Federal Court of Australia

Gallagher v AAG Labour Services Pty Ltd [2020] FCA 1753

ORDERS

THE COURT ORDERS THAT:

Claim

1.    On or before 1 February 2021, the applicant must:

(a)    to the extent that is reasonably practicable for her to do so within that time, provide particulars, insofar as they are within her knowledge, of:

(i)    any days on which she did work on the farms known as L2 and/or L3 during the Term;

(ii)    any days on which she did not work on the farms known as L2 and/or L3 during the Term;

(iii)    the hours she worked on any day specified pursuant to (i) above; and

(b)    provide particulars of every fact, matter, circumstance or thing on which she relies in order to calculate the 'Total hours worked' alleged in each row of Schedule B to the statement of claim.

2.    The respondents' interlocutory application dated 16 October 2020 is otherwise dismissed.

3.    Costs are reserved.

Cross-Claim

4.    Pursuant to r 16.51 of the Federal Court Rules 2011 (Cth), the cross-respondent has leave to file a re-amended defence to the cross-claim, in terms of the re-amended defence annexed to the minute of consent submitted by the parties to the cross-claim on 3 December 2020, by no later than 4.00 pm on 4 December 2020.

5.    The time for compliance with paragraph 3 of the orders made on 3 November 2020 is extended to 23 December 2020.

6.    Costs, if any, are reserved.

Mediation

7.    The claim and the cross-claim are referred to mediation before a Registrar of the court pursuant to r 28.02 of the Federal Court Rules 2011 (Cth), to take place not before March 2021.

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

REASONS FOR JUDGMENT

(edited from the transcript)

JACKSON J:

1    These reasons concern an interlocutory application for particulars of a statement of claim. The applicant in the proceeding, Beth Gallagher, alleges that the first respondent, AAG Labour Services Pty Ltd (AAG), has not paid her for all the hours she worked while she was its employee. She also alleges that the second respondent, Mr Elgin-Stuczynski, who is a director of the first respondent, was involved in contraventions of the Fair Work Act 2009 (Cth) (FWA), which she says resulted from that underpayment.

2    An associated company of AAG owned two dairy farms in Western Australia. Ms Gallagher alleges that AAG was responsible for employing people who worked on the farms. She started working for AAG as a casual farm hand on 19 July 2017. The terms of her employment were formalised in a written employment agreement in August 2017. Ms Gallagher was to work on a farm known as L2. She was to be paid an hourly rate, plus 9.5% superannuation. It is common ground that the Pastoral Award 2010 MA0035 applied to her employment. She alleges that the employment agreement was later varied orally and by conduct to provide that she also work on a farm called L3; the respondents deny this but nothing turns on that for the purposes of the interlocutory application.

3    Ms Gallagher alleges that she worked for AAG from 19 July 2017 to 6 January 2020, which she defines as the 'Term'. AAG says that she only worked for it from 19 July 2017 to 13 January 2019. She says she performed the duties of a 'Level FHL8 Farmhand' under the Award; the respondents say she worked as a Farm and Livestock Hand Level 7.

4    Paragraph 23 of the statement of claim makes an allegation as to the total hours Ms Gallagher worked. That is the paragraph of which the respondents seek particulars. It reads, 'During the Term, the applicant worked for at least 10,008.50 hours on L2 and L3 (Total Hours)'.

5    The statement of claim then alleges that AAG has failed or refused to pay Ms Gallagher for 'at least 3,614 hours' worked by her between 19 July 2017 and 13 January 2019 (the first period), and has failed to pay her for any of the hours she says she worked between 14 January 2019 and 6 January 2020, being 'at least 3,920 hours' (the second period). In relation to the first period, Schedule A to the statement of claim sets out for each fortnightly pay period the unpaid hours worked during that first period. That is expressed as a total for each fortnight, e.g. 75 unpaid hours. There is no breakdown of the hours worked day to day. There is also a Schedule B which alleges the total hours worked during each fortnight over that first period, the total hours paid, and the difference. AAG admits that it has not paid her for those hours but says in effect that she did not work those hours, so that it has paid her in full for the hours she worked. Schedule B also alleges that during the second period Ms Gallagher worked a total of 3,920 hours, for none of which she has been paid. There is a brief calculation in relation to that figure, of 49 weeks, average of 11.5 hours per day, but no further breakdown of the hours claimed to have been worked.

