FEDERAL COURT OF AUSTRALIA
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
SOUTH AUSTRALIA DISTRICT REGISTRY | |
SAD 209 of 2013 |
BETWEEN: | FAIR WORK OMBUDSMAN Applicant
|
AND: | DEVINE MARINE GROUP PTY LTD First Respondent BRETT BARRY DEVINE Second Respondent ARTHUR BOUCAUT-JONES Third Respondent
|
JUDGE: | WHITE J |
DATE: | 12 december 2014 |
PLACE: | ADELAIDE |
REASONS FOR JUDGMENT
1 In 2011, Mr James and Mr Kouka, who are from Fiji, came to Australia and performed services for the first respondent (DMG). In Mr James’ case, those services were performed in three separate periods, each of three months. In Mr Kouka’s case, they were performed in one period of three months.
2 The applicant (the FWO) claims that the men were employed under common law contracts of employment and that DMG contravened s 45 of the Fair Work Act 2009 (Cth) (FW Act) by failing to pay them the wages and other benefits to which they were entitled under the Manufacturing and Associated Industries and Occupations Award 2010 (the Award). In the case of Mr James, the FWO seeks relief only in respect of the second and third periods in which he performed services for DMG.
3 The FWO contends that the second and third respondents, Captains Devine and Boucaut-Jones (Capt Devine and Capt Boucaut-Jones respectively), aided, abetted or were knowingly concerned in DMG’s contraventions and seeks declarations that they too have contravened the FW Act.
4 Captain Devine was, at material times, the sole director and shareholder of DMG. It is plain that he controlled its activities. Captain Boucaut-Jones is the principal of an association incorporated in South Australia called “Adelaide Nautical College Incorporated” (ANC) which provides some forms of training services.
5 The underlying contention of the FWO is that DMG and Capt Devine arranged to bring Mr James and Mr Kouka to Australia as apparent participants in a training program when, in reality, they were carrying out work as employees and were entitled to the benefit of the Award. It is said that Capt Boucaut-Jones participated in this scheme by, amongst other things, issuing certificates to the participants on documents bearing the heading “Adelaide Nautical College”. These certified to the participation of the men, and others, in training programs when, in reality, no such programs had been provided. Both Captains Devine and Boucaut-Jones deny the FWO allegations and contend that Mr James and Mr Kouka were participants in a training course, and not employees.
6 Section 45 of the FW Act provides that a person must not contravene a term of a modern award. It is a civil remedy provision for which a civil penalty may be imposed.
7 In addition to the contravention of s 45, the FWO also alleges a contravention by DMG of s 712 of the FW Act by its failure, without reasonable excuse, to comply with the requirements of a notice to produce documents. It alleges that Capt Devine aided and abetted, or was knowingly involved in, this contravention.
8 The proceedings were commenced in the Federal Circuit Court (then known as the Federal Magistrates Court) on 31 May 2012 but, given an estimate of a trial of seven to 10 days, were transferred to this Court.
9 The FWO has standing to bring the proceedings: see ss 539(2) and 701 of the FW Act.
10 By its second amended statement of claim (2ASC), the FWO seeks declarations with respect to the alleged contraventions of s 45 by all three respondents, declarations with respect to the contravention of s 712 by DMG and Capt Devine, the imposition of penalties on all three respondents, and orders for the payment by DMG of wages and other benefits to Mr James and Mr Kouka. However, on 11 October 2013, an order was made for the winding up of DMG. The FWO has not sought an order under s 471B of the Corporations Act 2001 (Cth) (Corporations Act) permitting it to proceed with its claim against DMG, with the effect that the proceedings concerning it are now stayed. Accordingly, the hearing continued against Capts Devine and Boucaut-Jones only although, for the purposes of determining their accessorial liability, it will be necessary to address the conduct alleged against DMG. The Court was not asked to make orders for the payment of any amounts due to Mr James and Mr Kouka. In these reasons I will, for convenience, refer to Capts Devine and Boucaut-Jones collectively as “the respondents”.
11 During the course of the trial, the FWO indicated that she did not pursue the allegation in the 2ASC that DMG had failed, in contravention of reg 3.32 of the Fair Work Regulations, to keep the prescribed books and records nor a separate allegation that the respondents had conspired with one another, within the meaning of s 550(2)(d) of the FW Act, to effect the contraventions of the FW Act.
12 The respondents had legal representation until November 2013. They were unrepresented during the trial.
13 At the commencement of the trial I ordered that it proceed on all issues other than the imposition of penalties, with that issue to be addressed in a separate hearing should it become necessary. As the proceedings may result in the imposition of civil penalties, I have kept in mind the provisions in s 140 of the Evidence Act 1995 (Cth) concerning the degree of satisfaction which is appropriate for findings of fact.
The Issues
14 The issues for determination in this stage of the trial are these:
1. Were Mr James and Mr Kouka employees of DMG?
2. If so, was DMG a “national system employer” for the purposes of the FW Act?
3. If Mr James and Mr Kouka were employees, were they nevertheless excluded from the application of the FW Act because they were in “vocational placements” as contemplated by s 13 of the FW Act?
4. Was the employment of Mr James and Mr Kouka (if they were employees) governed by the Award?
5. If the Award was applicable, did DMG contravene it in relation to Mr James and Mr Kouka by:
(a) Failing to pay wages either weekly or fortnightly as required by cl 34.1?
(b) Failing to pay the minimum hourly rate required by cl 24.1?
(c) Failing to pay the casual loading required by cl 14.1?
(d) Failing to pay the weekend penalty rates required by cll 40.7 and 40.8?
6. Did DMG fail without reasonable excuse to comply with a notice to produce documents relating to Mr James and Mr Kouka to a Fair Work Inspector as required by s 712 of the FW Act?
7. Is Capt Devine liable as an accessory under s 550(2) of the FW Act in respect of the contraventions by DMG of ss 45 and 712 of the FW Act?
8. Is Capt Boucaut-Jones liable as an accessory under s 550(2) of the FW Act in respect of the contraventions by DMG of s 45 of the FW Act?
The Witnesses
15 The FWO led evidence from Mr James and Mr Kouka, and from two Fair Work Inspectors, Ms Smith and Mr Hulme. The evidence-in-chief of each was in affidavit form and, because the respondents were unrepresented, none of the witnesses was subjected to a searching cross-examination. Nevertheless, I concluded that each of the applicant’s witnesses was endeavouring to give honest evidence and that their evidence was generally reliable.
16 Captain Devine gave evidence himself and led evidence from Joseph Glamocak, Losena Vulatolu and Michael Greguss. I accept the evidence of Mr Glamocak, although it does not have a significant bearing on the issues for determination. I regarded the evidence of Ms Vulatolu as honest and generally reliable, although I consider that she is mistaken in one respect. I regarded Mr Greguss as a generally honest witness. However, his evidence was at a level of generality which limited its utility.
17 I do consider that Capt Devine was attempting to assist the Court and to give evidence honestly but his evidence and submissions were marked by their loquacity. It was very apparent that Capt Devine does not have a natural aptitude for detail and there are several aspects of his evidence which I regard as unreliable.
18 Captain Boucaut-Jones gave evidence in his own defence and did not lead evidence from any other witnesses. He has previously worked as a teacher. He was able to adapt to the Court process much better than Capt Devine but, nevertheless, his evidence was marked by a degree of bombast, bluster and evasiveness. As will become apparent, I do not accept all of his evidence.
Background
19 In this section of the reasons, I make findings as to the background circumstances giving rise to the issues for the Court’s determination. In many respects, these findings concern matters which are uncontentious but, in some instances, involve findings of disputed matters.
20 For many years, the business of DMG involved the provision of general marine services as well as marine repair and salvage services. It was established by Capt Devine and was based in Rozelle, Sydney. DMG operated in South Australia from premises at Dock 1, Ocean Steamers Road, Port Adelaide. Much of the evidence in this case concerned its work in the cutting up for scrap of an 80 m fishing vessel described as a “Japanese Longliner” or as the “D3” and the repair of a vessel, the Bradley, at Port Adelaide. The Bradley is a large seagoing barge (83 m in length, 33 m wide and 5 m high) used in salvage and dredging operations. It is equipped with a crane and numerous buoyancy tanks.
21 Captain Devine has been a salvage master for about 40 years. This means that he has a certification issued by the Australian Maritime Authority and that he is qualified to engage in the removal and retrieval of wrecks. He has had a diverse employment history in maritime industries.
22 For many years, Capt Devine has had an association with Fiji and has come to know many people there. From time to time he has carried out salvage operations in and around Fiji.
Mr James
23 Mr James is Fijian. He has had a variety of maritime jobs and has worked on large fishing boats as a bosun. A friend, Mamatuki Viliame, told him that he had been to Australia doing salvage work for Capt Devine who had provided his airfares, arranged his visa, provided him with food and paid him a cash living allowance. Mr James was interested in doing the same as there was little work available to him in Fiji.
24 Shortly afterwards, Mr Viliame told him that Capt Devine wished to see his papers. He then emailed copies of his passport, seaman’s book and trade certificates to Capt Devine. Shortly afterwards he received a telephone call from Ms Vulatolu. She arranged to meet him at the Australian Embassy in Suva on 11 January 2011.
25 At the Embassy, Ms Vulatolu assisted Mr James to complete a visa application, giving him the form of application for a Business (Short Stay) visa which permits a stay in Australia of up to three months. Question 17 on the application form required applicants to “describe your intended principal business activity in Australia”. At the direction of Ms Vulatolu, Mr James wrote:
Learn about and prepare vessels that are being delivered to Fiji so that I can work on them in Fiji.
He gave Capt Devine’s name and address as his contact person. Mr James also provided Ms Vulatolu with copies of references and certificates of service from three previous employers.
26 Mr Viliame attended the Australian Embassy at the same time and also completed a visa application.
27 When Mr James and Mr Viliame presented their visa applications to Embassy staff, they were asked for their “support” letters. I take this to be a reference to evidence that they had “adequate means [of] support” during their intended stay in Australia, as required by reg 456.322 of the Migration Regulations 1994 (Cth) as then in force. However, Mr James did not know what it meant. Ms Vulatolu said that she would “arrange” the letters and Mr James did nothing further in that regard.
28 The FWO tendered copies of the documents held by the Department of Immigration and Citizenship (DIAC) in relation to Mr James’ visa application of 11 January. Those documents include an unsigned letter from DMG to Mr James at his address in Suva. I find that this was the letter of support about which the Embassy staff had enquired. Mr James deposed, and I accept, that he first saw the letter when it was shown to him by the FWO staff in connection with the investigation leading to the present proceedings. The substantive part of the letter is as follows:
With reference to your recent stay in Australia and our discussions when we met in Adelaide. We have engaged a tender with the Fijian Government to salvage and dispose of the wrecked Japanese Longliner vessels in Fiji scattered around Walu Bay and the Suva area.
We are currently beginning the disposal of a similar Japanese Longliner in Adelaide, Australia. In order for the locals to work with us on the Fiji projects you will need some experience and training before the salvages in Fiji are nominated. I would like to invite you back to Australia with 3 other Fijians to train and participate in an actual disposal of a Japanese Longliner and to see how our safety and environmental practices work.
The company would of course be supporting you with accommodation, food, and necessities during your stay with us in Australia.
We would like to sponsor you here from the 14 January for 12 weeks until 14 April 2011.
If you would like to return please contact me to confirm and arrange a 456 Business Visa in Fiji and enclose this letter with your application.
Kind regards
Captain Brett Devine
Managing Director
Devine Marine Group of Companies
29 As can be seen, the letter was on its face an invitation to Mr James to return to Australia for training and experience in the salvage and disposal of a fishing vessel under the sponsorship of DMG. I accept Mr James’ evidence that he had not previously been to Australia or met Capt Devine and find that the implications in the first sentence were accordingly false. Although Capt Devine was interested in obtaining a tender in relation to wrecked Japanese Longliners in Fiji, he acknowledged that he had not obtained a contract from the Fijian Government to do so.
30 On about 14 January 2011, Ms Vulatolu arranged with Mr James to meet her again at the Australian Embassy. He was then given a visa and his passport was returned to him. While they were at the Embassy, Mr James spoke to Capt Devine on Ms Vulatolu’s telephone. Mr James said that they had a conversation to the following effect:
Capt Devine: I want to ask you something. Do you know about carpentry?
Mr James: Yes.
Capt Devine: On boats?
Mr James: Yes.
Capt Devine: That’s good. I’ve got some yachts that need to be repaired.
Captain Devine then told Mr James that he could “work” for him on the same conditions as did Mr Viliame. There was no discussion about him undergoing training. A day or so later, Mr James received by email an e-ticket for his flight to Australia.
31 In the above findings, I have found that Mr James had the assistance of Ms Vulatolu in Fiji in reaching his agreement with Capt Devine and in obtaining his visa. It is appropriate to record that Ms Vulatolu said that she was in Australia in January 2011 and had not assisted Mr James in person. Instead, she had used the documents sent by Mr James to Capt Devine to complete in her handwriting the greater amount of the visa application, had then scanned the application, and sent it by email to Mr James for him to complete the details of his relatives and then to sign it. This evidence emerged most clearly when Ms Vulatolu was recalled as a witness at the end of all the other evidence. It is consistent in some respects with her original evidence and inconsistent in other respects.
