Federal Court: An Online Retailer Found to be True Employer of Workers

OUTCOME: Allowed

FEDERAL COURT OF AUSTRALIA

[NAME_1] v [COMPANY_2] (No 2) [2014] FCA 55 Citation: [NAME_1] v [COMPANY_2] (No 2) [2014] FCA 55

Parties: [NAME_1] v [COMPANY_2] (ACN [PHONE]), [COMPANY_4] (ACN 117 006 596), [COMPANY_5] (ACN 117 059 319) and [NAME_2] number: QUD 376 of 2010

Judge: COLLIER J

Date of judgment: 11 February 2014

Corrigendum: 18 February 2014

Catchwords: INDUSTRIAL LAW – first respondent operated fruit picking and packing business at farm – fourth respondent director of first respondent and manager of farm – second and third respondents purported to employ fruit pickers on documentation – sole directors of second and third respondents sons of fourth respondent – Notional Agreement Preserving State Awards – employees subject to Fruit and Vegetable Growing Industry Award – State 2002 (Qld) – legal obligation to pay employees who worked more than 40 hours per week overtime – s 182 Workplace Relations Act 1996 (Cth) – employees not paid overtime – arrangement at farm whereby employees worked up to 40 hours for second respondent and voluntarily worked extra hours for third respondent – whether employees employed by first respondent or second and third respondents – principles relevant to identifying employer – employees believed they worked for first respondent – employees wore shirts bearing logo of first respondent – employees had limited knowledge of second and third respondents except as payroll companies – no contracts of employment with second or third respondents – first respondent was employer – fourth respondent aware of legal obligation to pay overtime – purpose of creating second and third respondents was to avoid overtime obligations – s 728 Workplace Relations Act 1996 (Cth) – whether second to fourth respondents aided and abetted or were knowingly concerned in contravention by first respondent – knowledge of essential facts by second to fourth respondents

Legislation: Workplace Relations Act 1996 (Cth) ss 182, 182(1), 208(1), 717, 719, 728 Workplace Relations Amendment (Work Choices) Act 2005 (Cth) Sch 1 Fruit and Vegetable Growing Industry Award - State 2002 (Qld)

Cases cited: Damevski v Giudice (2003) 133 FCR 438 cited Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174 cited Franks v Reuters Ltd [2003] IRLR 423 cited Yorke v Lucas (1985) 158 CLR 661 cited

Date of hearing: 22-23 October and 8 November 2012

Place: Brisbane

Division: FAIR WORK DIVISION

Category: Catchwords

Number of paragraphs: 133

Counsel for the Applicant: [redacted]

Solicitor for the Applicant: [redacted]

Counsel for the First, Second, Third and Fourth Respondents: [redacted]

Solicitor for the First, Second, Third and Fourth Respondents: [redacted]

FEDERAL COURT OF AUSTRALIA [NAME_1] v [COMPANY_2] (No 2) [2014] FCA 55 CORRIGENDUM 1 On the cover sheet the appearances should read, [NAME_7] SC "with [NAME_7] and [NAME_7]". 2 On the cover sheet the appearances should read, "Solicitor for the First, Second, Third and Fourth Respondents: [redacted] I certify that the preceding two (2) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Collier.

Associate: Dated: 18 February 2014 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY FAIR WORK DIVISION QUD 376 of 2010

BETWEEN: [NAME_1]

Applicant

AND: [COMPANY_2] (ACN [PHONE])

First [COMPANY_37] (ACN 117 006 596)

Second [COMPANY_36] (ACN 117 059 319)

Third Respondent

[NAME_2]

Fourth Respondent

JUDGE: COLLIER J DATE OF ORDER: 11 FEBRUARY 2014 WHERE MADE: BRISBANE

THE COURT ORDERS THAT:

1. At a date to be fixed, Counsel bring in signed minutes of orders to give effect to the reasons in this judgment. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY FAIR WORK DIVISION QUD 376 of 2010

BETWEEN: [NAME_1]

Applicant

AND: [COMPANY_2] (ACN [PHONE])

First [COMPANY_37] (ACN 117 006 596)

Second [COMPANY_36] (ACN 117 059 319)

Third Respondent

[NAME_2]

