WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

PARTIES NING WEI LEI;

 KENNY MENG WAI NG

CLAIMANT

-v-

VST Pty Ltd;

VST Pty Ltd

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE M. BOON

HEARD wednesday, 23 june 2010, thursday, 24 june 2010 

DELIVERED Monday, 13 September 2010

CLAIM NO. M 25 OF 2009, M 26 OF 2009

CITATION NO. 2010 WAIRC 00896

CatchWords

                                    Restaurant, Tearoom and Catering Workers’ Award 1979, an award of the Western Australian Industrial Relations Commission made pursuant to section 37 of the Industrial Relations Act 1979 (WA), and a Notional Agreement Preserving the Award pursuant to Part 3 of Schedule 8 of the Workplace Relations Act 1996 (Cth). 

                                    Alleged failure to pay claimants casual loading before their alleged employment converted to full time in breach of clause 11; alleged failure to pay claimants’ wages at the rates specified by the Award/NAPSA in breach of clause 21; alleged failure to pay claimants additional rates for ordinary hours in breach of clause 9; alleged failure to pay claimants overtime in breach of clause 10; alleged failure to pay claimant’s accrued annual leave or leave loading in breach of clause 18; and alleged failure to pay superannuation in breach of clause 37.  Whether claimants entitled to be paid in accordance with the Award and if so at what level. Whether a penalty should be imposed.  Whether a costs order should be made.

Legislation  Industrial Relations Act 1979 (WA)

Work Place Relations Act 1996 (Commonwealth)

Industrial Instruments Restaurant Tearoom and Catering Workers Award 1979

Notional Agreement Preserving the Award:

Cases referred to

in decision Jones v Hansson Pty Ltd [2008] FMCA 291

Carr v CEPU and Another [2007] FMCA 1526 of 29

Construction, Forestry, Mining and MMG Unions v Clark [2008] FCAFC 143 Dennington v Pee Cee Pty Ltd (No 2) [2008] FMCA 336

Dowling v Fairfax Media Publications Pty Ltd (No 2) [2010] FCAFC 28

Result Claims Proven

Representation 

Claimant Ms R Cosentino with Ms A Bilich instructed by Gibson and Gibson appeared for the Claimants.

Respondent             Mr V Todaro, director, appeared for the respondent.

REASONS FOR DECISION

Background

1         The respondent, V S T Pty Ltd, operates the Venezia Restaurant in Pier Street, Perth. The Venezia Restaurant serves Italian food such as pizza, pasta and meat dishes, and is open for lunch from Mondays to Fridays and for dinner seven days a week.  The claimants, Ms Ning Wei Lei and Mr Kenny Meng Wei Ng, who are husband and wife, allege they were employed by the Venezia Restaurant for some years.  They allege they were underpaid while they worked there.   Mr Ng alleges he originally worked at the restaurant as an assistant chef on a casual basis from 29 December 2004 to 8 March 2005, and then from 9 March 2005 to 9 December 2007 as a full-time permanent employee as the supervising chef.  Mr Ng says that the Venezia had a lunch time shift and a dinner shift for its employees.  He said that for each lunch shift and each dinner shift he worked, he was paid $50 per shift no matter what number of hours he actually worked.  Ms Lei alleges that she worked at the Venezia as a kitchen hand, initially on a casual basis from March 2006 to July 2006 and thereafter worked regular shifts to 17 November 2007.  She claims she worked five days a week during the evening dinner shift, with some weekend shifts as well.  Ms Lei alleges that she was paid $40 cash for each shift she worked, regardless of how many hours she worked. 

2         Mr Ng alleges that he should be paid at the rate of a Cook Grade 2 within the definition of clause 6 of the Restaurant Tearoom and Catering Workers’ Award 1979 (and its successor, the Notional Agreement Preserving the Award in the Commonwealth jurisdiction), and Ms Lei alleges that she should have been paid at the rate of a Level 1 Kitchen Hand under the Award.  Both Mr Ng and Ms Lei allege that they should have been paid casual loadings during the time they were casual employees; overtime rates, as well as two weeks annual leave taken in January 2007 (and payments in lieu of annual leave) when they worked as permanent employees.  They also allege that the respondent did not contribute to superannuation on their behalf in accordance with the requirements of the Superannuation Guarantee (Administration) Act 1992.

3         Mr Vincenzo Todaro, the director of the respondent, alleges that the claims are fabrications and denies that the company is liable to pay anything to the two claimants.  He does not admit that Mr Ng and Ms Lei were ever employees.  He says that Mr Ng was there to learn Italian cooking and that his skills were just above those of a kitchen hand.  Mr Todaro alleges Ms Lei wanted to be with her husband as she was lonely, and that the restaurant was “babysitting” her.  He claims that both Mr Ng and Ms Lei were happy with what they received and that Mr Ng’s mother “put them up to” making these claims.

4         The claimants further submit that the conduct of the respondent warrants the imposition of a penalty, and they seek an order for their costs to be paid.

The issues to be determined

5         The issues in this case are:

(1)Were either or both of the claimants ever employed by the respondent?

(2) If so, over which periods were they employed, what were their duties, what hours did they work, and what were they paid?

(3) If the claimants were employed by the respondent, did the respondent pay them in accordance with the relevant awards and legislation and, if not, what if anything should the respondent be ordered to pay to each claimant in respect of breaches of the awards? 

(4) If the respondent is shown to have breached the provisions of the awards, should a penalty be imposed?

(5)   Should the respondent pay the claimants’ costs in this matter?

The claimants have the burden of proof in this matter and the standard of proof is on the balance of probabilities.

The history of the proceedings

6         The originating claims (Form 1.1), lodged on 16 June 2009, both alleged the respondent had failed to comply with an award, namely, “underpayment of wages, leave entitlements, no group certificate”. They did not request a penalty to be imposed by this court. Calculations from the Workplace Ombudsman were attached to each claim.  In each case the Workplace Inspector had deemed the evidence obtained was insufficient to pursue the matter in a formal court process.  The Workplace Inspector stated that Mr Todaro refuted that either claimant had ever worked at the Venezia Café Restaurant. 

7         The claims were served on the respondent on 17 June 2009.  The respondent lodged responses wholly denying each claim and opposing any orders sought.  In each case the response stated:

“The claimant is asking money on false pretences and the respondent will sue for any legal expenses incurred in defending the claim”.

8         On 3 August 2009 a pre-trial conference was held.  Programming Orders were made.  On 16 September 2009 an Advocacy Officer from the Ethnic Disability Advocacy Centre requested the matters be adjourned for 6 months to identify and secure credible witnesses.  It was set down for trial on 7 April 2010.  The respondent was ordered to lodge and serve an outline of the case in response to the claim by 11 December 2009, and the parties were ordered to lodge and serve on each other copies of any records that they intend to use in evidence for trial by 12 February 2010. 

9         On 9 December 2009 the respondent lodged an outline of response which stated merely:

“1. The Claimants have no valid claim against the Respondent.

 2. The Claimants’ claim be dismissed.”

10      On 8 January 2010 Ms Lei wrote to the court to ask for an adjournment because she had to return to China to visit her ill mother, and she had a return date on her ticket of 10 April 2010. On 12 February 2010 Gibson and Gibson lodged a Notice of Appointment of Lawyer and the claimants’ book of records to be relied upon at trial.  On 10 March 2010 the claimants lodged an application seeking orders that the respondent provide copies of all its wages records for the café for the period December 04 to December 07 within 7 days, and if the respondent failed to comply with the order, the trial be adjourned.  The claimants also asked for orders that the respondent lodge and serve further and better particulars of its case within 7 days.  The claimants’ application was heard on 25 March 2010, and Mr Todaro appeared for the respondent.  Orders were made that the matters be heard together; that the trial be vacated and relisted for two days on dates to be advised; that on or before 15 April 2010 the respondent was to lodge and serve a further response setting out full particulars of its case, copies of any records it intended to use in evidence at trial, and its entire wages record for the period 1 December 2004 – 31 December 2007.  Further, it was ordered that on or before 1 April 2010 the claimants were to lodge and serve any Notice to Admit Facts.  The respondent was to lodge and serve its response to that notice on or before 15 April 2010.  On or before 15 April the claimants were to lodge and serve copies of their tax returns for the years 2004 to 2007, plus copies of all documents in their possession or control relating to all Centrelink benefits they had received for that period. 

