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Nasirian v Sarvastani [2020] FCCA 355 (12 February 2020)

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Nasirian v Sarvastani [2020] FCCA 355 (12 February 2020)

Last Updated: 24 February 2020

FEDERAL CIRCUIT COURT OF AUSTRALIA

NASIRIAN v SARVASTANI


Catchwords:
INDUSTRIAL LAW – Default judgment – multiple contraventions of the relevant award – minimum rates of pay – failure to pay entitlements – failure to remit superannuation – penalty payable to the Applicant.


Legislation:
Fair Work Act 2009 (Cth), ss.44.45, 90(2), 117(2), 340, 545, 545(1), 546(1), 546(3)(c), 547
Federal Circuit Court Rules 2001 (Cth), rr.13.03B(2)(c), 16.05(2)(a)

Cases cited:
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Kelly v Fitzpatrick [2007] FCA 1080
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62


Applicant:
HAMIDREZA NASIRIAN

Respondent:
ARSHAM MOMTAZI SARVASTANI

File Number:
MLG 776 of 2019

Judgment of:
Judge McNab

Hearing date:
12 February 2020

Date of Last Submission:
12 February 2020

Delivered at:
Melbourne

Delivered on:
12 February 2020


REPRESENTATION

Counsel for the Applicant:
Mr Murphy

Solicitors for the Applicant:
Maurice Blackburn Lawyers

ORDERS

(1) Pursuant to rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) and section 545(1) of the Fair Work Act 2009 (Cth) (“the Act”), default judgment be entered in favour of the Applicant against the Respondent.
(2) Upon admissions which the Respondent is taken to have made, and upon non-compliance with the Orders of this Court dated 29 April 2019, the Court makes declarations that:

and consequently contravened section 45 of the Act.

(b) the Respondent contravened the following provisions of the National Employment Standards:

and consequently contravened section 44 of the Act.

(c) the Respondent contravened section 340 of the Act by dismissing the Applicant because or for reasons including that the Applicant exercised a workplace right, as set out at in [10]-[26] of the Statement of Claim.
(d) by reason of the Respondent’s contraventions of section 45 of the Act, the Applicant has suffered a loss of wages in the amount of $35,196.49.
(e) by reason of the Respondent’s contraventions of section 44 of the Act, in relation to leave entitlements and entitlement to a payment in lieu of notice, the Applicant has suffered a loss of entitlements in the amount of $5,752.57.
(f) by reason of the Respondent’s failure to pay superannuation, the Applicant has suffered a loss $7,265.11 in respect of unpaid superannuation contributions.
(3) Pursuant to section 545 of the Act, the Respondent compensate the Applicant for the loss and damage suffered by the Applicant as a consequence of contraventions referred to in Order 2 above, in the sums set out in Order 2(d), 2(e) and 2(f) being a total of $48,214.17.
(4) Pursuant to section 547 of the Act, the Respondent pay interest on the amount ordered under Order 3 above in the amount of $2,729.38.
(5) Pursuant to section 546(1) of the Act, the Respondent pay a pecuniary penalty of $30,000 for the contraventions of the Act declared by the Court under Order 2.
(6) Pursuant to section 546(3)(c) of the Act, the pecuniary penalties ordered under Order 5 be paid by the Respondent to the Applicant.
(7) The Applicant serve sealed copies of these Orders upon the Respondent by email sent to itz_arshamm@hotmail.com within seven (7) days of these Orders being made.
(8) Costs be reserved.

AND THE COURT NOTES:

  1. This Order was made in the absence of the Respondent and the Respondent may apply to vary or set aside this order pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 776 of 2019

HAMIDREZA NASIRIAN

Applicant

And

ARSHAM MOMTAZI SARVASTANI

Respondent


REASONS FOR JUDGMENT

(REVISED FROM DELIVERED EX-TEMPORE REASONS)