Fourth Respondent

JUDGE: COLLIER J DATE: 11 FEBRUARY 2014 PLACE: BRISBANE

REASONS FOR JUDGMENT

INTRODUCTION 3 In substance, this case raises one critical question for determination. At material times, who was the employer of certain workers at a farm at [ADDRESS], Applethorpe, Queensland? 4 The applicant, the [NAME_1] ("[NAME_1]"), asserts that the employer of these workers was the first respondent, [COMPANY_2] ("[NAME_2]"). The [NAME_1] contends further that as [NAME_2] was the employer, it has contravened both the Workplace Relations Act 1996 (Cth) ("the Act") and certain clauses of the applicable Notional Agreement Preserving State Awards (NAPSA) (relevantly, the Fruit and Vegetable Growing Industry Award - State 2002 (Qld), which was in operation at material times) by failing to pay those workers overtime, and penalty rates on public holidays. The applicant asserts further that although the putative employers of those workers were the second and third respondents, the arrangement was ineffective as the totality of the circumstances demonstrated that the true employer was [NAME_2], and that the second and third respondents were merely payroll companies associated with [NAME_2]. 5 The crux of the respondents' defence to the proceedings commenced by the [NAME_1] was the second and third respondent were the true employers of the relevant workers. If this defence is substantiated, the applicant's entire case must fail. 6 In my view the [NAME_1] has substantiated its case against the respondents. I am satisfied that the first respondent was the true employer of the employees identified in the [NAME_1]'s claims, and that the second, third and fourth respondents were accessorially liable within the meaning of s 728 of the Act. I have reached this view in light of the evidence before the Court and for reasons to which I will shortly turn.

BACKGROUND 7 Determination of this case, and the key question of the identity of the employer of relevant employees, is very much dependent on the facts. The parties have made extensive submissions based on those facts. It is appropriate to recount the facts in some detail before examining the case before the Court.

The parties 8 [NAME_2] and the fourth respondent, [NAME_2], have been married since 1972. They have four adult children: [NAME_2], [NAME_2], [NAME_2] and [NAME_2]. 9 [NAME_2] are the sole directors and shareholders of [NAME_2]. [NAME_2] is the trustee of the [COMPANY_8], which is effectively a family trust established for the benefit of the [NAME_2]. The beneficiaries of the trust are [NAME_2]'s children, their children's spouses, and their grandchildren. 10 In its capacity as trustee for the [COMPANY_8], [NAME_2] conducts the business of the [NAME_2] farm ("the farm") at [ADDRESS], Applethorpe, Queensland. Since their marriage, [NAME_2] have continued to operate the farm. At material times the farm grew and sold capsicums, stone fruit and apples. 11 [NAME_2] is the sole shareholder and director of the second respondent, [COMPANY_4] ("[NAME_3]"). 12 [NAME_2] is the sole shareholder and director of the third respondent, [COMPANY_5] ("[NAME_3]"). 13 The [NAME_1] discontinued the proceedings against the fifth respondent, [NAME_9], on 4 October 2012. 14 In 2008 the following former casual workers of the farm made complaints to the [NAME_1] (formerly the [NAME_1]) in relation to overtime and penalty rates on public holidays: [NAME_10]; [NAME_10] ([NAME_10]'s son); [NAME_12]; and [NAME_13]. (For convenience throughout this judgment I will refer to these employees collectively as "the relevant employees".) 15 The hours worked by each employee are not in dispute. The respondents acknowledge that the [NAME_11] worked more than 40 hours at the farm during some weeks and that all four employees worked on at least one public holiday. The issue is whether the employees were employed by the first respondent. If so, they were entitled to overtime and penalty rates, and the first respondent has contravened the Act and cll 6.4.2, 7.6.1, 7.6.2 and 7.6.3 of the NAPSA.

Material relied upon by the parties 16 The [NAME_1] relied on the following material: Affidavit of [NAME_15] sworn 2 May 2012 (exhibit 1(A)). Affidavit of [NAME_14] affirmed 31 August 2012 (exhibit 2(A)). Affidavit of [NAME_14] sworn 2 May 2012 (exhibit 3(A)). Supplementary affidavit of [NAME_14] sworn 31 August 2012 (exhibit 4(A)). Affidavit of [NAME_10] sworn 2 May 2012 (exhibit 5(A)). Supplementary affidavit of [NAME_10] sworn 31 August 2012 (exhibit 6(A)). Two shirts (exhibit 7(A)). Affidavit of [NAME_10] affirmed 18 May 2012 (exhibit 8(A)). Supplementary affidavit of [NAME_10] affirmed 29 August 2012 (exhibit 9(A)). Affidavit of [NAME_12] affirmed 3 May 2012 (exhibit 10(A)). Supplementary affidavit of [NAME_12] affirmed 31 August 2012 (exhibit 11(A)). A roll of stickers (exhibit 13(A)). Affidavit of [NAME_13] sworn 4 May 2012 (exhibit 14(A)). Supplementary affidavit of [NAME_13] affirmed 30 August 2012 (exhibit 15(A)). Two [NAME_2] photographs displaying "[COMPANY_2]" (exhibit 18(A)). Four aerial photographs of [ADDRESS], Applethorpe (exhibit 19(A)). Electronic lodgement declaration forms being tax declarations of [NAME_2] (exhibit 20(A)). Tax returns and associated financial statements for [NAME_2] and the [COMPANY_8] for the years ending 30 June 2006 to 30 June 2011 (exhibit 26(A)). 17 Counsel for the respondents cross-examined [NAME_14], [NAME_10], [NAME_10], [NAME_12] and [NAME_13]. 18 The respondents relied on the following material: Two employment documents, one of [NAME_3] and one of [NAME_3], dated 28 June 2007 signed by [NAME_12] (exhibit 12(R)). Affidavit of [NAME_2] sworn 10 July 2012 (exhibit 16(R)). Affidavit of [NAME_2] sworn 17 July 2012 (exhibit 17(R)). Affidavit of [NAME_2] sworn 10 July 2012 (exhibit 21(R)). Affidavit of [NAME_16] sworn 10 July 2012 (exhibit 22(R)). Affidavit of [NAME_17] sworn 10 July 2012 (exhibit 23(R)). Tax returns for [NAME_3] for the years ending 30 June 2006 – 30 June 2011 (exhibit 24(R)). Tax returns for [NAME_3] for the years ending 30 June 2006 – 30 June 2011 (exhibit 25(R)). 19 Counsel for the [NAME_1] cross-examined [NAME_2], [NAME_2], [NAME_16] and [NAME_17].