11      At the hearing of the application on 23 March 2010 I explained to Mr Todaro that a blanket denial was not sufficient and that he needed to provide more particulars of the respondent’s defence to the claims.  Mr Todaro advised that he wanted a further six months to get the documents together and to obtain legal advice.  I told him he had had plenty of time to obtain legal advice and that I was not going allow a further six month adjournment.  I asked Mr Todaro to explain the basis of his defence and he said that he did not know who the claimants were, what they looked like or whether they had worked for his café.  I said to him that there were photographs of both claimants in the documents that had been filed and suggested he look at them.  They were available in the court room at the time.  Mr Todaro said that the names didn’t mean anything to him and that all Chinese people look alike to him.  I told him that he had to lodge and serve copies of any documents relating to the staff the restaurant employed and Mr Todaro replied that it was a family business and that they had no wages records at all. 

12      On 1 April 2010 the claimants lodged Invitations to Admit Facts which invited the respondent to admit that each claimant had been employed by the respondent; the period of each claimant’s employment (in Mr Ng’s case from December 2004 to December 2007; and in Ms Lei’s case from April 2006 to December 2007): that Mr Ng was employed as a cook and Ms Lei was employed as a kitchen hand; that the Mr Ng’s duties included preparing food, cooking meals for customers and staff including breakfast, lunch and dinner, and cleaning and Ms Lei’s duties were preparing ingredients for cooking and kitchen cleaning; that the claimants’ employment was covered by the Restaurant Tearoom and Catering Workers Award 1979; that Mr Ng’s work was classified as “Cook (Tradesperson) Grade 3” , and Me Lei’s work was classified as “Kitchen Attendant Grade 1” under the Award; that Mr Ng’s hours of work were on average

(a) 10.5 hours per fortnight from December 2004 to March 2005;

(b) 126 hours per fortnight from March 2005 to the end of 2006;

(c) 113 hours per fortnight from the beginning of 2007 to December 2007,

and that Ms Lei’s hours of work were 26 hours per fortnight for the duration of her employment; that the respondent paid Mr Ng the sum of $100.00 in cash per shift regardless of the number of hours worked and paid Ms Lei the sum of $160.00 in cash per fortnight regardless of the hours worked; and that the respondent did not pay the claimant any entitlements such as overtime or annual leave. 

13      The respondent filed a Response to each of the Invitations to Admit in which it did not admit any facts, and neither did it deny any facts.  Instead, it set out all of the facts it had been invited to admit in the section “facts which are not known to be correct or not correct”.  Further, the respondent lodged in each case a further response in which it denied the claims and opposed the court granting any order sought in the claim, and in each case said merely:

“The Respondent has no knowledge of the Claimant.

The Respondent does not owe the Claimant any money.

The Claimant is claiming money under false pretences”.

14      The claimants complied with the orders to provide documents, but the respondent did not comply with those orders.

15      On 23 June 2010, at the outset of the trial, Mr Todaro asked this court to dismiss the claimants’ claims on the basis that he had been requesting some information from them and it had not been provided.  It transpired that by letter of 13 May 2010 Mr Todaro had written to Gibson and Gibson asking the claimants to provide copies of all passports held by both claimants; to advise whether either or both claimants undertook any apprenticeships and if so provide details and supporting evidence; to provide details of the claimants’ qualifications with supporting evidence; to state the dates that the claimants claimed they worked for the respondent at breakfast, at lunch, and at dinner; to state exactly how much each claimant was paid per day by the respondent; to ask whether either or both claimants worked for any other employer in the period 2003 to 2007 and if so to provide the names and addresses of all employers and hours worked for each employer during the period; whether either or both the claimants received any Centrelink benefits in the period 2003 to 2007 and if so to state exactly how much; to state whether either or both claimants declared their alleged wages from the respondent to Centrelink in those periods.  The letter went on to say that:

“Unless your clients provide the above answers, with supporting documents, latest by 20 May 2010, I shall produce this letter to the Court and seek an adjournment of the trial on the grounds you’re your clients have and are deliberately withholding/not disclosing relevant evidence”. 

16      Gibson and Gibson had replied by correspondence of 28 May 2010 to the effect that the passports would not be provided as they were irrelevant to the proceedings (to which the respondent subsequently responded that they were relevant because if they were out of the country during those periods then they could not be working); that Mr Ng had numerous qualifications and experience in the food and catering industry, and they enclosed copies of three certificates from particular training courses and three references from prior employers; they provided details of the hours worked and referred to the fact that the details had been provided in the client’s originating claim; they answered how much was paid per day, they confirmed that Mr Ng received Centrelink benefits and referred to the documents filed in Court on 15 April and served on the respondent; and they reminded Mr Todaro of his obligations to provide full particulars of the case, copies of any records he intended to use in evidence and wages records.  Further, by letter of 21 June Gibson and Gibson enclosed some additional Centrelink documents and copies of the passports.  It became apparent that the respondent had not received the documents that had been mailed out on 21 June.  They were handed over to Mr Todaro at the start of the trial.  I ruled the trial would not be adjourned but I allowed Mr Todaro an opportunity to look at the documents which had been sent by mail and I stood down to enable him to do so. 

17      After being given a lengthy opportunity to look at the documents, Mr Todaro once again requested an adjournment of the trial on the basis that he had only just received them.  However, the only documents he had not seen before were the passports, the originals of the certificates (He had been advised of their contents), and some additional information from Centrelink.  I refused Mr Todaro’s application for an adjournment because the substance of the information had already been provided to him prior to the trial; what he had not seen prior to the trial he had been given an opportunity to look at while the court adjourned; he had made no application to this Court for access to this further information; he had himself not complied with the programming orders; and as the matter had been on foot for approximately a year it was important that it be heard and determined.

18      The trial proceeded on 23 and 24 June and Mr Todaro cross-examined the various witnesses called by the claimants.  Despite many warnings about the consequences for the company if it called no evidence in response to the evidence of the claimants, Mr Todaro elected not to give evidence himself and did not call any witnesses to give evidence on behalf of the company.

Mr Ng’s Claim

19      Mr Ng is a Chinese Australian who came to Western Australia in 1987.  He has a hearing impairment which sometimes affects his ability to communicate.  He gave evidence that he had completed an Education Department of Western Australia Technical Certificate in Job Orientated Migrant English in Food Preparation and Cooking.  After completing that course in August 1987 he obtained work at the Royal Perth Hospital in the hospital’s kitchen working as a Kitchen Hand for a short time.  Between 1987 and 2004 he continued to work in the catering and hospitality industry in many different jobs and capacities.  He also completed a number of courses including an Academy of Hotel and Catering course in Short Order Food Preparation in February 1996 and a Centrecare Skills Training Centre course in Asian Cookery in October 1996.  He said he had worked in jobs in various restaurants, hotels and hospitals as breakfast and commis chef.  Mr Ng provided a bundle of references and statements of service from previous employers including the Kemayan Inntown Hotel, Spices Catering as Kitchen Hand and Chef’s Assistant, as a day chef at Searripple Village Karratha Catering; Seasons of Perth as a Commis Chef; Hotel Alexander, Blue Collar People, Burswood Casino as casual Chef for about 5 years, Hans Café and ESS Catering.  He said that immediately before commencing employment with the Venezia Restaurant he was living in Broome and working at the Cable Beach Resort, where he was Commis Chef full-time from 5 May to 8 September 2004.  He found the cost of living in Broome too high and decided to move back to Perth.  After he left Broome he travelled to China and asked Ms Lei to marry him. 