32 Given that Mr James came to Australia in similar circumstances on three occasions, it is possible that either he or Ms Vulatolu is confusing the circumstances which occurred in relation to a later application with those which occurred on the first. It is not easy to resolve this issue, as I was impressed by Ms Vulatolu’s apparent conscientiousness as a witness. I also acknowledge that it is possible to regard some of the circumstantial evidence as being more consistent with Ms Vulatolu’s account on this topic. However, ultimately I have preferred the evidence of Mr James as I think he is likely to recall the circumstances by which he came to Australia the first time and he was not cross-examined about his own account. I indicate, however, my view that not a lot turns on whether Ms Vulatolu was in Australia or in Fiji in January 2011 as she readily acknowledged her involvement in preparing the visa application.
33 Mr James and Mr Viliame and two other Fijian men flew to Australia on 18 January 2011. Captain Devine met them at Adelaide Airport and arranged for them to live in a hotel at Semaphore (a suburb of Adelaide near Port Adelaide) for two weeks. Thereafter they lived in a caravan located on the Bradley while they worked on the D3. An Australian man, Steven Barrett, who Capt Devine described as the “foreman”, was also working on the D3. During the first two weeks, Mr James had some supervision and direction from Capt Devine but he then returned to Sydney. Thereafter, it was mostly Mr Barrett (who was a boilermaker) who gave the directions. Captain Devine did teach Mr James and the other Fijians to operate an excavator, a large crane and a 20 t forklift.
34 On 19 March 2011, Mr James suffered an injury to his knee in a bin for which he received treatment at the Queen Elizabeth Hospital. The Hospital gave him a WorkCover Medical Certificate and he gave the Hospital the contact details for Capt Devine. The latter telephoned Mr James a few days later and told him words to the effect “never ever say you are working for me, say it’s training”. Captain Devine agreed that he had probably said these words to Mr James.
35 A few days later Capt Devine came to Adelaide and, at a meeting with Mr James and others, said words to the effect: “If you are asked what you’re doing, it’s training”. He also told the Fijians to tell anyone questioning them that the Principal of ANC came each morning to supervise their training. Captain Devine accepted they he had said the former words but was not certain that he had made the latter statement. I accept Mr James’ evidence about this.
36 In early April 2011, Capt Devine told the Fijians that Arthur, the Principal of ANC, would give them certificates. I accept Mr James’ evidence that this was the first time he had heard the name Arthur. Captain Devine was referring to Capt Boucaut-Jones.
37 Captain Boucaut-Jones did come to the Port Adelaide dock a day or so later. He gave Mr James a certificate dated 7 April 2011 in the following terms:
Adelaide Nautical College
Certificate of Training Completed by
Andrew James
Bosun site foreman
OH&S relative to work on ships
Boilermaker welder
Oxy propane cutting
Fire watch and safety
Laying Containment boom
Safe removal of oils, freezer gas, hydro carbons & insulation foam
Loading skip-bins
Dogman skills
Operational procedure on forklifts and cranes
Training was provided during salvage and disposal of D-3 Longliner at ASCI shipyard, Port Adelaide under the training supervision of Salvage Master Capt. Brett Devine
(It is noted this vessel is similar to problem longliners in Fiji.)
Training noted by Training program supervised by
(signed)
Capt. Arthur Boucaut-Jones JP Capt. Brett Devine
Principal Salvage Master
Adelaide Nautical College
7/4/11
The certificate was signed and dated by Capt Boucaut-Jones but was not signed by Capt Devine. As can be seen, the certificate certified that Mr James had completed the identified “training” under the “supervision” of Capt Devine and that the “training program” had been “noted” by Capt Boucaut-Jones. Mr James said that the activities listed in the certificate were those he did as part of his every day activities on the D3 other than “OH&S relative to work on ships” and “fire watch and safety”.
38 On Capt Devine’s own evidence, he was in Adelaide only intermittently after the first two weeks: sometimes for only a few hours, sometimes for two or three days and sometimes for up to a week.
39 Towards the end of the three month period, Capt Devine asked Mr James to return for another three month period to finish off work on the Longliner. Mr James agreed. He left Australia and returned to Fiji on 18 April 2011.
40 After he had been back in Suva about 10 days, Ms Vulatolu arranged to meet him again at the Australian Embassy. Ms Vulatolu made most of the handwritten entries on the application for a Business (Short Stay) visa including the entry “further training” as Mr James intended principal business activity in Australia. Ms Vulatolu also told the Embassy staff that she had arranged the “support” letter. The documents obtained from DIAC included the following unsigned letter from DMG to Mr James at his Suva address:
The salvage, demolition and disposal training course being run on the D-Three longliner vessel by the Adelaide Nautical College is still underway. This course will be greatly beneficial to complete for your training and experience to operate on the similar vessels in Suva, Fiji that need to be salvaged.
There is approximately 12 weeks available for further training before the vessel is completed.
Myself and the College are satisfied with your performance thus far and I would like to invite you back to Australia to complete the salvage of the D Three.
Should you wish to return you will need to organise yourself a 456 Visa immediately. I will provide all financial assistance in airfares, accommodation, living expenses etc, while you are under my care in Australia.
Please include this letter with your 456 Visa application.
Kind regards
Captain Brett Devine
Managing Director
Devine Marine Group of Companies
41 I accept Mr James’ evidence that the first time he saw this letter was when he was shown it by the FWO staff in connection with this litigation. I note that the letter refers to a “training course” and to the completion of Mr James’ “training and experience”.
42 Mr James arrived in Sydney on 30 April 2011 but did not continue on to Adelaide immediately. For the first six weeks or so he remained in Sydney living on a tugboat moored near the DMG yard at Rozelle. He and other Fijians carried out work in DMG’s yard cleaning, sanding and spray painting boats under the direction of Capt Devine. Whilst they were in Sydney, DMG undertook the retrieval of a cruiser which had sunk off Manly. This involved some two days of activity. This was first occasion on which Mr James had undertaken a salvage and he was shown what to do by Capt Devine.
43 After about six weeks, Mr James and another drove to Adelaide and resumed work on the demolition of the D3. Some items such as the engine and generator were sold or donated but the rest was sold as scrap metal. As on the previous trip, this involved principally cutting the vessel into smaller pieces using oxy cutting. Mr James said, and I accept, that Capt Devine told him that he was the foreman. He spoke to Capt Devine by telephone each day for directions and supervised the day to day work of the other Fijians as well as carrying out work himself.
44 Mr James said that, after a few weeks, Capt Devine told him and a fellow Fijian to go with him to Queensland and they did. There they carried out a variety of jobs in and around Capt Devine’s daughter’s home including cleaning up debris, attending to securing the home, and repairing damage caused by a cyclone. They also built a treehouse and a swing. They were in Cairns for about two weeks. It is possible that the cyclone in question was Cyclone Yasi. However, that Cyclone made landfall in early February 2011, and it may be that both Mr James and Capt Devine are confused about which of the times when he was in Australia that this trip occurred. Alternatively, they may be confused about whether the trip was made in the immediate aftermath of Cyclone Yasi or some months later. However, nothing turns on that for present purposes as it was common ground that Capt Devine had taken the men to Cairns at one stage; and that they had worked on Capt Devine’s daughter’s home and later his former wife’s caravan park for about two weeks. Mr James returned to Fiji on 28 July 2011.
45 Mr James returned to Australia on 22 August 2011. He obtained his visa for this trip in much the same way as had occurred on the first two occasions. This time, Mr James carried out work at DMG’s Rozelle yard for about one week doing cleaning and repairs on a boat and then drove to Adelaide. He and others then commenced work on the Bradley. At one stage there were about six Fijians working on the Bradley as well as, occasionally, Damian Sturm, a University student. Much of Mr James’ work involved spray painting.
46 In November 2011, an incident occurred in which Mr Sturm collapsed whilst working in a tank. Mr James was instrumental in retrieving him from the tank before losing consciousness himself. Emergency services attended and both men were taken to hospital. It seems that the subsequent investigations of the incident led to questions about the circumstances in which the Fijians were engaged on the Bradley and, in turn, to the present litigation.
47 Mr James left Australia on 19 November 2011. Before he left, he was given another certificate from ANC which certified as follows:
Adelaide Nautical College
Certificate of Training Completed by
Andrew James
Preparation for mobilisation and ABS Class survey of “Bradley Barge”
L = 83m B= 23m GRT 5,250 crane barge with 650 Ton crane capacity.
Preparation for tow to comply with AMSA requirements.
Cleaning down, & welding repairs as required.
Painting preparation and application.
Confined space training.
Training was provided on Bradley Barge in Dock 1, Port Adelaide for relocation to East coast Australia under the training supervision of Salvage Master Capt. Brett Devine.
Training program noted by Training program supervised by
(signed) (signed)
Capt. Arthur Boucaut-Jones JP Capt. Brett Devine
Principal Salvage Master
Adelaide Nautical College
The certificate, which was undated, was signed by Capts Devine and Boucaut-Jones and, in addition, had the company seal of DMG.
48 In January 2012, Mr James lodged another application for a Business (Short Stay) visa with Ms Vulatolu’s assistance, but this application was refused.
Mr Kouka
49 Mr Kouka is a citizen of Tuvalu but has lived in Fiji for around 10 years. His principal occupation is that of seaman and he has sailed on ocean going ships. He has qualifications from the Tuvalu Maritime School and is rated as a bosun.
50 Mr Kouka first learnt of the possibility of carrying out work for DMG (using that word presently in a neutral sense) from a cousin who had already done some work for DMG in Australia. As a result of that contact, he met Capt Devine on 12 September 2011. After questioning him about his previous experience, Capt Devine told him that he could “work” with him in Australia on a tugboat in Sydney. He also told Mr Kouka that he would send him to a school for some study and mentioned the ANC. Capt Devine told Mr Kouka that he would pay him a living away allowance of $100.00 per day and would pay his airfares and the costs of his visa application but that Mr Kouka would have to pay him back out of his allowance. He also told Mr Kouka that, if he worked for him in Australia, he would get work with DMG in Fiji doing salvages.
51 On the following day Ms Vulatolu assisted Mr Kouka to complete an application for a Business (Short Stay) visa and wrote herself the words “for further training and familiarisation and preparation of Brooke-D in Sydney to Fiji” as Mr Kouka’s intended principal business activity in Australia. The FWO has obtained from the Department of Immigration and Citizenship the papers lodged with Mr Kouka’s application. This includes a letter dated 13 September 2011 from DMG addressed to Mr Kouka at his Fiji address. The substantive part of the letter is as follows:
With reference to our meeting and discussions in relation to the ocean going salvage Tug Brooke D (ex Weela).
We invite you to join the Brooke D in Sydney, Australia for 3 months familiarisation and preparation of the ship for the sea journey to Fiji to carry out work on our wreck dive tourism project in Yasawa Group of Islands.
You will help make her and yourself seaworthy in Sydney and join the crew to deliver her to Adelaide for slipping and surveying with RINA inspectors to comply with the International Classification Society rules and regulations.
Upon successful completion of survey, the tug will then voyage to Port Gladstone Queensland for Australian Customs clearance for the voyage to Lautoka, Fiji.
Should you wish to join the crew you will need to organise yourself a 456 Visa immediately. I will provide all financial assistance in airfares, accommodation, living expenses etc, while you are under my care in Australia.
Please include this letter with your 456 Visa application.
Kind Regards
Captain Brett Devine
Managing Director
Devine Marine Group of Companies
52 I accept Mr Kouka’s evidence that, until he prepared his statement in connection with these proceedings, he had not previously seen the letter.
53 Captain Devine, Ms Vulatolu and others went to the Australian Embassy but Mr Kouka remained outside. Capt Devine lodged the visa applications. A week or so later Ms Vulatolu told him that his visa was ready. On 20 September 2011, he met Ms Vulatolu and four others at the Embassy to collect their visas and passports. They met another man at the airport in Nadi. On the same day, the six men flew to Australia: four to Brisbane and two to Sydney. Mr Kouka and others flew on to Adelaide from Brisbane. They were met at the airport by Mr James who drove them to Port Adelaide. After living in a hotel for two nights, they transferred to a house near to the Port Adelaide docks. On the arrival of Mr Kouka’s group, there were seven persons from Fiji working on the Bradley. However, some left during Mr Kouka’s stay, some because their visa had expired and some because they went to work with DMG in Sydney. Mr Kouka remained working in Adelaide until 16 December 2011. During that time he performed work on the Bradley to which I will return shortly.
54 Captain Devine acknowledged he had asked Ms Vulatolu to assist Mr James, Mr Kouka and the other Fijians with their visa applications. He also acknowledged that the arrangements which he had with all the Fijians who came to Australia in 2011 were the same.
Were Mr James and Mr Kouka employees of DMG?
55 Captain Devine repeatedly referred to the Fijians as his “invited guests”. They were, on his account, volunteers who were undergoing a form of training in the deconstruction of the Japanese Longliner and in the repair and maintenance of the Bradley in anticipation of performing work of a like kind for DMG in and around Fiji. Although Capt Devine did not put it in these terms, his case in effect was that he was acting in a beneficent manner, doing the Fijian men a favour, prompted by the goodwill which he had developed towards Fiji and Fijians as a result of his contact with that country over many years, and giving them the opportunity at his expense to acquire new skills so as to be able to work for him in the event that he obtained contracts in Fiji.
56 Whether the relationship of Mr James and Mr Kouka with DMG was that of employee-employer involves consideration of three inter-related sub-issues:
(a) Was there an intention by DMG and each of Mr James and Mr Kouka to establish a contractual relationship?