GENERAL OPERATIONS AT THE FARM

Evidence of [NAME_2]

The farming business 20 The farm sells most of its produce to major Australian supermarket chains including [NAME_18]. These chains have high standards in respect of the shape, size, [NAME_2], imperfections and sugar content of the fruit that they will accept. 21 [NAME_2] deposed that the [NAME_2] business is a "price taker" because it has no capacity to negotiate the supermarket chains as there are no substitute purchasers. As a result the farm runs on small margins. Her evidence was that the ongoing viability of the business depended on the farm producing sufficient volumes and quality of produce to ensure the supermarket chains will purchase the goods. 22 The vast majority of the work available at the farm is seasonal. This high-volume work involves picking and packing particular produce during the few months each year when it is ripe. The farm requires few permanent staff, but during peak periods a large volume of work is required to be performed at the farm. During these peak periods, the workforce comprises backpackers, itinerant workers and unskilled local residents. The backpackers and itinerant workers generally seek as much work as possible to finance their travel or holidays. The local workers tend to work only in the fruit picking and packing industry, so they aim to work long hours during the peak season to support themselves through the rest of the year when there are few local employment opportunities. 23 At paragraph 16 of her affidavit sworn 10 July 2012, [NAME_2] deposed: The workers engaged at the farm would regularly say that they wanted to work more than 40 hours per week. The workers were always extremely disappointed when I told them that we could not offer them more than 40 hours per week. Almost all of the workers I spoke [sic] stated that they were prepared to forego their entitlement to over time if we could provide them with further hours. I would always explain to the workers that the we [sic] could not offer them more than 40 hours per week. 24 [NAME_2] deposed that given its small profit margin, the farm would not be commercially viable if it had to pay overtime during the picking season because the wages costs would exceed the prices that the supermarkets paid. [NAME_2] was not aware of any other farms which paid overtime rates to their picking and packing staff. 25 [NAME_2] was responsible for the farming operations in the packing shed and [NAME_2] was responsible for farming operations in the field. In 2006 the farm engaged [NAME_19] as shed manager. [NAME_2] shared the role with him for 12 months so he could learn how to allocate work to employees and how to determine how many workers would be required each day.

Historical practices in engaging workers at the farm 26 [NAME_2] deposed that historically the farm engaged workers as casuals for a maximum of 40 hours per week. As a general rule once that group of workers had exceeded 40 hours, the farm employed another group of workers, who would also only be permitted to work up to 40 hours each week at the farm. Those additional workers were recruited from labour hire companies as well as being workers who had already worked 40 hours at other local farms. 27 [NAME_2] deposed that it was normally more expensive to pay the labour hire companies than to directly employ workers, due to the surcharge the labour hire companies charged. However she also deposed that paying the labour hire companies' surcharge was less expensive than paying workers overtime. 28 In relation to two or more external labour companies hiring a single worker [NAME_2] deposed at the hearing as follows: HER HONOUR: [NAME_2], can you just explain to me again why you setup – why [NAME_20]. were setup. Why didn't you continue to simply hire people directly from [NAME_2] or by [NAME_2]?---Well - - - I know it's quite a long time ago, obviously the advice ..... but can you recall why?---Well, we couldn't employ people out of [NAME_2], right, unless we had kept the hours under 40 hours. I see, it was the 40 hours limitation that was the problem?---Yes. I see. And you did mention that before?---Yes. And that was the reason?---The reason was that we wanted everything to be legal and above board, right, and the workers were asking for more than 40 hours. We had staff – the labour hire companies had staff where they would refuse to work at the workplace unless they would give them more than 40 hours. How do we tackle this problem. Okay. So under the arrangement where you before [NAME_20]. went through other labour hire companies, that was a problem – it was a similar problem then?---The problem was from way back, right, and then in 1994 we engaged the first two labour hire companies, right, which was [NAME_21] and [NAME_21] and then it moved on from there. Okay?---And we kept the same system in regards – in – from advice given by [NAME_22]. Right. So just let me understand this, just say a person, I will say a man, wants some workers as a pickup, so before you engaged the labour hire companies, he would come to you and you would say, "We can only engage you for 40 hours a week."?---That's right. And then you started using different labour hire companies, so in, was it, 1994 you started doing that, so how would that person's position have changed under those labour hire companies?---Well, the way they were engaged was they were explained that the first 40 hours would be under [NAME_3], if it wasn't - - - No, no, I mean under the old labour hire companies, not [NAME_3].?---[NAME_2]? No, no, you know there was a list of labour hire companies?---Yes, well - - - I [sic] just trying to understand, what was the situation in the transitional period between [NAME_2] and [NAME_20]., so that person could have been engaged by several labour hire companies?---Could have done, yes. And maybe worked more than 40 hours because he was engaged by different labour hire companies?---Yes. All right. And so you were seeking to duplicate that arrangement by [NAME_20]. being set up; is that right?---Yes, from the advice that [NAME_9] had received. (Transcript 23 October 2012 p 79 l 1 – p 80 l 5.)