20      Mr Ng said that in or around November 2004 he saw an advertisement in the West Australian Newspaper for a Cook/Chef at the Venezia Restaurant.   Mr Todaro interviewed him and gave him the job of Assistant Chef.  Mr Ng said there was never any discussion about his pay or his hours and nothing was put in writing about his employment.  Mr Todaro introduced him to the Head Chef, Salvatore, who taught him how to prepare the food and supervised him in his tasks.  He said that Venezia is an Italian Café Restaurant which has a lunch and dinner trade, and its menu is mainly pasta, pizza and traditional Italian dishes.  Mr Ng said that he worked casually from 29 December 2004 to 8 March 2005, and on average worked about 36.5 hours each fortnight, although his hours fluctuated from week to week.  Mr Todaro told him what shifts to work.  He wrote down his shifts on a calendar at home but the calendar has been lost.  Mr Ng said that at that time Salvatore was the Head Chef, Pamela was the Bar Manager, there a weekend only casual chef called Michael, a waiter, a kitchen hand called Bernard Paterson and a Japanese tourist who worked as a kitchen hand and waitress.  At that stage his duties included cooking sauces for pastas before mealtimes, making soup, assembling lasagne and baking it, peeling squid, roasting lamb dishes, cooking meals as they were ordered including pastas, pizzas, hamburgers and grilling steaks and cleaning up.

21      Mr Ng said that in 2005 Salvatore wanted to take a break and go on holiday so Mr Todaro and Salvatore asked him if he would take over as Head Chef.  That meant working more hours each week for lunch and dinner.  Mr Ng said that by that time he knew how to prepare the food and how to cook most meals and agreed to be Head Chef, which he did from 8 March 2005.  He said that Mr Todaro gave him a key and he looked after the restaurant.  Salvatore did not come back to work and he continued in that role.  For the first few weeks Mr Ng worked 3 days a week doing the lunch and dinner shift, then it increased to 4 days a week, and after a few more weeks increased to 5 days a week, Monday to Friday.  On those days the lunch shift was from 11.00am to 3 or 4 pm, and the dinner shift was 4 or 5 pm to 10.30 or 11.00 pm.  His actual hours did vary slightly as to when he finished depending on how busy the restaurant was and how long it took to clean up.  Mr Ng’s evidence was that in his role of Head Chef he sometimes worked with Mr Todaro but not often.  He came into the kitchen on most shifts for a short while but never for more than 2 hours.  If there was a function booked at the weekend, or if the weekend chef Michael was unable to work, or if it was expected to be a busy weekend, Mr Todaro or Pamela would ask Mr Ng to work the weekend in addition to his week day shifts.

22      Mr Ng said that Mr Todaro gave him $50.00 in cash for each shift he worked: namely, $50.00 for the lunch shift and $50.00 for the dinner shift, so he was paid $100.00 per day no matter how many hours he worked.  He said that Mr Todaro did not pay him any more than this amount even when he worked overtime.  Whenever he worked 5 days a week he was paid $500.00 and when he worked 7 days in a week, he was paid $600.00 for that week.  He was paid in cash each week usually on Wednesday.  He was never given any payslips or group certificates.  Mr Ng said that in 2005 Mr Todaro went away for about 6 weeks and left Pamela in charge of the restaurant, during which time he was working both shifts 4 days a week for which he was paid $500.00 in cash each week.  When Mr Todaro returned he told Mr Ng that he did not deserve to be paid $500.00 and made him repay $100.00 for each of the 6 weeks he had been away, so he ended up repaying $600.00.

23      Mr Ng said that he could not recall taking any time off work except for two weeks in January of 2007.  He did not receive any pay for annual leave taken or sick leave, and no pay in lieu of annual leave when he left.  The respondent had made no contribution to his superannuation fund.

24      Mr Ng said that Mr Todaro suggested to him that by paying him cash he was doing him a favour because he could also claim Centrelink benefits.  Mr Ng said he asked Mr Todaro many times not to be paid in cash as he didn’t want that arrangement but Mr Todaro refused and said that he wasn’t very clever. 

25      Mr Ng said that while working for Venezia he also worked at a few other restaurants on a casual basis.  He worked at Café Villa, Seasons of Perth and for a 3 week period at Prime Taste Restaurant.  He worked at Café Villa in February 2005 to November 2007 as a casual chef, one shift per week, and his hours ranged from 6 to 25 hours in a month.  He was paid $18.92 per hour.  He worked Saturdays and sometime Sundays for Café Villa.  He worked at Seasons of Perth from 28 May 2005 to 4 January 2006 as a casual commis chef, 1 to 2 shifts per week or 3 to 6 hours per week, for which he was paid $19.263 per hour plus penalty.  He said he could not recall the details of his work for Prime Taste but it was in the 2007 financial year for which he earned a total of $564.00.

26      Mr Ng said that he was extremely unhappy with what Mr Todaro was paying him so in 2006 he spoke to him about paying them under an Award.  Mr Todaro asked him to get his mother Marjorie Pringle to negotiate with him for better pay.  Mr Todaro knew his mother, and she speaks better English than he does.  His mother talked to Vince and emailed Pamela about it.  However Mr Todaro refused to pay them under the Award and told his mum that he would be buying him a new car as a bonus.  He never received the car.

27      In November 2007 after his wife had stopped her employment with the restaurant he typed out all the hours he had worked since he started at the Venezia in 2004.  He inputted the hours he had written on the calendars at home into a single document and he also asked his wife to give him her hours of work so that he could type them and calculate the total number of hours for the purpose of a claim for back pay and overtime.  His wife wrote out her hours from memory and gave them to him.  He typed her handwritten notes.  He produced the document he had prepared based on his hand written records from the calendar.  He said his wife had thrown out the calendar by accident when she was cleaning out the room to prepare for the birth of their baby.  Ms Lei confirmed that evidence.

28      Mr Ng said that on 19 November 2007 his mother came and saw him working in the kitchen and after that she believed that he was not being given a correct wage for his services.  He again asked Mr Todaro to pay him under the Award and he refused, so on 9 December 2007 he served him with his and his wife’s Workplace Ombudsman Wages and Conditions Claim Form dated 4 December 2007.  Mr Todaro took the claim forms from him and said “no, no more pay, now go”.  Mr Todaro shook his hand and told him not to come back to the restaurant.  He did not get paid from the period 14 November to 4 December 2007.  Mr Ng provided a comprehensive list of hours he says he worked at the Venezia Italian Restaurant.  His evidence is that his hours were on average:

1. From 29 December 2004 to 8 March 2005 5 – 11pm (6 hours), 6 to 10 times per fortnight (36 – 60 hours per fortnight);

2. Between 9 March 2005 and 30 October 2005 from 11.00 am to 3.00 pm and from 4.30 pm to 10.00 pm ( 9.5 hours), 8 days per fortnight and 11.00 am to 3.00 pm (5 hours) 2 days per fortnight (86 hours per fortnight).

3. Between 31 October 2005 and 4 December 2007 from 11.00 am to 3.00 pm and from 4.00 pm to 10.30 pm and between 5 and 11 hours per days, 12 days per fortnight (up to 120 hours per fortnight) except for two weeks in January 2007.

29      Mr Bernard Paterson gave evidence that before he was retired he would come into the Venezia Restaurant and give Mr Todaro a hand.  He was not on his payroll, but in exchange for doing odd duties such as washing up, cleaning the toilets and preparing fish, Mr Todaro would give him coffee and a good meal.  They had this arrangement for at least 7 years.  He said that Mr Ng was one of the chefs working at the restaurant, and that he saw Mr Ng cooking and working very hard.  Mr Todaro would come in sometimes and help and he would be in the kitchen some of the time but sometimes not.  When Mr Ng was working there he was not aware of any other chefs working there.  Other chefs would be on different shifts.  He saw Mr Ng there a lot of mornings and also evenings.  Sometimes he would take Mr Ng and his wife home by car because it was so late, about 10 to 11.

30      Ms Lei gave evidence that she came to Perth on 11 February 2006 and visited her husband in the restaurant in about April 2006, from which time she started to work there.  She saw her husband working in the kitchen cooking pasta, tomato sauce, lasagne, chicken and beef.  He taught her some skills such as making pizza, salad, potato chips and fish and garlic bread.  Mr Todaro was in the kitchen but very seldom.

