Case: Gibbs v Mayor, Councillors and Citizens of City of Altona [1992] FCA 374 ; (1992) 37 FCR 216
Outcome: followed
Under s 719(2) of the Act , and s 178(2) of the Act as it stood prior to 27 March 2006, where multiple breaches of an award provision arose out of a course of conduct by one person, those breaches, for the purposes of the section, constitute one breach. In Gibbs v Mayor, Councillors and Citizens of City of Altona [1992] FCA 374 ; (1992) 37 FCR 216 at 223, Gray J held that each separate obligation found in an award should be regarded as a term for the purposes of s 178. The same would now apply to s 719. Gray J went on to say at 233: The ascertainment of what is a term should not depend on matters of form, such as how the award maker has chosen to designate by numbers or letters the various provisions of an award, but on matters of substance, namely the different obligations which can be spelt out. 17 His Honour then said that he considered each separate obligation imposed by an award to be a "term" for the purposes of s 178. Importantly, he then said at 233: If the different terms impose cumulative obligations or obligations that substantially overlap, it is possible to take into account the substance of the matter by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others. 18 I agree, with respect, with the approach of Gray J to the question of "course of conduct" under s 719(2) and the former s 178(2). Tracey J applied the same approach in Kelly v Fitzpatrick [2007] 166 IR 14 at 17. I therefore reject the submission of counsel for Mrs Healey, Mr Green, that there was one single course of conduct which was constituted by Mrs Healey paying a flat rate of pay to her employees instead of the award rate plus loadings and allowances. 22 In accordance with the approach of Gray J in Gibbs , I consider it appropriate to examine the circumstances of each relevant employee and assess an appropriate penalty for each breach. This may mean that in many instances no penalty will be imposed for breaches. 23 Apart from Mr Whitton and Ms Jodi Buck, Mrs Healey employed the affected employees on a flat casual rate in breach of the award. In each of those 39 cases the critical offending conduct was the setting of a rate below the award rate. The failure to pay appropriate loadings and allowances flowed from the setting of the incorrect rates of pay for the relevant classifications. The 50% figure referred to above should apply to the maximum penalty available for all breaches of cl 18 of the award which is applicable, as at their commencement date, to all but seven employees. Those seven commenced as juniors. Clause 15.5.2 was breached in respect of them. In other words, depending on the time of commencement of the employee a fine of 50% of the maximum should be imposed 41 times. In seven of those cases the relevant breach will be that of cl 15.5.1 because seven of the 41 employees commenced as junior employees. 29 The total penalties for breaches of cls 15.5.1 (in respect of juniors) and 18 (in respect of adults) amount to $91,300. Putting to one side the non-payment of Ms Jodi Buck, the major transgression was the setting of a flat rate for all purposes for every employee, except Mr Whitton. Even Mr Whitton was not paid the amount due under the award. Accordingly, seven penalties will be imposed for breach of cl 15.5.2 and 34 for breach of cl 18. The failure to pay the correct casual loadings and allowances in breach of cl 15.2.2 involved Mrs Healey in a failure to comply with obligations which "substantially overlap" (in the words of Gray J in Gibbs at 233) with the obligation to set the appropriate adult or junior rate for the relevant classification as required by cls 15.5.1 and 18. Consequently, I impose no penalty for breaches of cl 15.5.2 of the award. I also impose no penalties for additional breaches of cls 15.5.1 and 18 in respect of payments made to employees in the weeks subsequent to the commencement.