2025 WAIRC 00208
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION
:
2025 WAIRC 00208



CORAM
:
INDUSTRIAL MAGISTRATE D. SCADDAN



HEARD
:
FRIDAY, 28 MARCH 2025



DELIVERED
:
FRIDAY, 4 APRIL 2025



FILE NO.
:
M 120 OF 2024



BETWEEN
:
SIMON WARREN


CLAIMANT





AND





SAFE CO PTY LTD
FIRST RESPONDENT

AND

SAFE INTEGRATED SYSTEMS PTY LTD
SECOND RESPONDENT

AND

CYBER DINE HOLDINGS PTY LTD


THIRD RESPONDENT

CatchWords : INDUSTRIAL LAW – Small claims procedure under the Fair Work Act 2009 (Cth) – Failure to pay untaken annual leave pursuant to s 90(2) of the Fair Work Act 2009 (Cth) – Failure to pay personal leave pursuant to s 99 of the Fair Work Act 2009 (Cth) – Whether the deduction recorded on a final payslip was unauthorised – Whether amounts owed were paid in full
Legislation : Fair Work Act 2009 (Cth)
Fair Work Regulations 2009 (Cth)
Case(s) referred
to in reasons: : Mildren v Gabbusch [2014] SAIRC 15
Miller v Minister of Pensions [1947] 2 All ER 372, 374
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Result : The claim is proven
Representation:
Claimant : Self-represented
Respondents : Mr Ben Pavlic (Director)