31      The Court also heard from Ms Marjorie Pringle, the mother of Mr Ng.  Her evidence was that she often has to assist her son in his dealings with other people because of his hearing impairment and communication difficulties.

32      Ms Pringle said she was aware that her son worked for the Venezia Restaurant from December 2004 to December 2007.  She would drop in at the restaurant from time to time and almost every time she did so he was working in the kitchen there.  She became very familiar and friendly with Mr Todaro.  From time to time she also corresponded with the manager, Pamela, by email in relation to work issues, and she provided copies of some of those emails. 

33      Ms Pringle said that some time in 2006 her son asked her to go to the restaurant to ask for a contract of employment.  She went to Mr Todaro and said that her son needed a contract and that it was not fair that he was paid in cash because he needed to pay tax.  Mr Todaro gave her a job application form for the Four Seasons Hotel.  She asked Mr Todaro if the Venezia Restaurant had anything to do with Four Seasons and he said no.   Some time in 2007 she again went to the Venezia Restaurant and asked for a contract for Kenny.  Pamela handed her another Four Seasons application form but she refused to take it and again said that this was not right.  On one occasion Mr Todaro told her that he would buy her son a car as a bonus.  Ms Pringle started an email correspondence via Pamela to try to persuade Mr Todaro to improve her son’s pay.  She said that many times her son had wanted to quit but she convinced him to keep working as he needed the money and she thought Mr Todaro was a nice person.  In November 2007 Mr Todaro telephoned her and asked her to come to the restaurant to see how her son worked.  He offered to put her up at a hotel in the city for a week as she had to travel from Waroona where she was living.  Mr Todaro had told her that her son was incapable, but she watched him cook all day and she was amazed at how much was going on at once.  She said that her son was performing much better than she had expected him to, given what Mr Todaro had told her about him.  She said she spoke to Mr Todaro and told him that her son should be getting paid twice what he was getting paid.  Mr Todaro refused.  She was the one who suggested that her son and his wife make an application for payment of back pay wages and entitlements. 

Ms Lei’s Claim

34      Ms Lei lived in China until she came to Australia with her husband in 2006.  She said that in China she had operated a snack shop in 2003, at which she made and sold desserts, dumplings, noodles and wantons.   Her husband had told her that there was a possibility of a job for her at the Venezia Restaurant.  From April 2006 she worked Mondays and Tuesday nights from 5.00pm until 10.30 or sometimes 11.00pm.  She washed the dishes, and did the vegetables.  She stopped work in May and returned in June of 2006.  From then her work was Monday to Friday from 5.00pm to 10.30 or 11.00pm.  Pamela had told her husband that she must work those hours, and her husband told her.  In October 2006 she began working the lunch shift as well, from 11.00am to 3.00pm and sometimes 3.30pm, and that was in addition to the Friday evenings she was already working.  From July 2006 she had to work from Monday night to Sunday night and Pamela would write down her shift times for her.  For each shift she was paid $40.00 in cash.  She never received any documentation or pay slips concerning the pay or the hours she worked.  She washed the dishes, washed the vegetables, washed the fish and cleaned the toilet.  During the first two months she also watched her husband work sometimes and he taught her how to make pizza, salad, potato chips and fish and also garlic bread.  There was nobody else working in the kitchen when she was working, other than her husband.  She did not receive any holiday pay or superannuation.  She took three days off in October 2006 and received no sick pay.  She had a holiday with her husband in January 2007.  After the holiday her shift changed in that she worked from Monday night to Friday night, and prior to that she worked the Saturday and the Sunday and she no longer needed to do that.  She left work at the Venezia Café on 13 November 2007.  She said she was 2 months’ pregnant at the time and it was very late, 11.15pm.  There was another order in the kitchen and she was too tired.  She was unhappy about it.  Pamela saw that she was unhappy and she told Ms Lei “If you don’t want to do that, you can go home”.  Pamela was very hostile when she said that and spoke to her in a loud voice.  She became angry herself and had never been back to work since that day.  She said that in February 2007 she had given her Tax File Number to Mr Todaro, who replied that he did not have enough money to pay the tax.  Ms Lei provided a document setting out her work times and work schedule, which she said accurately reflected the hours that she worked at the Venezia Café.  She said she knew this was accurate because it was normally what her work hours were. 

35      Mr Ng also confirmed in his evidence that his wife worked at the restaurant during this time, and Ms Pringle also verified that her daughter-in-law worked at the restaurant.  Mr Paterson also confirmed that Ms Lei was working in the restaurant while he was there.

V S T Pty Ltd’s Case

36      The respondent elected to give no evidence.  Mr Todaro on behalf of the respondent company made blanket denials in the responses to the claim, and he did not admit any facts in response to the Invitations to Admit. 

37      At the close of the evidence, I ordered the parties to provide submissions in writing.  This was done primarily to allow the respondent more time to consider the claimants’ submissions and to make its submissions in response.  The respondent provided a written submission as follows:

“Summary of Points:

1. I received the closing submissions from Gibson and Gibson a couple of days late.

2. Mr Ng and Ms Lei have to prove their case.  The Company does not have to prove anything.

3. Mr Ng’s evidence is a complete fabrication of the truth and his evidence should be completely rejected.  He has lied to the Court, to the Work Place Ombudsman, to the Tax Office and to Centrelink.

4. I refer to the bottom of page 2 of Mr Ng’s submissions.  On his own evidence, he took money from the Company and did not declare any of that in his Tax Returns over several years.  He gave no excuse for this.  He and his mother know that he should have declared the money he received.  He did not over a number of years.  The Court should treat his evidence with great suspicion.

  5. The company was forced into trial without full disclosure from Mr Ng and Ms Lei.  The company requested Centrelink records which they have refused to supply.  It is likely that they have refused to supply the records because they fear being found out not to have told Centrelink the truth.

6. The truth is that Mr Ng asked to be involved in the kitchen so he could learn Italian cooking.  He has no qualifications as a Chef.  He wanted to learn from me and from others.  He got some payments from me which were more than enough.  He was never “employed” by the company and nor was his wife.  His skills were just above those of a kitchen hand.  He was happy with the arrangement as he got money to learn about Italian cooking.  He has no accurate records.  His claims are false and his mother has put him up to this case.  I paid her a $100.00 once to see for herself that Mr Ng is no chef.  He had other jobs and just wanted to learn Italian cooking.  Now he is suing the company.  It is just incredible.

7. This case is a waste of the Court’s and everyone’s time.  Mr Ng and Ms  Lei got well and truly more than enough.  It is unbelievable that they would work \ (happily) for so many years without complaint to me or anyone else.  They are just bitter and vindictive liars. 

8. As to the evidence of Mr Ng and Ms Lei about the payments received, there was no fixed amount paid to them because there was no fixed employment. Also, Mr Ng has lied to his lawyers because once they wrote saying he got $50.00 per shift and another time saying it was a $100.00 per shift.  The claimants would not have continued to come into the restaurant for year after year if they were not treated fairly.  They are just bitter and twisted and seeking money to which they are not entitled.”

38      The respondent’s submissions in writing contained a cover letter to me, which said:

“Further to the hearing on 23 June 2010, I wish to advise that I have attended to all matters that your Honour has required of me and further advise that should your Honour require anything further from me or for me to attend in person, I shall be more than happy to do so”.

39      The letter was signed by Mr Todaro. 

40      The respondent provided no evidence, no case outline, and did not comply with any orders requiring it to provide relevant documentation.  Even taking into account that the respondent was at all times self -represented, its director simply failed to respond to the claim and he was not prepared to give sworn evidence himself.  Mr Todaro did however cross-examine each of the witnesses and put various propositions to them, but he provided no evidence himself to support those propositions. 

41      In relation to Mr Paterson’s evidence, Mr Todaro suggested that he had been “sucked in” to coming to court to give evidence, but did not actually put that to him.