Creation of [NAME_23] 29 In 1994 [NAME_2] sought legal advice in respect of alternative strategies for labour hire without affecting the commercial viability of the farm. Mr [NAME_9], the farm's solicitor and accountant, advised the Baronios that their problem was faced by many farmers in the Stanthorpe area and that some farmers used internal labour hire companies. He recommended however that they seek advice from an industrial relations expert, [NAME_22]. 30 [NAME_22] provided a short written advice. [NAME_2] discussed this advice with [NAME_9] and understood it to be as follows: a) we would incorporate two separate companies; b) those companies would be distinct legal entities from [NAME_2]; c) those two companies and [NAME_2] would reach an agreement for the provision of labour; d) those two companies would agree that certain [NAME_2] employees or directors (i.e. [NAME_24]) could act as agents for the companies; e) both of those companies would offer employment to the workers at the farm; f) the first company would engage the workers for a period of up to 40 hours per week; g) after the completion of 40 hours for the first company the employees would be entitled to take up employment with the second company; h) each of the separate companies would be responsible for the wages of the employees for the relevant hours; i) at the end of any given period the separate companies would invoice [NAME_2] for the costs of the labour; j) the employees needed to be clear that they were accepting employment with two companies and that they would not be entitled to overtime; k) two separate timesheets would need to be completed for each employee; l) each company would be responsible for making the payment to its workers; and m) certain [NAME_2] employees or directors (i.e. [NAME_24]) would be entitled to direct and control the employee provided [sic] pursuant to the agreement between the three companies. 31 The Baronios decided to set up their own labour hire companies rather than use companies provided by [NAME_22]. Two shelf companies were purchased: [COMPANY_3] ("[NAME_21]") and [COMPANY_3] ("[NAME_3]"). [NAME_2] became shareholder and director of [NAME_21] and [NAME_2] became shareholder and director of [NAME_3]. [NAME_2] deposed that the following agreement was reached: a) [NAME_21] and [NAME_3] would provide labour to [NAME_2]; b) [NAME_2] would pay [NAME_21] and [NAME_3] for the costs of that labour; c) [NAME_24] and myself would be entitled to act as agents of [NAME_21] and [NAME_3]; d) when a new worker started at the farm they would be offered employment with [NAME_21] and [NAME_3]; e) the worker would be free to accept employment with one or both employers; f) at the commencement the employee would be advised that their first 40 hours of work would be with [NAME_21] and that any subsequent hours worked on the farm would be with [NAME_3]; g) [NAME_24] (and any other nominated employees of [NAME_2], [NAME_21] or [NAME_3]) would have authority to offer employment with [NAME_21] and [NAME_3] and to dismiss employees; and h) [NAME_24] (and any other nominated employees of [NAME_2], [NAME_21] or [NAME_3]) would have authority to direct and control the labour provided by [NAME_21] and [NAME_3]. 32 The family also decided that new employees would sign a separate commencement letter and tax file declaration form for each of the two companies, and each week complete a separate timesheet for each of the two companies. 33 Due to changes within the [NAME_2], in 2000 two new labour hire companies replaced [NAME_21] and [NAME_3]: [COMPANY_25] and [COMPANY_25]. Notwithstanding this development, the farm's operations continued exactly as they had under [NAME_21] and [NAME_3]. 34 In 2005 [NAME_23] were created to replace [COMPANY_25] and [COMPANY_25]. 35 [NAME_2] met with [NAME_2] (director and shareholder of [NAME_3]) and [NAME_2] (director and shareholder of [NAME_3]). They agreed that [NAME_2], [NAME_23] would adopt the agreements reached between the previous labour hire companies and [NAME_2]. 36 It appears from his affidavit sworn 10 July 2012 that [NAME_9]'s recollection of events leading to the creation of [NAME_23] is similar to that of [NAME_2].

