Federal Court of Australia

Danaratna v Arunatilaka [2024] FCA 918

ORDERS

THE COURT DECLARES THAT:

1.    The respondent contravened the following civil remedy provisions in the period between 12 March 2016 and 14 August 2018:

(a)    section 323(1) of the Fair Work Act 2009 (Cth) by failing to pay the applicant amounts payable to her in relation to the performance of work in full, at least monthly and by one of the methods specified in s 323(2) of the FW Act;

(b)    section 536(1) of the FW Act by failing to provide the applicant with a pay slip within one working day of paying her an amount in relation to her performance of work;

(c)    section 44 of the FW Act by contravening a provision of the National Employment Standards, being s 90(2) of the FW Act, by failing to pay the applicant when her employment ended the amount that would have been payable to her had she taken that annual leave;

(d)    section 45 of the FW Act by:

(i)    the applicant being required to perform more than an average of 38 ordinary hours of work per week as a full-time employee in breach of cl 10.2 of the Miscellaneous Award 2010;

(ii)    the applicant being required to perform ordinary hours of work on more than 6 days a week and more than 20 days in a 28 day period in breach of cl 20.1 of the Award;

(iii)    the applicant being required to work in excess of 10 ordinary hours of work on any one day in breach of cl 20.2 of the Award;

(iv)    failing to provide the applicant with an unpaid break of at least 30 minutes where the applicant was required to work more than 5 hours in breach cl 21 of the Award;

(v)    failing to pay overtime rates in breach of cl 22.1 of the Award;

(vi)    failing to pay penalty rates for work performed on public holidays in breach of cl 22.2(e) (until 21 August 2016) and cl 22.3(e) (thereafter) of the Award; and

(vii)    failing to pay an annual leave loading of 17.5% in breach of cl 23.3 of the Award.

THE COURT ORDERS THAT:

1.    Pursuant to s 545(1) of the FW Act, the respondent pay $374,151.90 plus interest, to the applicant within 60 days of these orders.

2.    The parties have leave to make any application to vary the above declarations and orders within 14 days, or such longer time as may be allowed, with notification of such application to be provided by email to the associate to Justice Raper.

3.    The matter be listed for a further case management hearing with respect to the timetabling of the penalty hearing at 10:00 am on 29 August 2024.

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

REASONS FOR JUDGMENT

RAPER J

1    By further amended originating application filed 8 August 2024 the applicant, Ms Horathal Pedi Gedara Priyanka Danaratna, seeks for this Court to grant declaratory relief, order compensation and impose pecuniary penalties on her former employer, Ms Himalee Subhashini de Silya Arunatilaka for whom she performed work as a domestic servant, by reason of Ms Arunatilaka’s failure to pay Ms Danaratna and afford her with the working conditions upon which she was entitled under the Fair Work Act 2009 (Cth). The claim is not made with respect to the entirety of her employment, given time limitations, but only between 12 March 2016 and 14 August 2018 (employment claim period) where she worked at Ms Arunatilaka’s home in Canberra whilst Ms Arunatilaka was the Sri Lankan Deputy High Commissioner in Australia.

2    Ms Arunatilaka has never engaged with this proceeding: she has not filed a notice of address for service, a defence or any evidence or submissions opposing Ms Danaratna’s claim. She did not attend the hearing. Ms Danaratna has served on Ms Arunatilaka all the material relied upon in support of her claim namely, the initiating processes, pleadings, evidence and submissions. Ms Danaratna applied for an order that the hearing proceed in Ms Arunatilaka’s absence pursuant to r 30.21(1)(b)(i) of the Federal Court Rules 2011 (Cth). At hearing I made this order on the basis that I was satisfied that Ms Arunatilaka had been notified on numerous occasions of the claim against her and of the hearing and it appeared that she did not intend, by her own election, to take any part in the proceedings.

3    For the following reasons, Ms Danaratna has established that Ms Arunatilaka has breached the FW Act and is entitled to the declaratory and compensatory relief she seeks. The question of penalty remains to be determined at a later stage.

Filed Evidence

4    At hearing Ms Danaratna relied upon the following evidence, in support of her application:

(a)    an affidavit of Ms Kylie-Jade Crawford affirmed 13 February 2024;

(b)    affidavits of Ms Robyn Lewis affirmed 10 June 2024 and 22 July 2024;

(c)    her own affidavit affirmed 11 June 2024; and

(d)    an affidavit of Ms Lal Kuruppu, affirmed 11 June 2024.