42      In relation to Mr Ng’s evidence, Mr Todaro put to him that he could not have worked in December 2004 and could not have had an interview on 25 December 2004 because the restaurant was not open.  He suggested that Mr Ng was lying, which was vehemently denied.  He suggested to Mr Ng that the restaurant had been closed between 28 December and 6 January.  Mr Ng’s evidence was that sometimes the restaurant was open for functions on public holidays.  Therefore, although it was normally closed on public holidays, sometimes there were special events which they catered for.

43      Mr Todaro also put to Mr Ng that he had asked Mr Ng how much money he wanted and Mr Ng had replied “$450.00”, and Mr Todaro had then given him $460.00.  He put to Mr Ng that he was very happy and had thanked him and said his ambition was to learn Italian cuisine.  Mr Ng denied this, and said that he had just been given $400.00 by Mr Todaro and there had been no discussion about pay.  He said he knew he had been under paid.  Mr Ng said he had asked his mother to talk to Mr Todaro about this.

44      Mr Todaro also put to Mr Ng that as he had been working at other restaurants he could not have been working at the Venezia for the hours that he claimed to have worked.  Mr Ng however provided Group Certificates for the other restaurants which indicated that he had either worked for various short periods of time or had worked few hours at the other restaurants.  He said he had worked for the Venezia during the week and had worked at other restaurants at the weekend. 

45      Mr Todaro also suggested that Mr Ng had been training at the Venezia and had been there only to learn to be a chef.  He said that Mr Ng had been unable to cook properly and had been learning from Mr Todaro.  Mr Ng denied this, and said he had had considerable experience and for much of the time Mr Todaro left him alone in the kitchen to do the work. 

46      Mr Todaro also referred to a letter from the claimants’ lawyers which had alleged that Mr Ng had worked breakfast shift, despite the fact that the Venezia was not open for breakfast.  This appears to have been an error, and Mr Ng gave evidence that he did not work any breakfast shifts.  Mr Todaro put to Mr Ng that he “could not cook for peanuts” and had no qualifications.  He said that Mr Ng was allowed to do a bit of work here and there but he was not qualified.  He said that whatever work had been done by Mr Ng he was paid for.  He alleged that Mr Ng had been over- paid for what he did.  He said Mr Ng had been a waste of time for him.  He alleged he had been teaching Mr Ng the whole time for which Mr Ng had been very grateful.  He alleged that Mr Ng had been “poisoned” by Ms Pringle and that it was his mother who had decided to bring this claim.  He suggested the claim was fabricated.  He said that Mr Ng had been “like a little baby who wanted to become a chef”.  Mr Ng denied the allegations Mr Todaro put to him, and there was no evidence given on behalf of the respondent to support the allegations made.

47      In relation to Ms Lei’s evidence, Mr Todaro suggested to her that when she arrived from China she was lonely and came to the restaurant so they could “babysit” her as she had nothing to do.  He suggested that any work she did was voluntary.  This was denied by Ms Lei, who said she had worked very hard while she was there.  Mr Todaro said he would give Ms Lei $100.00, but that was a present and she did not work.  Ms Lei denied this.  She said that she had been working there all the time and that she worked similar times every day, and the money was basically the same.  She also said that when she took three days’ leave in October 2006 her husband came home and said Pamela had asked when she would be able to return to work.  Most of the time there was just herself assisting her husband in the kitchen. 

48      Mr Todaro put to Ms Pringle that she had asked him to help her son and that he was to teach Mr Ng.  Ms Pringle said that her son had worked at the restaurant for three years and he had worked very hard.  She said she had always thought that Mr Todaro was a very kind man and was trying to help her son.  She had believed him when he said her son was no good, because of his hearing impairment.  But it was not until she had worked alongside her son for a day and realised how hard he worked and how good he was that she believed what her son had been saying.

49      Mr Todaro suggested that Ms Pringle was a trouble maker who had put her son and daughter-in-law up to making the claim.  He suggested that she was an hysterical liar and that the whole claim was ridiculous.  He pointed out inconsistencies in Ms Pringle’s evidence.  Ms Pringle said that the stress of dealing with the matter for the past years had affected her health and her memory and she acknowledged that she could not remember everything properly.  She said however that her son had worked at the restaurant, that he had been under paid and that her daughter-in-law had also worked at the restaurant. 

Assessment of the evidence

50      Mr Todaro was scathing about Ms Pringle, and it is true that her evidence was somewhat vague.  There was, however, clear evidence given by Mr Ng, Mr Paterson and Ms Lei to the effect that Mr Ng and Ms Lei had worked in the restaurant for a considerable period.  Their evidence is uncontradicted in that Mr Todaro was not prepared to give evidence himself, nor call anyone else to give evidence on behalf of the restaurant.  I draw an adverse inference from the failure of the respondent to call any evidence.  Although the respondent submits that Mr Ng and Ms Lei have lied to this court, to the Workplace Ombudsman, the Tax Office and Centrelink, Mr Ng’s and Ms Lei’s evidence about the hours they worked, the amounts they were paid and the duties they performed was not challenged by any evidence to the contrary.  I accept their explanations that they asked Mr Todaro several times for their employment to be documented properly and to be paid in accordance with the Award.  Despite Mr Todaro’s submissions to the contrary, they were not happy with what they were paid, but they were not in a strong bargaining position.  Their actions must be seen in light of all of the circumstances, which include that they were both vulnerable, given their language and communication difficulties, Mr Ng’s disability and Ms Lei’s recent arrival in Australia.  My view is that their evidence was credible, and I accept what they said.  I find that they worked the hours they said they did and were paid what they said they were paid. 

Did the respondent employ the claimants and if so over what period and what hours did they work?

51      As I have already indicated, I accept the evidence of the claimants.  The respondent did not give any evidence to rebut the evidence called by the claimants, and in any event the allegations that Mr Ng was at the restaurant to learn Italian cooking instead of work, and that Ms Lei was there only because she was lonely, are just not credible.  I find that Mr Ng was employed by the Venezia on a casual basis from 29 December 2004 to 7 March 2005, and thereafter on a fulltime permanent basis until 4 December 2007.  Ms Lei’s evidence was that from April 2006 she started to work casually at the restaurant.  She did not know which day in April she started.  Ms Lei however is claiming payments from May 2006 onwards and I find that she was employed by the Venezia from May 2006 to July 2006 on a casual basis, and from July 2006 to 17 November 2006 on a permanent basis.  I accept that they worked for the hours they said they worked, and those hours are contained in the annexures to Mr Ng’s witness statement which forms Exhibit 1 in these proceedings.

Did the respondent pay the claimants in accordance with relevant awards and legislation?

The applicable Award

52      Both Mr Ng and Ms Lei claim that at all times during their employment by the Venezia Restaurant they were entitled to be paid pursuant to the Restaurant Tearoom and Catering Workers Award 1979.  That Award was made pursuant to section 37 of the Industrial Relations Act 1979 which applied from the commencement of the employment on 29 December 2004 to 25 March 2006. 

53      From 26 March 2006, because the respondent is a constitutional corporation, the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) applied to this employment to the exclusion of the State Laws (see section 16 of the Workplace Relations Act 1996).  Part III of Schedule 8 of the   sets out transitional provisions in relation to the treatment of State Awards.  Clause 31 provides that if immediately before the commencement of the Work Choices Amendments, the terms and conditions of employment of an employee in a single business were not determined under a State Employment Agreement and were determined in whole or in part under a State Award, a “notional agreement preserving State award” comes into operation.  Clauses 32 and 33 of Part III provide that any party who is bound by or subject to an Award immediately before the Reform commencement, and is an employer or employee of the relevant business, is bound by or subject to the Notional Agreement Preserving the Award, and a person employed by the business after the reform commencement and who would have been bound by the Award under its terms, is also bound.  The terms of the Award are taken to be terms of the Notional Agreement preserving the Award, and the Notional Agreement preserving the Award has effect according to its terms, except for “prohibited content” (see clauses 34, 37 and 38).  Apart from the wage rates from time to time, the terms of the Award and the terms of the Notional Agreement Preserving the Award are identical.  As Ms Lei was employed after March 2006 the Notional Agreement Preserving the Award applied to her employment. 