(b) If so, did they form contracts?
(c) If so, are the respective contracts to be characterised as contracts of employment?
57 In determining these questions, it is not necessary in my opinion to distinguish between Mr Kouka and Mr James, nor between the second and third periods in which Mr James came to Australia in 2011 which formed the basis of the FWO claim concerning him. No one suggested that there was any relevant difference between any of the periods about which Mr James performed services for DMG in 2011. As just noted, Capt Devine acknowledged that the arrangements he had with all the Fijian men who came to Australia in 2011 were the same. The findings concerning the evidence relating to Mr James’ first stay are relevant to the proper characterisation of his second and third stays.
Relevant Principles
58 The principles relating to an intention to establish legal relationships are those stated by Gaudron, McHugh, Kirby, Hayne and Callinan JJ in Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 at [24]-[25]. It is of the essence of a contract that there is a voluntary assumption of a legally enforceable duty and that the parties intend to create legally binding obligations. The ascertainment of such an intention requires an objective assessment of the state of affairs between the parties, as distinct from the identification of any uncommunicated subjective reservation or intention of either. The Court must consider what was conveyed objectively by what was said or done, having regard to the circumstances in which the statements and actions occurred. That includes consideration of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and any other relevant surrounding circumstances.
59 The question of whether persons having the requisite intention have concluded a contract is also to be determined objectively: Taylor v Johnson (1983) 151 CLR 422 at 428. Blackburn J explained the position in Smith v Hughes (1871) LR 6 QB 597 at 607:
If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agreeing to the other party’s terms.
60 Finally, the question of whether a person is an employee or performing services for another pursuant to a relationship for which some other legal characterisation is appropriate is to be determined by an objective assessment of the nature of their relationship, having regard to its true substance: Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [24].
61 Commonly, the question for the Courts is whether a relationship between two persons is that of employer and employee or that of principal and independent contractor. However, depending on the circumstances, other relationships recognised by the law do from time to time require consideration, for example, the relationship between partners and the relationship between principal and agent. The alternative characterisation said to be appropriate in this case, namely that of host business and trainee, arises for consideration less commonly. Nevertheless, the principles developed by the common law in the other categories of case are the means by which the existence or otherwise of a relationship of employer and employee in the present case is to be determined.
62 In former times, the determination of whether a person performing work for another was an employee was determined principally by consideration of the degree of control exercised by the putative employer over the putative employee. Thus, in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 Wilson and Dawson JJ said at 35:
The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it …
63 The common law recognised however, that the importance of the element of control lay not so much in its actual exercise as in the right of the putative employer to exercise it: Zuijs v Worth Bros Pty Ltd (1955) 93 CLR 561 at 571; Stevens v Brodribb at 24.
64 The more recent cases recognise that the relationship of employer and employee is not capable of precise definition and that regard must be had to the combined effect of a variety of indicia of which the element of control is important but not decisive. Because of the variety of circumstances in which employment relationships exist, different features may be influential in a given case. For this reason, it is necessary to have regard to the totality of the relationship: Hollis v Vabu at [24]. The characterisation which the parties themselves, or one of them, gave to the relationship at the time may be a relevant consideration, but is not decisive: Australian Mutual Provident Society v Allan (1978) 52 ALJR 407 at 409. Accordingly, Capt Devine’s description of the Fijian men as his “invited guests” or as “trainees” is not conclusive of the proper characterisation of their relationship.
Consideration of the relationship
65 Considered objectively, the conclusion that Mr James and Mr Kouka had entered into a contractual relationship with DMG, which is properly characterised as that of employee-employer, is the only proper conclusion on the evidence.
66 First, Captain Devine himself used the word “work” to describe the men’s activities. When he spoke to Mr James on Ms Vulatolu’s mobile phone in Suva, he told him that he could come and “work” for him on the same conditions as Mr Viliame. Captain Devine did not use the word “training”. I accept Mr James’ evidence about that. Mr James gave this evidence in his affidavit and said much the same in his cross-examination by Capt Boucat-Jones:
CAPT BOUCAUT-JONES: … Did Captain Devine ask you to come to Australia to be his employee?
A: That’s correct.
HIS HONOUR: Well, did he use the word “employee”?
A: He used the word – if you [are] interested in working with me, you can work under the same condition[s] as [Mr Viliame].
CAPT BOUCAUT-JONES: What were the conditions that you were told about working with Captain Devine by [Mr Viliame]?
A: They will be doing welding, cutting, getting $100 a day.
Q: Did he say anything about being trained?
A: No.
67 Captain Boucaut-Jones cross-examined Mr James about his understanding of the word “work” with a view, apparently, to establishing that Mr James had understood Capt Devine’s use of it in a distinctive sense. However, Mr James said:
In my first language, work is to do something to get something out of it … I think it’s common sense. Everybody knows you work to get money. Nobody works to get something else. … Money is … the main thing.
In my view, that accords with the ordinary understanding of the word “work” and both Capt Devine and Mr James understood the word in that sense.
68 Mr Kouka said that Capt Devine told him that he could come to Australia to “work” for him and that he would be “working” on tugboats in Sydney.
69 Mr James did say that Capt Devine had spoken of plans to establish a company in Fiji. It is possible that, in that context, Capt Devine mentioned the prospect of the men obtaining work with him in Fiji. Mr James gave the following evidence:
HIS HONOUR: When you did come to talk to Capt Devine was there any discussion about the work or working in Fiji later on or anything of that kind?
A: No. He used to – he said – like, after, after all this he’s going to make a company in Fiji, but no guarantee that …
HIS HONOUR: What did he say on that topic?
A: He used to tell us that all the projects here will be finished and he’s going to open a company in Fiji.
HIS HONOUR: And was there anything said about you working for that company when it was established?
A: No idea, but we don’t know if we’re going to work in Fiji. So we tried to prove ourselves here so we had the chance to work in Fiji.
I accept that evidence. It indicates that Mr James had the hope of obtaining work with Capt Devine’s company in the event that he established operations in Fiji, but it is well short of indicating that Mr James was informed that he was undergoing training in Australia for contemplated employment in Fiji.
70 Next, the very value of the benefits provided to the Fijians over an extended period is highly suggestive of the benefits being provided in consideration of reciprocal benefits to Capt Devine and/or DMG. DMG’s payment of the airfares of Mr James and Mr Kouka, its provision of their accommodation, its payment of a “living away allowance” of $100 per day and its provision of a vehicle to Mr James for his use, together with other benefits are all highly suggestive that the arrangement was not the beneficent provision of work experience or work training.
71 In relation to the Japanese Longliner, DMG deployed the men in a profit-making activity. The men took the cut metal from the vessel to a scrap metal merchant and were paid for it. Captain Devine said that the men would collect “two or three, four thousand dollars” every “two or three days”. From that money, Mr James would deduct the living away allowance and any out of pocket expenses and then send the balance to Capt Devine. Captain Devine said that ultimately he did not make money on the project but he did not produce any documentary evidence supporting that assertion. In any event, whether or not DMG did make a profit is immaterial as it is apparent that the cutting up and sale for scrap of the Japanese Longliner was intended as a profit-making exercise.
72 The work on the Bradley which involved the cleaning and removal of rust and scale, water jet blasting, pumping out and spray painting was of a different nature but was nevertheless valuable to DMG. The Bradley was being repaired and maintained so as to meet the requirements for a sea survey and to ready it for use on a valuable contract in Queensland which DMG had procured.
73 Mr Kouka said that in addition to the work he carried out on the Bradley, he also cleaned and painted two tugboats. His evidence about that was limited and it is not clear how he came to do that work.
74 The nature of the work carried out on both the Longliner and the Bradley was of a kind typically performed by employees. The men were essentially supplying their labour.
75 Captain Devine expectation of the work on the Bradley was revealed in the following passage in his cross examination:
Q: Do you agree that there were occasions when you would telephone and provide instructions on what needed to be done?
A: No I would ask, “where are you up to?”. I had a rough idea where he was going, where he was up to, and a couple times I said, “you know, you are dragging the chain a bit. We’ve only got another week or so and we’ve got a survey inspection”.
Q: Yes.
A: They were already pre-booked you see; everything was pre-booked.
Q: And so just talking about the Bradley barge, you expected them to complete this within a particular time?
A: Well, if they had – and if I could see they were getting behind, I would’ve sent [Mr Barrett] and some other – or engaged some other contractors or something like that to assist them.
Q: And also you would tell them to hurry up a bit, would that be fair?
A: I would tell them if they were, you know, sort of getting behind schedule but I knew in my own self that [Mr James] was a doer. He wasn’t a slacko.
This is very suggestive of the men having to complete a work task according to a schedule, rather than a component of training.
76 The manner in which the men worked is indicative of an employment relationship. Mr James, Mr Kouka and the other Fijian men usually worked Monday to Saturday but Mr James also said that they often worked Sundays as well. They usually started work each day at about 6:00am and finished at about 6:00pm. If Capt Devine was on site, they continued working until he said they could stop. When he was not on site, they worked until they finished the particular task on which they were then engaged or, in Mr Kouka’s case, until Mr James or Mr Viliame said they could stop. They had a lunch break each day of about half an hour. The very hours and regularity with which the men worked militates against their activities being regarded as a form of training. It is much more consistent with DMG wishing to maximise their output in the time they were available to it.
77 Both men recorded the days they worked in the manner of employees recording their work. There was no need for them to do so if they were mere trainees. Mr James recorded the days he worked in an invoice book with provision for duplicates. The original invoice was given to Capt Devine and a carbon copy was retained in the book. Sometimes Mr James used the word “training” or the word “experience” as a heading for the entries. Captain Devine usually signed the entries in his book when he gave him the originals.
78 Mr Kouka said that he recorded in an invoice book the days he worked and the entitlement to the Living Away Allowance for that day. Mostly he recorded $100.00 but, if he had not worked the full day, he recorded $50.00 only. In all his entries he used the word “training”. He was told what to put in the book by Mr James and by the other Fijians, and not by Capt Devine. Mr Kouka’s invoice book showed the deduction of an amount described as “Sub”. It seems that this was the amount deducted by DMG for reimbursement of the airfares paid by it.
79 Another indication of the way in which Capt Devine regarded Mr James was his description of him as “the foreman”. Captain Devine said that Mr James took over from Mr Barrett in that respect and praised his qualities. When he was away from Adelaide, which was often, he would telephone Mr James regularly giving directions and enquiring as to the progress of the work. In this respect he gave the following evidence:
Q: How did [Mr James] know what tasks he was to carry out?
A: I would tell him. I would say, “I want the barge” – I would not only tell him. I would fly down here …
Captain Devine also said that when he was away from Adelaide he would from time to time ask others such as Capt Boucaut-Jones or a Mr Lawrie to check on the Fijians and to report to him.
80 Mr James said that it was common for Capt Devine to telephone him shortly before 6:00am and to speak to him about the work planned for the day, and for him to ring again at about 5:30pm to enquire about the progress of the work. Mr James did not say so expressly but it was implicit in his evidence that Capt Devine was not enquiring about the men’s training. It is very evident that Capt Devine exercised considerable control over the day to day activities of the men.
81 Captain Devine said that the men were free to go off and do something else but later said that he would have been “very annoyed” if they had gone to work for anyone else. He said that, in that event, he would have contacted DIAC so that the men’s visas would be cancelled. Mr Kouka also said, and I accept, that Capt Devine said to him more than once words to the effect “I need to see the work. If you don’t like it, you go back to Fiji.”.
82 Another indication that Capt Devine regarded the Fijians as subject to his control is seen in the evidence as to the locations at which they worked. I referred earlier to Mr James’ evidence concerning the trip to Cairns and his work at Capt Devine’s daughter’s home and at the caravan park of his former wife. Captain Devine told the men to accompany him and directed them as to the task which they were to perform. There was no suggestion that this was made in the form of a request as might have been expected if the men were regarded as “invited guests”. They were not, for example, asked to leave their training programs for a time. Captain Devine did say that he had “possibly” said that the Cairns trip would be “some good training for cyclones for you”. I do not accept that evidence as it had the hallmarks of a retrospective reconstruction. The nature of the tasks which Mr James and his fellow Fijians undertook in Cairns cannot reasonably be described as participation in a training program at all, let alone a training program relating to work on boats.
83 Further, Capt Devine was able to direct some of the Fijians to work at his yard in Sydney, rather than to come to Adelaide to work on the Japanese Longliner or the Bradley, and despite what was said in the letters of support provided in relation to the visa applications. He said that he was the one who made the decision as to whether a Fijian came to Adelaide or to Sydney. As noted, Mr James did spend six weeks of his second trip in Sydney on a variety of activities, none of which could be regarded as participation in a structured training program. Further, on Mr James’ third trip he worked for about one week in Sydney doing cleaning and repairs on a boat at DMG’s yard at Rozelle before driving to Adelaide and commencing work on the Bradley.
84 Captain Devine’s ability and evident right to control both the activities of the men and the places at which they performed it is highly suggestive of an employment arrangement.