Employment of workers 37 In relation to the hiring of casual workers at the farm, [NAME_2] deposed in her affidavit sworn 10 July 2012 as follows:

67. Throughout the existence of N.B and [NAME_3] the process for hiring new employees was as follows: a) the prospective employee would be interviewed by either [NAME_24], [NAME_2], [NAME_19] or myself. If we formed the view that the prospective employee was suitable we would advise them that there was work available and refer them to [NAME_16] in the office; b) [NAME_16] would give the prospective employee: an employee detail form for [NAME_3], a tax file number declaration form for [NAME_3], an employee detail form for N.B, a tax file number declaration form for N.B, and a one page work document (in relation to each of [NAME_20].) about their workplace health and safety obligations; c) [NAME_16] would then explain to the worker that they would work for [NAME_3]. for up to 40 hours per week. If they wished to work more than 40 hours they would then start working for N.B. It was made clear to the worker that any work that was done for N.B. was voluntary additional hours at the same rate of pay as work done for [NAME_3]; d) if the employee was content with those terms they would then sign the forms and commence working. So the position was abundantly clear to the employees, the forms for [NAME_3]. were white in [NAME_2] and the forms for N.B. were green in [NAME_2]. It has always been our practice to have different coloured forms for each labour hire entity.

68. At the end of each week the employees would be required to sign two timesheets, one for the hours that they have worked with [NAME_3] and one for the hours they have worked with N.B. The employees would then receive payment from [NAME_3] and N.B respectively.

69. It was part of [NAME_16]'s responsibility to ensure that each new worker understood and agreed to the arrangements at the farm. Further, [NAME_16] was responsible for ascertaining whether a new worker wished to work more than 40 hours per week. If they did not wish to work more than 40 hours per week then they were only to accept employment with [NAME_3].

70. When [NAME_16] ceased working in the administrative office in the middle 2007 [sic] we decided that her responsibilities, in respect of new employees, would be undertaken by [NAME_19], in respect of packing shed workers and [NAME_2], in respect of field workers.

71. At no time were employees forced to accept employment with [NAME_26]. Further, no employees were forced to work in excess of 40 hours per week. All work undertaken by employees was done so on a voluntary basis. 38 During cross-examination, the following exchange occurred: MR [NAME_6]: And the reason why these entities were established was for the simple reason that if people worked for more than 40 hours a week, you didn't want to pay overtime?---There was no overtime available in the system. No, but - - -?---There was never any – why would we pay overtime when we've got staff knocking on doors looking for work? Yes, but - - -?---I mean, if we pick our fruit on a Saturday instead of a Friday, [NAME_18] are not going to give us extra money because we paid 150 or 200 per cent. (Transcript 23 October 2012 p 80 ll 12-21.) 39 During cross-examination, [NAME_2] was shown the [NAME_2] t-shirts, and the following exchange occurred: MR [NAME_6]: You will see - have you - I think - when you were in court yesterday, I think they were being shown to [NAME_10]?---Yes. That's right. [NAME_10], Senior, and other witnesses. And those shirts or shirts like them were worn by packers in the shed if they wanted to purchase one?---That's right. Yes. But they were the only shirts or type like that with [NAME_2]'s livery on them which were available for sale for packers if they wanted them?---Packers and staff in the field, yes. Yes. They could by [sic] those. Were there any shirts with the livery of [NAME_3] on them for sale?---No, because that was - [NAME_2] was the workplace. Yes?---Right? And this symbolises the workplace. (Transcript 23 October 2012 p 70 ll 24-38.)

Practice at the farm in relation to public holidays 40 [NAME_2] deposed that the practice at the farm in relation to public holidays was as follows: a) at the commencement of the week in which the public holiday fell the shed manager would assess whether it was likely that we would need people to work on the public holiday; b) if it was expected that work would be required, a meeting of all workers would be held and they would be asked whether they would like to work on the public holiday in return for a day off in lieu; and c) the workers who wanted to work would then raise their hands. Those workers who wanted to work would then complete a form confirming that they wished to work on the public holiday. Those workers who did not wish to work on the public holiday were not asked to work on the public holiday. 41 Most of the workers always opted to work on public holidays. However, it appears that in 2008 [NAME_2] inadvertently threw away a significant number of the forms that workers had signed, in which they agreed to work on public holidays.

Re-signing of paperwork by employees in June 2007 42 In her supplementary affidavit sworn 17 June 2012, [NAME_2] deposed that the employees of [NAME_23] signed a second set of "employee engagement" paperwork in June 2007. [NAME_9]'s office had commenced administration of the payroll and noticed deficiencies in some of the employee paperwork, for example in relation to choice of superannuation. 43 In the packing shed [NAME_2] organised a meeting of all workers on the farm. She took the workers through the new paperwork and repeated her earlier explanation to them of how they worked their core hours for [NAME_3] and their voluntary additional hours for [NAME_3]. She said that she took special care to ensure that the workers understood the reason and purpose behind the new forms, which replicated the existing arrangements, and how the employment arrangements between [NAME_23] worked.

