly large ‘sophisticated’ or ‘significant’ to use the applicant’s description.  It seems to me in the absence of clear contrary evidence that the main reason it was able to employ the number of people it did was because it underpaid them. 

243               The applicant says that:

… the Respondents have provided little or no co-operation to the Applicant and have shown little regard for the role of the FWO as a public regulator or for the efficient administration of justice, and specifically the efficient conduct of these proceedings.  [Mr] Zhang has returned to China and has failed to attend court on multiple occasions, ...  The disrespect to the Federal Court of Australia signalled by that non-attendance, with no representative of either Respondent being engaged to attend court on those occasions, further manifests the Respondents’ disregard for the administration of justice.

244               The applicant submits that, in imposing a penalty against the respondents, it is necessary for the Court to set the penalty in a range that reinforces the fundamental importance of compliance with the employment standards enshrined in Commonwealth workplace laws.  Given the vulnerability of Subclass 457 visa migrant workers in the Australian community, general deterrence is particularly important in this matter. 

245               General deterrence is an important factor in circumstances where an employer has failed to pay statutory minimum entitlements to its employees, especially in circumstances such as this.  The Court is entitled to mark its disapproval of the conduct in question, and set a penalty which serves as a warning to others.  This is particularly so when the employees concerned are vulnerable and therefore likely to be unable to enforce their rights themselves.

246               The applicant contends that it is particularly important that the Court send a message to the business community that, when utilising a Commonwealth government scheme designed to assist employers with obtaining labour resources, those employers abide by other Commonwealth laws regulating the use of that labour.  Failure by employers to comply with Commonwealth workplace laws in relation to migrant workers can result not only in exploitation of vulnerable workers, but also can give the non-compliant employer an unfair comparative advantage against competing Australian businesses and workers.  By imposing a penalty in the appropriate range, the Court can attempt to counteract, or at least reduce, those dangers.

247               In relation to specific deterrence, although Mr Zhang appears not to currently reside in Australia, Kentwood continues to conduct business in Australia and Mr Zhang remains a director of Kentwood.

248               There is no evidence that Mr Zhang intends not to return to Australia or to have no further involvement in the operation of business in Australia (whether through Kentwood or through another entity).  Accordingly, since Mr Zhang remains a director of Kentwood, specific deterrence is of relevance to both respondents.

Contraventions should be grouped

249               Some of the 14 contraventions have common elements and this should be taken into account in considering an appropriate penalty to ensure that the respondents are not punished more than once for the same or substantially similar conduct.

250               The 14 contraventions may reasonably be grouped into the following six distinct categories:

•           failure to pay the guaranteed basic rate of pay;

•           failure to comply with frequency of payment obligations;

•           failure to pay overtime and failure to pay overtime meal allowances;

•           failure to pay public holiday rates;

•           failure to pay accrued annual leave and failure to pay annual leave loading; and

•           failure to provide rostered days off.

251               It is appropriate to recognise the common elements in the contraventions when assessing the appropriate penalty to impose in respect of each of the 14 contraventions.

252               The applicant states:

(a)        This extremely serious course of sustained and conscious  underpayment of wages and other entitlements, and related statutory contraventions to the severe detriment of a vulnerable group of low paid employees, the Court should impose penalties for each group of contraventions which closely approach the statutory maxima.

(b)        In the absence of any credible material or submission put before the Court in mitigation of the contraventions (beyond the fact that the respondents are to be treated as first offenders under the WR Act and related industrial instruments) the total penalties should therefore be in the high range of penalties available to the Court.  The applicant submits that a penalty of not less than 80% of the maximum penalty would be appropriate in all the circumstances of this case .

(c)        The applicant submits that the penalty be made payable into consolidated revenue pursuant to s 841 of the WR Act .

PENALTY ORDERS TO BE ADJOURNED

253               Notwithstanding the detailed submissions of the applicant on penalty (which I acknowledge the respondents have had for some time), I would not be prepared to reach any conclusion on this aspect of the judgment without first receiving submissions from the respondents on penalty, particularly on the topics of the circumstances which should be taken into account in mitigation and also on the capacity of the respondents to meet penalty orders such as those sought by the applicant.  Those submissions should be filed and served within 28 days of filing of the applicant’s minute of orders referred to below. 

COSTS

254               The applicant should have all its party and party taxed costs.  It should have costs in relation to three directions hearings and costs thrown away by reason of the adjournment of the trial on 18 February 2010 as well as its costs of the trial, including costs incurred as a result of the orders to be made following the reasons now published.  I will give liberty to apply to any party on the question of costs. 

CONCLUSION

255               The applicant has succeeded against Kentwood and Mr Zhang.  I will direct that the applicant file and serve within 21 days a minute of orders as to declarations, repayments, interest and costs reflecting these reasons.  If there are to be any submissions from the respondents in relation to that minute, they must be filed and served within a further 14 days, with 10 days for the applicant to reply.  Further, the respondents are to file submissions on penalty within 28 days of service of the applicant’s minute.  The applicant will have 10 days to reply to those submissions.  I will adjourn the determination as to penalty until receipt of those submissions. 

I certify that the preceding two-hundred and fifty-five (255) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate: 

Dated:         27 October 2010