85 I accept that the men did receive some training but it cannot reasonably be regarded as sufficiently detailed or continuing so as to warrant the description of a course of training. Both Mr James and Mr Kouka had had a diverse work experience in a marine environment and were familiar with a number of the tasks involved. However, Mr James had not previously done oxy-cutting and he was taught how to do that. In addition, he received training in operating an excavator, in operating the cranes used on the site, and in the operation of a 20 t forklift. Captain Devine considered that Mr Kouka’s manner of throwing a heaving line was deficient and gave him some instructions in the appropriate technique. Mr Kouka said, and I accept, that most of the jobs which he did on the Bradley were tasks which he had done as a seaman over the previous 10 years and that he learnt very little which was new to him. In my opinion, the instruction given to the men was a form of on the job training of the kind which is commonplace in many workplaces. It cannot reasonably be regarded as an incident of a structured and organised training program. In particular, the evidence does not indicate that the men spent much time at all being shown techniques, or the manner of working, or in observing others for instructional purposes.
86 Captain Devine referred to the payments made to the men as a “Living Away Allowance”. However, the following evidence from Capt Devine made it plain that the allowance was not to compensate the men for the costs they would incur by being away from their home:
Q: Is this right? That the purpose of that money was effectively to cover expenses while they were away from home?
A: Yes, it was to accommodate their family, their school, their children, their schooling. They’re far superior than what they would receive working on a fishing boat of $20 a day. $100 a day is equivalent to $250 Fijian dollars a day.
….
Q: So did you contemplate that they would be able to send that money or at least some of it back to Fiji?
…
A: Yes, to cover all their outgoings, everything, and it was far superior than what they would be doing earning in Fiji.
This evidence indicates two things. First, that the payments were to enable the men to support their families in Fiji, rather than to meet their own living costs in Australia. Secondly, the amounts paid were considerably in excess of that which they would have been paid if working in Fiji. The inference can therefore be drawn that the Living Away Allowance was not intended as compensation for the earnings which the men forwent by voluntarily undergoing training in Australia.
87 Mr James explained that the reason he had gone straight back to work after cutting his knee in the incident in March 2011 was “because of the money, if I’m not working I’m not paid”. He gave other evidence, which I accept, which provided a reasonable basis for that belief. For example, on occasions when the men did not do a full days’ work, DMG paid only $50 per day. Mr Kouka said that, on some days, Capt Devine told them to finish early and to record those days as “half days”. He received only $50 in respect of the half days. In this way the payment of the allowance was conditional on the men’s performance of productive activity.
88 I also observe that Capt Devine either paid for, or provided, the men’s accommodation. He also supplied some of their food from time to time. In this way he met significant parts of the men’s costs of living away from their own homes. That being so, the payment of $100 per day cannot reasonably be regarded as an estimate of the men’s living expenses while in Australia.
89 All these matters point to the Living Away Allowance as being a payment of remuneration. I conclude that that is how the monies should be characterised. Captain Devine’s description of the payments as a Living Away Allowance does not alter their true character. Nor does the circumstance that there were no deductions of income tax.
90 The certificates provided by Capt Boucaut-Jones purporting to certify that the Fijian men had completed forms of training should not be regarded as evidence that the men were engaged in some form of genuine training program. An obvious point is that Capt Devine had not even met Capt Boucaut-Jones until after Mr James had commenced working on the Japanese Longliner in January 2011. He could not therefore have established any program with ANC pursuant to which Mr James, and the others who came at that time, were undergoing some form of training with that College. I note that Capt Devine acknowledged that, at the time of Mr James’ first trip to Australia, he had not had any arrangement with Capt Boucaut-Jones for the provision of training.
91 It was common ground between Capt Devine and Capt Boucaut-Jones that the latter had prepared the certificates at the request of the former and had included in them the detail which Capt Devine requested. Both Capts Devine and Boucaut-Jones acknowledged that Capt Boucaut-Jones had not undertaken any training of the Fijians at all. Some evidence from Capt Boucaut-Jones suggested that he had monitored aspects of the activities being undertaken by the Fijians and could see that it was training. I do not accept that evidence. I accept instead the evidence of Mr James that, in total, he had seen Capt Boucaut-Jones on four occasions only. One of those occasions was in April 2011 when Capt Boucaut-Jones gave him his ANC certificate. Another was after the incident in November in which Mr Sturm was asphyxiated in a tank on the Bradley. Mr Kouka said that the first time he saw Capt Boucaut-Jones was on the day of that incident. Captain Boucaut-Jones himself acknowledged that he had been to the shipyard only twice before presenting Mr James and others with the certificates dated 7 April 2011. Accordingly, the opportunities for any monitoring by Capt Boucaut-Jones of the Fijians were quite limited.
92 Further, Capt Boucaut-Jones’ evidence was that the only course which the ANC provided in 2011 related to recreational boating licences, a very different activity from those being undertaken by the Fijians. Further again, Capt Boucaut -Jones told Capt Devine, when first asked if he could provide a training program for the Fijians, that he was not licenced to do so.
93 Captain Devine’s explanation for the provision of these certificates is revealing. He said that he asked Capt Boucaut-Jones to provide Mr James with a certificate “like a boy scout stamp or a good behaviour stamp from a school teacher”. He went on to say “Fiji is a little bit different to Australia. They’re just lovely, wonderful people. Give them an encouragement and they really want to try. And that’s how it has always been, every certificate …”. He said in relation to the certificates provided later in 2011:
At all times, I have asked Captain Boucaut-Jones could he give me a certificate from – believe you me, when you see a Fijian’s resume, the more certificates he has got – that’s more impressive. It’s just like a boy scout. The more emblems on his shirt, the more pride he takes in – amongst his clan. It’s the same with Fijians. The more certificates they’ve got …
94 Captain Boucaut-Jones gave the following evidence in cross-examination concerning his provision of the certificates dated 7 April 2011:
Q: And what did Captain Devine ask you, or what did he say when he asked you to put together those documents?
A: I think it would be good thing for the boys if they had some recognition that they could take back to their family, to tell them what they had been doing in Australia. It was to be presented as an award on a final barbeque night in Sydney, before they left to go home.
95 The provision of the certificates is relevant in other respects and it will be necessary to return to them. However, for present purposes I indicate my satisfaction that the certificates are not evidence that the Fijian men were undergoing a training program, let alone a formal training program. They were little more than tokens given for patronising reasons. The certificates do not displace the very strong inference that the men were brought to Australia to carry out work.
96 I will refer later to the letters of support which Capt Devine provided on the DMG letterhead for use in connection with the visa applications. As indicated earlier, neither Mr James nor Mr Kouka saw these letters at the time of the visa application. They cannot be regarded as part of the communications between the parties against which their relationship is to be assessed. However, even if they were, they would not, in my view, result in any different characterisation. There is an element of contrivance in each of the letters. I make the following points about the letter of 9 January 2011 addressed to Mr James:
(i) Although the letter was addressed to Mr James, it was never provided to him, a circumstance which by itself means that it could not have been an invitation to him at all, let alone an invitation to train and participate in the disposal of a Longliner;
(ii) Contrary to the first sentence, Mr James had not had a “recent stay” in Australia and nor had he met Capt Devine in Adelaide so as to have any discussions with him;
(iii) For the same reasons, Mr James could not be invited “back to Australia”.
The reality of the situation was that DMG was not “sponsoring” Mr James but instead wishing to engage him to perform services for it.
97 Similar points may be made in respect of the letter of 27 April 2011 addressed to Mr James:
(i) Although the letter was addressed to Mr James, it was never provided to him and so it could not reasonably be regarded as an invitation to him;
(ii) Contrary to the statement in the first paragraph, ANC was not running a “salvage, demolition and disposal training course” on the Longliner;
(iii) This meant that the contemplated completion of the “course” could not be beneficial for Mr James;
(iv) There were not “approximately 12 weeks available for further training before the vessel is completed”. Even if there was another 12 weeks of work on the Longliner, DMG did not allocate Mr James to that work but instead had him work for six weeks in Sydney in DMG’s salvage yard.
98 The letter to Mr Kouka of 13 September 2011 did not refer to training or instruction at all. It contemplated Mr Kouka carrying out activities on the tug Brooke D and made no reference to the Bradley. Mr Kouka was invited to Sydney for “three months familiarisation and preparation of the ship for the sea journey to Fiji to carry out work on our wreck-dive tourism project in the Yasawa Group of Islands”. The letter said that he would help make the Brooke D and himself “seaworthy in Sydney and [then] join the crew to deliver her to Adelaide for slipping and surveying with RINA inspectors to comply with the International Classification Society rules and regulations.” That is all suggestive of work activities. Although the letter referred to the Brooke D and not to the Bradley, it cannot be regarded as misleading of Mr Kouka because it was not provided to him.
99 It is very evident that each of the letters of support was prepared to assist in obtaining for the men a 456 Visa and that none reflected the reality of the situation.
100 I will refer later to Capt Boucaut-Jones’ letter of 27 September 2011.
101 Objectively considered, it is plain that Capt Devine and DMG, on the one hand, and Mr James and Mr Kouka, on the other, entered into contractual relationships pursuant to which, in consideration of the payment of their airfares, accommodation, living away allowance and other benefits, the men were to provide valuable services to DMG. The fact that they may have acquired some additional skills and experience in doing so does not alter he underlying nature of the relationship. Their respective relationships cannot reasonably be understood as one between a host-business and a training participant. The proper characterisation of the relationship in each case is that of employer-employee.
Was DMG a national system employer?
102 The Award is a modern award made by the Fair Work Commission under Part 2-3 of the FW Act. Clause 4.1 of the Award states that it covers “employers” throughout Australia of “employees” in the manufacturing and associated industries and occupations who are covered by the classifications in the Award and “those employees”. The terms “employer” and “employee” are defined in cl 3.1 to mean a “national system employer” and a “national system employee” respectively within the meaning of the FW Act. The terms “national system employer” and “national system employee” are defined in ss 13 and 14 of the FW Act. It is plain that DMG is within that definition of “national system employer” as it is a “constitutional corporation” as defined.
Were Mr James and Mr Kouka in “vocational placements”?
103 Section 13 of the FW Act excludes persons on “vocational placements” from being a national system employee. Further, s 15 provides that the term “employee” does not include a person on a “vocational placement”. Section 13 provides:
A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of “national system employer” in section 14, by a national system employer, except on a vocational placement.
104 The term “vocational placement” is defined in s 12 of the FW Act to mean a placement that is:
(a) undertaken with an employer for which a person is not entitled to be paid any remuneration; and
(b) undertaken as a requirement of an education or training course; and
(c) authorised under a law or an administrative arrangement of the Commonwealth, a State or a Territory.
105 It is plain that Mr James and Mr Kouka were not undergoing vocational placements in the defined sense. None of the three elements of the definition are satisfied: they did receive remuneration; the placement was not a requirement of an education or training course; and it was not authorised under a law or administrative arrangement of the Commonwealth, a State or a Territory.
Did the Award govern the employment of Mr James and Mr Kouka?
106 The application of the Award involves two sub-issues:
(a) Was DMG an employer in a “manufacturing and associated industry and occupation”?
(b) Were Mr James and Mr Kouka at relevant times performing work in one of the classifications to which the Award applies?
The industry and occupation
107 As noted, the Award applies throughout Australia to employers of employees in “the manufacturing and associated industries and occupations” who are covered by the classifications in the Award. The term “manufacturing and associated industries and occupations” is defined in cl 4.9 of the Award in an extensive way and (relevantly) as follows:
4.9 Manufacturing and Associated Industries and Occupations means:
(a) The following industries and parts of industries:
(i) The manufacture, making, assembling, processing, treatment, fabrication and preparation of:
• the products, structures, articles, parts or components set out in clause 4.10; or
• the materials or substances set out in clause 4.10; or
• any products, structures, articles, parts or components made from, or containing, the materials or substances set out in clause 4.10.
…
(iii) The repair, refurbishment, reconditioning, maintenance, installation, testing and fault finding of:
• any of the items referred to in clause 4.9(a)(i); or
…
(ix) Every operation, process, duty and function carried on or performed in or in connection with or incidental to any of the foregoing industries, parts of industries or occupations.
…
4.10 For the purposes of clause 4.9(a)(i), the products, structures, articles, parts, components, materials and substances include:
….
(e) Ships, boats, barges and marine vessels of all descriptions, and components.
108 The FWO submitted that, relevantly for the purposes of this case, the Award applied to the industry of the manufacture, making, assembling, procuring, treatment, fabrication and preparation of marine vessels of all descriptions and to the repair, refurbishment, reconditioning, maintenance, installation, testing and fault finding of such vessels. The FWO then contended that both the salvage of the Longliner and the repair of the Bradley were “fairly and squarely” within that coverage. That submission, if accepted, would not be conclusive of the issue because, as cl 4.1 indicates, regard must also be had to the classifications in the Award.
109 The submissions of the FWO did not indicate how the cutting up and salvage of the Longliner came within cl 4.9. The activities involved in that work cannot reasonably be described as “manufacture, making, assembling, processing, treatment, fabrication or preparation” of a marine vessel. Nor can those activities reasonably be described as the repair, refurbishment, reconditioning, maintenance, installation, testing or fault finding of a marine vessel. To the contrary, the work involved the dismemberment of the Longliner and the salvage of the materials used in its construction for their scrap value.
110 The FWO did not rely on cl 4.9(a)(ix) set out above. Nor did she attempt to establish the overall activities of DMG with a view to showing that the deconstruction of the Longliner could be regarded as an operation “in or in connection with or incidental to” an industry or occupation in which DMG was engaged.
111 Accordingly, I am not satisfied that the Award applied to the work carried out in the deconstruction of the Longliner.
112 The position is different with respect to the work on the Bradley. That work satisfies the description of the repair, refurbishment, reconditioning and maintenance of a marine vessel.