6    The statement of claim gives particulars of various alleged instances of the respondents pressuring Ms Gallagher to under record or not record hours worked, which are not necessary to describe. Ms Gallagher alleges that as a result she did not record all of her worked hours on her time sheets between at least September 2017 and January 2019 and did not record any of her worked hours from 14 January 2019 to 6 January 2020. The respondents deny these allegations.

7    The statement of claim alleges that AAG did not 'make accurate records of the hours worked' by her during the first period, because it only recorded the hours for which she had been paid and not the other hours for which she says she has not been paid. Further or alternatively, it alleges that the records were false or misleading in a material particular. Ms Gallagher alleges that AAG failed to make any records of the hours she worked during the second period. On the same basis, she alleges that the pay slips which AAG gave her between 19 July 2017 and 13 January 2019 were false or misleading in a material particular and that AAG failed to give her any pay slips in respect of the hours she worked between 14 January 2019 and 6 January 2020. The respondents deny any inaccuracies in the records it kept and the payslips it gave.

8    Ms Gallagher alleges that AAG has breached the terms of the employment agreement and the Award and s 45 and s 323(1)(a) of the FWA. She pleads that in relation to the breaches of the FWA she will rely on s 557C(1) of the FWA in relation to work performed after that section commenced on 15 September 2017. Section 557C is important to the interlocutory application for particulars. Its heading in the FWA is 'Presumption where records not provided'. Section 557C(1) provides:

If:

(a)    in proceedings relating to a contravention by an employer of a civil remedy provision referred to in subsection (3), an applicant makes an allegation in relation to a matter; and

 (b)    the employer was required:

(i)    by subsection 535(1) or (2) to make and keep a record; or

(ii)    by regulations made for the purposes of subsection 535(3) to make available for inspection a record; or

(iii)    by subsection 536(1) or (2) to give a pay slip;

in relation to the matter; and

(c)    the employer failed to comply with the requirement;

the employer has the burden of disproving the allegation.

The civil remedy provisions referred to in s 557C(3) include s 45 and s 323(1).

9    Ms Gallagher also alleges that AAG has failed to keep employee records prescribed by r 3.33(2) of the Fair Work Regulations 2009 (Cth) (FWRs) and so has breached s 535(1) of the FWA. She also alleges breach of r 3.46(3)(b) and s 536 concerning the obligation to give pay slips. Other breaches of the FWA and FWRs which are not presently relevant are also alleged. It is claimed that the second respondent is liable for the contraventions of the FWA and FWRs by reason of involvement within the meaning of s 550 of the FWA.

10    AAG has filed a cross-claim against Hayden Russell. It appears that Mr Russell was farming on L2 under a share farming agreement with the owner of L2, and it is alleged that during the entire period covered by Ms Gallagher's claim he was the farm manager on L2 who was responsible for the management and supervision of employees. He has also since March 2017 been Ms Gallagher's de facto husband. In broad terms, AAG claims that if it did underpay Ms Gallagher, that is because Mr Russell did not submit complete and accurate time sheets to it. So, it says, he is liable to pay AAG any loss it suffers as a result of her claim.

11    The respondents submit that the statement of claim does not perform the basic function of adequately informing them of the case they must meet. They seek particulars of the days Ms Gallagher claims she worked and the hours she says she worked on each day. In oral submissions the complaint was put by counsel for the respondents as being that the respondents did not know 'how the total hours and the unpaid hours have been derived'. That is a reference to both the total hours referred to in para 23 of the statement of claim and what is, in effect, the fortnightly breakdowns for the first period in Schedules A and B and the global figure given for hours worked in the second period.