The Facts

5    Between 2002 and 2015 Ms Danaratna performed work as an office cleaner in Kandy, Sri Lanka. Ms Arunatilaka was a friend of her former employer’s wife. In that context, Ms Arunatilaka approached Ms Danaratna and told her that she was travelling to Australia to work as the Deputy High Commissioner of Sri Lanka and asked if she would like to come to Australia to work as her domestic servant. Ms Danaratna went to Colombo to meet with Ms Arunatilaka and prepared a meal for her so that Ms Arunatilaka could test her culinary skills.

6    Ms Danaratna had never left Sri Lanka, prior to receiving Ms Arunatilaka’s assistance in obtaining a passport and being granted a subclass 403 domestic worker visa to perform work as Ms Arunatilaka’s private domestic employee.

7    Ms Danaratna was (and remains) unable to speak or read in English.

8    Ms Arunatilaka arranged for Ms Danaratna to sign all the relevant documents which would facilitate her passage to Australia. Ms Danaratna has no recollection of Ms Arunatilaka translating nor explaining to her the terms of any of the documents. The suite of documents comprised an Application for a Temporary Work (International Relations) visa, the Advice by a migration agent/exempt person of providing immigration assistance (Form 956), a Subclass 403 domestic worker stream employee declaration form and a contract of employment.

9    The Application for a Temporary Work visa, described her position as being one of a “domestic worker” where her duties would involve “cooking, cleaning and other household chores” and that Ms Arunatilaka was the “organisation or individual for whom the work or activity will be undertaken”. The address at which the activity was to be undertaken was “No 1, Gawler Crescent, Deakin 2600”. Curiously, whilst the form indicates that Ms Danaratna would receive salary/wages, accommodation, meal allowance and other living allowance, the monetary value for each of those amounts is left blank.

10    By correspondence dated 20 July 2015, the Sri Lankan Ministry of Foreign Affairs stated to the Australian High Commission in Colombo:

The Ministry of Foreign Affairs of the Democratic Socialist Republic of Sri Lanka presents its compliments to the (Australian High Commission in Sri Lanka and … has the hounor (sic) to inform that Ms. Hortal Pedi Gedara Priyanka Danaratna. Private Domestic employee of Mrs. Himalee Subhashini De Silva Arunatilaka who has been appointed as Deputy High Commissioner to the Sri Lanka High Commission in Canberra is scheduled to leave for Australia shortly.

The Ministry wishes to inform the following:

1.     Ms. Danaratna, is a Sri Lankan citizen (carrying a valid ordinary passport …) and neither a citizen nor a permanent resident of any other country;

2.     Ms. Danaratna undertakes work only as a domestic worker of Mrs. Arunatilaka’s private household;

3.     Ms. Danaratna will leave Australia at the conclusion of Mrs. Arunatilaka’s term at the Sri Lanka Mission or when Mrs. Arunatilaka leaves Australia, whichever comes first;

4.     Both Mrs. Arunatilaka and her spouse are not related to Ms. Danaratna; and

5.     Ms. Danaratna is schedule to leave for Canberra on 20 August 2015.

The monthly emoluments, allowances, return airfare and cost of medical care of Ms. Danaratna will be met by the Sri Lanka Mission during her assignment with Mrs. Arunatilaka.

The Ministry of Foreign Affairs would appreciate if the esteemed High Commission could grant appropriate gratis visa to Ms. Horathal Pedi Gedara Priyanka Danaratna, Private Domestic employee of Mrs. Himalee Subhashini De Silva Arunatilaka. The passport: duly filled visa application form, and other relevant documents are enclosed herewith.

The Ministry of Foreign Affairs of the Democratic Republic of Sri Lanka avails itself of this opportunity to renew the High Commission of Australia in Sri Lanka the assurances of its highest consideration.

11    The July 2015 employment contract stipulated that Ms Arunatilaka was the employer, that its term was for three years (but would terminate when Ms Arunatilaka completes her tour of duty in the Sri Lanka High Commission in Canberra) and where Ms Danaratna’s duties would comprise the following:

a.    Cleaning and vacuuming of the entire premises, including bathrooms, toilets and garages at regular intervals as decided by the Employer.

b.    Preparation of meals on a daily basis including on special occasions/functions etc.

c.    Serving of food and beverages to guests.

d.    Washing, drying and ironing of clothes, lines etc.

e.    Maintenance of gardens, lawns, flower beds, driveways and cleaning of the exterior of the premises.

f.    Any other incidental duties and functions assigned to the Employee by the Employer.

12    In addition, the contract stipulated that:

The Employee undertake work only as a Private Domestic Worker of the Employer’s household and does not undertake any other work outside the Employer’s household.

13    The contract described Ms Danaratna’s remuneration as being:

The Employer shall pay the Employee a monthly salary of 2,650 Australian dollars inclusive of all allowances (ie. accommodation; meals; clothing; one time return air ticket etc) for the duration of the Contract.