REASONS FOR DECISION
Introduction
1 The claimant, Mr Simon Warren (Mr Warren), was employed as a technical sales manager for Safe Co Pty Ltd, when his employment was transferred to the first respondent (Safe). Mr Warren commenced employment with Safe Integrated Pty Ltd on 1 December 2017 as a service manager and then as an operations manager and assumed his last role with Safe after his employment was transferred.
2 It was not disputed that Safe employed Mr Warren after some form of restructuring of its business when Safe Integrated Pty Ltd (the second respondent) and Cyber Dine Holdings Pty Ltd (the third respondent) went into administration. Safe Integrated Pty Ltd’s and Cyber Dine Holdings Pty Ltd’s status was the subject of some dispute at the hearing, but it is unnecessary to resolve this issue where Safe accepts it employed Mr Warren.
3 Mr Warren resigned from his employment on 4 July 2024. Mr Warren alleges Safe failed to pay him $18,795.37, being an amount that he alleges would have been payable to him had he taken his unpaid accrued annual leave of 311 hours.
4 Mr Warren further alleges he was not paid 80 hours of sick, or carers leave (now called personal leave) in accordance with medical certificates provided by him for the period 20 June to 4 July 2024. The number of hours of unpaid personal leave was amended to 40 hours.
5 In a response to an application for default judgment, Safe agreed to pay 311 hours of unpaid annual leave but disputed Mr Warren’s claim for the payment of 80 hours of personal leave. However, later Safe agreed it owed 40 hours of personal leave.
6 On 31 January 2025, Safe prepared a final payslip for Mr Warren where it recorded it owed 311.4611 hours of unpaid accrued annual leave and 40 hours of unpaid personal leave, in the total amount of $16,897.17 (the Final Payslip) Exhibit 1 – Witness Statement of Simon Warren as an attachment (last page).
.
7 On 2 February 2025, Safe made a payment of $5,089.17 for unpaid accrued annual leave and personal leave to Mr Warren (less the applicable taxation) Exhibit 1 – as above.
.
Issue for Determination
8 At the commencement of the hearing, the Industrial Magistrates Court of Western Australia (IMC or Court) confirmed with Mr Benjamin Pavlic (Mr Pavlic), Director for Safe, whether the alleged hours of unpaid accrued annual leave detailed in the Final Payslip were in dispute. It was not.
9 Further, the Court confirmed with Mr Warren whether the alleged hours of unpaid personal leave in the Final Payslip was in dispute. It was not.
10 As will be seen, the only issue in dispute was an amount of $7,024 deducted by Safe and recorded on the Final Payslip, and whether Safe was authorised to make this deduction.
11 Schedule 1 of these reasons for decision outline the jurisdiction, practice and procedure of the IMC.
12 Mr Warren relied upon his witness statement lodged on 11 March 2025 with annexures Exhibit 1
.
13 Safe relied upon the witness statement of Mr Pavlic lodged on 20 March 2025 with annexures Exhibit 2 – Witness Statement of Ben Pavlic.
.
The Claim
14 Mr Warren elected the small claims procedure to apply pursuant to s 548 of the Fair Work Act 2009 (Cth) (FWA). The Originating Claim lodged in the Court on 2 September 2024 states that the grounds of his claim is that Safe ‘[f]ailed to comply with an award, agreement, instrument or order’, namely the Commercial Sales Award 2010. However, Mr Warren has not made any claim for payment pursuant to an award or industrial agreement. Rather, it appears that his claim relates to not being paid in full:
(a) his annual leave entitlements pursuant to s 90(2) and s 323(1) of FWA; and
(b) his personal leave entitlement pursuant to s 99 and s 323(1) of FWA.
15 Section 545(3) of the FWA enables an eligible state court (and the IMC is an eligible state court) to:
[O]rder an employer to pay an amount to, or on behalf of, an employee of the employer if the court is satisfied that:
(a) the employer was required to pay the amount under this Act or a fair work instrument; and
(b) the employer has contravened a civil remedy provision by failing to pay the amount (emphasis added)
16 There are three pre-conditions for the IMC to make an order under s 545(3) of the FWA:
(a) An amount is payable by the employer to the employee;
(b) A requirement to pay the amount arises by reference to an obligation under the FWA or a fair work instrument; and
(c) The failure to pay constitutes a civil remedy provision under s 539(1) and s 539(2) of the FWA.
17 As Mr Warren elected the small claims procedure to apply pursuant to s 548 of the FWA, the amount referred to in s 548(1)(a) and s 548(1A)(a) of the FWA refers to:
[A]n amount that an employer was required to pay to … an employee:
(i) under [FWA] or a fair work instrument; or
(ii) because of a safety net contractual entitlement; or
(iii) because of an entitlement of the employee arising under subsection 542(1) [of the FWA].
18 Section 12 of the FWA defines ‘safety net contractual entitlement’ to mean:
An entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:
(a) Subsection 61(2) (which deals with the National Employment Standards); or
(b) Subsection 139(1) (which deals with modern awards).
19 I have understood Mr Warren’s claim to be made pursuant to the provisions of s 548 of FWA by reference to the National Employment Standards (NES) and the FWA. I have therefore limited my consideration and determination of Mr Warren’s claim for payment under the FWA, pursuant to s 61(2), s 90(2), s 99, s 323(1), s 326, s 542 and s 548 of the FWA.
Is Safe a National System Employer and is Mr Warren a National System Employee?
20 According to Mr Pavlic, Safe is an Australian proprietary company limited by shares operating a small manufacturing business Exhibit 2 at [56].
.
21 Therefore, Safe is a constitutional corporation to which paragraph 51(xx) of the Constitution applies. Further, where Safe admits it employed Mr Warren, pursuant to s 14(1)(a) of the FWA, as a constitutional corporation, Safe is a national system employer.
22 Mr Warren, being employed by Safe, a national system employer, is a national system employee: s 13 of the FWA.
23 Where Safe and Mr Warren are a national system employer and national system employee, the NES applies as the minimum standards to Mr Warren’s employment and cannot be displaced: s 61(2) of the FWA. This includes minimum standards relating to annual leave (Part 22, Division 6) and personal leave (Part 22, Division 7).
Was Mr Warren Entitled Upon Termination of Employment to the Payment of Unpaid Accrued Annual Leave?
24 Safe did not dispute that at the date of cessation of his employment, Mr Warren’s unpaid accrued annual leave amounted to 311.4611 hours, consistent with the Final Payslip Exhibit 1 as an attachment.
.
25 As identified on the Final Payslip, this amounted to $14,974.09.
26 At the time his employment ceased, Mr Warren had a period of untaken paid annual leave owing (311.4611 hours) and, pursuant to s 90(2) of the FWA, Safe was required to pay him the amount that would have been payable had he taken the period of leave. Therefore, at the time Mr Warren’s employment ended, Safe was required to pay him $14,974.09.
Was Mr Warren Entitled to the Payment of Personal Leave?
27 Safe did not dispute that at the date of cessation of his employment, Mr Warren was entitled to personal leave of 40 hours, consistent with the Final Payslip Exhibit 1 as an attachment.
.
28 As identified on the Final Payslip this amounted to $1,923.08.
29 Pursuant to s 99 of the FWA, Mr Warren was entitled to be paid for a period of paid personal leave where he complied with s 97 of the FWA. Therefore, at the time Mr Warren’s employment ended, Safe was required to pay him $1,923.08 for taken personal leave.
Was Safe Entitled to Deduct Monies from Mr Warren’s Final Payment?