12    Ms Gallagher's principal basis for resisting an order for her to provide particulars of those matters appears to be the reversal of the onus of proof for which section 557C provides. She says this arises because of the aspects of her claim concerning record keeping and pay slips. Setting that aside for the moment, Ms Gallagher also submits that the request is oppressive as 'it cannot be expected that the applicant would recall the precise number of hours she worked for each day over nearly 2.5 years, without reference to accurate records'. She submits that the statement of claim gives the respondents fair notice of the case to be met, namely that she has not been paid for 3,614 hours during the first period and any of the hours worked, being 3,920 hours, during the second period.

13    In relation to this basic question of the level of particularity Ms Gallagher needs to provide in order to give adequate notice of the case to be met, I do not accept either the position put in the respondents' interlocutory application or Ms Gallagher's response to that application. If a casual employee who does not have set hours of work has not kept detailed records of the hours she has worked, she cannot be expected to provide a daily breakdown of hours worked over a period of approximately two and a half years. But her inability to do so is not necessarily fatal to her claim. It may be, for example, that her case is that she regularly worked at least seven hours a day for six days a week, although she cannot be specific about which days she worked or the precise hours worked on each day. Setting aside any question of the reversal of onus under s 557C, if she is able to establish that proposition on the balance of probabilities, she may thereby be able to establish her claim to underpayment, at least up to a certain amount. If that is her case, then putting it that way would give the employer respondent adequate notice of the case. The lack of precision in the case may affect its credibility, but that is a different matter.

14    I therefore do not accept the position reflected in the respondents' interlocutory application that Ms Gallagher should be compelled to provide a daily breakdown of hours worked. The respondents submitted that a breakdown of that kind would reduce the burden on them of preparing their case because, for example, if it is specified that the applicant did not work on particular days, then there would be no need to speak to witnesses about whether she did work on those days. While that may be so as an abstract proposition, in practice I am not persuaded that it is an important factor in this application. The reality is that if there are witnesses to whom the respondents can speak in order to determine the days on which Ms Gallagher worked, and the hours which she worked, then they are likely to need to extract as much detail from those witnesses as they can, and it does not appear to me that the omission of specific days or specific periods within the Term is likely to substantially reduce the burden of preparation on the respondents. That is particularly so where, as may be the case here, the periods excluded from the claim are relatively short.

15    Nevertheless, I do not accept that the statement of claim currently gives adequate notice of the claim to be met. The example I have given in paragraph 13 above of how hours claimed to be worked may be calculated is purely hypothetical. No such way of calculating the hours worked is articulated in the statement of claim. All that is given is a fortnightly breakdown of hours worked and hours paid, at least for the first period, and not even that for the second period. There is some precision in relation to how the hours are put in relation to the first period. For example, many of the fortnightly amounts of hours worked are stated down to the half hour, as is the total of '10,008.50 hours' pleaded in para 23 of the statement of claim. So it can be inferred that Ms Gallagher and/or her solicitors have engaged in some process of calculation to work out the hours she claims she worked. They must have done so in order to have a proper factual basis to make the allegations in the statement of claim. But the basis of the calculations is undisclosed. In my view, this does not give the respondents fair notice of the case they will have to meet. All they have are fortnightly figures, with no way of knowing how they have been worked out. In the case of the second period, where it is alleged there were no timesheets and no payment for the work Ms Gallagher says she did, there is not even a fortnightly breakdown. It is just alleged that she worked for 3,920 hours during that period and was paid for none of those hours. Ms Gallagher's submissions say that in correspondence between the parties' solicitors the respondents have been informed of her usual start and finish times, and counsel for the respondents acknowledged that this was so, but the court has not seen this correspondence and if it is relied on as partial particulars of the applicant's claim, then that should be reflected on the court file.