The respondent’s business and the Award

54      The Award applied to the Venezia Restaurant because it was a common rule Award with effect throughout the State of Western Australia.  It applied to all workers employed in the callings described in clause 21 of the Award in “restaurants” as defined by the Award (see clauses 3 and 4 of the Award and section 37 of the Industrial Relations Act 1979).  Clause 6(1) of the Award states:

“Restaurant and/or tearoom means any meal room, dining room, grill room, coffee shop, tea shop, oyster shop, fish café, cafeteria or hamburger shop …”.

55      The evidence shows that the Venezia Restaurant run by the respondent company was clearly a “restaurant” within the definition in that clause.  The respondent itself states on its website that it is

“…the oldest Italian restaurant in the Perth central business district.  Open for lunch and dinner Monday to Friday, and dinner on Saturday and Sunday, this restaurant serves authentic home style Italian food at an affordable price.”

56      I find that the respondent comes within the definition of “restaurant” in the Award.

The claimants’ work and the Award

57      Clause 6 sets out the callings in the Award and the relevant parts are as follows:

“(9)Kitchen Attendant Grade 1 means an employee engaged in any of the      following:

(a)  general cleaning duties within a kitchen or food preparation area and scullery,  including the cleaning of cooking and general utensils used in a kitchen and restaurant;

                        (b)  assisting employees who are cooking;

                        (c)  assembly and preparation of ingredients for cooking; or

                        (d)  general pantry duties.

                             …

                       (12) Cook Grade 1 means an employee who carries out cooking of      

                               breakfasts and snacks, baking, pastry cooking or butchering.

                       (13) Cook Grade 2 means an employee who has the appropriate level of  

                               training and who performs cooking duties including baking, pastry

                               cooking or butchering.

                       (14) Cook (Tradesperson) Grade 3 means a “commi chef” or equivalent who 

                               has completed an apprenticeship or who has passed the appropriate trade

                               test, and who is engaged in cooking, baking, pastry cooking or butchering

                               duties.

                     (21) Appropriate level of training means:

    (a) completion of a training course and the employee qualifying for an   

               appropriate certificate relevant to the employee of particular classification; or

                         (b) that the employee’s skills have been assessed to be at least the equivalent of     those  obtained through the suitable course described in paragraph (a) of this sub-clause assessment to be undertaken by a qualified skills assessor.”

58      Mr Ng submits that he was entitled to be paid as a Cook Grade 2.  I accept Mr Ng’s evidence as to the duties he performed at the Venezia Restaurant, and they included cooking duties and baking.  He provided copies of his training certificates and has provided evidence of his experience.  He has not completed an apprenticeship or appropriate trade test, so he is not a Cook (Tradesperson) Grade 3.  I find on the evidence that Mr Ng’s employment fell within the category of Cook Grade 2 within the definition set out in clause 6(13) of the Award.

59      I also I accept the evidence in relation to Ms Lei’s employment, and she carried out the duties consistent with the definition of a Kitchen Attendant Grade 1 in clause 6(9) of the Award. 

60      I find that Ms Lei should have been paid as a Kitchen Attendant Grade 1 pursuant to the Award, and that Mr Ng should have been paid as a Cook Grade 2 pursuant to the Award. 

Minimum rates of pay, casual loadings and overtime

61      Clause 21 sets out the minimum fortnightly wages.   The Award provides that the ordinary hours of work are 76 hours a fortnight, over not more than 10 days per fortnight (see clause 8(1)).  Clause 8(1)(c) provides:

“Each ordinary hours work period shall not be less than 4 nor more than 10 ordinary hours, and shall be worked within a spread or shift not exceeding 12 hours. Provided that no employee shall be left with to work less than 3 hours consecutively exclusive of meal breaks.”

62      Clause 9(1) states that an employee who is required to work any ordinary hours after 7.00pm on any Monday until Friday shall be paid at the rate of an extra $1.66 per hour for each such hour or part thereof worked.  Clause 9(2) states that all time worked during the ordinary hours of work on Saturdays and Sundays shall be paid for at the rate of time and a half.  Clause 9(3) states that an employee who is required to work any of his or her ordinary hours on any day in more than one period of employment, other than for meal breaks, shall be paid an allowance of $2.70 per day, for such broken work period worked.  Clause 10(1) provides that overtime means all work performed outside of the rostered ordinary hours of work or outside the daily spread of shift.  Clause 10(2) states that all overtime worked between Monday and Friday shall be paid for at the rate of time and a half for the first two hours and double time thereafter, and all overtime worked on a Saturday or Sunday shall be paid for at the rate of double time.  Clause 11 states that casual employees are entitled to be paid an hourly rate of pay equivalent to 1/76th of the fortnightly rate prescribed by the Award plus a 25 percent loading for week days, 50 percent loading for weekends and 125 percent loading for public holidays. 

63      I find that the Venezia Restaurant paid Mr Ng $50.00 cash for each shift he worked throughout the employment, that he worked two such shifts per day, and it paid Ms Lei $40.00 cash for each shift she work throughout her employment.   In each case the claimants were paid the same rates no matter what hours they worked.

64      Therefore, given my findings of fact, the respondent did not pay the applicants in accordance with the relevant Awards and legislation.  The minimum fortnightly wages according to clause 21 are as follows:

For Mr Ng, who is entitled to be paid as a Cook Grade 2 per fortnight for ordinary hours:

$7.35 per hour (casual rate) from 29 December 2004 to 8 March 2005.

$1,055.00 between 8 March 2005 and 6 July 2005.

$1,089.00 between 7 July 2005 and 30 November 2006.

$1,143.80 between 1 December 2006 and 30 September 2007.

$1,164.32 between 1 October 2007 and 4 December 2007.

Ms Lei was entitled to be paid per fortnight for ordinary hours as follows:

$1,002.20 between June 2006 and 30 November 2006.

$1,057.16 between 1 December 2006 and 30 September 2007.

$1,077.68 between 1 October 2007 and 17 November 2007.

Annual leave

65      Clause 18 states that employees are entitled to four weeks’ paid annual leave for each year of continuous service paid at the ordinary rate of pay plus 17.5 percent leave loading.   Both Mr Ng and Ms Lei took two weeks’ leave in January for which they were not paid.  They were also not paid in lieu of annual leave when the left their employment.

Superannuation

66      Clause 37 of the Award provides that the employer shall contribute on behalf of the employee in accordance with the requirements of the Superannuation Guarantee (Administration) Act 1992, the Superannuation Guarantee Charge Act 1992 and the Superannuation (Resolution of Complaints) Act 1993 as varied from time to time.  The evidence is that no superannuation contributions were paid by the respondent in respect of the two claimants and that is something to which they are entitled.

Breaches of the Award and enforcement

67      The claimants submit (at paragraph 40) that the respondent has breached both the Award and the Notional Agreement Preserving the Award as follows:

“1. Failure to pay Ng and Ning casual loadings before their employment  

                        converted to full time in breach of clause 11.

2. Failure to pay Ng and Ning wages at the rates specified by the Award and the Notional Agreement in breach of clause 21.

3. Failure to pay Ng and Ning additional rates for ordinary hours in breach of

              clause 9.

              4.  Failure to pay Ng and Ning overtime in breach of clause 10.

5. Failure to pay Ng and Ning accrued annual leave or leave loading in breach of   clause 18.

              6. Failure to pay superannuation in respect of Ng and Ning in breach of clause    

                     37.”

68      As submitted on behalf of the applicants, the Court’s power to enforce the Award is contained in section 83 of the Industrial Relations Act 1979, which states as follows:

“83. Enforcement of certain instruments

                        (1) Subject to this Act, where a person contravenes or fails to comply 

                              with a provision of an instrument to which this section applies any  

                               of the following may apply in the prescribed manner to an 

                               industrial magistrates court for the enforcement of the provision –

                              (e) any person on his or her own behalf …to whom it applies…

                        (2)  In this section-

                              “instrument to which this section applies” means -

             (a) An award;

(b)  An Industrial Agreement;

                                    ….”