113 It is possible that the Award applies to the work which Mr James carried out in Sydney at the commencement of his second period in Australia, but the FWO did not, on my understanding, rely on that work for this purpose.
Were Mr James and Mr Kouka performing work in an Award classification?
114 Clause 24.1 contains the classifications and minimum wages for employees. It establishes 14 classifications in which Classification “C14” is the lowest paid and Classification “C2(b)” the highest paid. The definitions of the classifications are set out in Sch B to the Award.
115 The FWO submitted that Classification C13 was appropriate to Mr James and Mr Kouka. It is appropriate however, to set out the definitions for both Classifications C13 and C14.
Wage Group: C14
(a) Engineering/Manufacturing Employee – Level I
(i) An Engineering/Manufacturing Employee – Level I is an employee who is undertaking up to 38 hours induction training which may include information on the enterprise, conditions of employment, introduction to supervisors and fellow workers, training and career path opportunities, plant layout, work and documentation procedures, occupational health and safety, equal employment opportunity and quality control/assurance.
(ii) An employee at this level performs routine duties essentially of a manual nature and to the level of their training:
performs general labouring and cleaning duties;
exercises minimal judgement;
works under direct supervision;
is undertaking structured training so as to enable them to work at the C13 level.
Wage Group: C13
(a) Engineering/Manufacturing Employee – Level II
(i) An Engineering/Manufacturing Employee – Level II is an employee who has completed up to three months structured training so as to enable the employee to perform work within the scope of this level.
(ii) An employee at this level performs work above and beyond the skills of an employee at the C14 level and to the level of their skills, competence and training:
works in accordance with standard operating procedures and established criteria;
works under direct supervision either individually or in a team environment;
understands and undertakes basic quality control/assurance procedures including the ability to recognise basic quality deviations/faults;
understands and utilises basic statistical process control procedures;
follows safe work practices and can report workplace hazards.
116 Clause B.4.2 in Sch B elaborates the tasks which may be expected of a person in Classification C13:
B.4.2 For the purposes of clause B.3.4 (level C13) the following are the indicative tasks which an employee at this level may perform:
assembles components using basic written, spoken and/or diagrammatic instructions in an assembly environment;
repetition work on automatic, semi-automatic or single purpose machines or equipment;
basic soldering or butt and spot welding skills or cuts scrap with oxyacetylene blow pipe;
use selected hand tools;
boiler cleaning;
maintains simple records;
repetitive packing in standard containers;
uses hand trolleys and pallet trucks;
assists in the provision of on-the-job training;
non-trades cleaning up of wooden floors, punching of nails and sanding of wooden floors by machine or hand and/or application of all types of sealers and plastic coatings on wooden floors.
117 As can be seen, cl B.3.4(a)(i) refers to employees who have completed up to three months structured training. The previous work history of both Mr James and Mr Kouka seems to answer that description. Each of Mr James and Mr Kouka, and especially Mr James, were performing work above and beyond the skills of an employee at the C14 level. It is arguable that Mr James should be regarded as working in a higher classification, given that he was operating as the “foreman” of the group. However, it is not necessary to express a view about that. Although not all the indicative tasks in cl B.4.2 are apt to their work, I consider that each of Mr James and Mr Kouka can appropriately be regarded as within Classification C13 of the Award. Their work, and in particular that of Mr Kouka, seems to have been at a level matching the indicative tasks set out in the definition to C13.
118 This means that I accept that the Award was applicable to the work of Mr James in the period between 22 August 2011 and 19 November 2011 and to the work of Mr Kouka in the period between 20 September 2011 and 16 December 2011. I do not accept that the Award was applicable to the work of Mr James in the period between 30 April 2011 and 28 July 2011.
Did DMG contravene the Award?
Failure to pay the minimum hourly rate?
119 Clause 24.1(a) of the Award sets out the classifications and minimum wages for adult employees in a table. The minimum weekly wage for those in Classification C13 after 1 July 2011 was $606.48 and the minimum hourly wage was $15.96. It is not necessary to consider the minimum hourly wage for work before 1 July 2011 as I have found that the Award was not applicable to Mr James’ work in that period.
120 The Award does not in express terms impose an obligation to pay the minimum weekly wage or the minimum hourly rate but that may be taken to be implicit in its provisions.
121 Clause 24.1(b) provides that, for the purposes of cl 24.1(a), any entitlement to a minimum wage expressed to be by the week means the entitlement which an employee would receive for performing 38 hours of work.
122 The FWO submitted that, given the hours worked by the men, it is plain that they had not been paid at the required minimum hourly rate even if account is taken of the Living Away Allowance. That submission should be accepted.
123 The evidence of Mr James and Mr Kouka to which I referred earlier indicates that they commenced each day at about 6:00am and worked to about 6:00pm, with a half hour for lunch. There is some evidence which is inconsistent with those claims. Mr Glamocak, in whose premises the work on the Longliner was carried out, said that the men usually started at 7:00am and that it “could have been” the case that they worked until 6:00pm each day.
124 As indicated earlier, I accept Mr Glamocak as an honest and reliable witness. His evidence does not support the evidence in respect of the 6:00am starts but he did also say that it was a “possibility” that the men had sometimes started before 7:00am, that being his usual starting time. I think it probable that the men did sometimes start at 6:00am but did not do so every day.
125 Whether the men started at 6:00am or 7:00am each day, it is plain that the payment of $100 per day was not a payment to them of the minimum hourly rate for all the hours worked. This can be demonstrated as follows: with a starting time of 7:00am and a finishing time of 6:00pm and a half hour lunch break, the men worked 10½ hour days; 10½ x $15.96 = $167.58, a figure well in excess of the Living Away Allowance of $100.00.
126 As the FWO no longer seeks an order for payment of unpaid wages, it is unnecessary to determine the submission of the FWO to the effect that the Living Away Allowance should be disregarded altogether. The FWO referred in this respect to Poletti v Ecob (No 2) (1989) 31 IR 321 and to Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; (1999) 94 IR 218 for the proposition that an amount paid for a purpose other than payment of wages cannot later be relied upon in satisfaction of an entitlement to wages. See also Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406; (2002) 121 IR 250 at [53]-[65]. I observe however, that the submission seemed to give more significance to the label which Capt Devine gave to the payment rather than to its substance. On my finding, it was a payment of remuneration to the men for their services and not a true living away from home allowance. That being so, the principle on which the FWO relied may not be applicable in this case.
127 It is not possible to make precise findings as to the hours worked by the men each day or the number of days worked each week. However, for the reasons given above, I am satisfied that DMG’s payments, whether of $100 or $50 per day, did not constitute a payment of the minimum hourly wage for each hour worked by the men.
128 Accordingly, the FWO has established a contravention of cl 24.1 of the Award.
Failure to pay wages weekly or fortnightly?
129 Clause 34.1 of the Award provides:
34.1 Period of payment
(a) Except as provided in clause 34.1(b), wages must be paid weekly or fortnightly, either:
1 according to the actual ordinary hours worked each week or fortnight; or
1 according to the average number of ordinary hours worked each or fortnight.
(b) By agreement between the employer and the majority of employees in the relevant enterprise, wages may be paid three weekly, four weekly or monthly. Agreement in this respect may also be reached between the employer and individual employee.
130 The FWO submitted that cl 34.1 imposed a requirement as to the regularity or frequency with which the wages required by the Award were to be paid.
131 The FWO submitted that DMG had contravened s 45 by failing to pay each of Mr James and Mr Kouka wages at least weekly or fortnightly. The first submission was that DMG’s failure to pay any wages at all meant that it had failed to pay Mr James and Mr Kouka wages at least fortnightly as required. That submission cannot be upheld because, on my findings, the payment of the Living Away Allowance was in substance a payment of wages.
132 The evidence concerning the regularity with which the men received the payment of the Living Away Allowance was at a level of generality. Mr James said:
[128] Brett was not very regular with paying the money. I often had to call him on behalf of the boys and ask him to pay us. Sometimes, he would not pay the money for 3 weeks at a time and then would not pay all of the money he owed. For example, I recall a few occasions when Brett did not pay for about 3 weeks, and said to me words like “I will pay you when I get the money”. Then, when he finally paid, he only gave me $400 for the whole 3 weeks and [said] “I will pay the rest later”.
Mr James did not indicate the particular trip or trips to Australia to which he was referring in this evidence. Nor did he identify particular weeks or periods in respect of “late” payment was experienced. Nor did the evidence identify the criterion by which Mr James has assessed the lateness.
133 Mr Kouka’s evidence also suffered from a degree of generality. He deposed:
[76] Brett did not pay the money allowance regularly.
[77] When Brett was in Adelaide, I gave him my invoices and [he signed] them and then paid me in cash. If he had been away from Adelaide, sometimes I would give him 2 or 3 weeks of invoices at once when he came back. He often said that he could not pay all the money and might give me $500 when he owed $1000.
134 This evidence is suggestive of a non-compliance with cl 34.1 but does not permit any finding as to a particular occasion or particular occasions upon which the clause was breached. Counsel for the FWO acknowledged that this was so. Given the duration of the men’s employment, and the evidence that it was only on some occasions that payments were made “late”, it seems necessary to identify the particular occasion or occasions when the alleged contraventions occurred.
135 As that cannot be done, I find that the FWO has not established a contravention or contraventions by DMG of cl 34.1 of the Award.
Failure to pay the casual loading?
136 Clause 14 of the Award concerning casual employment provides (relevantly):
14.1 A casual employee is one engaged and paid as such. A casual employee for working ordinary time must be paid an hourly rate calculated on the basis of one thirty-eighth of the minimum weekly wage prescribed in clause 24.1(a) for the work being performed plus a casual loading of 25%. The loading constitutes part of the casual employee’s all purpose rate.
…
14.3 An employer when engaging a casual must inform the employee that they are employed as a casual, stating by whom the employee is employed, the classification level and rate of pay and the likely number of hours required.
137 The FWO submitted that both Mr James and Mr Kouka should be characterised as casual employees and that they had not been paid the casual loading. The submissions of the FWO proceeded on the basis that the status of the men as casuals or otherwise was to be determined by the general law. In this respect, the FWO referred to Reed v Blue Line Cruises Ltd (1996) 73 IR 420 and to Hamzy v Tricon International Restaurants [2001] FCA 1589; [2001] 115 FCR 78. In Blue Line Cruises, Moore J at 425 described casual employment in the following terms:
A characteristic of engagement on a casual basis is … that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.
To similar effect, the Full Court in Hamzy said at [38]:
… The essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work. But that is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
138 However, in my opinion, the approach for which the FWO contended is not the correct approach. Regard must be had instead to the definition of “casual employment” in cl 14.1, namely, that a “casual employee is one engaged and paid as such”. That definition is to be understood in the context of the Award as a whole and, in particular, in the context of its provisions concerning full-time and part-time employment.
139 Clause 12 of the Award establishes that the default position in the engagement of employees is that of full-time employment:
12. Full-time employment
Any employee not specifically engaged as being a part-time or casual employee is for all purposes of this award a full-time employee, unless otherwise specified in this award.
Clause 13 identifies a part-time employee as follows:
13. Part-time employment
13.1 An employee may be engaged to work on a part-time basis involving a regular pattern of hours which average less than 38 ordinary hours per week.
140 In effect, cll 12, 13 and 14 establish a scheme for the employment of employees as full-time employees, part-time employees or casual employees. Employees are to be regarded as full-time employees unless they are “specifically engaged” as part-time or casual employees. This indicates that casual employment is an exception to the default position established by cl 12. In order for that exception to apply, cl 14.1 requires two matters to be satisfied: first, that the employee be engaged as a casual; and, secondly, that the employee be paid as a casual.
141 The word “engaged” in cl 14.1 of the Award is capable of more than one meaning. On one view, it can refer to the way in which the parties themselves identified their arrangement at its commencement. On another view, it can be a reference to the objective characterisation of the engagement, as a matter of fact and law, having regard to all the circumstances. Support for the former construction is seen in the decision of the Full Bench of the Fair Work Commission in Telum Civil (Qld) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FWCFB 2434. The Full Bench said at [38]:
[38] All of the modern awards contain a definition of casual employment. Those definitions, notwithstanding some variation in wording, have the same core criteria:
(i) That the employee was “engaged” as a casual - that is, the label of “casual” is applied at the time of time of engagement; and
(ii) That the employee is paid as a casual, and specifically, the employee is paid a casual loading (set at 25% in all of the modern awards, subject to transitional arrangements), which loading is paid as compensation for a range of entitlements that are provided to permanent employees but not to casual employees.
(Emphasis added)
142 The second construction is seen in the decision of Industrial Relations Commission of Western Australia in Loves Bus and Taxi Service v Zucchiatti [2006] WAIRC 5758; (2006) 157 IR 348. Ritter AP, with whom Beech CC and Mayman C agreed, said at [45]:
[45] I also do not think that the Commissioner was in error in not finding the respondent was engaged as a casual, pursuant to clause 14(5) of the award. This definition refers to a “worker engaged and paid” as a casual worker. This definition means that just because somebody is paid as a casual employee does not mean that they are a casual employee under the award. This is because they must also be “engaged as such”. The reference to the engagement of the worker in my opinion directs attention to the basis upon which the worker was employed as a matter of law and fact. It does not simply direct attention to the label placed upon the status of the worker by the parties. …
(Emphasis added)
143 None of the parties addressed any submissions to these competing constructions. That is cause for pause before expressing any concluded views of general application.
