18 December 2015 Industry Update

Court Summary - Finalised matters

Three matters have been finalised in the Courts following the previous edition of Industry Update on 27 November 2015. A summary of the outcomes are outlined below:

1) Melbourne company fined for failing to pay staff (9 December 2015)
Vic Metro Brick and Blocklaying Australia was fined a total of $19,250 in the Federal Circuit Court and ordered to repay $6,105.23 in unpaid wages and entitlements after being found to have underpaid five members of its staff in 2013.

In this case, Judge Riley found that three of the five affected employees were particularly vulnerable due to their status as foreign nationals.

As of November 2013, the Fair Work Ombudsman assumed responsibility for pursuing wages and entitlements claims for construction industry participants although FWBC continues to oversee matters that were on foot prior to November 2013.

FWBC Director Nigel Hadgkiss said “employers must ensure they meet their obligations under the Fair Work Act at all times or face legal action from the Fair Work Ombudsman.”

2) Linkhill v FWBC (11 December 2015)
The sham contracting case involving the Roy Morgan entity Linkhill Pty Ltd and FWBC came to a conclusion on Friday  11 December when High Court Justices Nettle and Gordon heard a special leave application from the company and decided against granting leave for a further hearing.

In 2011, FWBC predecessor agency ABCC commenced action alleging Linkhill Pty Ltd engaged in sham contracting, failed to keep proper employment records, and owed a total of $178,941.92 in unpaid wages and entitlements to the workers.  

This case included many court decisions and unsuccessful appeals from the defendant and all avenues for the company to challenge the previous penalty and compensation decisions have now been exhausted.

FWBC will now take steps to ensure the penalty and underpayment amounts (totalling approximately $490,000) currently held by the Court, and the interest on those amounts, are properly distributed.
 

3) FWO and FWBC can settle on civil penalties: High Court (9 December 2015)

Following a proceeding FWBC commenced against the CFMEU and the CEPU for unlawful industrial action, the High Court unanimously held that in civil penalty proceedings, the courts are not precluded from considering and, if appropriate, imposing penalties that are agreed between the parties .

The Unions admitted the contraventions and agreed with the FWBC to seek from the Court declarations in relation to the contraventions and pecuniary penalties of $105,000 against the CFMEU and $45,000 against the CEPU.

At a pre-trial directions hearing, the primary Judge raised a concern about whether the decision of the High Court in Barbaro v The Queen (2014) (Barbaro) was relevant to these proceedings. (In Barbaro the High Court held that criminal prosecutors were not able to make a submission to a sentencing judge nominating a quantified range of sentences.)  

The question was referred to the Full Court of the Federal Court who held that the principle in Barbaro applies to civil proceedings.  In effect, this meant federal regulatory agencies such as FWBC and FWO could not make submissions about a range of penalties to a court, including about penalties that had been agreed with respondents such as unions or employers.  

By grants of special leave, the Commonwealth and the Unions each appealed to the High Court. The Full Court of the High Court pointed to the differences between criminal and civil litigation and unanimously held that the principle in Barbaro does not apply to civil penalty proceedings. Instead, the task of a court is to determine whether, in all the circumstances, the agreed penalty is an appropriate penalty. The court is not bound to accept the agreed penalty if it does not consider it appropriate.

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