Section 83A(1) states:

“(1)Where in any proceedings brought under section 83(1)  against an    employer it appears to the industrial magistrates court that an employee of that employer has not been paid by that employer the amount which the employee was entitled to be paid under an instrument to which that section applies the industrial magistrates court shall, subject to sub-section (2), order that employer to pay that employee the amount by which the employee has been underpaid.

69      Sub-section (2) of section 83A contains exclusions which do not apply in this case. Sub-section (3) of section 83A states:

“(3) Where when an order is made under sub-section (1) the amount  stated in the order shall be taken to be a penalty imposed under this Act  and may be recovered accordingly, but on recovery shall be paid as stated in the order under section 83F.”

70      The Notional Agreement Preserving the Award is enforced in the same way as a collective agreement under the Workplace Relations Act 1996 (clause 43, Schedule 8 of the Act).  Under section 718(4) of the Act an employee who is bound by a collective agreement or a Notional Agreement Preserving the Award and is affected by the relevant breach has standing to apply for penalties or remedies under Part 14 of the Act.  As is submitted on behalf of the claimants (see paragraph 45 of the submissions):

    “The remedies available under Part 14 include:

• The imposition of penalties in respect of breaches of “applicable provisions” i.e. terms of a collective agreement under section 719(1);
• An order for an employer to pay an employee in the amount which the employer was required to pay but has not paid to the employee under the applicable provision under section 719(6);
• In respect of a failure to pay superannuation required to be paid under an applicable provision, an order requiring an employer to pay to or in respect of an employee a payment for the purpose of restoring the employee to the position that would have been had the employer not so failed under section 719(7);
• An order for payment of interest at such rate as the Court thinks fit on the amount of the judgment for the whole or part of the period between the date when the cause of action arose and the date of judgment under section 7. 

 Underpayments

71      The claimants’ written submissions have annexures which calculate Mr Ng’s alleged underpayments.  They are contained as calculations in Schedule A to the written submissions and I shall not set them out in full here but I adopt them as part of these reasons.  The calculations are based on the principles set out in these reasons.  Mr Ng’s entitlements are calculated as a casual employee from 29 December 2004 to 8 March 2005, and on a full-time permanent basis thereafter, at the level of a Cook Grade 2.  Further, Ms Lei’s entitlements are annexed as Schedule B and I similarly adopt those as if they were incorporated into these reasons for decision.  Her claim and calculations commence from 29 May 2006, which shows she has not claimed for the period April and most of May.  The amounts of the underpayments of wages, annual leave and unpaid superannuation are as follows:

Mr Ng claims:

$75,521.43 underpayment of wages,

$8,534.82 for annual leave taken and accrued,

$13,321.93 for unpaid superannuation.

Ms Lei claims:

$24,419.35 underpayment of wages,

$3,005.31 for annual leave taken and accrued,

$3,850.14 for unpaid superannuation.

Superannuation

72      In relation to the superannuation entitlements, although I accept the amounts calculated on behalf of the claimants, s719(7) makes provision for such payments to be made “to or in respect of “ the employee, and the intention is to restore the employee to the position he or she would have been in had the employer complied with the provisions.  Because of this, I consider it appropriate to award to each Mr Ng and Ms Lei the amount of superannuation they should have had paid into their funds, but those amounts should be paid in respect of each of them into an appropriate superannuation fund, not by way of lump sums payable directly to them. 

Interest

73      Schedule C to the submissions contain interest calculations made pursuant to section 722 of the Workplace Relations Act, with a total interest for Mr Ng’s claim amounting to $12,385.41, and for Ms Lei’s a sum of $5,511.54.  The submissions in Schedule C refer to s722(1) of the Workplace Relations Act 1996 which allows interest to be awarded:

  “at such rate as the eligible Court thinks fit on the whole or any part of the money for the whole or part of the period between the date when the cause of action arose and the date on which the order is made or judgment is entered”.

74      Alternatively, the court may order a lump sum instead of interest under s722(1)(b).  The interest calculations are based on a flat rate of interest of 10% and are set out in Schedule C.   The pre-judgment interest as set out in the submissions is pursuant to s51A of the Federal Court of Australia Act 1976 and the Federal Court Rules Order 35 Rule 7A as

 “the cash rate of interest set by the Reserve Bank of Australia from time to time…plus 4%”. 

75      The applicable rate of interest set out in the submissions using the “cash rate plus 4%” formula varies from 9.55% between 26 March 2006 and 2 May 2006 to 12.75 from 3 May 2006 to 5 August 2006.  In relation to Mr Ng, only that portion of the underpayments which accrued from 26 March 2006 was included in the calculations: that is, a sum of $53,635.09.  The calculations however set out a 10% applied to the total amount for underpayment of wages over the period from 26 March 2006 to the date of trial for Mr Ng, and from 1 June 2006 to trial for Ms Lei, and also 10% on the total amounts in respect of leave entitlements from January 2007 to trial.  A significant portion of the underpayments had not started to accrue at those dates.  My view is that the 10% is an appropriate rate of interest to apply in each case, but it is fairer to calculate the 10% from the date they finished their respective employments (as that was when the whole of the amounts had accrued) to the date of trial, which means for the period 9 December 2007 to 23 June 2010 in the case of Mr Ng, and 17 November 2007 to the date of judgment.

Conclusions on breaches

76      Therefore, in respect of Mr Ng, given that the breaches of the Industrial Instruments have been proved, it is appropriate to order that the respondent pay to the claimant the following:

(1) $21,886.34 underpayment of wages from 28 December 2004 to 25 March 2005;

(2) $53,635.09 underpayment of wages from 26 March 2006 to 4 December 2007;

                        (3) $8,534.82 for annual leave taken and accrued;

                        (4) $13,321.93 unpaid superannuation to be paid to any complying superannuation   fund  nominated by Mr Ng within 14 days of the date of the order or, if no such fund is nominated, into Host Plus Super Fund, and

(5)   interest at the rate of 10% per year payable on the amounts $53,635.09 plus $8,534.82 (making a total of $62,169.91) from 9 December 2006 to the date of this order.

77      In respect of Ms Lei’s employment, the respondent is ordered to pay to Ms Lei the following:

(1) $24,419.35 underpayment of wages;

(2) $3,005.31 for annual leave taken and accrued;

(3) $3,850.14 for unpaid superannuation to be paid to any complying

                       superannuation fund nominated by Ms Lei within 14 days of the

                             date of this order or, if no such fund is nominated, into Host Plus 

                             Super Fund, and

(4) interest the rate of 10% per year payable on the amounts

             $24,419.35 and $3,005.31 (making a total of $27,424.66) from

       17 November 2007 to the date of this order.

Should a penalty be imposed?

78      The claimant urge that a penalty should be imposed against the respondent pursuant to section 83(4)(a)(ii) of the Industrial Relations Act 1979, and Part 14 of the Workplace Relations Act 1996. 

79      In this matter the contravention of the Award has been proved.  The claimants submit that the relevant considerations are set out in Jones v Hansson Pty Ltd [2008] FMCA 291.  They submit that in this case, the relevant circumstances include that Mr Ng suffers from a hearing impairment which affects his communication skills; that Ms Lei is a recent Chinese immigrant with very limited English; and that both Mr Ng and Ms Lei were therefore vulnerable employees.  Further, it is submitted that another relevant circumstance includes that the respondent in response to the proceedings denied knowledge of the claimants for three years and despite the Workplace Ombudsman investigation in the meantime, and it was apparent at the hearing that Mr Todaro knew who the claimants were.  They further submit that the amounts of the underpayments are significant in both instances, but the breaches continued after the claimants requested their Award entitlements, the underpayments were over a period of 3 years and that they remain outstanding to date.  They further submit that the conduct was deliberate and there was evidence that the respondent knew that Mr Ng was not being paid Award entitlements but persuaded him to accept cash so he could claim Centrelink benefits.  There is no known record of civil penalty contravention.  They submit that considering the role of deterrence, a light handed approach is no longer applicable to civil breaches of industrial law, and the case of Carr v CEPU and Another [2007] FMCA 1526 of 29 is referred to.  It is submitted that

“54. The Respondent’s conduct was deliberate and in complete disregard of its legal obligations.  The Respondent’s approach has been to deny all allegations and indeed to deny knowledge of the Claimants causing additional undue and unnecessary stress to the Claimants as described by Marjorie Pringle in her evidence.  The Respondent via its director Vincenzo Todaro has made no acknowledgement of the Award’s application to it. 