Enterprise agreement – employment practices at farm 44 As at 10 July 2012, all employees at the farm were employed by [COMPANY_27] pursuant to an enterprise agreement approved by [NAME_1] on 16 May 2010. All employees had taken up the option in the enterprise agreement to work voluntary additional hours at their ordinary rates of pay.

Evidence of [NAME_16] 45 [NAME_16] immigrated to Australia from El Salvador on 13 July 1990. Both of her parents have worked at the farm. After 1999 [NAME_16] accepted work in the farm office. In her affidavit sworn 10 July 2012 [NAME_16] deposed that her responsibilities included the following: providing commencement forms and explaining employment arrangements to new employees; collecting the commencement forms and tax file number declaration forms from new employees; preparing each employee's timesheet for each company based on their weekly run sheets; ensuring that each employee checked and signed their timesheets, and understood the pay arrangements. 46 [NAME_16] deposed that if there was insufficient work in the office, she would perform packing duties in the packing shed. 47 [NAME_16] ceased performing any payroll or roster duties in June 2007. She has not worked at the farm since June 2008.

Practice in relation to informing new employees of their employment arrangements 48 In early 2006 [NAME_2] convened a meeting of all of the farm's workers in the packing shed. At that meeting, [NAME_2] advised the workers (in summary): the two existing labour hire companies were being wound up; two new companies, [NAME_23], would be incorporated and responsible for employing all of the workers on the farm; the workers were invited to accept employment with [NAME_23] on the same arrangement as with the two previous companies; the workers would work their first 40 hours of work each week for [NAME_3]. Any subsequent work would be for [NAME_3]; if the workers did not wish to work more than 40 hours per week, they could accept employment solely with [NAME_3]. 49 [NAME_16] deposed that subsequently her general practice was to explain to new employees that they would be employed by both [NAME_23]. If a new employee wished to work more than 40 hours per week, they would need to accept employment with both companies. They would work their first 40 hours for [NAME_3] and any additional hours for [NAME_3]. [NAME_16] made it clear that if an employee accepted employment with both [NAME_23], they would not be paid overtime. [NAME_16] would provide an employee who accepted these conditions with a set of white commencement forms for [NAME_3], and a set of green commencement forms for employment with [NAME_3]. If instead a supervisor had given the forms to a new employee, [NAME_16] would ensure that she took the time to explain the employment arrangements to them when the employee returned the forms to her.

Timesheets 50 Each work crew at the farm had a run sheet listing all of the employees in that crew. At the end of each day, each worker recorded the total hours they had worked for that day. As a general practice [NAME_16] took the run sheets and created weekly timesheets of work performed by each worker for [NAME_23]. [NAME_16] would record up to 40 hours of work by a worker for [NAME_3] and any remainder for [NAME_3]. 51 [NAME_16] would ask each employee to review their weekly timesheets in the office, and sign them if they were accurate. [NAME_16] deposed that her practice was that while an employee reviewed their timesheets she would reiterate the details about why the worker was being paid by two companies. She could not recall any employee expressing confusion about the [NAME_23] arrangements.

Evidence of [NAME_14] 52 [NAME_14] is the Fair Work Inspector who had carriage of the investigations relating to the relevant employees from 2008 when the complaints were referred to or lodged with the [NAME_1]. 53 On 16 December 2008 Ms [NAME_14] interviewed [NAME_28], ex shed manager at the farm. Ms [NAME_14] was unable to obtain a signed statement from [NAME_28], due to [NAME_28] being ill. However, Ms [NAME_14] deposes that the record of interview transcript dated 16 December 2008 annexed to her affidavit sworn 2 May 2012 is an accurate record of the interview. During the interview [NAME_28] stated, in summary, that: It was explained to her to tell new employees that the reason they had to fill out two tax file declaration forms was as follows: "I was – I was told that you would work 40 hours under one company and then you would work 40 hours under the other and I was told to tell them this way. They – they had to pay less tax." (transcript 16 December 2008 p 14 ll 16-33). When the employees had to sign new tax file declaration forms for [NAME_23], the rest of the staff were told "just that they were changing pay companies" (transcript 16 December 2008 p 15 ll 13-29). [NAME_28] agreed with her husband's statement that the reason for [NAME_23] was "to cancel out overtime" so that the workers never received overtime or holiday pay (transcript 16 December 2008 p 16 ll 13-30).

WORK BY [NAME_10]

Evidence of [NAME_10] 54 [NAME_10] worked at the farm as a forklift driver from 27 November 2005 until November 2007.