144 It is sufficient in my opinion to state that, in the present case, the former construction draws support from two considerations and should be adopted. First, the term “specifically engaged” in cl 12 indicates that the focus is on the agreement of the parties at the commencement of the employment as to the character of the employment. Secondly, the requirement in cl 14.3 for the observance of formality at the time of engagement of a casual employee suggests that the word “engaged” is directed to the agreement made between the parties rather than to the manner and circumstances in which the employee does in fact carry out his or her work.
145 In my opinion, neither Mr James nor Mr Kouka can be regarded as casual employees on this understanding of the definition in cl 14.1. Nothing was said to them at the time of their engagement about being casuals. It cannot be concluded therefore that they were “engaged” as casuals. They gave no evidence that they had, subjectively, regarded themselves as casuals. Further, and in any event, they were not paid as casuals.
146 The better characterisation of their employment is that of full-time employees working pursuant to a contract with a fixed term. Accordingly, this claimed contravention of the Award fails.
Failure to pay weekend penalty rates?
147 Clause 36 of the Award contains provisions regarding the ordinary hours of work. Relevantly for present purposes, cl 36 provided as follows:
36.2 Ordinary hours of work – day workers
(a) Subject to clause 36.5, the ordinary hours of work for day workers are an average of 38 per week but not exceeding 152 hours in 28 days.
(b) The ordinary hours of work may be worked on any day or all of the days of the week, Monday to Friday. The days on which ordinary hours are worked may include Saturday and Sunday subject to agreement between the employer and the majority of employees concerned. Agreement in this respect may also be reached between the employer and an individual employee.
Clause 36.5 to which cl 36.2(a) refers is not pertinent presently.
148 Clause 40.1 provided that subject to some qualifications, all work done outside of ordinary hours on any day was overtime and to be paid at the rate of time and a half for the first three hours and double time thereafter. Clauses 40.7 and 40.8 contained separate stipulations in relation to Saturday and Sunday work:
40.7 Saturday work
A day worker required to work overtime on a Saturday must be afforded at least four hours work or be paid for four hours at the rate of time and half for the first three hours and double time thereafter, except where the overtime is continuous with overtime commenced on the previous day.
40.8 Sunday work
An employee required to work overtime on a Sunday must be paid for a minimum of three hours work at double time. The double time is to be paid until the employee is relieved from duty.
149 The FWO submitted that Mr James and Mr Kouka completed their 38 hours of ordinary time in the period between Monday and Friday each week. This meant that the hours they worked on Saturdays and Sundays could not be regarded as ordinary time and had to be paid as overtime. The FWO submitted that DMG had not paid the men the penalty rates required by cll 40.7 and 40.8.
150 This submission should be upheld. I accept that Mr James and Mr Kouka did work on Saturdays and sometimes on Sundays. On my findings, the amount paid to them by way of Living Away Allowance was not sufficient to pay them for the ordinary time they worked Monday to Fridays. Nor was the flat payment of $100 for each Saturday or Sunday work sufficient to discharge DMG’s obligations under the Award with respect to the weekend penalty rates.
151 I find that the FWO has established a contravention of cll 40.7 and 40.8 of the Award.
Failure to comply with the notice to produce documents?
152 The FWO claims that DMG failed to comply with the notice sent by the FWO to it pursuant to s 712 of the FW Act requiring the production of documents. Section 712 provides:
Power to require persons to produce records or documents
(1) An inspector may require a person, by notice, to produce a record or document to the inspector.
(2) The notice must:
(a) be in writing; and
(b) be served on the person; and
(c) require the person to produce the record or document at a specified place within a specified period of at least 14 days.
The notice may be served by sending the notice to the person’s fax number.
(3) A person who is served with a notice to produce must not fail to comply with the notice.
(4) Subsection (3) does not apply if the person has a reasonable excuse.
153 As can be seen, the effect of subs (4) is that a person will not fail to comply with a notice by an inspector to produce documents if the person has “a reasonable excuse”. The circumstance that production of a record or document might tend to incriminate the person, or expose the person to a penalty, is not such a reasonable excuse: see s 713 of the FW Act.
Relevant principles
154 Many of the authorities concerning the concept of “reasonable excuse” as a ground of exculpation were reviewed by Hely J in Bank of the Valletta PLC v National Crime Authority [1999] FCA 791; (1999) 164 ALR 45 at [36]-[47]. Hely J referred to the observation of the plurality in Taikato v The Queen (1986) 186 CLR 454 at 464 that decisions on other statutes provide no guidance because what is a reasonable excuse depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of “reasonable excuse” is an exception. Hely J also referred to the observation of Dawson J in Taikato at 470:
A reasonable excuse is no more or less than an excuse which would be accepted by a reasonable person. It is different from a lawful excuse …
155 In Australian Securities and Investments Commission v Albarran [2008] FCA 147; (2008) 169 FCR 448, Jacobson J summarised three propositions emerging from Bank of Valletta:
[81] First, the question of what constitutes “reasonable excuse” is to be determined from the terms and structure of the particular statute and the circumstances of each particular case: Valletta at [39], [47].
[82] Second, reasonable excuse is not confined to physical or practical difficulties in complying with the statutory prescription. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance, but it is necessary to bear in mind the importance of the particular statutory prescription to the overall statutory regime: Valetta at [42].
[83] Third, the question of what constitutes reasonable excuse involves an objective determination in all the circumstances. These include the adverse consequences to an individual of being compelled to answer and the adverse consequences to an inquiry if the questions are not answered: Valletta at [44], [47].
156 Section 712 is contained in Pt 5-2 Div 3 Subdiv D of the FW Act, which concerns the functions and powers of Fair Work inspectors. It is obvious that s 712 is an important part of the armoury of powers of fair work inspectors appointed by the FWO. The powers are to be exercised to assist the inspectors in the discharge of the functions identified in s 706 of the FW Act. That includes the function of determining whether there has been compliance with the FW Act itself and with an Award made under the Act (s 706(1)(a)). The concept of “reasonable excuse” in s 712 is to be construed having regard to this statutory context.
The communications regarding the Notice to Produce
157 On 24 November 2011, Ms Smith, an inspector in the office of the FWO served on DMG by facsimile a Notice to Produce Records or Documents. The notice required the production of the records and documents by 9 December 2011. The substance of the notice was as follows:
I, Brodie Smith, a Fair Work Inspector appointed under section 700 of the Fair Work Act 2009 (the Act), require you, The Proper Officer of Devine Marine Group Pty Ltd (“Devine Marine Group”) to produce to me the following records or documents in relation to the engagement of all past and present visa holders with Devine Marine Group for the performance of work in Australia:
1. All records or documents identifying the following details for all visa holders engaged by Devine Marine Group for performance of work in Australia:
a. full name
b. Wages (including hourly rate of pay);
c. employment status (full time, part time, casual)
d. visa type (i.e. 456);
2. Any and all records or documents detailing the agreed terms and conditions of the visa holders who performed work including but not limited to contracts of employment, training contracts, letters of offer and acceptance thereof;
3. Any and all records of documents concerning the visa application process including but not limited to application forms, correspondence with Department of Immigration and Citizenship and the approval of the application;
4. Any and all time records for the visa holder employees including but not limited to timesheets, diary records, time books, clock cards, rosters which identify times and hours worked and meal breaks.
5. Payroll records including but not limited to the following detail for each pay period:
a. Ordinary hours worked;
b. Overtime or penalty hours worked including but not limited to Saturdays, Sundays and Public Holiday work;
c. Gross payment for all hours worked;
d. Allowance payments;
e. Pay period and date paid.
6. A copy of all pay slips issued for the period;
7. Documentary evidence of any allowances paid to the visa holders whilst in Australia and/or following departure from Australia;
8. Documentary evidence of any training provided to the visa holder while in Australia and identification of any costs met by the individual for training attended.
9. Any and all records or documents outlining any traineeship or apprenticeship arrangements and arrangements with the training provider;
10. Any and all records or documents identifying the duties performed by the above listed employees, including any job descriptions, duty statements and job specifications;
158 Captain Devine responded to this notice by email on 9 December 2011. Amongst other things, he raised issues about the width of the request, the uncertainty of its terms and the manner of its expression. The substance of his email was as follows:
Dear Sir
Re Purported notice to produce records or documents sent under cover of facts (sic) dated 24th November 2011 (“The purported notice”)
We have received from you the purported notice under the hand of Brodie Smith, a copy of which is attached.
We accept that section 712 of the Fair Work Act 2009 (“The Act”) permits an inspector to require by notice the production of records or documents.
We say that the purported notice is not a valid notice pursuant to section 712 of the Act (“The assertion”).
We have however and without prejudice to the assertion we seek (sic) to deal with matters raised in the purported notice on the following basis.
1. As to the preamble in the purported notice we do not understand what you mean in saying “… In relation to the engagement of all past and present visa holders …” By way of illustration we observe that the writer is a visa holder who has held a passport for more than 40 years. The Devine Marine Group has had employees since its incorporation more than 10 years ago, many of whom have held passports thus, no doubt, visas.
You will see from this casual analysis that the form of your preamble is, in reality, unable to be understood with any precision so that a meaningful response may be given. We invite you to precisely identify what it is you are seeking to have produced pursuant to your power under section 712 of the Act.
2. As to your paragraph 1, as best as we can respond in terms of the language of the paragraph, there are no relevant visa holders engaged (whatever that word means) by Devine Marine Group that we can identify in terms of the request in your paragraph 1(a) to (e) inclusive.
3. As to your paragraph 2, there are no such documents that can be identified in terms of the language of the purported notice.
4. As to your paragraph 3, there are no such documents that can be identified in terms of the language of the purported notice.
5. In relation to your paragraph 4, there are no such documents that can be identified in terms of the language of the purported notice.
6. In relation to your paragraph 5, there are no such documents that can be identified in terms of the language of the purported notice.
7. In relation to your paragraph 6, there are no pay slips.
8. In relation to your paragraph 7, this paragraph is not understood noting that section 712 of the Act specifically relates to what (sic) a record or document.
9. As to your paragraph 8 we do not understand this request. What do you mean by “Documentary Evidence”?
10. As to your paragraph 9 there are not any such documents as described in this paragraph.
11. As to your paragraph 10, we do not understand this paragraph generally and in particular the purported notice does not list employees above.
Please let us have an indication of your views on that matter raised.
Should we be wrong in the assertion we assume that time for compliance would be extended to a reasonable time after the resolution of the matters raised above.
Should this assumption be correct would you please advise your attitude to the question of time running.
159 Ms Smith wrote again by facsimile to DMG on 19 December 2011. She did not refer at all to DMG’s email of 9 December 2011, but asserted that DMG had failed to produce the records or documents required under the Notice to Produce within the specified time. Ms Smith went on to request that DMG advise, by 4 January 2012, whether it had a reasonable excuse for not complying with the notice.
160 By separate letter dated 22 December 2011, Ms Smith also invited Capt Devine to participate in an interview. In the email to DMG attaching the interview request, Ms Smith included the following:
I have made attempts to contact you via phone to discuss the Notice to Produce Records or Documents issued on 25 November 2011 (sic) and subsequent Failure to comply with the Notice to Produce Records or Documents issued on 19 December 2011. To date these attempts have been unsuccessful.
Please could you provide the documentation regarding the engagement of all past and present visa holder workers with the Devine Marine Group Pty Ltd for the performance of work in Australia since 27 March 2006 being the start of our jurisdiction.
Following our meeting on 16 November 2011 at Port Adelaide I require all records or documents for the workers engaged or previously engaged at the Port Adelaide site.
161 There then followed an exchange of emails regarding the request for interview. In a further email of 22 December 2011, Ms Smith said:
Failure to comply with the Notice to Produce Records or Documents is a contravention under subsection 712(3) of the Fair Work Act 2009. Please comply with this request by 4 January 2012.
By email of 4 January 2012 to Ms Smith, DMG said:
In relation to your request for Notice to Produce Records, we vehemently deny that we have failed in this regard, enclosed is previous email response, sent to you 12 December 2011 (sic), which has not been responded to. Please note that your response to such is anticipated as it will enable us to complete (sic) your requests.
Ms Smith then responded by email on 9 January 2012, saying:
Thank you for your email.
With respect to your point 1, you are correct in identifying the term visa holder and we would request the same records for yourself if you are also a visa holder. You state that the Devine Marine Group has had employees who have held visas since its incorporation so records for these employees you identify are requested from 27 March 2006 until present.
With respect to point 2 you advise that there are no relevant visa holders engaged with Devine Marine Group however, in your point above you advise that you have employees holding visas. We require all records for visa holders who are performing work or have previously performed work for Devine Marine Group in Australia.
You have advised me that you do not have the following records for workers holding a visa:
1. Contracts of employment
2. Training contracts
3. Letters of offer and acceptance thereof
4. Visa applications
5. Time records
6. Payroll records
7. Pay slips
8. Details of allowances paid to visa holders whilst in Australia
In relation to points 8 and 9, the notice requests documentary evidence which has been defined in the notice. Please can you advise if you have any evidence of training or training costs met by the individual.
In relation to your point 10 please can you confirm that you do not have any arrangements with a registered training organisation.
In relation to your point 11, I confirm that the employees for which a list of duties are requested relate to the employees you identified in your point 1.
Please can you provide a response to this email by close of business Tuesday 10 January 2012.
As you have not responded the offer of interview please can I confirm that you have declined this request.