30 Part 29 of the FWA relates to other terms and conditions of employment. Section 322 of the FWA defines employee in this Part to mean a national system employee and an employer to mean a national system employer. The effect of these definitions is that, unless provided otherwise, the requirements of Part 29 apply to Mr Warren’s employment with Safe.
31 Section 323(1)(a) of the FWA provides that an employer may pay an employee amounts payable to the employee in relation to the performance of work in full (except as provided by s 324). This includes leave payments.
32 Pursuant to s 324(1) of the FWA an employer may deduct an amount from an amount payable to an employee in accordance with s 323(1) if, relevant to this case, the deduction is authorised in writing by the employee and is principally for the employee’s benefit.
33 It is common ground between the parties that Mr Warren did not authorise in writing the deduction of $7,024 referred to in the Final Payslip. Mr Warren was not aware of the deduction until he saw the Final Payslip and he did not know the reason for the deduction until Mr Pavlic gave evidence at the trial. He disagreed that he and Mr Pavlic spoke about repaying $5,000 in cash provided to him by Mr Pavlic in June 2023 at the Wanneroo Tavern.
34 Mr Pavlic admitted that Safe did not obtain in writing any authorisation from Mr Warren to deduct the monies referred to in the Final Payslip. Mr Pavlic also admitted that Safe never informed Mr Warren that it intended to deduct the monies referred to in the Final Payslip. Mr Pavlic referred to the deduction as more of a ‘balance adjustment’ or ‘cash advance’.
35 Section 326(1) of the FWA provides that, relevantly, a term of a contract of employment has no effect to the extent that the term permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work, if the deduction is:
(a) directly or indirectly for the benefit of the employer or a party related to employer; and
(b) is unreasonable in the circumstances.
36 Section 326(2) of the FWA provides that the Fair Work Regulations 2009 (Cth) (FWR) may prescribe circumstances in which a deduction referred to in s 326(1) is or is not reasonable.
37 Regulation 2.12(1) of the FWR provides that for s 326(2) of the FWA, a circumstance in which a deduction in s 326(1) is reasonable is that:
(a) [T]he deduction is made in respect of the provision of goods or services:
(i) by an employer, or a party related to the employer; and
(ii) to an employee; and
(b) the goods or services are provided in the ordinary course of the business of the employer or related party; and
(c) the goods or services are provided to members of the general public on:
(i) the same terms and conditions as those on which the goods or services were provided to the employee; or
(ii) on terms and conditions that are not more favourable to the members of the general public.
38 Examples provided in the associated notes include deductions of health insurance fees made by an employer that is a health fund or deductions for a loan repayment by an employer that is a financial institution.
39 Regulation 2.12(2) of the FWR provides that for s 326(2) of the FWA, a circumstance in which a deduction in s 326(1) is reasonable is that the deduction is ‘for the purpose of recovering costs directly incurred by the employer as a result of the voluntary private use of particular property of the employer by an employee (whether authorised or not).’
40 Examples provided in the associated notes include deductions for the costs of items purchased on a corporate credit card for personal use by the employee or deductions for the cost of personal calls on a company mobile telephone or deductions for the cost of petrol purchased for the private use of a company vehicle by the employee.
41 The reason Mr Pavlic gave for the deduction in the Final Payslip is because Safe was looking to ‘clawback’ a cash amount of $5,000 paid to Mr Warren in June 2023, and because Mr Pavlic thought Mr Warren took advantage of Safe. Mr Pavlic referred to Safe’s ‘Clawback’ Policy attached to his witness statement and sought to rely upon the payment of $5,000 to Mr Warren as an ‘inappropriate benefit’ (along with an increase in salary).
42 Mr Pavlic said the ‘Clawback’ Policy enabled Safe, at cl 3, to deduct or balance adjust the employee’s final payslip Exhibit 2 at attachment 6.
.
43 However, there are a number of difficulties for Safe in relying upon the ‘Clawback’ Policy in the circumstances:
(a) Mr Pavlic forgot about the ‘Clawback’ Policy until it was bought to his attention by an insolvency agent in December 2024 when reconciling the first respondent’s finances;
(b) Mr Warren was never informed that Safe was seeking to invoke the ‘Clawback’ Policy before they made the deduction; and
(c) Mr Warren was not aware, and I accept he was not aware, of the ‘Clawback’ Policy and its application. The footnote at end of the document provides that it is dated in 2021, whereas the induction form signed by Mr Warren on 20 November 2017, also attached to Mr Pavlic’s witness statement, makes no reference to a ‘Clawback’ Policy Exhibit 2 at attachment 9.
. Thus, there is considerable doubt as to whether the ‘Clawback’ Policy was, in fact, ever a term of any contract of employment between Mr Warren and Safe.
44 To the extent that Safe relies upon other employment documents attached to Mr Pavlic’s witness statement, I note these documents include a Code of Conduct signed by Mr Warren on 16 May 2019 Exhibit 2 at attachment 12.
and a Statutory Declaration and job description document signed by Mr Warren on 6 April 2021 Exhibit 2 at attachments 13 and 14.
. Neither of these documents refer to the ‘Clawback’ Policy, even if they could be considered as comprising employment contracts.
45 Thus, not only was the deduction not made in accordance with s 324(1) of the FWA, but for the purposes of s 326(1)(a) it was also a deduction that was for the benefit, either directly or indirectly, of Safe and not Mr Warren.
46 Further, for the purposes of s 326(1)(b) the deduction was unreasonable in the circumstances where it was never conveyed to Mr Warren that it would be made, he had no opportunity to respond to it being made, and he was not aware it could be made under the ‘Clawback’ Policy.
47 Of course this assumes that, in fact, the inclusion of the ‘Clawback’ Policy was a term of any contract of employment between Mr Warren and Safe. But even if it was (which I expressed doubt that it was), for reasons given it would have no effect in enabling Safe to ‘clawback’ or deduct or balance adjust $7,024 from the Final Payslip.
48 For the avoidance of any doubt, as indicated to Mr Pavlic during the hearing, this assumes his evidence at its highest about Mr Warren’s behaviour Exhibit 2 and by way of example at [3], [4], [20], [33], [37], [38] and [50].
. However, this does not change the outcome or Safe’s obligations under the FWA.
49 I am satisfied and I find on the balance of probabilities that there was no basis under the FWA for the respondent to make the deduction of $7,024 in the Final Payslip.
50 I further find on the balance of probabilities that in doing so, Safe failed to pay in full the entitlements owed to Mr Warren for unpaid accrued annual leave and personal leave in contravention of s 323(1) of the FWA, when read with s 90(2) and s 99 of the FWA.
51 I am satisfied and I find the claim proven as against Safe, the first respondent. Mr Warren named Safe Integrated Pty Ltd and Cyber Dine Holdings Pty Ltd as parties to the proceedings where he seemed unsure of the relationship between the companies. However, I am satisfied Safe was Mr Warren’s employer.
Outcome
52 Pursuant to s 545(3) and s 548(1A) of the FWA, the first respondent is to pay to the claimant the amount $7,024, subject to any liability to the Commissioner of Taxation under the Taxation Administration Act 1953 (Cth).
53 The claim as it relates to the named second and third respondents is dismissed.

