Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034

KATZMANN J

summary

In accordance with the practice of the Federal Court in some cases of public interest, the following Summary has been prepared to accompany the reasons for judgment delivered today. The Summary is intended to assist understanding of the decision of the Court. It is not a complete statement of the conclusions reached by the Court or the reasons for those conclusions. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment. The published reasons for judgment and this Summary will be available on the Internet at www.fedcourt.gov.au.

Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034

KATZMANN J

SUMMARY

This is a case about the calculated exploitation of a vulnerable workforce.

The Fair Work Ombudsman sued a contract cleaning business known as Grouped Property Services Pty Ltd (GPS) for multiple breaches of the Fair Work Act 2009 (Cth). She also sued two people who were involved in the management of GPS: Enrico Pucci and Enrico’s brother, Rosario (also known as “Ross”). Enrico was the sole director of GPS. Rosario was its Chief Operating Officer and, from mid-April 2012 to at least December 2015, an undischarged bankrupt.

Sone 36 contraventions of the Act were pleaded. Yet many of the contraventions involved more than one employee. Consequently, the substance of the Ombudsman’s case was that GPS (or alternatively National Contractors) breached the Fair Work Act more than 580 times. The breaches were said to have taken place over a period between 2011 and 2013 and to have affected a total of 51 employees.

Some of the breaches related to a failure to pay basic employee entitlements, including penalty rates, annual and personal leave, payment in lieu of notice on termination, superannuation, minimum wages and, in some cases, any wages at all. Others related to a failure to keep proper records and provide pay slips. One involved an employee, Moona Hasan, who was fired merely because she made repeated inquiries about why she had not been paid and when she would be paid. Another concerned representations made to a number of individuals that they were contractors rather than employees.

The Ombudsman said that Enrico was involved in the unlawful dismissal of Ms Hasan, and that Rosario was involved in each of the other breaches.

In its defence, GPS and Enrico claimed that GPS had not employed any of the 51 individuals. Rather, they said that it hired their labour from National Contractors and certain other companies. National Contractors admitted that some of the 51 were employees, but said that others were independent contractors. Rosario did not file a defence at all.

The evidence supported most, but not all, of the Ombudsman’s allegations. The evidence also disclosed that, more often than not, when employees asked why they had not been paid, their inquiries were repeatedly ignored and/or rebuffed. Sometimes the employees were abused — merely for pursuing their legal entitlements. Sometimes they were threatened. Sometimes they were sacked without notice. On one such occasion an employee was physically removed from the office.

I have found that most, but not all, of the alleged contraventions took place. I have also found that, despite attempts to disguise the true state of affairs, all 51 individuals were in fact employees rather than contractors, and that GPS was their true employer. In addition, I have found that Enrico was involved in the dismissal of Ms Hasan (indeed, it was he who fired her) and that Rosario was involved in most of GPS’s other contraventions.

At this stage, I have made declarations concerning these matters and orders:

    requiring GPS to undertake an audit of its compliance with the Fair Work Act and the applicable modern awards;

    requiring GPS to undertake training in relation to its obligations under the Act and awards;

    restraining GPS from further conduct that contravenes the relevant parts of the Act and awards; and

    restraining Rosario and Enrico from being involved in such conduct.

I have also directed the District Registrar of the Court to forward a copy of the judgment to ASIC and the ATO.

The Ombudsman has asked the Court to impose penalties for the contravening conduct and seeks compensation for the affected employees. I will deal with these questions after the parties have had the opportunity to review the findings and make further submissions.