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Industrial relations – allegations of contraventions…

…of ss45, 323, 325, 343 and 345 and ‘serious contraventions’ under s557A, Fair Work Act – where employees had been granted or sought sponsorship for work visas

In Basi v Namitha Nakul Pty Ltd [2022] FCA 712 (21 June 2022), Mr Basi and Mr Haider (applicants) alleged that their former employer – the first respondent Namitha Nakul Pty Ltd (Namitha Nakul) – contravened the Fair Work Act 2009 (Cth) (the Act), and that its sole director and shareholder – the second respondent (Mr Usha) – was involved in those contraventions and personally contravened the Act.

The case involved application of s557A of the Act, which provides that a contravention of a civil remedy provision by a person is a serious contravention if the person knowingly contravened the provision, and the conduct was part of a systemic pattern of conduct relating to one or more other persons. Section 557A has not previously been the subject of detailed consideration by the Federal Court.

Namitha Nakul operated two Indian restaurants in New South Wales. The applicants contended that throughout their employment as cooks by Namitha Nakul, they were required to work excessive hours without any formal breaks, they were not paid their award entitlements, and they were unlawfully required to pay a significant proportion of their wages back to the respondents, as either repayments of alleged loans made to them by Mr Usha, or to cover tax liabilities on their wages and visa application costs.

The court noted particular difficulties in the evidence. One such difficulty was that the evidence advanced by all parties exposed them to contraventions of the Migration Act 1958 (Cth) (at [20]). Although certificates were provided under s128 of the Evidence Act 1995 (Cth) as a result of the potential for self-incrimination, witnesses tended to give self-serving and conflicting testimonial recollections, which had to be assessed against the apparent logic of events and objectively established facts.

Halley J found that there were aspects of the evidence of each of the applicants that could not be accepted, particularly regarding claims that they had worked 12 hour days, six days a week. His Honour concluded that it was also not established that the applicants had worked overtime hours or had worked for more than five hours on any given day, without a break (at [17(d)]). This finding was made notwithstanding that under s557C of the Act, the burden was on the respondents to disprove those allegations due to their failure to keep adequate records (at [206]-[218]).

Halley J was especially critical of the second respondent, Mr Usha, describing him as “not impressive” and “frequently provid[ing] long winded, self-serving and argumentative responses . . . [that] had the effect of obfuscating, rather than illuminating, critical issues” (at [56]). Much of Mr Usha’s evidence was found to be implausible and reflected very poorly on his credit (at [57]). His Honour was highly critical of an attempt by Mr Usha to discredit one of the applicants by seeking a false statement from the other applicant (at [61]).

Halley J found that the respondents had breached s45 of the Act by failing to abide by the Restaurant Industry Award 2010 in arranging hours of work, failing to pay weekend holiday rates, and failing to pay the amounts due and payable to the applicants. Significantly, his Honour found that the first respondent, through Mr Usha, had contravened ss323 and 325 of the Act, which impose an obligation on the employer to pay amounts payable to an employee, and not to impose unreasonable requirements on the employee to pay or spend money.

The provisions were contravened by paying an ostensibly lawful rate and then coercing payments back in cash. His Honour found that Mr Usha made demands for payment of money to cover tax liabilities and visa sponsorship costs in breach of s325, and contrary to ss343, 344 and 345 of the Act, which prohibit coercion, undue influence and mirepresentations.

Mr Usha engaged in threats to Mr Basi’s employment and visa status so as to make Mr Basi compliant and forego his workplace rights (at [453] and [466]). His Honour also found that Mr Usha had demanded Mr Haider make a payment towards the cost of sponsorship for his visa, in breach of s325 of the Act (at [494]-[495]).

Halley J found that the contraventions of ss45 and 323 of the Act amounted to ‘serious contraventions’ for the purposes of s557A of the Act, as the respondents knowingly contravened the provisions and their conduct was part of a systemic pattern of conduct relating to both applicants (at [426] and [428]). Mr Usha was found to be knowingly involved in these serious contraventions.

The court also found that, contrary to the case of the respondents, Mr Haider had worked for the first respondent for several months and was entitled to a quantum meruit payment (at [202]).

Shanta Martin is a barrister at the Victorian Bar, ph 03 9225 7222 or email shanta.martin@vicbar.com.au. The full version of these judgments can be found at www.austlii.edu.au. Numbers in square brackets refer to a paragraph number in the judgment.

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