Ms Smith sent a further email to DMG on 19 January 2012 stating (relevantly):
I refer to the current investigation being undertaken by the Fair Work Ombudsman regarding Devine Marine Group and related correspondence.
Please note that clause 9 of the Notice to Produce Documents issued on Thursday 24 November 2011 which requested any and all records or documents outlining any traineeship or apprenticeship arrangements includes any and all notes or documents distributed to potential participants in Fiji or Australia or training materials/information/advertisements.
Please provide this information by close of business Tuesday 24 January 2012.
162 Finally, Ms Smith wrote again on 24 January 2012 to DMG in which she asserted that DMG had failed to comply with the Notice served on 24 November 2011 and required DMG to rectify the contravention.
163 It was common ground that DMG did not produce any records in response to the Notice to Produce.
Consideration
164 In my opinion, the FWO has not made out the claimed contravention of s 712. The Notice to Produce served on 24 November 2011 suffers from a number of defects. First, it sought the production of 10 categories of records or documents in relation to the “engagement” of “all past and present visa holders” with DMG “for the performance of work” in Australia. It was not limited to the Fijians who carried out activities on the Japanese Longliner or on the Bradley; it was not limited to persons who carried out services for DMG in 2011 and it extended to visa holders who had performed “work” for DMG in Australia. This meant that the notice required the production to the FWO of the 10 categories of documents in relation to any person who had at any time performed work for DMG, whether as an employee, contractor or otherwise and who, at the time of performing the work, held a visa. This was a very wide request.
165 The expense and inconvenience (and perhaps oppression) in complying with a notice to produce, will not usually provide a “reasonable excuse” for non-compliance with the notice. It is be expected that compliance will usually occasion a respondent some inconvenience and expense but, unless the circumstances are out of the ordinary, this is to be taken to be a necessary incidence of compliance, and will not relieve the respondent from complying with the notice. As Bowen CJ observed in Riley McKay Pty Ltd v Bannerman (1977) 31 FLR 129 at 136 in an analogous context:
It is not … a good ground of objection to a notice under s 155 that it is burdensome or oppressive. It is clear that when such a notice is given, the answering of it may involve the recipient in considerable work and expense. This, in itself, may constitute a kind of penalty whether or not there is ultimately found to have been a contravention. The legislation assumes that the public interest necessitates this.
Nevertheless, the wide range of the documents required to be produced, together with other factors, may be a matter bearing upon whether a recipient does have a reasonable excuse for not complying with the notice, at least within the time specified in the notice.
166 Secondly and more fundamentally, the notice assumed that DMG had engaged “visa holders” for the performance of work as employees in Australia. This is seen in its preamble and in its use of terms such as “wages”, “employment status”, “employees”, “payroll records” and the like. Expressing the Notice in this way assumed a particular conclusion of fact and law regarding DMG’s “engagement” of the “visa holders” which, to the knowledge of the FWO, had not been accepted by DMG. Given the issue about the status of the Fijians, it would have been desirable for the Notice to be expressed in more neutral terms. DMG did not have to accept the FWO’s characterisation of its engagement of the men in determining its response. Given its own view of its relationship with the Fijians at the time, it was reasonable for Capt Devine to say, as he did in the response of 9 December, that DMG did not have documents which could be identified “in terms of the language of the purported notice”.
167 Thirdly, category 10 required production of records or documents identifying the duties performed “by the above listed employees”. There was, however, no list of employees to which that request could relate.
168 Fourthly, category 6 sought copies of all pay slips issued for “the period” without any period having been identified.
169 Categories 7 and 8 did not seek particular records or documents at all. Instead, the inspector sought “documentary evidence” of certain matters. A requirement for production of documents of this kind does not appear authorised by s 712. The following observation of Lander J (with whom Kenny J agreed) in Laing v Carroll [2005] FCAFC 202; (2005) 146 FCR 511 in relation to the counterpart of s 712 in the Workplace Relation Act 1996 (Cth) is pertinent:
[215] A notice of this kind is like a subpoena. The documents sought must be identified with sufficient particularity to allow the person to whom the notice is addressed to comply with the notice. It may only seek documents which are relevant to the power being exercised. If the notice goes further then it may be set aside as being oppressive or the notice may be limited by severing from the notice documents which are beyond the reach of the authorised officer giving the notice.
This means that a notice under s 712 must identify with some particularity the records or documents to be produced. Categories 7 and 8 lacked the requisite particularity.
170 The FWO referred to the clarification and modification of the Notice to Produce in Ms Smith’s email to DMG of 9 January 2012 and submitted that this cured any shortcomings in the original notice. However, Counsel for the FWO acknowledged that it was not possible for an inspector to alter the formal notice to which s 712(1) and (2) referred by later informal communications. It seemed implicit in Counsel’s acknowledgement that any alteration of an original notice should be made by the issue of an amended notice. I note also two further matters: first that the notice which is the subject of the claimed contravention is the Notice as served on 24 November 2011 and not that Notice as later amended or modified by Ms Smith; secondly, that Ms Smith’s email of 9 January 2012 purported to enlarge in some respects the scope of the original Notice.
171 I add that later communications from an inspector may have relevance to an alleged contravention of s 712. For example, the contents of a later communication may, if acted upon, provide a reasonable excuse for a respondent’s failure to comply with a notice in accordance with its terms.
172 For the reasons given above, I hold that the Notice to Produce Documents was unduly wide and uncertain and was premised on assumptions which, in the particular circumstances of this case, DMG did not have to accept. Those matters in combination meant that DMG did have a reasonable excuse for not complying with the notice.
173 The FWO does not make out the claimed contravention of s 712.
Is Captain Devine liable as an accessory?
174 As previously noted, s 45 of the FW Act is a civil remedy provision. Section 550 of the FW Act provides for the accessorial liability of person “involved in” a contravention of a civil remedy provision:
Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
175 The FWO submitted that Capt Devine was involved in the contraventions because he had aided, abetted, counsel or procured the contraventions within the meaning of s 550(2)(a) or had been knowingly concerned in or party to the contraventions within the meaning of s 550(2)(c) of the FW Act. Those allegations need be considered only in relation to the contraventions which I have found established, namely, DMG’s failure to pay the minimum hourly rate and its failure to pay the weekend penalty rates.
Relevant principles
176 Although the general principles relating to accessorial liability are settled, their application in a case such as the present is not without difficulty. In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention: Yorke v Lucas (1984) 158 CLR 661 at 667. In order to have the requisite intention, the person must have knowledge of “the essential matters” which go to make up the events, whether or not the person knows that those matters amount to a crime: Yorke v Lucas at 667. Although it is necessary for the person to be an intentional participant and to have knowledge of the matters or things constituting the contravention, it is not necessary for the person to know those matters or things do constitute a contravention: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236 at [159]-[160]. That is to say, it is not necessary that the accessory should appreciate that the conduct in question is unlawful. The Full Court in Rafferty v Madgwicks [2012] FCAFC 37; (2012) 287 ALR 437 summarised the position in this respect at [254]:
[W]hile the identification of the elements of a contravention requires careful legal analysis, “[i]n order to know the essential facts, and thus satisfy s 75B(1) … and like provisions, it is not necessary to know those facts are capable of characterisation in the language of the statute” … This is another aspect of the longstanding principle that it is not necessary for a person to “recognise” the contravention as such, or explicitly to think about the relevant legislation that their actions may contravene …
177 Actual, rather than imputed, knowledge is required. So much was made clear in Giorgianni v The Queen (1985) 156 CLR 473 at 506-7 by Wilson, Deane and Dawson JJ:
… [Offences of aiding and abetting and counselling and procuring] require intentional participation in a crime by lending assistance or encouragement. They do not, of course, require knowledge of the law and it is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under the law. The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognize the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it. It is not sufficient if his knowledge or belief extends only to the possibility or even probability that the acts which he is assisting or encouraging are such, whether he realizes it or not, as to constitute the factual ingredients of a crime. If that were sufficient, a person might be guilty of aiding, abetting, counselling or procuring the commission of an offence which formed no part of his design. Intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts. …
178 The notion of being “knowingly concerned” in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring” a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which “implicates or involves him or her” in the contravention so that there be a “practical connection between” the person and the contravention: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers’ Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]-[325].
179 As indicated, these principles are not in doubt. The more difficult question arises from their application to the circumstances of this case and, in the identification of the essential facts about which an accessory must have actual knowledge.
180 Counsel submitted that it was necessary for the FWO to establish that Capt Devine had actual knowledge of the following matters:
(a) That Mr James and Mr Kouka performed work for DMG;
(b) That Mr James and Mr Kouka were employees of DMG;
(c) The nature of the work performed by Mr James and Mr Kouka;
(d) That Mr James and Mr Kouka were entitled to be paid minimum wages; and
(e) That Mr James and Mr Kouka were not paid the minimum wages.
181 Counsel then contended that it was not necessary for the FWO to establish that Capt Devine had knowledge of the following matters:
(a) That a particular Award applied to the work performed by Mr James and Mr Kouka;
(b) The specific entitlements arising under that Award;
(c) The particular hours worked by Mr James and Mr Kouka.
182 Counsel drew attention, quite fairly, to Potter v Fair Work Ombudsman [2014] FCA 187. In that case, Cowdroy J held that knowledge by the accessory that a particular industrial award, the Clerical and Administrative Employees (State) Award (the Clerical NAPSA), was applicable was an essential element of accessorial liability in respect of the underpayment of award entitlements. Cowdroy J held:
[80] The primary submission of the FWO is that Mrs Potter did not need to know that the Clerical NAPSA applied; rather, the only essential fact was that the Employees were not remunerated at the rate set under the provisions of the Clerical NAPSA. This is said to be because it is not necessary that an accessory know that an offence has been committed: Giorgianni v R (1985) 156 CLR 473 at 506.
[81] Knowledge that the Clerical NAPSA applied to the Employees is not identical to knowledge that a failure to pay the Employees in accordance with the Clerical NAPSA constitutes a breach of a civil remedy provision, although it is undeniable that the difference is a small one. The Court finds that, to be an accessory to the underpayment contraventions, Mrs Potter must have known the Clerical NAPSA applied to the Employees. It is not difficult to imagine a situation in which directors of a company honestly but mistakenly arrange for the company’s employees to be paid under an incorrect award. There would be no doubt that the company had underpaid its employees, and by virtue of that fact, contravened the FW Act. If the position were as the FWO submits however, the directors would be liable as accessories to those contraventions simply because they knew how much the employees were being paid and because they had knowledge of the existence of the applicable award, even though they honestly believed that such award did not apply.
(Emphasis added)
183 As can be seen, Cowdroy J considered that the alleged accessory must have actual knowledge not only of the existence of the relevant Award but that it applied to the employees in question. If it were otherwise, accessories such as the directors of an employing company who knew of the existence of an award but genuinely believed it to be inapplicable, would nevertheless be found liable as accessories.
184 Besanko J considered a similar question in the context of a summary dismissal application in Fair Work Ombudsman v Al Hilfi [2012] FCA 1166. The allegation in that case was that Coles Supermarkets Ltd was liable as an accessory in respect of the underpayment of wages to trolley collectors employed by a subcontractor. Coles submitted that the FWO had to establish that it had actual knowledge of the following matters:
(i) that the four employees who were the subject of the claim were employed by Mr Ali Hilfi during the relevant period;
(ii) that the Cleaning Services Award 2010 applied to the employment of those employees;
(iii) that the work of each of the employees gave rise to the specific entitlements alleged;
(iv) that the employees were not paid those entitlements by Mr Al Hilfi.
Ultimately, it was not necessary for Besanko J to decide the correctness of the position asserted by Coles, but he did say (at [44]) that there was “a good deal of force” in its submission.
185 In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v John Holland Pty Ltd [2009] FCA 274; (2008) 180 IR 350 at [44], Greenwood J considered the question of accessorial liability in relation to the alleged assistance to a company contravening a provision of the Workplace Relations Act 1996 (Cth) requiring employers, in defined circumstances, to permit a right of entry to unions. Greenwood J held that the applicant had to establish that the defendant “had knowledge that the permit holders enjoyed a right of entry and, notwithstanding that knowledge, he set about engaging in the contravening conduct” (at [45]). Although addressed to a different point, the decision in John Holland also supports the views expressed by Cowdroy J in Potter and by Besanko J in Al Hilfi.
186 Counsel for the FWO submitted that Potter should be distinguished because of the nature of the issue being considered by Cowdroy J. The putative accessory in that case was aware of the Clerical NAPSA but said that she considered it to be inapplicable because of registered Australian Workplace Agreements. Counsel submitted that, in that circumstance, it was understandable that Cowdroy J considered that actual knowledge that the Clerical NAPSA applied was essential for the establishment of accessorial liability.
187 In my opinion, Potter cannot be distinguished on this basis. The FWO submission does not give effect to the requirement that the accessory’s involvement be intentional. That is the real issue to which Cowdroy J’s reasoning was directed. Without knowledge that an Award is applicable, it is difficult to see how a finding could be made that the accessory had intentionally participated in the contravention: see Yorke v Lucas at 670.
188 As the respondents were not represented, the Court did not have the benefit of full argument on these issues. Nevertheless, I consider that the claims of accessorial liability in this case should be determined in accordance with the principles stated in Potter and Al Hilfi. That is because knowledge that there is an award which is applicable which prescribes minimum rates or entitlements is a factual element necessary for the establishment of the accessory’s intention.
