Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union

• Jurisdiction: Australia Federal only
• Judgment Date: 08 October 2008
• Neutral Citation: [2008] FCAFC 170
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union

[2008] FCAFC 170

INDUSTRIAL LAW – award – breach of clauses of a notional agreement preserving a State award – breach of three clauses – proper approach to fixing penalty – need for consideration of the circumstances of the particular case – importance of deterrence – totality principle – consideration of appropriate recipient of penalty

Workplace Relations Act 1996 (Cth), ss 4(1), 8, 717, 717(a)(iv), 718(1), 718(6), 719, 719(2), 719(2)(a), 719(6), 824, 824(2), 841, 853(1), Sch 8

Workplace Relations Amendment (Work Choices) Act 2005 (Cth), s 2(1), Sch 1

Federal Court of Australia Act 1976 (Cth), ss 24(1)(c), 25(5)

Acts Interpretation Act 1901 (Cth), ss 26, 26(d)

Conciliation and Arbitration Act 1904 (Cth), ss 119, 120

Crimes Act 1914 (Cth), ss 4AA(1), 13

Fair Work Act 1994 (SA), ss 8, 9, 16, 19A(1), 19A(4), 21, 154(1), 154(1)(b), 154(2), 169, 169(1)

Magistrates Act 1983 (SA), s 5

LHMU v Plancor Pty Ltd t/as The Meridien Lodge [2008] SAIRC 7 reversed

Coles v Elsen Bros Pty Ltd [2007] FMCA 1838 referred to

John L Pierce Pty Ltd v Kennedy [2000] FCA 1729 (2000) 104 FCR 225 followed

Metropolitan Health Services Board v Australian Nursing Federation [1999] FCA 1513 (1999) 94 FCR 132 not followed

Construction, Forestry, Mining and Energy Union and Ors v Clarke [2005] FCA 986 (2005) 144 FCR 226 followed

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 (2008) 165 FCR 560 approved

Vehicle Builders’ Employees’ Federation of Australia v General Motors-Holdens Pty Ltd (1977) 32 FLR 100 referred to

Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 followed

Gibbs v The Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216 referred to

CPSU, The Community and Public Sector Union v Telstra Corporation Limited [2001] FCA 1364 (2001) 108 IR 228 disapproved

Municipal Officers Association of Australia v City of Bayswater (1987) 22 IR 45 disapproved

PLANCOR PTY LTD v LIQUOR HOSPITALITY AND MISCELLANEOUS UNION

SAD 25 of 2008

GRAY, BRANSON AND LANDER JJ

8 OCTOBER 2008

ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 25 of 2008

ON APPEAL FROM THE INDUSTRIAL RELATIONS COURT OF SOUTH AUSTRALIA

BETWEEN:	PLANCOR PTY LTD Appellant
AND:	LIQUOR HOSPITALITY AND MISCELLANEOUS UNION Respondent

JUDGES:	GRAY, BRANSON AND LANDER JJ
DATE OF ORDER:	8 OCTOBER 2008
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The orders made by the Industrial Relations Court of South Australia on 8 February 2008 be set aside.

3. The matter be remitted to the Industrial Relations Court of South Australia for the determination of the penalty or penalties to be imposed on the appellant for breaches of the notional agreement preserving the Motels (South Australia) Award.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 25 of 2008

ON APPEAL FROM THE INDUSTRIAL RELATIONS COURT OF SOUTH AUSTRALIA

BETWEEN:	PLANCOR PTY LTD Appellant
AND:	LIQUOR HOSPITALITY AND MISCELLANEOUS UNION Respondent

JUDGES:	GRAY, BRANSON AND LANDER JJ
DATE:	8 OCTOBER 2008
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

GRAY J:

The nature and history of the proceeding

1 This appeal is from orders made by an industrial magistrate, constituting the Industrial Relations Court of South Australia (“the IRCSA”), imposing on the appellant (“Plancor”) penalties for breaches of a collective agreement, pursuant to the Workplace Relations Act 1996 (Cth) (“the WR Act”). On 8 February 2008, the industrial magistrate ordered Plancor to pay penalties of $5,500 for failing to pay accrued annual leave on termination of employment, $4,000 for failing to pay the appropriate amount in lieu of notice of termination, and $9,500 for failing to pay the appropriate amount of redundancy severance pay, to a former employee, Jacqueline Baker, whose employment it had terminated. The total of the penalties was $19,000. The industrial magistrate ordered that this sum be paid as to $2,000 to Ms Baker, as to $4,000 to the respondent, the Liquor Hospitality and Miscellaneous Union (“the Union”), and as to $13,000 to the Consolidated Revenue Fund, within 28 days of the making of the orders.

