Federal Court of Australia

Wollermann v Fortrend Securities Pty Ltd [2025] FCA 103

ORDERS

THE COURT ORDERS THAT:

1.    The parties bring in appropriate minutes to give effect to these reasons.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J

Introduction

1    This proceeding was heard together with Fortrend Securities Pty Ltd v Wollermann (No 2) [2025] FCA 96.

2    Mr Wollermann and Mr Lyle (together the applicants), both former employees of the first respondent (Fortrend Securities Pty Ltd or Fortrend), contend that Fortrend has contravened the Fair Work Act 2009 (Cth) (the Act) in three ways.

3    First, they contend that, contrary to s 323 of the Act, Fortrend withheld bonus payments from them and that Fortrend also declined to pay them such amounts that had already been earned on termination.

4    Secondly, Mr Wollermann contends that, contrary to s 323 of the Act, Fortrend unilaterally deducted amounts from his monthly pay, and that the amounts deducted were not authorised in accordance with s 324 of the Act.

5    Thirdly, they contend that, contrary to s 536(1) and (2) of the Act, Fortrend failed to provide pay slips to them within one working day of being paid each month, on many occasions Fortrend did not provide pay slips at all, and those that were provided were deficient.

6    The applicants also contend that the second respondent (Joseph Forster or Mr Forster), the Managing Director of Fortrend, was “involved in” each of Fortrend’s contraventions of the Act and is therefore liable as an accessory pursuant to s 550 of the Act for each of Fortrend’s contraventions.

7    In addition to the contraventions of the Act alleged above, the applicants lastly contend that Fortrend also failed to pay them their long service leave entitlements in accordance with the Long Service Leave Act 2018 (Vic) (the LSL Act).

8    For the reasons that follow, each of those claims, other than that Mr Forster is liable as an accessory in respect of the pay slips claim, succeeds.

Bonus payments claim

9    Section 323(1) of the Act relevantly provides that an employer (here, Fortrend) must pay an employee (here, the applicants) “amounts payable” to them “in relation to the performance of work: (a) in full (except as provided by section 324); and (b) in money …; and (c) at least monthly”.

10    Note 2 to s 323(1) relevantly says that “[a]mounts … include the following if they become payable during a relevant period: (a) incentive-based payments and bonuses”.

11    As Jessup J explained in Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908; (2013) 238 IR 307 at 352 [142], s 323(1) is a civil remedy provision that “picks up, amongst other things, entitlements arising under contracts of employment and gives statutory consequences to an employer’s failure to make good on them”.

12    In the present case, the applicants performed trades on behalf of Fortrend’s clients, and Fortrend would then obtain revenue by way of commissions earned on the trades performed.

13    Clause 4.3 of Mr Wollermann’s contract of employment provided as follows:

4.3 Bonus

(a)    You would receive a bonus in the event of Fortrend receiving more than USD50,000 per month in commissions through the clients and accounts allocated to you. This bonus would be equal to 10% of the commissions above 50,000. For the avoidance of doubt, commissions are calculated on the basis of trades settled in a particular month.

For example, if Fortrend receives a commission of USD 60,000 in a month, your bonus would be USD1,000 which is 10% of 10,000.

(b)    The bonus for a particular month will be paid in the following manner:

(i)    50% on the fifteenth day of the following month; and

(ii)     50% after a period of seven months.

For example, if you are entitled for a bonus of USD1,000 for the month of January, an equivalent of USD500 in Australian Dollars will be paid to you on the fifteenth of February and the remaining on the fifteenth of August after a period of six months.

(c)    If you resign or if your employment is terminated, you will not be entitled to receive the unpaid bonus.

14    Clause 4.3 of Mr Lyle’s contract of employment is materially identical to that of Mr Wollermann, except that the former provides Mr Lyle with a larger potential bonus “equal to 15% of the commissions above USDE50,000 and a further 20% of the commissions above USDE100,000” (where USDE means “US dollar equivalent”).

15    Fortrend resisted the applicants’ claim to unpaid bonuses on the grounds that:

(a)    subclause 4.3(b) of the employment contracts, properly construed, means that “[h]alf of the amount is payable midway through the following month of the month the bonus relates to, and entitlement to the other half crystallises after a period of seven months”; and

(b)    “the contracts plainly state under clause 4.3(c) that the unpaid 50% is forfeited if the employee resigned or is terminated before payment”.

It submitted that “there is therefore no obligation on [it] to pay amounts which have not yet become due and payable before the end of the relevant seven-month period, or ever, if the Applicants resign before the conditions for payment of those amounts are satisfied”.

16    I do not agree. The proper construction of clause 4.3 is that proffered by the applicants. It is subclause 4.3(a), and not subclause 4.3(b), that determines the amounts payable for the performance of work. Subclause 4.3(b) simply says when those amounts “will be paid”, and the example provided makes that quite clear: “if you are entitled for [sic] a bonus of USD1,000 for the month of January, an equivalent of USD500 in Australian Dollars will be paid to you on the fifteenth of February and the remaining on the fifteenth of August after a period of six months” (emphasis added). As the applicants submitted, there is no requirement for work (other than the completion of trades that earn Fortrend over USD50,000 per month in commissions) before Fortrend’s obligation to pay the amounts to the employee crystallises. Once that monthly commission threshold is surpassed, the bonuses become payable.

17    So what then of the provision in subclause 4.3(c) that “[i]f you resign … you will not be entitled to receive the unpaid bonus”?

18    As the respondents recognised in their submissions, s 323(1) of the Act provides that incentive-based payments and bonuses which become payable must be paid “in full”, “in money” and “at least monthly”. It follows that a contractual provision which purports to enable an employer to withhold payment of 50% of an employee’s entitlement for a period of seven months, or which purports to impose forfeiture of amounts to which an employee was already entitled, is prohibited by s 323 and is invalid.

19    The first respondent did not dispute that bonuses were “in relation to the performance of work” and did not dispute the quantum claimed (i.e. USD38,032.43).

Mr Wollermann’s deductions claim

20    Mr Wollermann gave the following unchallenged evidence in his affidavit dated 8 April 2024 at [23]–[26]:

On 15 March 2015, I noticed a discrepancy in what Lyle and I were paid for that month. This was highly unusual, as Lyle and I were always paid the same amount. For that reason, we worked together to reconcile monthly revenue for the purposes of ensuring that we were paid correctly. I raised this discrepancy orally with Forster who shrugged his shoulders and said words to the effect that he did not know, and that I would have to ask Richard Hannagan (Hannagan), FSA’s office manager, about the issue. Hannagan was not in the office that day, so I telephoned him. Hannagan said to me words to the effect that Forster had instructed him to deduct from my pay the cost of flights to Brisbane to visit FSA clients, being $337.95. I flew to Brisbane at Forster’s direction to visit clients, in particular Burrell Stockbroking. Visiting clients was an important part of managing client relationships, and ensuring that I was servicing clients in accordance with their instructions and objectives. I considered this to be part of my duties, in the same way that visiting clients within Victoria was a large part of my role at FSA.

The following day, on 16 March 2015, I sent an email to Forster regarding the deduction, as follows:

Joe,

As I mentioned yesterday, I’ve identified a discrepancy in payroll this month.

Per your suggestion, I’ve now had the benefit of discussing this with Richard Hannagan, and am extremely disappointed to learn that the cost of recently booked flights (booked per your instruction to visit Fortrend clients) was deducted. That you were not forthcoming with this information when I asked about the discrepancy yesterday is equally disappointing.

I consider this type of behaviour – which extends to harassing staff for expensive lunches – to be petty and underhanded, and seriously undermines the spirit of teamwork and cooperation which is critical to our collective success.

I’d appreciate this discrepancy being made good immediately.

Later that day [on 16 March 2015], I received six emails from Forster, as follows:

(a)    at approximately 8:56 pm:

If you are going to be petty find a new job.

(b)    at approximately 9:55 pm:

Don’t give me the shits.

(c)    at approximately 9:59 pm:

You need to cover your own travel.

And I can’t be bothered with petty change. That is what I hire Richard for, to deal with your petty issues.

Travel and entertainment is at your expense, and you are expected to travel and see your clients, and entertain them.

Do NOT bring this up with me again.

(d)    at approximately 10:00 pm:

And FUCK OFF about my conversation with Kelly about lunch.

None of your business!

(e)    at approximately 10:14 pm:

Richard handles petty cash, but Travel is your cost.

Kelly can speak for herself.

You really pissed me off with this email!

Do not bring this shit up with me again.

(f)    at approximately 10:50 pm:

Good work Chris.

Effective immediately, FORTREND is amending your pay structure. $500 will be deducted from your pay each month and allocated to a client entertainment account and travel account.

If you submit valid expenses, then up to $500 per month will be reimbursed to you. Use it or lose it. Each expense must include name of client and details of business discusses. This can be used to attend [American Chambers of Commerce in Australia (AMCHAM)] events.

Speak to [R]ichard Hannagan if you have questions. Do not speak to me.

Go out and see people.

I remind you that your pay structure is confidential and must not be discussed with anyone but me and Richard Hannagan. A breach of contract will be taken very seriously.

…

From April 2015 onwards, and in accordance with Forster’s emails to me described in the previous paragraph, $500 was deducted from my pay each month. …

21    Mr Forster admitted during cross-examination that he made deductions of $500 per month from Mr Wollermann’s salary from about April 2015 “until Mr Wollermann resigned”. See transcript at page 387. The applicants have proceeded on the basis that this resignation date is to be understood as the date that Mr Wollermann departed from Fortrend, namely 16 December 2022. See [24] of the applicants’ written closing submissions. However, Mr Forster’s admissions at trial were somewhat more confined, conceding as he did that he made the relevant deductions from April 2015 until Mr Wollermann’s resignation in November 2022. See transcript at pages 382 and 387.

22    The total gross amount of the deductions was $46,837.95. However, by reason of the time limitation provision in s 545(5) of the Act, Mr Wollermann accepted that he would only be entitled to recover $29,500, being the deductions between 16 February 2018 and 16 December 2022.

23    Fortrend contended that it was entitled unilaterally to vary Mr Wollermann’s contract of employment under clause 2, which provided:

FORTREND POLICIES

You are required to comply with the policies and procedures of Fortrend that are in place from time to time. Fortrend may change its policies at any time without giving you prior notice; however, such changes will be communicated to employees.

24    It contended that “[u]nder this clause, [it] was empowered to implement policies concerning employment expenses and a client entertainment budget, which Mr Wollermann was required to comply with”.

25    It says that it did so by virtue of the profanity-riddled emails sent by Mr Forster to Mr Wollermann on 16 March 2015 set out at paragraph 20 above.

26    This submission is frankly ridiculous. The amount that an employee is entitled to be paid under their contract is not a “policy”. And in any event, an employer cannot, by purporting to invoke a change in “policy”, unilaterally reduce an employee’s contractual entitlements.

27    Equally ridiculous were the submissions made in the respondents’ written closing submissions that Mr Wollermann accepted the variation to his contract of employment by his “silence and conduct” and is therefore estopped from contending that the variation was not effective. Neither defence was pleaded, so I need say no more about them.

28    In their closing submissions, the respondents did not contend that the deductions were “permitted” within the meaning of s 324(1)(a) of the Act, which allows an employer to deduct an amount from an amount payable to an employee where the deduction is “authorised in writing by the employee and is principally for the employee’s benefit”.

29    Nor could they. As the applicants submitted, there were no clauses in Mr Wollermann’s employment contract that would permit any reduction in his pay and no evidence of Mr Wollermann providing his authorisation in writing for the $500 per month deduction in any other form.

30    And on no possible view could the deduction be characterised as principally for Mr Wollermann’s benefit. Mr Forster’s rationale for the deductions was not to benefit Mr Wollermann but rather was solely “to allocate [$500 per month] towards a travel and expense account because [Mr Wollermann] wasn’t taking clients out”. See transcript at page 387. As the applicants submitted, that was an admission that Fortrend was taking a portion of Mr Wollermann’s salary and allocating it to a fund to be spent on Fortrend’s clients.

Contravention of the Act

31    Section 323(1) of the Act is a civil remedy provision. Section 557A(1) provided at the relevant time that a contravention of a civil remedy provision is a “serious contravention” if “(a) the person knowingly contravened the provision; and (b) the person’s conduct constituting the contravention was part of a systematic pattern of conduct relating to one or more other persons”.

32    Section 557B(1) of the Act provides that a body corporate “knowingly contravenes” a civil remedy provision if it expressly, tacitly or impliedly authorised the contravention.

33    Mr Wollermann contended that the decision by Fortrend (via Mr Forster as its controlling mind) to deduct Mr Wollermann’s pay was deliberate; that so much can be gleaned from the emails Mr Forster sent on 16 March 2015 set out at paragraph 20 above; and that Mr Forster’s deliberate intention in facilitating the deductions was to ensure that the cost of visiting clients was borne by Mr Wollermann.

34    It was also contended that the conduct in authorising the deduction of $500 per month from about April 2015 until 16 December 2022 could only be described as systematic, and that once the above is accepted, I can be satisfied that the contravention of s 323(1) of the Act in respect of the deductions involving Mr Wollermann was a “serious contravention”.

35    Fortrend’s counsel submitted in her closing address that there is insufficient evidence to support the conclusion that Mr Forster did not have a reasonable subjective belief that he was entitled to make the deductions. Counsel also submitted, both in her closing address and in her written closing submissions, that Mr Wollermann’s purported acceptance of the varied pay structure through his silence and conduct should be taken into account in determining whether the deductions by Fortrend constitute a serious contravention.

36    I disagree. In my view the breach does constitute a serious contravention for the reasons advanced on behalf of the applicants.

Pay slips claim

37    Fortrend was required to provide each applicant with pay slips that met the requirements in s 536 of the Act and the Fair Work Regulations 2009 (Cth) (Fair Work Regulations).

38    Section 536 of the Act relevantly provides as follows:

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).

…

(2)    The pay slip must:

(a)    if a form is prescribed by the regulations—be in that form; and

(b)    include any information prescribed by the regulations; and

…

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

Note 2: If an employer fails to comply with subsection (1) or (2), the employer may bear the burden of disproving allegations in proceedings relating to a contravention of certain civil remedy provisions: see section 557C.

39    Messrs Wollermann and Lyle gave evidence that they were not provided their pay slips within one working day of being paid each month and, on several occasions, did not receive a pay slip at all. This evidence was not challenged in any material respect.

40    It was further contended, and the respondents did not dispute, that when a pay slip was received it was deficient. For example, the pay slip issued to Mr Wollermann for the period between 1 October 2022 and 31 October 2022:

(a)    does not identify Mr Wollermann’s annual salary and in fact suggests that the salary is $0.00, contrary to reg 3.46(4) of the Fair Work Regulations (“[i]f the employee is paid at an annual rate of pay, the pay slip must also include the rate as at the latest date to which the payment relates”);

(b)    does not otherwise distinguish between Mr Wollermann’s salary within the meaning of clause 4.1 of his employment contract and the bonus paid to him, contrary to reg 3.46(1)(g) of the Fair Work Regulations (“a pay slip must specify … any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement”); and

(c)    does not identify the deduction of $500 per month made by Fortrend, contrary to reg 3.46(2) of the Fair Work Regulations (“[i]f one or more amounts are deducted from the gross amount of the payment under subsection 324(1) of the Act, the pay slip must also include, for each deduction: (a) the amount of the deduction; and (b) the name, or the name and number, of the fund or account into which the deduction was paid”).

41    I am therefore satisfied that Fortrend contravened s 536(1) and (2) of the Act as alleged.

Is Mr Forster liable as an accessory?

42    Sections 323(1) and 536(1) to (2) of the Act are civil remedy provisions. Section 550(1) provides that a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision, while s 550(2) defines the meaning of the words “involved in” for the purposes of subs (1), as follows:

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.

43    As White J said in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176] and following:

… In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention … 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 ... 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 … 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 ...

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. ...

The notion of being “knowingly concerned” in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring” [sic] 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 …

(Footnotes omitted.)

44    The applicants submitted at paragraph 49(a) of their written closing submissions that I should find that Mr Forster, as the controlling mind of Fortrend in respect of the alleged withholding of bonus payments:

(a)    was responsible for ensuring Fortrend’s compliance with the Act, which he admitted in his defence dated 22 March 2024 at [4];

(b)    admitted in cross-examination that he decided to include a provision in the employment contracts of the applicants to split their bonus entitlements over a period of seven months (see transcript at page 382);

(c)    admitted in cross-examination that he decided to withhold the second half of the applicants’ bonus payments (see transcript at page 382);

(d)    admitted in cross-examination that he made all relevant payroll payments (see transcript at page 382);

(e)    admitted in cross-examination that Messrs Wollermann and Lyle were not required to perform any further work in order to be entitled to receive the bonus payments each month, and that he had no discretion as to whether the amounts identified pursuant to clause 4.3(a) of their respective employment contracts were to be paid (see transcript at page 381);

(f)    accordingly, had knowledge of each of the essential matters the subject of the contravention of s 323(1) of the Act; and

(g)    is therefore liable as an accessory to Fortrend’s contravention of s 323(1) of the Act.

45    The applicants also submitted at paragraph 49(b) of their written closing submissions that I should find that Mr Forster, as the controlling mind of Fortrend in respect of the allegedly unlawful deductions:

(a)    was responsible for ensuring Fortrend’s compliance with the Act, which he admitted in his defence dated 22 March 2024 at [4];

(b)    admitted that he made deductions of $500 per month from Mr Wollermann’s salary from about April 2015 until 16 December 2022 (see transcript at page 387);

(c)    could not in his evidence identify any relevant provision in Mr Wollermann’s contract of employment that would have lawfully permitted the deductions to occur;

(d)    authorised the deductions for the purpose of “[allocating $500 per month] towards a travel and expense account because [Mr Wollermann] wasn’t taking clients out” (see transcript at page 387) – that is, the deductions were not principally for Mr Wollermann’s benefit, but rather were taken out of Mr Wollermann’s salary by Fortrend (as authorised and directed by Mr Forster) to be allocated to a fund to be spent on Fortrend’s clients;

(e)    sent each of the emails to Mr Wollermann set out in paragraph 20 above;

(f)    accordingly, had knowledge of each of the essential matters the subject of the contravention of s 323(1) of the Act; and

(g)    is therefore liable as an accessory to Fortrend’s contravention of s 323(1) of the Act.

46    The applicants further submitted at paragraph 49(c) of their written closing submissions that I should find that Mr Forster, as the controlling mind of Fortrend in respect of the alleged pay slip contraventions:

(a)    was responsible for ensuring Fortrend’s compliance with the Act, which he admitted in his defence dated 22 March 2024 at [4];

(b)    did not issue pay slips to the applicants;

(c)    admitted in his affidavit dated 23 April 2024 (at [15]) that he knew that pay slips were, at least on occasion, being sent to the applicants;

(d)    provided no evidence to suggest he took steps to ensure appropriate compliance with the Act in respect of pay slips, despite the fact that Fortrend’s compliance was his responsibility;

(e)    accordingly, had knowledge of each of the essential matters the subject of the contravention of s 536(1) of the Act; and

(f)    is therefore liable as an accessory to Fortrend’s contravention of s 536(1) of the Act.

47    Mr Forster’s counsel submitted in relation to the alleged withholding of bonus payments that “Mr Forster was cross-examined and was not asked to (nor, it is accepted, could he) give any evidence in relation to the construction of [clause 4.3 of the relevant employment contracts]”.

48    In relation to the deductions issue, Mr Forster’s counsel submitted that his “evidence is that he had a genuine belief that the change in policy was justified, it was to incentivise Mr Wollermann to improve his client relationships to build business, and Mr Forster was unequivocal that it was not motivated by ‘retribution’”. The following extract from Mr Forster’s cross-examination (see transcript at pages 387 and 389–390) was relied on in that regard:

MR CRUTCHFIELD: Have you got the contract of employment?---Yes.

…

Look at clause 2?---2.

You’re relying on your right under the second sentence; is that right?---Probably.

Relying on anything else?---I don’t know.

You don’t know. You know you had no right under this contract to reduce Mr Wollermann’s salary in the way that you did, don’t you?---I disagree completely. I think I had every right to encourage him to perform the job expected of him and he certainly accepted it. It went for nine years.

Well, you made – it was – you personally made the decision to deduct $500 per month from Mr Wollermann’s salary in April 2015, didn’t you?---And you’ve mischaracterised it. I decided to allocate it towards a travel and expense account because he wasn’t taking clients out, he wasn’t entertaining, he wasn’t taking them to lunch, wasn’t travelling, he wasn’t doing what we required him to do under the job - - -

Yes?--- - - - so we changed his incentive program.

So you - - -?---I changed his incentive program.

You deducted $500 in his pay each month and allocated it to a client, entertainment and travel account; correct?---So – yes. And he had to submit his invoices.

And on a use-it-or-lose-it basis; correct?---Yes, yes.

And you deducted that amount from his salary and allocated it to a client entertainment and travel account from April 2015 right up until Mr Wollermann resigned; that’s correct, isn’t it?---Sounds about right.

* * *

And you decided to withhold the $500 per month from Wollermann, correct?---You keep to this. You’re trying to – I decided to allocate it towards an entertainment and travel expense account.

Yes. And I suggest that you made that decision in retribution for Mr Wollermann raising an inquiry – or a query – about expenses, and expressing his disappointment with you, and making comments like suggesting you were harassing staff for expensive lunches. You did this by way of retribution, didn’t you?---Retribution? No.

Yes?---No, it wasn’t retribution.

Well, why did you do it?---Because I wanted to incentivise him to go out and entertain clients.

Well, I suggest to you that what happened was: Mr Wollermann had raised an issue with you, and this was your way of seeking revenge, wasn’t it?---No.

49    In relation to the pay slip issue, Mr Forster’s counsel relied on the following extract from Mr Forster’s cross-examination (see transcript at page 388):

[MR CRUTCHFIELD] Okay. This is a – payslips were not always provided to Lyle and Wollermann, were they?---I think they were. I think Richard Hannagan produced payslips for them on a regular basis. I thought he did that every month. But Richard would execute that – so I would – so the way it works – I won’t explain. Yes, I think they were.

Well, I suggest to you that they weren’t given to them every month. You disagree, do you?---I don’t know. Richard was responsible for that.

This is an example of a pay report, correct? From your system, Fortrend system?---I don’t know.

I beg your pardon?---I said, I don’t know.

What, you’ve never seen this before? You’ve never seen documents - - -?---No, Richard produces these things. I, frankly, didn’t get involved with this, these pay slips.

I thought you authorised most things that happen in the office?---I authorised the pay, and then Richard does it and gives them the payslip, so Richard takes care of that, and I didn’t watch every time he sent them a payslip.

50    I am satisfied that, for the reasons they advance, the applicants have made good the claims that Mr Forster was involved in each of Fortrend’s contraventions of s 323(1) of the Act. Mr Forster is therefore liable, as an accessory pursuant to s 550 of the Act, for unlawfully withholding bonus payments from the applicants and making unlawful deductions from Mr Wollermann’s salary.

51    As Mason CJ and Wilson and Toohey JJ explained in Hamilton v Whitehead (1988) 166 CLR 121 at 127–128:

There can be no doubt, on the facts of the present case, that the respondent, in placing the advertisement and in dealing with those who replied to it, was the company. He was its managing director and his mind was the mind of the company. The company therefore was liable as a principal for the breaches of s 169 of the [Companies (Western Australia)] Code. The liability was direct, not vicarious.

It is against this background that the liability of the respondent falls to be considered. As we have said, the applicant relies upon s 38(1) of the Interpretation Code, the terms of which have been set out. Since the respondent was the actor in the conduct constituting the offences and had knowledge of all the material circumstances, it must follow, according to the applicant, that the respondent was “knowingly concerned” in the commission of the offences committed by the company.

In our opinion, the submission is plainly right. Counsel for the respondent sought to gain some comfort from the words of Dixon J in Mallan v Lee. But, as we have sought to explain, the inversion of which his Honour spoke has no application here. The company is not vicariously liable for the actions of the respondent. The company is the principal offender and the respondent is charged as an accessory. Franklyn J thought that it was “wrong and oppressive” to prosecute the respondent for the identical acts and decisions as were relied on as the acts of the company. There is nothing conceptually wrong in such a course since “it is a logical consequence of the decision in Salomon’s Case [i.e. Salomon v Salomon & Co Ltd [1897] AC 22] that one person may function in dual capacities”: Lee v Lee’s Air Farming Ltd [[1961] AC 12 at 26]. In [R] v Goodall [(1975) 11 SASR 94 at 100] Bray CJ discussed what his Honour described as: “… some sort of metaphysical bifurcation or duplication of one act by one man so that it is in law both the act of the company and the separate act of himself as an individual” and expressed his conclusion as follows [(at 101)]: “my view is that the logical consequence of Salomon’s Case … is that the company, being a legal entity apart from its members, is also a legal person apart from the legal personality of the individual controller of the company, and that he in his personal capacity can aid and abet what the company speaking through his mouth or acting through his hand may have done”. We agree with this view.

(Footnotes omitted.)

52    Likewise here, since Mr Forster was the relevant actor in the conduct constituting the breaches of s 323(1) of the Act and had knowledge of all the material circumstances set out above and relied upon by the applicants, it must follow that he was “knowingly concerned” in Fortrend’s commission of the offences.

53    The position is different with respect to the alleged pay slip contraventions.

54    Subsections (1) and (2) of s 536 impose obligations on an employer in relation to the time within which a pay slip must be provided to an employee and the form and content that such a pay slip must have.

55    The applicants alleged that Fortrend contravened these subsections by not providing pay slips to Messrs Wollermann and Lyle in time (or, in some instances, at all) and by providing them with deficient pay slips. In the one example relied upon in the applicants’ written closing submissions, a pay slip was said to have been deficient because it did not accurately record Mr Wollermann’s annual salary, did not distinguish between his salary and the bonus payment he received and did not identify the $500 deduction that Fortrend had made.

56    Mr Forster gave evidence during his cross-examination that, although he authorised payments to Fortrend employees, he was not responsible for the production of any pay slips or the distribution of those pay slips to the relevant employees. I accept that evidence and that the specific processes relating to the production and distribution of pay slips were, as a matter of professional practice, outside of Mr Forster’s purview.

57    In the absence of evidence indicating that Mr Forster had actual knowledge of the essential facts underlying the production and distribution of pay slips, I am not satisfied that he was “knowingly concerned” in Fortrend’s contravention of s 536(1) and (2) of the Act. I am therefore not satisfied that Mr Forster was involved in Fortrend’s contravention of these subsections, and he is therefore not liable as an accessory to Fortrend’s contravention.

Long service leave claim

58    Section 6 of the LSL Act provides for an employee’s entitlement to long service leave in these terms:

At any time after completing 7 years of continuous employment with one employer, an employee is entitled to an amount of long service leave on ordinary pay equal to 1/60th of the employee’s total period of continuous employment less any period of long service leave taken during that period.

59    “Ordinary pay” is relevantly defined in s 15(1) of the LSL Act as follows:

For the purposes of this Act, and subject to this section, ordinary pay—

(a)    means the pay that an employee is entitled to receive on the day on which the employee starts long service leave, calculated on the employee’s normal weekly hours at the employee’s ordinary time rate of pay …

60    Section 15(2) of the LSL Act relevantly provides as follows:

If an ordinary time rate of pay is not fixed for an employee’s work under the relevant employment agreement, the employee’s ordinary time rate of pay is the greatest of the following—

(a)    the average weekly rate earned by the employee in the 52 weeks immediately before the employee starts long service leave;

(b)    the average weekly rate earned by the employee in the 260 weeks immediately before the employee starts long service leave;

(c)    the average weekly rate earned by the employee during the employee’s period of continuous employment with the employer immediately before the employee starts long service leave.

61    This court has jurisdiction to hear the applicants’ long service leave claim. See Scarati v Republic of Italy (2023) 302 FCR 427 at 469–472 [263]–[274].

62    The applicants contended, and the respondents denied, that Messrs Wollermann and Lyle did not have ordinary hours of work, normal weekly hours or a fixed ordinary time rate of pay. Accordingly, the applicants contended that their ordinary time rate of pay should be calculated in accordance with s 15(2) of the LSL Act.

63    The applicants also contended that their average weekly rate was greatest in the 260 weeks immediately before they started long service leave, being $11,844.50.

64    The applicants’ counsel contended that, applying the formula contained in s 6 of the LSL Act, Mr Lyle is entitled to long service leave of $109,254.41 (being 1/60th of his total period of continuous employment of 553 weeks and 3 days, calculated at the average weekly rate of $11,844.50) and Mr Wollermann is entitled to long service leave of $136,211.74 (being 1/60th of his total period of continuous employment of 691 weeks and 4 days, calculated at the average weekly rate of $11,844.50). The respondents did not contest these calculations (except in the manner referenced in paragraph 62 above).

65    The applicants thus contended that they are entitled to payment in lieu of long service leave and sought orders that Fortrend pay them their entitlement to long service leave (including interest pursuant to s 26(6) of the LSL Act).

66    Fortrend submitted that the applicants were full time employees of Fortrend and that “ordinary hours were deemed to be 38 hours per week and this status as full time employees remained unchanged throughout their employment”. It was further contended that “[t]o the extent it is claimed that any time was worked in excess of or outside the ordinary hours, these hours are not ‘normal’ or ‘ordinary’ hours and are irrelevant to the calculation of a long service leave entitlement”. It was also submitted that “there is no sufficient evidence about the number of hours worked per week by either of the employees”.

67    The respondents also submitted that “the Applicants’ ordinary time rate of pay … was plainly fixed, determined by their salary, being $60,000 per year (gross inclusive of superannuation), paid on a monthly basis. The monthly, weekly, and/or hourly ordinary time rate can be calculated based on this fixed salary and the Applicants’ ordinary hours of work as determined by law”.

68    I cannot accept the respondents’ submissions, because they fly in the face of the facts.

69    The applicants received a salary. Whatever number of hours they worked, the salary remained the same. Additionally, they could, and did, receive bonuses pursuant to a formula contained in their respective contracts of employment. They could work any number of hours to achieve their salary, and the generation of the bonuses depended not on time spent but rather on the number and value of the trades settled in a particular month. How they were remunerated does not fit within the concept of the “ordinary time rate of pay”. They did not have an ordinary time. They did not have a rate of pay referable to time. Compare the helpful reasons of Magistrate Lauritsen (as he then was) in Williams v Collier International (Victoria) Pty Ltd (Industrial) [2011] VMC 82 at [9].

70    Fortrend relied on findings to the contrary by the Wage Inspectorate Victoria (Inspectorate) and made the following submissions:

(a)    in 2023, both Mr Wollermann and Mr Lyle submitted applications to the Inspectorate about their long service leave entitlements;

(b)    the Inspectorate is an independent statutory authority established on 1 July 2021 by the Wage Theft Act 2020 (Vic). It is the Victorian regulator for issues surrounding long service leave and wage theft, and is empowered to administer the enforcement of Victorian-based workplace laws under the LSL Act;

(c)    the applicants provided the Inspectorate with relevant documents concerning their long service leave entitlements;

(d)    the submissions made by each of the applicants to the Inspectorate in respect of the effect of the relevant provisions of the LSL Act were identical to the submissions now made to me here; and

(e)    the Inspectorate expressed the view that Mr Wollermann and Mr Lyle’s long service leave entitlements were to be determined in a manner consistent with Fortrend’s case before me and that there was no long service leave outstanding because Fortrend had paid the amounts notified to it by the Inspectorate.

71    Ultimately, counsel for Fortrend put her submission no higher than as follows in her answer to my question about the Inspectorate’s view (see transcript at page 1230):

HIS HONOUR: Well, you wouldn’t call them fulsome reasons, would you? And in any event, Mr Lyle is told that if you don’t like it, you can lodge a claim in the industrial division of the Magistrates Court or - - -

MS ANTHONY-SHAW: That’s right, your Honour.

HIS HONOUR: - - - to alternatively, go to the Federal Court if - - -

MS ANTHONY-SHAW: That’s right, but what’s said by the respondents is that they are theoretically entitled to seek a judicial determination, but the court should be cautious of ignoring evidence the inspectorate did conduct its processes and considered the matters which were put to it, specifically in relation to the manner in which those provisions ought to be applied.

72    As counsel for Fortrend accepted in her closing address in that passage from the transcript, the Inspectorate’s “view” does not in any way operate as a jurisdictional bar to this court determining the question of the applicants’ entitlements to long service leave payments.

73    For the reasons set out above, I agree that each of the applicants is entitled to payment in lieu of long service leave. I will therefore order Fortrend to pay Mr Lyle his entitlement to long service leave of $109,254.41 and to pay Mr Wollermann his entitlement to long service leave of $136,211.74.

Conclusion

74    The parties will be directed to bring in appropriate minutes to give effect to these reasons..

Associate:

Dated:    21 February 2025