14    No mention was made in the contract of Ms Danaratna’s hours of work, rather the contract contained the following telling term:

The Employee shall be entitled to one (01) rest day per week, to be mutually agreed upon.

15    A further contract was entered into in August 2015, but contained the following terms regarding remuneration:

4.    The employer shall pay the Employee a monthly salary of LKR 60,300.00 (approx.. AUD 620) inclusive of all allowances, for the duration of this contract. For administrative purposes, the salary and allowances shall be paid to the Employee by the Employer through the High Commission of Sri Lanka in Canberra, Australia. For this purpose, the Employee shall be deemed to be a member of the home-based staff of the High Commission.

5.     The Employee shall meet the cost of the following:

Accommodation                         $1000

Utilities                             $150

Phone/Internet                             $100

Food                                 $400

Airfare                                 $85

Medical                             $150

Clothing                             $150

Incidentals (including transport)                 $100

Other                                 $286

6.    The salary package would be equivalent to AUD 3,041 per month, as given in terms 4 & 5.

16    The arrangements for Ms Danaratna’s travel to Canberra from Colombo were made by Ms Arunatilaka, who with her husband, met Ms Danaratna upon her arrival at Canberra Airport and took her to their family home. Shortly thereafter, they took Ms Danaratna’s passport under promise to return it to her before she left Australia (though Ms Danaratna has not seen it again).

17    Ms Danaratna remained and resided at Ms Arunatilaka’s private residence, at 1 Gawler Crescent, Deakin where she worked every day at her home until she left.

18    Her conditions of employment were described in her affidavit in the following way:

29.    I did all the domestic duties in Ms Arunatilaka’s residence.

a.     cooking and preparing meals;

b.     cleaning;

c.     washing and ironing;

d.     preparations and cooking for when Ms Arunatilaka held parties at her home for up to 30 or 40 guests; and

e.     whatever other household tasks might need to be done.

31.     I worked seven days a week. I woke up at 5:30am, and by 6am I was working. I prepared breakfast at home and lunch for Ms Arunatilaka to take to the High Commission. I laid out the clothes for Ms Arunatilaka to wear to work.

32.     I worked from around 6am to around 10pm on a normal day. On a special occasion such as when Ms Arunatilaka held a party, I would work from around Sam until midnight or 1 am.

33.     I would usually have a break during the day while Ms Arunatilaka was at work. If it was not a busy day, I would have around 90 minutes to two hours' break.

34.     Sometimes Ms Arunatilaka had house guests or her brother stay at the residence. and I had to cook. clean and look after them too.

35.     On one occasion during my employment with Ms Arunatilaka, I burned my hand on hot oil in the kitchen. It was badly burned. I called Ms Arunatilaka at work, and she came home and took me to the hospital. I had two days off work. Apart from these two days, I did not take any time off while working for Ms Arunatilaka.

36.     Ms Arunatilaka did not allow me to leave the house without permission. She gave me permission from time to time to go for a short walk around the neighbourhood. I was not allowed to go to the shops or do other activities outside the house by myself. Sometimes Ms Arunatilaka would take me to the shops if I wanted to buy something.

37.     The only contact that I had with other people while I was in Canberra was with three other domestic servants referred to in paragraph [28]. I spoke to them in Sinhala when the four of us attended the High Commission to assist in preparing for functions.

38.     Ms Arunatilaka would sometimes travel interstate or overseas. She would brief me on the work to do while she was away, and I would continue working during these periods. I recall one instance where Ms Arunatilaka went overseas while her husband and I remained in the Canberra residence.

39.     Ms Arunatilaka was not impolite to me and never made threats to me. However, she did not provide me with satisfactory clothing and food. I did not feel like I was being treated properly.

19    Accordingly, it is apparent that Ms Danaratna’s standard hours of work were 6:00am to 10:00pm seven days a week, though on certain occasions she was required to work from 5:00am to 1:00am. Her daily duties typically included the cooking and preparation of meals, cleaning, washing and ironing, and (at times) preparing for events Ms Arunatilaka would hold at her home for up to 40 guests.

20    The evidence revealed that despite what was agreed in her employment contract, Ms Danaratna never received the approximate $620 monthly salary, nor the monthly allowance as stipulated in cl 5 of the August 2015 contract, extracted at [15] above (noting there appears to be a typographical error, “Employee” should be read as “Employer”).

21    It was Ms Danaratna’s evidence that she was not paid any monies at regular intervals, rather payments were made by Ms Arunatilaka, from time to time into Ms Danaratna’s or her family’s bank accounts in Sri Lanka or by providing her with small amounts of cash to purchase small personal times she needed, when attending shops or garage sales in Canberra with Ms Arunatilaka. Ms Danaratna misapprehended that Ms Arunatilaka was keeping her monthly salary for her and was keeping a tally of what was being paid. This misapprehension was partially correct as Ms Arunatilaka did provide her with a tally in around August 2018 (just prior to the completion of her employment term). However, the tally, whilst an accurate description of the amounts paid to Ms Danaratna, did not reflect her remunerative entitlement, even at least in accordance with the August 2015 employment contract.

22    The tally did reveal that over the employment claim period, a period of two and a half years, payments to a total of $10,183.81 were made by Ms Arunatilaka to Ms Danaratna. An additional final payment of $1,028.89 was made to Ms Danaratna after the cessation of her employment.

Jurisdiction to hear Ms Danaratna’s claim

23    This Court’s jurisdiction is enlivened by s 562 of the FW Act. Ms Arunatilaka carried on the activity of running a household in Canberra and employed Ms Danaratna to cook, clean and perform other domestic tasks in connection with that activity. Accordingly, I am satisfied that Ms Arunatilaka was a “national system employer” (within the meaning of s 14(1)(f)), and Ms Danaratna a “national system employee”, within the meaning of the FW Act, for the reasons set out below.

24    I note that Ms Arunatilaka was, during the employment period, the Deputy Sri Lankan High Commissioner to Australia. As a consequence, given the application was heard in Ms Arunatilaka’s absence, Ms Bindon, on behalf of Ms Danaratna, addressed two possible impediments to this Court having jurisdiction to hear and determine her claim, namely foreign state and diplomatic immunity.

25    For the following reasons, it is my view that neither of these potential impediments apply here.

Lack of application of foreign state immunity

26    Where a person is directly engaged by a foreign state to work at its embassy or high commission in Australia brings an action in an Australian court seeking certain employee entitlements, the foreign state may plead immunity from jurisdiction in certain circumstances under the Foreign States Immunities Act 1985 (Cth).

27    It is readily apparent from Ms Danaratna’s visa application, the employment contracts and her evidence that Ms Danaratna was employed by Ms Arunatilaka personally to perform services at her home for her, by reason of the matters outlined above and my reasons below. Here there is no basis to argue that Ms Danaratna was engaged to perform work for a foreign state. Accordingly, I am satisfied that no such immunity exists.

Lack of application of diplomatic immunity

28    Where a person is engaged directly by a foreign diplomat to work as his or her private domestic staff and brings an action in an Australian court, it may be open for the diplomat to argue that he or she is immune from the court’s jurisdiction by virtue of the Vienna Convention on Diplomatic Relations, opened for signature 18 April 1961, 500 UNTS 95 (entered into force 24 April 1964) given force in Australia by s 7 of the Diplomatic Privileges and Immunities Act 1967 (Cth).

29    However, art 39(2) of the Convention provides:

When the functions of a person enjoying privileges and immunities have come to an end, such privileges and immunities shall normally cease at the moment when he leaves the country, or on expiry of a reasonable period in which to do so, but shall subsist until that time, even in case of armed conflict. However, with respect to acts performed by such a person in the exercise of his functions as a member of the mission, immunity shall continue to subsist.

…

(Emphasis added.)

30    Here, the evidence establishes two relevant matters: First, Ms Arunatilaka’s functions as Deputy High Commissioner have come to an end and she must have left Australia, from at least 2022. The evidence establishes that after the cessation of this diplomatic post Ms Arunatilaka initially worked as an ambassador in Nepal and now is living in Switzerland as the Ambassador and Permanent Representative of Sri Lanka to the United Nations in Geneva. Secondly, for the reasons identified above, there was no evidence to suggest that Ms Arunatilaka’s conduct as Ms Danaratna’s employer, formed part of her functions as a member of the mission, for which immunity could continue to subsist: Shergill v Singh [2023] FCA 1346; 326 IR 428 at [50]–[61]; Reyes v Al-Malki [2017] UKSC 61; [2019] AC 735 at [4].

31    Therefore, I am satisfied that this Court has jurisdiction with respect to Ms Danaratna’s claim.

Contraventions of the FW Act

32    Ms Danaratna claims that Ms Arunatilaka breached:

(a)    section 323(1) of the FW Act by failing to pay amounts payable to her in relation to the performance of work in full, at least monthly and by one of the methods specified in s 323(2) of the FW Act;

(b)    section 536(1) of the FW Act by failing to provide her with a pay slip within one working day of paying her an amount in relation to her performance of work; and

(c)    section 44 of the FW Act by contravening a provision of the National Employment Standards, being s 90(2) of the FW Act, by failing to pay the applicant when employment ended the amount that would have been payable to her had she taken that period of annual leave.

33    In addition, Ms Danaratna claims that Ms Arunatilaka breached s 45 of the FW Act by contravening the following clauses of the Miscellaneous Award 2010 during the employment claim period:

(a)    clause 10.2 by requiring her to perform more than an average of 38 hours a week as a full-time employee;

(b)    clause 20.1 by requiring her to perform ordinary hours of work on more than 6 days a week and over 20 days in a 28 day period;

(c)    clause 20.2 by requiring her to perform an excess of 10 ordinary hours of work in any one day;

(d)    clause 21 by failing to provide an unpaid break of at least 30 mins when she worked more than 5 hours;

(e)    clause 22.1 by failing to pay overtime rates;

(f)    clauses 22.2(e) (until 21 August 2016) and 22.3(e) (thereafter) by failing to pay penalty rates for work performed on public holidays; and

(g)    clause 23.3 by failing to pay an annual leave loading.

Consideration

34    In order for Ms Arunatilaka to be liable for the alleged conduct, it must be established that Ms Danaratna is entitled to the alleged entitlements and protections under both the FW Act and the Award. Accordingly, there are three threshold issues to be determined, whether Ms Danaratna was employed by Ms Arunatilaka, whether Ms Arunatilaka was a “national system employer” within the meaning of s 14 of the FW Act and whether Ms Danaratna’s employment was covered by the Award such that she was entitled to the entitlements and protections contained within it.

Whether Ms Danaratna was Ms Arunatilaka’s employee

35    Where parties to a working relationship have comprehensively committed the terms of their relationship to a written agreement, the validity of which is not challenged as a sham nor its terms otherwise varied, waived or subject to an estoppel, the legal character of their relationship is determined by reference to the rights and obligations of the written agreement: Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 275 CLR 165 at [43], [59] and [66] per Kiefel CJ, Keane and Edelman JJ.

36    Two signed written agreements between Ms Danaratna and Ms Arunatilaka were in evidence, the July and August 2015 employment contracts, as described above. The evidence establishes that Ms Arunatilaka was Ms Danaratna’s employer, given the August 2015 contract, evinces an agreement, that Ms Danaratna perform work, in the form of personal service, for Ms Arunatilaka. There was consideration in the form of remuneration for the performance of work and Ms Arunatilaka was obliged to pay, in accordance with the contractual terms, Ms Danaratna for the personal service provided: Neil I, Chin D, Parkin C, The Modern Contract of Employment (3rd ed, Thomson Reuters, 2023) [1.001]–[1.005].

37    As stated above, Ms Arunatilaka was a “national system employer” within the meaning of s 14(1)(f) of the FW Act by virtue of her carrying on an activity, namely the running of a household in which Ms Danaratna performed domestic work, being an activity carried on in the Australian Capital Territory.

Whether the Award applied to Ms Danaratna and Ms Arunatilaka?

38    Section 47 of the FW Act prescribes when a modern award “applies” to an employer, employee, organisation or outworker entity. An award “applies” if the modern award “covers” the employee, employer, organisation or outworker entity, the modern award is in operation (as specified under s 49), and no other provision of the Act provides, or has the effect, that the modern award does not apply to the employee, employer, organisation or outworker entity: s 47. A modern award “covers’’ an employee or employer “if the award is expressed to cover” the employee or employer, or otherwise “covers” them by virtue of additional circumstances which do not arise in this case: s 48.

39    Clause 4 of Award stipulates that it covers employers throughout Australia and their employees in the classifications listed in cl 14, who are not covered by any other modern award, and is extracted as follows:

4. Coverage

4.1     Subject to clauses 4.2, 4.3, 4.4, 4.5 and 4.6 this award covers employers throughout Australia and their employees in the classifications listed in clause 14—Minimum wages who are not covered by any other modern award.

4.2     The award does not cover those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.

4.3     The award does not cover employees:

(a)     in an industry covered by a modern award who are not within a classification in that modern award; or

(b)     in a class exempted by a modern award from its operation,

or employers in relation to those employees.

4.4     The award does not cover employees excluded from award coverage by the Act.

40    For the following reasons, I find that the Award covers Ms Danaratna and Ms Arunatilaka. First, the work performed by Ms Danaratna fell within the broad generic classifications of the Award, which were as follows:

Schedule B—Classification Structure and Definitions

Level 1

An employee at this level has been employed for a period of less than three months and is not carrying out the duties of a level 3 or level 4 employee.

Level 2

An employee at this level has been employed for more than three months and is not carrying out the duties of a level 3 or level 4 employee.

Level 3

An employee at this level has a trade qualification or equivalent and is carrying out duties requiring such qualifications.

Level 4

An employee at this level has advanced trade qualifications and is carrying out duties requiring such qualifications or is a sub-professional employee.

41    I accept Ms Danaratna’s submission that she was, throughout the employment claim period, classified as a Level 2 employee, given the employment claim period did not start until almost six months after Ms Danaratna had commenced employment. Secondly, there is no other apparent modern award which covered the work Ms Danaratna performed. Thirdly, it is my view, adopting the reasons set out in Shergill at ([77]–[82]) that the exclusionary clause, cl 4.2, does not apply in this case.

42    Accordingly, given these threshold questions have been determined in Ms Danaratna’s favour, consideration then turns as to whether she has established on the evidence each of the alleged breaches of the FW Act and the Award.

Award provisions relating to the contraventions

43    The relevant clauses of the Award, underpinning each of Ms Danaratna’s award breach claims, are extracted as follows:

(a)    clauses 10.2 and 20 which concern, among other things, the permissible arrangements for ordinary hours of work:

10.    Types of employment

10.2    Full-time employment

The ordinary hours of full-time employees are an average of 38 per week.

…

20.     Ordinary hours of work and rostering

20.1     The ordinary hours fixed in accordance with clause 10—Types of employment, for employees other than casuals are to be worked on a regular basis with fixed starting and finishing times over a maximum of six days per week, provided that on average an employee must not be required to work ordinary hours on more than 20 days in any 28 day period. Once fixed, the starting and finishing times can be varied by agreement at any time or by the employer on seven days’ notice.

20.2     Ordinary hours are not to exceed 10 hours on any day or shift except by agreement in which case the maximum number of ordinary hours is 12.

(b)    clause 21 which concerns meal breaks:

21.     Breaks

An employee must not be required to work for more than five hours without an unpaid break of at least 30 minutes for a meal.

(c)    clause 22.1 which concerns overtime rates:

22.1     Overtime

All time worked in excess of an average of 38 hours per week by a full-time employee or in excess of the agreed number of hours per week by a part-time employee is overtime and must be paid at the rate of 150% of the relevant minimum wage for the first three hours and 200% of the relevant minimum wage thereafter. In the case of part-time employees, the agreed number of hours means the number of hours agreed in writing either at the commencement of employment or subsequently.

(d)    clauses 22.2(e) (until 21 August 2016) and 22.3(e) (thereafter) which concern penalty rates for work performed on public holidays:

22.2    Penalty rates

…

(e)    All work performed by an employee on a public holiday is to be paid at the rate of 250% of the relevant minimum wage.

22.3    Penalty rates

…

(e)    All work performed by an employee on a public holiday is to be paid at the rate of 250% of the relevant minimum wage.

(e)    clause 23.3 which provides for annual leave loading:

23.    Annual Leave

…

23.3     When taking a period of paid annual leave an employee must be paid a loading of 17.5% in addition to the payment required by the NES or the ordinary pay they would have received for the period of the leave, whichever is the greater.

Evidentiary foundations for the claims

44    The evidence establishes that, from Ms Danaratna’s arrival in Australia on 18 September 2015 until 14 August 2018, she lived and worked exclusively at Ms Arunatilaka’s home except for occasional attendances at the Sri Lanka High Commission to assist the domestic servants of the High Commissioner to prepare food for functions.

45    Her duties as a domestic worker, were undertaken under the direction of Ms Arunatilaka, and included performing, cooking, cleaning, laundry tasks, party preparation and any other household tasks that Ms Arunatilaka required of her.

46    For the duration of the employment claim period, Ms Danaratna worked 7 days per week. On a regular day, she would work from around 6am until 10pm. She would usually take a break during the day, which could be around 90 minutes to 2 hours when not busy. On special occasions, such as when Ms Arunatilaka held a party, Ms Danaratna would work from around 5am until midnight or 1am. However, no claim is made with respect to this work. The only occasion where Ms Danaratna took leave during the employment claim period was when she did not work for two days after she burned her hand on hot oil in the kitchen.

47    It is my view that despite the fact that there may have been downtime when working as a domestic worker, the authorities established that she was required to be paid for all the time that she stood and waited for work. As observed in Collier v Sunday Referee Publishing Co [1940] 2 KB 647 at 650 Asquith J said: "Provided I pay my cook her wages regularly she cannot complain if I choose to take any or all of my meals out.” Similarly, this is consistent with the holding in Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466 per Dixon J:

….wages are incident to the subsisting relationship of master and servant. A master who sends his servant upon a holiday upon full pay can be sued for wages under the contract, although not on a common money count for work and labour done. They also serve who only stand and wait.

48    Ms Arunatilaka paid Ms Danaratna a total of $11,212.70 for work performed during the employment claim period. The portion of that amount which was paid during the relevant period was $10,183.91. Additionally, Ms Arunatilaka made a payment of $1,028.89 in the years following the cessation of the Applicant’s employment. Payments to the Applicant were not made in regular intervals and were usually made at Ms Danaratna’s request. Ms Arunatilaka never provided Ms Danaratna with a pay slip for work performed.

49    By reason of the above, the evidence establishes the following, Ms Danaratna:

(a)    was required to work ordinary hours in excess of an average of 38 per week, in breach of cl 10.2;

(b)    was required to work ordinary hours on more than 20 days in a 28 day period, in breach of cl 20.1

(c)    was required to work ordinary hours in excess of 10 hours per day, in breach of cl 20.2;

(d)    was required to work for more than five hours without an unpaid break of at least 30 minutes for a meal every day, in breach of cl 21;

(e)    was required to work in excess of an average of 38 hours per week without being paid overtime, in breach of cl 22.1;

(f)    was required to perform work on public holidays without being paid penalty rates, in breach of cl 22.2(e) (until 21 August 2016) and 22.3(e) (thereafter); and

(g)    was not paid a 17.5% annual leave loading, in breach of cl 23.3.

50    Accordingly, Ms Danaratna has established that Ms Arunatilaka contravened s 45 of the FW Act in respect of each breach of cll 10.2, 20.1 20.2, 21, 22.1, 22.2 (e) (until 21 August 2016) and 22.3(e) (thereafter) and 23.3 of the Award throughout the employment claim period.

51    I turn now to deal with the other alleged breaches of the FW Act.

The failure to pay Ms Danaratna in full at least monthly

52    Ms Danaratna claims that throughout the employment period Ms Arunatilaka breached s 323(1) of the FW Act by failing to pay her in full at least monthly by one of the methods specified by s 323(2). Section 323 of the FW Act provides:

323 Method and frequency of payment

(1)    An employer must pay an employee amounts payable to the employee in relation to the performance of work:

(a)     in full (except as provided by section 324); and

(b)     in money by one, or a combination, of the methods referred to in subsection (2); and

(c)    at least monthly.

Note 1:    This subsection is a civil remedy provision (see Part 4‑1).

Note 2:    Amounts referred to in this subsection include the following if they become payable during a relevant period:

(a)     incentive‑based payments and bonuses;

(b)     loadings;

(c)    monetary allowances;

(d)    overtime or penalty rates;

(e)    leave payments.

(2)    The methods are as follows:

(a)    cash;

(b)     cheque, money order, postal order or similar order, payable to the employee;

(c)     the use of an electronic funds transfer system to credit an account held by the employee;

(d)     a method authorised under a modern award or an enterprise agreement.

(3)    Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.

Note: This subsection is a civil remedy provision (see Part 4‑1).

53    The evidence established that Ms Danaratna was not paid by Ms Arunatilaka at in any regular interval but that she was provided with small amounts of cash to purchase small items from shops or garage sales and, “from time to time”, payment was made into her or her family’s bank account in Sri Lanka.

54    For the reasons set out above, Ms Danaratna was not paid the full amounts owed to her by Ms Arunatilaka and was never paid at intervals that were at least monthly. Accordingly, I find that Ms Arunatilaka contravened s 323(1) of the FW Act.

The failure to pay annual leave on termination of employment (s 90(2))

55    Section 44 of the FW Act provides that an employer must not contravene a provision of the NES, and is a civil remedy provision. The NES are set out in Pt 2-2 of the FW Act. Section 90(2) provides that if, when an employee’s employment ends, he or she has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable had the employee taken that period of leave:

90 Payment for annual leave

(1)     If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.

(2)     If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.

56    The evidence establishes that, during the employment claim period, Ms Danaratna accrued annual leave but did not take any of that leave. Ms Danaratna was also entitled to annual leave loading of 17.5% in respect of the accrued leave under the Award (as found above).

57    Ms Danaratna seeks the totality of her annual leave accrual (which included for the period before the employment claim period). Section 90(2) concerns an employee’s entitlement to be paid the equivalent amount for his or her accrual of any untaken annual leave upon termination. The right crystallises upon termination. Accordingly, I accept Ms Danaratna’s claim for her annual leave accrual for the entirety of her employment. There is no limit within the provision which would have the effect that one’s accrual would be lessened by reason of any time limitation arising upon commencing a cause of action: Shergill at [95]. Accordingly, all accrued but untaken leave must be paid.

58    Given the same, when Ms Danaratna’s employment ceased, Ms Arunatilaka should have paid Ms Danaratna an amount for the equivalent of her having taken 58.16 days of untaken paid annual leave plus a 17.5% loading, totalling $10,507.38, but failed to do so. As a consequence, Ms Arunatilaka contravened s 90(2) of the FW Act and, in turn, s 44 of the FW Act.

Contravention of s 536(1)

59    Section 536(1) of the FW Act requires an employer to give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work. Section 536(1) provides as follows:

536 Employer obligations in relation to pay slips

(1)     An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.

Note 1:    This subsection is a civil remedy provision (see Part 4‑1).

Note 2:     Section 80 of the Paid Parental Leave Act 2010 requires an employer to give information to an employee to whom the employer pays an instalment under that Act.

….

60    The evidence establishes that at no stage during or after the employment claim period did Ms Arunatilaka provide Ms Danaratna with an electronic or hard copy pay slip. As a consequence, I find that Ms Arunatilaka contravened s 536(1) of the FW Act.

The quantum of the claim

61    At the hearing, concerns were raised by the Court with Ms Danaratna’s counsel as to certain apparent flaws with the calculations leading to the then claimed underpayment of $375,386.84 An additional 7 days after the hearing was given by Ms Danaratna’s legal representatives to review those calculations again and to provide supplementary submissions as to basis for calculation and further scrutinisation of the claims.

62    By supplementary submission, Ms Danaratna’s claim was recalculated and reduced to $374,151.90. A further amended originating application and statement of claim was filed to reflect these changes. In addition, submissions were made regarding the basis for the revised methodology for calculation, which were as follows, in part:

(a)     the Applicant working a 14 hour day, seven days a week;

(b)     the first 38 hours worked in a week being paid at the rate of 100% of the Miscellaneous Award 2010 (Award) wage rate for a level 2 employee;

(c)     the first three hours worked on a weekday in excess of 38 hours in a week being paid at the rate of 150% of the Award wage rate for a level 2 employee;

(d)     the subsequent hours after the first three hours worked on a weekday in excess of 38 hours in a week being paid at the rate of 200% of the Award wage rate for a level 2 employee;

(e)     all hours worked on Saturday and Sunday in a week being paid at the rate of 200% of the Award wage rate for a level 2 employee (because such hours were always worked after the first three hours in excess of 38 hours worked in a week); but

(f)     if any of the days in a given week were one of the 13 public holidays observed in the ACT as referred to in s 115 of the Fair Work Act 2009 (Cth) (FW Act) and s 3 of the Holidays Act 1958 (ACT) (Holidays Act) then all 14 hours worked on that public holiday would be paid at the rate of 250% of the Award wage rate for a level 2 employee (the public holidays observed in the ACT in each of 2016, 2017 and 2018 are contained at Annexure 1 to these submissions);

(g)     the calculations were broken into four separate periods to reflect increases to the Award wage rates during the Employment Claim Period i.e:

(i)     12 March 2016 – 30 June 2016;

(ii)     1 July 2016 – 30 June 2017;

(iii)     1 July 2017 – 30 June 2018;

(iv)     1 July 2018 – 14 August 2018.

63    Ms Danaratna was only paid the equivalent of approximately $11,212.7 in wages for work performed during the employment claim period.

64    I am satisfied that the revisions overcome the previously observed flaws and the amount now claimed reflects the amount to which Ms Danaratna is entitled.

65    Whilst there was no necessity to decide this issue and it was not determinative in this case, I would make the following observation. It is not without concern that it would have been clear to the Department of Immigration and Border Protection (as it then was), by reason of the materials provided to it in support of the Subclass 403 domestic worker stream visa that Ms Danaratna was not going to paid nor enjoy the protections under the Award or the FW Act. There was no apparent attempt to conceal the arrangement by Ms Arunatilaka. It is perplexing that the Department, in the circumstances, did nothing and granted the visa in the circumstances. I accept that the Department was not involved in this application nor invited to make any submission in this regard. However, it may have been the case, that insufficient scrutiny was given by the Department prior to the inception of this arrangement. If there had been, the circumstances of Ms Danaratna’s employment may have been very different.

Conclusion

66    For these reasons I am satisfied that it is appropriate to:

(a)    make declarations directed to the conduct about which Ms Danaratna claims but in a form different from that proposed by Ms Danaratna;

(b)    order Ms Arunatilaka pay Ms Danaratna $374,151.90, plus interest, for the loss suffered by reason of Ms Arunatilaka’s contravening conduct under the FW Act; and

(c)    list the matter for case management to timetable the matter for a penalty hearing at 10:00am on 29 August 2024.

Associate:

Dated:    15 August 2024