The Union’s claim

2 By its amended summons, dated 30 November 2007 and filed in the IRCSA, the Union sought the imposition of penalties pursuant to s 719 of the WR Act. The amended summons set out grounds to the following effect:

· The IRCSA had jurisdiction to hear the application pursuant to s 717 of the WR Act;

· The Union had standing to bring the application pursuant to s 718(6) of the WR Act;

· Ms Baker was a current financial member of the Union;

· Ms Baker was employed by Plancor’s predecessor from 1 April 2000 until December 2005;

· Plancor purchased the business in December 2005 and Ms Baker’s employment transmitted to Plancor;

· Ms Baker was employed by Plancor from December 2005 until her employment was terminated for redundancy on 21 May 2007;

· Ms Baker’s employment conditions were governed by the Motels (South Australia) Award (“the Award”), a notional agreement preserving State awards pursuant to Sch 8, Pt 3, Div 1, Subdiv B of the WR Act;

· A notional agreement preserving State awards is enforceable as if it were a collective agreement, pursuant to Sch 8, Pt 3, Div 4, cl 43(1) of the WR Act;

· On the termination of Ms Baker’s employment, Plancor breached cll 32(i), 38(a)(iii), 38(e) and 40(e)(iii) of the Award, by failing to pay to Ms Baker her correct entitlements; and

· The Union sought an order imposing penalties on Plancor for its breaches of those clauses of the Award.

The legislation

3 Section 719 of the WR Act provides relevantly as follows:

(1) An eligible court may impose a penalty in accordance with this
Division on a person if:

(a) the person is bound by an applicable provision; and

(b) the person breaches the provision.

(2) Subject to subsection (3), where:

(a) 2 or more breaches of an applicable provision are committed
by the same person; and

(b) the breaches arose out of a course of conduct by the person;

the breaches shall, for the purposes of this section, be taken to
constitute a single breach of the term.

...

(4) The maximum penalty that may be imposed under subsection (1) for a
breach of an applicable provision is:

...

(b) 300 penalty units for a body corporate.

4 Section 4(1) of the WR Act contains a definition of the term “penalty unit”, which adopts the meaning of that term given by s 4AA of the Crimes Act 1914 (Cth). By s 4AA(1), a penalty unit is $110. Section 717 of the WR Act contains definitions of the terms “applicable provision” and “eligible court”. By para (a)(iv) of the definition of “applicable provision”, the definition includes a term of a collective agreement that applies to a person. By para (e) of the definition of “eligible court”, the IRCSA is an eligible court.

5 Section 718(1) of the WR Act contains a table, setting out the persons who may apply for a penalty in relation to a breach of an applicable provision. By item 4(c) of the table, an organisation of employees may apply, subject to subs (6). Section 718(6) provides:

An organisation of employees must not apply for a penalty...in relation to a breach of an applicable provision that is:

...

(b) a term of a collective agreement; ...

unless:

(f) a member of the organisation is employed by the respondent employer;
and

(g) the breach relates to, or affects, the member of the organisation or
work carried on by the member for the employer.

6 Item 31 of Sch 8 of the WR Act (to which effect is given by s 8 of the WR Act) provides:

If, immediately before the reform commencement, the terms and conditions of employment of one or more employees in a single business or a part of a single business:

(a) were not determined under a State employment agreement; and

(b) were determined, in whole or in part, under a State award (the
original State award) or a State or Territory industrial law (the
original State law);

a notional agreement preserving State awards is taken to come into operation on the reform commencement in respect of the business or that part of the business.

7 The term “reform commencement” is defined in s 4(1) of the WR Act as meaning the commencement of Sch 1 to the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (“the WC Act”). By item 2 in the table in s 2(1) of the WC Act, Sch 1 to the WC Act was to come into operation on a day to be fixed by proclamation. That date was 27 March 2006.

8 By item 43(1) of Sch 8 to the WR Act, a notional agreement preserving State awards may be enforced as if it were a collective agreement. Section 841 of the WR Act provides:

A court that imposes a pecuniary penalty under this Act (other than a penalty for an offence) may order that the penalty, or a part of the penalty, be paid:

(a) to the Commonwealth; or

(b) to a particular organisation or person.

9 By s 853(1) of the WR Act, an appeal lies to this Court from a judgment of a court of a State in a matter arising under the WR Act. This Court therefore has jurisdiction, pursuant to s 24(1)(c) of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”) to hear and determine the appeal. Section 25(5) of the Federal Court Act provides:

Subject to any other Act, the jurisdiction of the Court...