Consideration of Capt Devine’s liability as an accessory
189 It is helpful to recall the declaration sought by the FWO in respect of the accessorial liability of Capt Devine. By [80.9] of the 2ASC, the FWO seeks (relevantly) a declaration that Capt Devine was involved in DMG’s contravention of s 45 of the FW Act, “by failing to pay the applicable minimum hourly rates” to Mr James and Mr Kouka and by failing to pay “Saturday penalty rates” and “Sunday penalty rates” to Mr James and Mr Kouka.
190 The essential facts amounting to DMG’s contraventions of which Capt Devine had to have actual knowledge were therefore that there were “minimum hourly rates” which were “applicable” to Mr James and Mr Kouka, and that there were “penalty rates” to which they were entitled in respect of their work on Saturdays and Sundays.
191 In relation to the hourly rates, Capt Devine had to know that there were prescribed hourly rates which were applicable to Mr James and Mr Kouka and that DMG was paying the men less than those rates. In my opinion, this requires the FWO to establish actual knowledge by Capt Devine that:
(i) Mr James and Mr Kouka performed work for DMG;
(ii) That they did so as employees;
(iii) That their work was governed by an industrial award (whether or not he knew of the name of the award);
(iv) That the award stipulated minimum rates of pay; and
(v) That the amounts DMG paid to Mr James and Mr Kouka were less than those minimum rates.
192 In relation to the weekend penalty rates, the FWO must, in addition to (i), (ii) and (iii) establish that Capt Devine had knowledge that the applicable award prescribed weekend penalty rates and that the amounts DMG paid to Mr James and Mr Kouka for their weekend work were less than those rates. Unless Capt Devine had actual knowledge of those matters, it cannot be said that he was aware of the essential matters constituting DMG’s contraventions.
193 In relation to Capt Devine’s knowledge of the industrial award and its stipulation of minimum hourly rates and weekend penalty rates, the FWO relied on the following:
(a) Captain Devine had been involved in the marine contracting business for nearly the whole of his working life. He had operated DMG for some 10 years. It can be inferred that he must have had knowledge of industrial awards generally and, in particular, of the application of awards to the business of DMG;
(b) Captain Devine was the relevant mind of DMG and controlled all its activities. He had been personally involved in the arrangements with the Fijians and was accordingly fully aware of those arrangements;
(c) In a conversation on 16 November 2011 with Mr Hulme, then a Fair Work Inspector, Capt Devine described the amounts which DMG paid the Fijian workers and then said “this is about 3.5 times cheaper than if they were MUA members. I’d have to put them up at the Hyatt and pay for all sorts of things”. Mr Hulme said that he understood Capt Devine to be referring to the Maritime Union of Australia. The correctness of that understanding was not challenged. Captain Devine denied making this statement to Mr Hulme, and said that it would have been “stupid” for him to have done so. Despite that, I consider that it is in keeping with Capt Devine’s loquacious nature for him to have made the statement and find that he did so;
(d) The evidence that Capt Devine had actively sought to create an appearance that the Fijians were engaged in a training course when that was patently not the case. The FWO referred in this respect to the misleading letters of invitation provided in connection with the visa applications, the tokenistic certificates provided to the Fijians, and to the evidence that following injuries to Mr James and Mr Sturm in April and November 2011 respectively, Capt Devine had told the men to tell anyone asking that they were trainees rather than workers.
(e) DMG obtained from the Fijians productive work for a profit-making purpose.
The inferences arising from this evidence that Capt Devine had knowledge, at least in a general sense, of award obligations are confirmed by other evidence of Capt Devine in cross-examination:
Everybody who participated in work activities with me, Sir, were mainly contractors. I engage contractors because of WorkCover, Fair Work and over regulation of this country that – in the Marine industry, in particular …
Later, after acknowledging that he was aware that it would have been significantly more expensive to employ a local citizen, whether or not a member of the MUA, Capt Devine, said:
I’ve always known that in the sense that, you know, you can’t run around with blind Harry and say that you don’t understand the reward (sic) rates and contractors charge certain things.
194 I note that it was not put expressly to Capt Devine in his cross-examination that he was aware of the Award, or even that he was aware that some industrial award applied to the activities of the men on the Japanese Longliner or on the Bradley. Despite this, the FWO submitted that an inference could be drawn from the matters summarised above that Capt Devine did know that an industrial award was applicable and that that award provided for wage entitlements which exceeded the amount of the Living Away Allowance he paid to the Fijian men, including Mr James and Mr Kouka. As noted earlier, I do not consider it necessary for the FWO to establish that Capt Devine knew the name of the particular award applicable to the work being performed by the Fijians: it is sufficient for the FWO to establish that Capt Devine knew that an award was applicable.
195 In my opinion, the evidence does justify that inference. Captain Devine’s admission to Mr Hulme is telling. I regard it as an admission by him that he knew that, if DMG paid for the work in accordance with the applicable industrial instrument, it would have to pay considerably more than it paid to the Fijians. In making this finding, I take into account that prescriptions in industrial awards of minimum rates and penalty rates for weekend work are commonplace. It is improbable that Capt Devine was unaware of those matters. I also am satisfied that DMG, controlled by Capt Devine, had arranged to bring the Fijians, and in particular Mr James and Mr Kouka, to Australia as apparent participants in a training program when, in reality, it intended that they should carry out productive work. The evident purpose of the strategy was to avoid DMG having to pay the rates which would otherwise be applicable to the performance of that work by local employees.
196 This means that I am satisfied that the FWO has established knowledge of elements (iii), (iv) and (v) outlined in [191]. I am also satisfied that he knew of elements (i) and (ii), as he was aware of all the facts and circumstances warranting the characterisation of the men as employees.
197 Accordingly, I am satisfied that the FWO has made good the claim that Capt Devine was involved in the contraventions by DMG of s 45 of the FW Act which I have found established and, accordingly, that he is liable as an accessory pursuant to s 550 of the FW Act.
Is Captain Boucaut-Jones liable as an accessory?
198 The principles discussed above are equally applicable in the case of the claim concerning Capt Boucaut-Jones.
199 As with Capt Devine, the FWO case concerning the knowledge of Capt Boucaut-Jones of the applicability of an industrial award containing minimum hourly rates and weekend penalty rates was circumstantial in nature. The FWO relied upon the following principal matters:
(a) Captain Boucaut-Jones’ provision of certificates of training on the ANC letterhead certifying that the men had undergone forms of training supervised by the ANC when that was plainly not the case;
(b) Mr Kouka’s evidence, which I accept, that after the November incident involving Mr Sturm, Capt Boucaut-Jones told the Fijians that he had been sent by Capt Devine and:
Tell anyone who comes down asking that you were doing training. Don’t tell them you’re working.
Mr Kouka went on to say that Capt Boucaut-Jones suggested that he should say he could not speak English. Captain Boucaut-Jones denied making the statements which Mr Kouka attributed to him but I regarded Mr Kouka’s evidence on this topic as reliable;
(c) Mr Kouka’s evidence, which I accept, that after the November incident, Capt Boucaut-Jones had come to the site again and given him and each of the other workers some blank note books and pens, saying words to the effect “in case anyone asks you for your schooling books, you can show them these”. Captain Boucaut-Jones agreed that he had provided some books and pens but said that that was at the request of one of the Fijians. Again, I regarded Mr Kouka’s evidence on this topic as reliable;
(d) The implications arising from Capt Boucaut-Jones’ letter of 27 September 2011, to which I will refer shortly.
200 I am satisfied that at the time of the statements and conduct described in points (a) to (c) above, Capt Boucaut-Jones knew that the Fijians were not, in fact, undergoing training. It can be inferred that Capt Boucaut-Jones had some knowledge of the adverse consequences for Capt Devine if the men were regarded as employees. However, the evidence did not establish that Capt Boucaut-Jones had any knowledge of an industrial award applying to the activities of the Fijians on the Japanese Longliner or the Bradley. He was not asked any questions directed to establishing knowledge of such an award. Nor did the evidence establish that Capt Boucaut-Jones had any knowledge at any time in 2011 of the amounts actually being paid to the Fijians, let alone how those amounts compared with the amounts to which they would be entitled under the Award. In these circumstances, a finding that Capt Boucaut-Jones was aware that the work being performed by the Fijians was governed by an industrial award specifying minimum rates of pay and weekend penalty rates is problematic.
201 As indicated, the FWO placed considerable emphasis on a letter dated 27 September 2011 on the ANC letterhead from Capt Boucaut-Jones to Capt Devine. It is evident that Capt Devine provided this letter, or a copy of it, to DIAC in support of the s 467 visa applications of the Fijians. It is also evident that Capt Boucaut-Jones prepared the letter with that purpose in mind. The substance of the letter was as follows:
Dear Capt. Devine
Thank you for your nomination of 12 Fijian Nationals for training with Adelaide Nautical College to World Maritime Safety requirements in preparation for work in your Fijian enterprises. As we have discussed, it is more practical to provide the training in Australia where you and your senior team are based and have all your equipment, in preparation for when you procure specific equipment to service the Fijian enterprises. It is also practical to have the college approved as the sponsor for trainees in the event that a similar service can be provided for other maritime enterprises to have their trainees enrolled in college training programs. In a similar way, part of the college agreement to accept trainees will be a contractual agreement that liability for supervision of the trainees and the potential financial costs of finding them should they abscond into the Australian community will be carried by the enterprise nominating the trainees to the college.
I have already delayed [the] start of the course for your nominees and the window of opportunity for your trainees to complete their course as you have requested, is rapidly closing. Other courses are banking up towards the end date for your group program. I appreciate your need to get your projects moving and I sympathise and agree with your frustration over the delay caused by Immigration procedures. I see no good reason why it should take so long in the three step process associated with a 442 visa.
To speed up the process it may be appropriate to bring your trainees into Australia on a 456 Visa to enable them to get started on the informal part of their course pending approval for their 442 visa training program. In this way we can comfortably reschedule the course timetable and get on with other tasks.
I recognise this delay in rescheduling will impact on your Fijian business development timing and contractual arrangements with Fijian Government to clear sunken wrecked vessels from their harbours, which is likely to further reflect on Australian support for Western Pacific nations. This is an unfortunate consequence of the domino effect of slow initial government processes.
You might like to bring this matter to the attention of the Australian Embassy in Fiji.
Thank you for your support of Adelaide Nautical College.
(Signed)
Arthur Boucaut-Jones
202 Captain Boucaut-Jones was cross-examined in some detail about this letter. I consider that his answers were marked by evasiveness and defensiveness. I do not accept much of Capt Boucaut-Jones’ evidence concerning the letter. In my opinion, the letter contains a number of misleading statements:
(a) Contrary to the implication in the first sentence, Capt Boucaut-Jones knew that Capt Devine had not nominated 12 Fijian Nationals to ANC for training to World Maritime Safety requirements;
(b) Contrary to the implication in the second sentence, Capt Boucaut-Jones knew that Capt Devine was not based in Adelaide and that he did not have a “senior team” based in Adelaide;
(c) Contrary to the implication in the first paragraph, ANC was not at the time in a position to provide training to satisfy “World Maritime Safety requirements”. As previously noted, the activities of ANC to that time related to recreational boating licences;
(d) Contrary to the implication in the opening sentence of the second paragraph, ANC had not delayed the start of any course for Capt Devine’s nominees and there was no “window” of opportunity, let alone a window which was “rapidly closing”;
(e) Contrary to the implication in the second sentence of the second paragraph, ANC did not have other courses “banking up” towards the end date of DMG’s “group program”;
(f) Contrary to the implication in the third paragraph, there was no course timetable which had to be rescheduled.
203 In my opinion, the letter of Capt Boucaut-Jones of 27 September 2011 was a transparent attempt to provide support to Capt Devine’s attempts to gain further s 467 visas for Fijians to come to Adelaide to perform productive work as apparent participants in a training program. It does Capt Boucaut-Jones no credit that he was prepared to assist that attempt in the way set out in the letter. Nor did it assist his credit that he attempted, in the cross-examination, to justify the letter.
204 In these circumstances, it is understandable that the FWO contended that inferences could be drawn from the letter in relation to Capt Boucaut-Jones’ knowledge, at least from 27 September 2011, of the true nature of DMG’s engagement of the Fijians. I accept that that is so. However, even drawing those inferences in favour of the FWO, it does not establish that Capt Boucaut-Jones had knowledge of an applicable industrial award, let alone an award containing stipulations with respect to minimum rates of pay and weekend penalty rates. Further, there would be an unfairness to Capt Boucaut-Jones in finding that he did have this awareness, when it was not put to him in cross-examination that he had such knowledge.
205 For these reasons, I consider that the FWO does not establish the claimed accessorial liability of Capt Boucaut-Jones.
Conclusion
206 In summary, I consider that, for the purpose only of establishing the accessory liability of Capt Devine, the FWO has established that DMG contravened s 45 of the FW Act by failing to pay the minimum hourly rate required by cl 24.1(a) of the Manufacturing and Associated Industries and Occupations Award 2010 and by failing to pay the weekend penalty rates required by cll 40.7 and 40.8 of the Award. I consider that the FWO has established that Capt Devine was involved as an accessory in those contraventions. There will be declarations accordingly.
207 In accordance with the arrangements made at the commencement of the hearing, I will hear from the parties further on the question of imposition of a penalty.
208 In all other respects, the application of the FWO is dismissed. The FWO is to bring in appropriate minutes to give effect to these conclusions and orders.
I certify that the preceding two hundred and eight (208) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. |
Associate:
