A recent decision of the Federal Court has resulted in significant penalties being awarded against Dick Stone Pty Ltd (Company), a large Sydney meat wholesaler and distributer for multiple breaches of the Fair Work Act 2009 (Cth) (Act) and the Meat Industry Award 2010 (Award) which applied to its employees.
Background
This matter involved an employee, Mr Samuel Boateng, who was a newly-arrived immigrant worker from Ghana who spoke little English.
When Mr Boateng commenced work for the Company, he was not provided with the Fair Work Information Statement, or any information regarding the terms and conditions of his employment, including his rate of pay, hours of work or penalty rates by the Company.
While Mr Boateng was provided with an employment contract, and informed of other employment terms after he had arrived for his first shift, he was not informed that his rate of pay and whether this was off-set against penalties contained in the Award.
As a result, Mr Boateng was unaware of his entitlements under the Award and Act, including in respect to overtime.
During his three years of employment with the Company, Mr Boateng:
- consistently worked 50 ordinary hours per week as a “knifehand/labourer” despite the Award prescribing ordinary hours for full time employees must not exceed 38 per week;
- would commence work at 2am, 6 days a week, hours which Mr Boateng found difficult, impacted his family life and which deprived him of a weekend; and
- was not paid any overtime or penalty rates for the 50 ordinary hours per week he performed despite this being required under the Award, however Mr Boateng’s contract did stipulate that he would be paid overtime for “additional hours” over and above the 50 hours a week.
Mr Boateng and his union, the Australasian Meat Industry Employees Union, commenced proceedings against the Company claiming multiple breaches of the Award and Act.
Decision
The Federal Court found that the additional 12 ordinary hours each week Mr Boateng was required to work above those prescribed under the Award were unreasonable in the circumstances despite the Company’s assertion that its workers preferred to work 50 hours per week. This was considered irrelevant in determining whether the number of hours worked were reasonable, with the time, amount and frequency of these hours all bearing on the reasonableness of the required hours.
Further, the requirement to consistently work 50 hours a week commencing at 2am, whilst being required to handle various knives and operating dicing machines, was considered by the Court to pose an obvious workplace health and safety risk to Mr Boateng.
In respect to overtime, the Company submitted that because the amounts it paid Mr Boateng were greater than the Award rates and that it had chosen to pay him in this way to cover its obligations under the Award, it was also entitled to set off the payments it made to Mr Boateng against the Award rates. The Court disagreed with this submission as payments made to Mr Boateng for working 50 hours a week were designated in his pay slips as payment for “ordinary hours” and the Company had not communicated its intention to satisfy its obligations to pay overtime rates in accordance with the Award by absorbing them in over-Award payments. Therefore, it was not open to the Company to offset these amounts and discharge its obligation under the Award.
Ultimately, the Court found the Company liable for contraventions of the Act and Award in requiring Mr Boateng to work unreasonable work hours and also for failing:
- to pay overtime in accordance with the Award;
- to provide a Fair Work Information Statement prior to or as soon as practicable after, Mr Boateng commenced employment;
- to ensure access to copies of the relevant Award and the National Employment Standards contained in the Act; and
- to post a roster with Mr Boateng’s start and finish times.
Penalties
The Company was fined a total of $93,000 for breaching the Act and Award, including:
- $30,000 for requiring Mr Boateng to work excessive ordinary hours, which the Court considered was a deliberate breach that occurred over a prolonged period;
- $20,000 for the deliberate and systematic failure to pay overtime, despite the Company having repaid the unpaid overtime to Mr Boateng prior to the Court awarding any penalties;
- Other penalties imposed for other contraventions of the Award and Act which ranged from $3,000 to $25,000 including for failing to post rosters. Notably, the Court noted that merely implementing an online system which may be considered more convenient for employees may not meet the Company’s obligations under the Award to display work rosters.
What does this mean for employers?
This case demonstrates that passive consent by employees to contravene minimum terms and conditions of employment does not reduce the unreasonableness of such arrangements imposed by the employer. Employers have an obligation to actively ensure employees are aware of the terms and conditions of their employment and their rights under the relevant industrial instrument, before they commence work.
Employers should be aware that:
- It is unlikely to be sufficient to simply have copies of applicable industrial instruments and the National Employment Standards available internally or externally online; it is the responsibility of an employer to take steps to ensure its employees are aware of how and where to access the information and to facilitate such access;
- A Fair Work Statement must not be merely made available to the employee (e.g. on display in the workplace), it must be actually provided to the employee, to meet employer obligations under the Act;
- Implementing an online roster system that may be considered more convenient for employees may still not discharge an employer’s responsibility under an Award – the obligation may extend to making enquiries as to whether each employee has the means to and understanding of how to access their electronic rosters; and
- If an employee’s pay rate is inclusive of entitlements and other benefits they would otherwise be subject to under an industrial instrument, this must be agreed upon between employer and employee in writing and understood by the employee prior to commencing employment (i.e. by way of a set off agreement).
Case reference: Australasian Meat Industry Employees Union v Dick Stone Pty Ltd (No 2) [2022] FCA 1263 (28 October 2022)