  1. This matter commenced by an Application filed on 19 March 2019. The Applicant was an employee of the Respondent, who is a sole trader running a restaurant business under the name Unique Bar and Restaurant.
  2. It is appropriate that the Court grant relief pursuant to rule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) because the Respondent has defaulted by playing no role in this proceeding, not filing any response or an address for service.
  3. I am satisfied that the Originating Application, the subsequent Amended Statement of Claim, the Further Amended Statement of Claim and the Application in the Case (which forms the basis of the Application before the Court this morning) have been served. I refer to the Affidavit of Jack Faine affirmed 17 December 2019, and in particular paragraph [7].
  4. I am satisfied that each of the pleaded contraventions are made out on the documentary evidence presented to the Court to substantiate each of the claims. The evidence which was attached to the Further Amended Statement of Claim makes good the claims made in the Statement of Claim that there has been significant underpayment of award wages and there has been a failure to pay superannuation, annual leave and payment in lieu of notice. I also find that the Respondent terminated the Applicant’s employment because he made complaints and enquiries in relation to his employment and the pay that he was receiving.
  5. The Statement of Claim is comprehensive and provides a narrative that the Applicant was employed by the Respondent to work at the business in early October 2017. He continued to work there until 4 December 2018. He was initially employed in the position of a kitchenhand at the business, and from about March 2018 his role changed to that of chef, but he also continued to perform the role of kitchenhand. At that time, the business was operating six days a week and employing people to work at the classification set out in Schedule B of the Restaurant Industry General Award 2010 (‘Award’). I find that the Award covered the Applicant’s employment.
  6. The Statement of Claim pleads that, in or around November 2017, the Applicant received his first pay from the business, and that in or around that time he made a complaint about the rate of pay. When he commenced the job, he was told by a person who interviewed him for the position, Sana Farghan, that his rate of pay would be $12 per hour. When he raised a complaint in November 2017, his pay was increased to $13 per hour.
  7. In January 2017, he raised a complaint with the Respondent that he had not been provided a payslip and was told by the Respondent that he would be provided with a payslip every three months. In January 2018, the Applicant received a payslip sent by email from the Respondent. He raised a complaint at that time, in about April 2018, that the payslips did not accurately record the number of hours worked by him and that the payslip recorded that superannuation was being paid on his behalf but the Applicant was not aware that any such payments were being made.
  8. At the end of the financial year 30 June 2018, the Applicant requested from the Respondent a payment summary in order that he could complete his tax return. That Respondent did not comply with that request.
  9. In around October 2018, the Applicant received payslips for the period of 1 July 2018 to 30 September 2018. On or about 4 December 2018, the Applicant rang the Respondent and complained that the payslips that he was receiving were inaccurate and complained that:
  10. During that conversation it is said that the Respondent told the Applicant that the business’s accountant was negligent and had made mistakes on the payslip, and that the Respondent made some comment to the effect that he has asked the accountant to change the payslips. An argument ensued and the Applicant was told to pack up his belongings and leave the business.
  11. A letter bearing the Respondent’s name and addressed to the Applicant was sent to him by email at 7.38pm on 4 December 2018 provided:
  12. The schedule of payment which was attached to the Statement of Claim, sets out the hours that were worked by the Applicant in the business. They were taken from electronic time records kept by the Respondent. I was informed in Court by Mr Murphy, who appeared on behalf of the Applicant, that the Applicant would take photographs of the electronic records and that is how the record was compiled.
  13. I accept that those records recorded the hours worked and show that the Applicant regularly worked in excess of nine hours per day. On occasion he was working 12 hours, 13 hours and even up to 15 hours on a day in February 2018. I accept there were also times that he was working less hours than that per day. The calculations which have been produced by the Applicant, in my view, provide an accurate summary of the hours worked and the underpayments when calculated against the Award entitlements. The Respondent has not disputed the calculations set out in or attached to the Statement of Claim.
  14. This matter was previously before the Court on 18 December 2019 and it was adjourned because, to their credit, the solicitors for the Applicant raised that there were discrepancies in the calculations in Attachment 2 to the Statement of Claim. Those discrepancies have been rectified. The total wages due to the Applicant for the period that he worked were $76,474.85. During that period, the Applicant was, in fact, paid $41,278.36. That is found from Attachment 3 to the Statement of Claim. There has been a loss of wages in the sum of $35,196.49.
  15. The Respondent has also contravened section 44 of the Fair Work Act 2009 (Cth) (‘the Act’) by failing to pay entitlements in relation to leave, notice and superannuation. The Applicant seeks declarations in respect of seven separate contraventions, being contraventions of:
    1. clause 20 and 27 of the Award and consequently, section 45 of the Act, by failing to pay the Applicant a minimum rate of pay;
    2. clause 34 of the Award and consequently section 45 of the Act, by failing to pay the Applicant penalty rates;
    1. clause 33 of the Award and consequently section 45 of the Act, by failing to pay the Applicant overtime rates;
    1. clause 30 of the Award and consequently section 45 of the Act, by failing to pay the Applicant’s superannuation;
    2. section 90(2) of the Act and consequently section 44 of the Act, by failing to pay the Applicant’s entitlement of accrued but untaken annual leave when the Applicant was dismissed;
    3. section 117(2) of the Act and consequently section 44 of the Act, by failing to give the Applicant two weeks’ notice or two weeks’ pay in lieu of notice upon termination; and
    4. section 340 of the Act, by dismissing the Applicant because he made complaints or inquiries in relation to his employment.
  16. I find that each of those contraventions have been made out on the material before the Court.
  17. The Applicant seeks that the conduct constituting each of the contraventions be treated as a course of conduct. The submissions he makes in relation to the operation of the decision in Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 is correct. The appropriate approach is to treat the contraventions separately and there is a need to consider the question of the penalty having regarded the totality principle.
  18. The maximum penalty in respect of each of the breaches is 60 penalty units per contravention. The total maximum penalty in this case is $88,200 in respect of the seven contraventions claimed. The Applicant has referred the Court to the well-known principles set out in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 which are referred to in the decision of Tracey J in Kelly v Fitzpatrick [2007] FCA 1080 at [14].
  19. The Court notes that the Applicant sought that the Respondent pay a penalty of $44,100 for the contraventions. He submits that this constitutes a penalty of $6,300, or 30 penalty units, per contravention. Consequently, the Applicant has sought 50% of the maximum penalty for each contravention.
  20. In terms of the nature and extent of the conduct, this conduct occurred over a 13-month period and occurred in the face of the Applicant raising concerns about his rate of pay and the lack of payslips. Rather than correcting matters, the irregularities continued.
  21. The Respondent has put no evidence before the Court in relation to his financial circumstances. As to whether the Respondent was impecunious, he is still bound by, and must comply with, the Award. The Respondent has chosen not to take any part in these proceedings or to put material before the Court, which might mitigate the penalty on the basis of impecuniosity.
  22. The extent of the loss and damages resulting from the breach in this case is significant. On the basis of the amounts paid to the Applicant by the Respondent during the period of employment from 2 October 2017 to 3 December 2018 was $41,278.36. That amount was paid for work which was done often well in excess of 40 hours per week. The Court has been told that the Applicant is married and supports a 13 year old daughter. I accept that that amount of money is a very significant sum for the Applicant.
  23. There is no evidence that the Respondent has engaged in similar conduct previously. Similarly, there is no evidence before the Court as to the size of the Respondent’s business but it would appear that it is a small business given that the Applicant was employed both as a chef and a kitchenhand.
  24. In my view, these breaches were deliberate. The Applicant brought to the Respondent’s attention the irregularities in relation to his pay rate. Whilst not raising specific amounts, he questioned the rate that he was being paid and also questioned the conduct in relation to payslips. The Respondent was a sole trader and responsible for the business and the decisions made in it.
  25. I also take into account that there has been no contrition exhibited or corrective action taken by the Respondent. It is important for the Court to make clear that businesses, whether large or small, must comply with the minimum standards set out in Awards and under the National Employment Standards. Here, both specific and general deterrence play a significant role.
  26. The penalty must be set at a rate that makes it clear that underpayment and the risk of a penalty is just simply part of the costs of doing business. I impose a penalty of $5,000 per contravention, but applying the totality principle, reduce that penalty to the sum of $30,000 as a penalty payable to the Applicant.
  27. That penalty should be paid to the Applicant who has engaged solicitors to prepare a comprehensive Statement of Claim, detailed written submissions and to collate material and present it in a clear form.
  28. This is not a case where the Order for payment of a penalty to the Applicant will result in a windfall or result in double compensation if it was paid to him. There may be cases where that circumstance may arise but in my view this is not one of them. The solicitors for the Applicant prepared a detailed Statement of Claim and prepared compendious attachments which set out the basis of the allegations in the Statement of Claim. Detailed written submissions were prepared in relation to the Orders sought, including separate submissions on penalty. The Court was also assisted by submissions made to the Court by Mr Murphy.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge McNab

Associate:

Date: 20 February 2020

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