Commencement at the farm by [NAME_10] 55 In his affidavit sworn 2 May 2012, [NAME_10] deposed that in 2005 he had had his forklift licence for more than 20 years. He went into [NAME_29], an employment centre in Stanthorpe on Friday 25 November 2005. The manager of the employment centre told him to go to [NAME_2]'s farm and speak to [NAME_2], who had a position for a forklift driver. 56 [NAME_10] deposed that, at the farm, [NAME_2] said words to the following effect: Are you willing to work long hours because you'll have to work as long as it takes each day to pack the day's goods. You should expect to be working at least 50 hours a week. You will have to work at least six days per week and sometimes seven days per week. 57 [NAME_10] said that was not a problem. [NAME_2] told him he would start off on a casual basis, probably over the weekend. [NAME_10] deposed that [NAME_2] did not discuss wages with him or which law would apply to his employment. He did not recall [NAME_2] saying anything to him about labour hire companies offering 40 hours of work with [NAME_3] and working any additional voluntary hours at the same rate of pay with [NAME_3]. 58 [NAME_2] subsequently called [NAME_10], and asked him to start work on 27 November 2005. While he worked at the farm, [NAME_2] directed his days and hours of work. [NAME_2] never told him that she was acting as an agent for [NAME_30]. While he met [NAME_2] and [NAME_2], they did not play any role in [NAME_10]'s recruitment or direct his work at the farm. 59 In his affidavit sworn 2 May 2012 [NAME_10] deposed that he signed a single tax file number declaration form. He could not remember the name of the employer on the form. However, under cross-examination he conceded that on 27 November 2005 he filled out two tax file number declaration forms (transcript 22 October 2012 p 20 ll 21-24). The section "to be completed by a payer" was blank (transcript 22 October 2012 p 19 ll 23-33). 60 Annexed to the affidavit of [NAME_9] are the commencement forms that [NAME_10] signed on 27 November 2005 when he started working at the farm. There is one bundle of documents for [NAME_3] (annexure VC-2) and one bundle of documents for [NAME_3] (annexure VC-3). 61 [NAME_10] did not recall ever having a conversation with [NAME_16] in relation to the payment arrangements by [NAME_23]. He recalls returning his employment forms to [NAME_28]. Nor did [NAME_10] recall any explanation by [NAME_16] of the [NAME_23] structures to him or his son, [NAME_10]. 62 In contrast to [NAME_10]'s recollection, [NAME_16] deposed that [NAME_10] returned his commencement forms to her. When he did so, she said: You understand that you are accepting employment with two companies. [NAME_3] will pay you for the first 40 hours and [NAME_3] will pay you for any hours after that. All wages will be paid at the ordinary time rate. 63 [NAME_10] deposed that when he started work, and throughout his employment, he believed that his employer was [NAME_2]. The boxes that were packed and shipped out of the farm had [NAME_2]'s labels and address on them. The transport documents for the goods were also in the name of [NAME_2]. During examination-in-chief, [NAME_10] deposed that [NAME_2] or [NAME_28] gave him two shirts with the [NAME_2] label on them. Other workers in the packing shed had similar clothes. However, he conceded during cross-examination that the workers did not have to wear the [NAME_2] shirts when they worked at the farm.

Timesheet and pay of [NAME_10] 64 [NAME_10] completed one timesheet for every day he worked. The timesheet was signed by him and his supervisor. [NAME_10] generally worked six days per week, having Saturday off. He would normally work from 5 am or 6 am until 6 pm or 7 pm. There was no formal work roster. [NAME_2] would tell him each afternoon whether he would be required to work the next day, depending on the number of orders that were required to be filled. The details of the days and hours that [NAME_10] worked at the farm are not in dispute. 65 [NAME_10] was paid weekly in arrears every Wednesday by direct deposit into his bank account. His bank accounts show deposits from [NAME_3] and [NAME_3]. Every week [NAME_10] received two payslips, one from [NAME_3] for 40 hours work, and one from [NAME_3] for the hours that he worked above 40 hours per week. The payslips showed the total hours worked for each company and did not detail the hours that [NAME_10] worked each day. Both companies paid him at the same rate of pay. 66 In mid-2007 a meeting was held for the workers to fill out new tax file number declarations for [NAME_23]. [NAME_10] recalled the meeting, but did not recall [NAME_2] or [NAME_16] saying anything about how the workers worked their core hours for [NAME_3] and their voluntary additional hours for [NAME_3].

Overtime and work on public holidays 67 In relation to the overtime that he worked while at the farm, [NAME_10] deposed in his affidavit sworn 2 May 2012 that:

45. I worked more than 40 hours per week at least every three out of every four weeks … 46. I worked all the hours voluntarily. However I was never given a choice by my employer to work over 40 hours per week. I just kept on working until the work was completed each day.

47. No one from [NAME_3] every spoke to me about my work when I reached 40 hours. No one from [NAME_3] ever offered me work for the rest of the week in excess of the 40 hours I had already worked for [NAME_3].

48. Nothing ever happened that alerted me to the fact that at any given point in time I was working for a different employer. The nature of my work never changed. I worked in the same shed whether I was paid by [NAME_30]. After 40 hours were completed, I never signed off and then signed on with another employer.