55. The Respondent, through Vincent Todaro suggested that the employees were “happy” and that therefore that exonerates the employer.  A high penalty must be imposed to ensure the respondent does not breach the Act again. 

56. The Respondent sought on both days of the hearing to adjourn the proceedings to seek legal representation.  Despite the opportunity to seek advice and to arrange a lawyer over the course of the proceedings he failed to do so.  Combined with the application to adjourn, his conduct suggests the disregard on the part of the Respondent for both the Court’s processes and the Claimants’ legal entitlements. 

57. The penalty must show the seriousness with which the Court views the contraventions.

58. The respondent has made no confessions in relation to the claims, despite the Ombudsman’s involvement.  It has failed to keep employee records also in breach of the IRA, WRA and in law to making the conduct of the claim more difficult.”

80      I accept the circumstances of this case as set out in the submissions of the claimants.  The respondent’s conduct has been in complete disregard of its legal obligations and it has made no concessions that it has any obligations to the claimants at all.  However, the originating claims in this matter did not seek the imposition of a penalty, and that issue only arose at the close of the proceedings.  The originating claims sought rectification of the underpayments.  Taking this into account, and further taking into account that the respondent was self represented and has no prior record, I do not consider it appropriate to exercise my discretion to impose a penalty, particularly given the large quantum of the underpayments which have been ordered to be paid to the claimants. 

Should the respondent pay the claimants’ costs?

81      The claimants seek a costs order pursuant to section 824(2) of the Workplace Relations Act, which allows the court to order a party to pay some or all of the other party’s costs if it is:

“satisfied that a party to the proceedings has, by an unreasonable act or omission, caused another party to the proceedings to incur costs in connection with the proceeding”. 

82      The claimants refer to authorities to the effect that whether a party has conducted itself or its litigation in such a way as to cross this threshold will depend on the particular circumstances of the case (see Construction, Forestry, Mining and MMG Unions v Clark [2008] FCAFC 143 (14 August 2008); Dennington v Pee Cee Pty Ltd (No 2) [2008] FMCA 336; and Dowling v Fairfax Media Publications Pty Ltd (No 2) [2010] FCAFC 28).  The claimants submit that the respondent has unreasonably omitted to admit any of the facts contained in their notices to admit facts, including the fact that the claimants were employed by it despite having and adducing no evidence at all.  The claimants also submit that the respondent has failed to comply with orders requiring it to lodge and serve full particulars of its case and its entire wages records for the period 1 December 2004 to 31 December 2007.  They submit that the respondent has unreasonably denied knowing the claimants and it has defended the proceedings without any factual basis for a defence.  They submit that the defendant’s defences are completely devoid of substance and it is pointed out that no evidence was led by the respondent to support the defence.  Further, they submit that in the particular circumstances of this case the respondent’s conduct is unreasonable and therefore satisfies the “unreasonable act or omission” limb of section 824(2).  They submit that the respondent’s unreasonable omission has caused the claimants to incur legal and professional costs and disbursements in preparing for trial including costs of adjourning proceedings on 15 April 2010, the cost of calling the witness Bernard Paterson to verify the claimants’ identities, and the costs of calculating hours worked by the claimants over the period of employment. 

83      Mr Ng also submits that under the Industrial Relations Act, costs may be awarded in proceedings against a party who has acted “frivolously or vexatiously” in its defence.  He submits that the respondent’s defence is inherently incredible, obviously untenable or manifestly groundless so as to be utterly hopeless.  He submits that the defence has been conducted in disregard of the court’s orders, and that the case is one which qualifies for the exercise of the power in section 83C(2) of the Industrial Relations Act to the extent of Mr Ng’s claim under that Act.

84      I note that the trial was listed for 7 April 2010.  The matter came before the court on 25 March 2010 on an application made on behalf of the claimants for an adjournment.  On that date, various programming orders were made and that was partly because the respondent had issued a blanket denial of all of the aspects of the claim.  However, the court had also received the letter dated 8 January 2010 from Ms Lei which asked for an adjournment because she had to return to China to visit her ill mother.  As both matters were to be heard together, and as Ms Lei and therefore her husband were not available for the trial date in April, I do not consider it appropriate to order the respondent to pay the costs thrown away of the trial in April 2010.   I further note that the claim made by Mr Ng was on the basis that the classification in the Award applying to him was as a Cook (Tradesperson) Grade 3, whereas I have found that he met the criteria for a Cook Grade 2.

85      However, when I examine the conduct of the respondent throughout the proceedings, it is clear that the claimants were forced to prove every aspect of their claims despite the fact that ultimately the respondent chose not to give any evidence itself.  Mr Todaro made serious allegations against the claimants, but he elected not to give any evidence himself, and did not call any witnesses on behalf of his company.  He consistently denied that the claimants had any basis for making a claim and accused them of fraud.  Until the trial he did not admit that they were known to him at all, even when photographs of the claimants were supplied to him.  It was clear that he did know the claimants. I have had no hesitation in accepting the evidence given by and on behalf of the claimants.  Further, the respondent has consistently disregarded the court’s programming orders. The respondent’s conduct in the proceedings taken as a whole has been unreasonable, frivolous and vexatious.  In these circumstances, I am satisfied that the respondent has, by unreasonable act and omission, caused both the claimants in these proceedings to incur costs.  I am also satisfied that the respondent has acted frivolously and vexatiously in its defence of Mr Ng’s claim in so far as it relates to his employment up to 25 March 2006.  Therefore, the grounds for making a costs order under both the Workplace Relations Act and the Industrial Relations Act are made out in this case.  I order the respondent to pay the claimants’ costs (excluding the costs thrown away by reason of the adjournment of the trial on 7 April 2010), such costs to be assessed, if not agreed.

86      Orders:

IN RESPECT OF CLAIM M25 OF 2009, IT IS ORDERED THAT:

The Respondent VST Pty Ltd pay to the Claimant Ning Wei Lei the following:

(1)  $24,419.35 underpayment of wages;

(2)  $3,005.31 for annual leave taken and accrued;

            (3) $3,850.14 for unpaid superannuation to be paid to any complying superannuation fund   nominated by Ms Lei within 14 days of the date of this order or, if no such fund is nominated, into Host Plus Super Fund, and

            (4) interest the rate of 10% per year payable on the amounts $24,419.35 and   

                  $3,005.31 (making a total of $27,424.66) from 17 November 2007 to the date of this order, and

(5)  the claimant’s costs (excluding the costs thrown away by reason of the adjournment of     the trial on 7 April 2010), such costs to be assessed if not agreed.

IN RESPECT OF CLAIM M26 OF 2009, IT IS ORDERED THAT:

The Respondent VST Pty Ltd pay to the Claimant Kenny Meng Wai Ng the following:

(1)   $21,886.34 underpayment of wages from 28 December 2004 to 25 March 

  2006;

(2)   $53,635.09 underpayment of wages from 26 March 2006 to 4 December

2007;

(3)   $8,534.82 for annual leave taken and accrued;

(4)   $13,321.93 unpaid superannuation to be paid to any complying

       superannuation fund nominated by Mr Ng within 14 days of the date of this 

       order or, if no such fund is nominated, into Host Plus Super Fund,

(5)   interest at the rate of 10% per year payable on the amounts $53,635.09 plus

                  $8,534.82 (making a total of $62,169.91) from 9 December 2006 to the

                  date of this order, and

(6)   the claimant’s costs (excluding the costs thrown away by reason of the

                  adjournment of the trial on 7 April 2010), such costs to be assessed if not

      agreed.

M Boon

Industrial Magistrate