D. SCADDAN
INDUSTRIAL MAGISTRATE


Schedule 1 – The Jurisdiction, Practice And Procedure Of The Western Australian Industrial Magistrates Court
Jurisdiction and burden of proof
[1] An employee, an employee organization or an inspector may apply to an eligible State or Territory court for orders regarding a contravention of the civil penalty provisions identified in s 539(2) of the FWA.
[2] The IMC, being a court constituted by an industrial magistrate, is an ‘eligible State or Territory court’: FWA s 12 (see definitions of ‘eligible State or Territory court’ and ‘magistrates court’); Industrial Relations Act 1979 (WA) s 81, s 81B.
[3] The application to the IMC must be made within six years after the day on which the contravention of the civil penalty provision occurred: FWA s 544.
[4] The civil penalty provisions identified in s 539 of the FWA include contravening a term of the NES and failing to pay in full an amount owed under the FWA: FWA s 44(1), s 323 respectively.
[5] An obligation upon an ‘employer’ is an obligation upon a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the Constitution applies’: FWA s 12, s 14, s 42, s 47. A NES entitlement of an employee is an entitlement of an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed … by a national system employer’: FWA s 13, s 42, s 47.
Contravention
[6] Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the court may make orders for ‘an employer to pay [to an employee] an amount … that the employer was required to pay’ under the modern award (emphasis added): FWA s 545(3)(a).
[7] The civil penalty provisions identified in s 539 of the FWA includes:
· The Core provisions set out in pt 2 - 1 of the FWA: FWA s 61(2), s 539; and
· Other terms and conditions of employment set out in Part 29 of the FWA: FWA s 323(1), s 539.
[8] Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the court may make orders for:
· An employer to pay to an employee an amount that the employer was required to pay under the FWA: FWA s 545(3).
[9] In contrast to the powers of the Federal Court and the Federal Circuit Court, an eligible State or Territory court has no power to order payment by an entity other than the employer of amounts that the employer was required to pay under the FWA. For example, the IMC has no power to order that the director of an employer company make payments of amounts payable under the FWA: Mildren v Gabbusch [2014] SAIRC 15.
Burden and standard of proof
[10] In an application under the FWA, the party making an allegation to enforce a legal right or to relieve the party of a legal obligation carries the burden of proving the allegation. The standard of proof required to discharge the burden is proof ‘on the balance of probabilities’. In Miller v Minister of Pensions [1947] 2 All ER 372, 374, Lord Denning explained the standard in the following terms:
It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say ‘we think it more probable than not’ the burden is discharged, but if the probabilities are equal it is not.
[11] In the context of an allegation of the breach of a civil penalty provision of the FWA it is also relevant to recall the observation of Dixon J said in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336:
The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters ‘reasonable satisfaction’ should not be produced by inexact proofs, indefinite testimony, or indirect inferences [362].