16    The applicant submitted that to provide particulars of the basis on which she has calculated the various figures for hours worked in the statement of claim would be a requirement to provide evidence rather than particulars. The distinction between evidence and particulars can sometimes be blurred and this is such a case. However, ultimately, I do not consider that requiring Ms Gallagher to disclose how she has derived the very specific numbers which appear in the statement of claim will necessarily compel her to disclose the evidence that supports the calculations. To return to the hypothetical example I have given, what is required is for her to state as a proposition the hours that are said to have been worked and how the calculation of the hours specified in the statement of claim was made. Whether or not that proposition will be supported by specific evidence from the applicant or others, or specific documents, is a separate question.

17    Another issue which arose in the course of oral submissions was whether or not the applicant should be ordered to at least disclose what she does know about her specific days or hours of work. For example, some evidence was adduced which suggests that the applicant may have travelled interstate at some point during the first period. Without making a finding as to whether or not she did so, it illustrates that it may be possible for her, at a minimum, to at least specify days where she knows she did not work and this may assist in defining the issues.

18    In my view, s 557C of the FWA does not relieve Ms Gallagher of the obligation to give the respondents fair notice of the basis on which she says she worked for the hours she has claimed. If s 557C applies, it reverses the burden of proving the allegations; it does not say anything about the level of detail an applicant should give in stating the allegations in her pleading. If anything, a requirement for the respondents to disprove the allegations would throw into even sharper relief the need for the respondents to know with particularity what the allegations are. The provision evidently reflects a legislative policy that if an employer has breached the FWA and the FWRs by failing to keep records of things such as hours worked, the employer should not be able to take advantage of that breach so that a claim for underpayment is defeated due to a lack of records. But that says nothing about the degree of specificity with which the claim should be articulated, as distinct from proved, in the first place. Ms Gallagher's submissions made much of the impossibility of her being specific about days and hours worked due to what she says is the respondents' failure to keep records of those things. The answer to that is found in what has been said above. If her claim is not based on such specifics, and it appears it is not, then the lack of specific records will not inhibit her ability to particularise the basis on which she calculates the hours she does claim she worked.

19    There is also an issue about whether s 557C applies at all in this situation. It applies when it is established that the employer has failed to comply with the requirement to keep a record. There is a question about whether this encompasses situations where records were kept, but they are found to be inaccurate or incomplete. And even if it does apply, it must be remembered that the section does not reverse the onus of proof solely if an allegation is made; it is still necessary for the employee to prove that the employer did fail to comply with the requirement to keep the record. If the claim is that there was a failure to keep a complete or accurate record, then it will be necessary for the employee to allege (and establish) why it is not complete or accurate, which in this case would require Ms Gallagher to allege and establish that she did work different hours to those recorded. If that is so, reliance on s 557C may not improve Ms Gallagher's position regarding particulars. However, since these matters may be substantive issues at trial, it is not appropriate to express a final view without the benefit of full evidence and argument.

20    In any event, s 557C cannot avail Ms Gallagher in respect of her claim for breach of contract, that is, the employment agreement. It also cannot avail her in respect of the part of the Term before s 557C commenced, which, as I have said, was 15 September 2017. I therefore consider it is appropriate to order further particulars of the claim, albeit not in the prescriptive way sought in the interlocutory application.

21    Ms Gallagher's submissions say that with the benefit of discovery she will be able to better particularise her claim. Discovery in the principal claim has been ordered to take place by 18 December 2020. In my view, after that, Ms Gallagher should be required to disclose the basis on which she says that she worked for particular hours in each fortnight during the first period and the basis on which she has derived the total hours in the second period. This may be achieved by ordering her to provide particulars, in respect of every row in Schedule B to the statement of claim, of every fact, matter, circumstance or thing on which she relies to claim that she worked for the total hours worked specified in that row.

22    I also consider that it is appropriate to require Ms Gallagher to particularise, to the extent that she can, any days that are within her knowledge where she did work or did not work on L2 or L3, and the hours that she worked on each day so specified. Counsel for Ms Gallagher submitted that there may be room for dispute about whether it is possible for her to provide that level of particularity, but, in my view, that can adequately be addressed by expressing the order in terms that, to the extent that it is reasonably practicable within the time provided for, Ms Gallagher is required to provide particulars of that kind.

Associate:

Dated:    7 December 2020