49. When I got my first pay cheque I asked [NAME_28], one of the other employees, to the effect why we did not get paid overtime and she told me to the effect that employer's [sic] in the fruit industry do not have to pay overtime. I had been away in America for 18 years so I was unaware of any changes in industrial relations laws so I just accepted this explanation.

50. I never understood why I was being paid by two companies. I thought it was strange but I never asked about this as I just thought it must be because the industrial relations laws had changed while I was living overseas.

51. I was never paid overtime for any of the hours I worked over 40 hours per week. 68 However, under cross-examination, the following exchanges took place between Counsel for the respondents and [NAME_10]: So you were clearly aware that there were two employers involved in this transaction, weren't you?---Not really sure, you know, I had an odd number of forms to fill out and I just did it and handed them in. I wasn't aware of the way [NAME_23] actually operated until after I got my first pay. (Transcript 22 October 2012 p 19 ll 15-18.) Now, you said that you didn't realise what was happening about the payment that [NAME_2] and the work on the farm until you got your first pay?---Yes. But from the time you got your first page [sic], you knew that there were two employers, one would play [sic] for the first 40 hours and the next - yes? ---Yes. (Transcript 22 October 2012 p 20 ll 26-30.) 69 [NAME_10] also deposed that he never received additional payments for the work he did on public holidays. He denied that the workers had had a meeting to vote in relation to working on public holidays. Instead, the workers were told whether they were required to work on public holidays. He recalled he was only asked once or twice to sign a form substituting a public holiday for a normal working day.

Evidence of [NAME_2] 70 [NAME_2] confirmed that he spoke to [NAME_10] when [NAME_10] came to farm to enquire about work. [NAME_2] deposed that:

12. During the conversation [NAME_10]) told me that he had recently been divorced from his wife who lived in the United States. [NAME_10]) told me that he was seeking work so that he could bring out his teenage son from the United States. During the conversation [NAME_10]) said words to the following effect: "I need as much work as I can get. I need to bring my family out from the United States."

13. I then said words to the following effect: "Here at [NAME_2], we use labour hire companies. Those labour hire companies offer 40 hours of work with [NAME_3]. If you want to work additional hours, they will be with [NAME_3] as additional voluntary hours at the same rate of pay."

14. I then said that [NAME_10]) should see [NAME_16] in the administration office and she would explain to him the details for the employment arrangements on the farm.

WORK BY [NAME_10]

Evidence of [NAME_10] at the farm by [NAME_10] 71 Between 1 September 2006 and 11 March 2007 [NAME_10] worked as a casual fruit packer at the farm. He obtained the job through his father, [NAME_10]. In August 2006, before he started work, [NAME_10] met with [NAME_2], [NAME_2] and [NAME_28]. 72 When he started work, [NAME_28] asked him to complete two tax file number declaration forms. However she did not explain to [NAME_10] the purpose for which he was completing two different forms. [NAME_10] also signed commencement documents for [NAME_3] and [NAME_3] on 4 September. During cross-examination, the following exchange occurred between [NAME_10] and Counsel for the respondents: [redacted] You realised that there were two employment arrangements being set up at that time, didn't you?---I didn't really understand it. I just signed it to commence working. (Transcript 22 October 2012 p 29 ll 13-17.) 73 [NAME_10] does not recall the meeting that [NAME_2] deposes occurred in mid-2007. 74 [NAME_10] deposed that he believed that his employer was [NAME_2]. The name of the farm was [NAME_2], and [NAME_2] was printed on the stickers that went on the fruit and the label on his work uniform (transcript 22 October 2012 p 33 ll 30-37). In [NAME_10]'s view his employers at the [NAME_2] farm were [NAME_2], because they were the ones telling people what to do and how to do their job, and they were the people who hired and fired workers at the farm.

Completion of timesheets and payment of wages 75 [NAME_10] worked at the same shed at the same address during the entire period at which he worked at the farm. Normally he stacked boxes of fruit onto pallets in preparation for them to be shipped. However, he would help out with whatever he was asked to do. All the workers were directed and disciplined, if necessary, by [NAME_2], [NAME_2], [NAME_28] or [NAME_19]. [NAME_10] personally was always directed by [NAME_2], [NAME_28] or [NAME_19]. 76 By hand he completed one timesheet at the end of every day entitled [NAME_2]. The timesheet was kept on a desk by the office in the shed. He completed the same timesheet, regardless of the numbers of hours he worked. 77 In her affidavit sworn 10 July 2012, [NAME_16] deposed that she recalled the first time that [NAME_10] inspected his timesheet, because he came with his father, [NAME_10]. She explained the arrangement between [NAME_23] to [NAME_10]. He said he understood. In contrast, [NAME_10] deposed that he does not recall [NAME_16] explaining why he would be paid by both [NAME_23] (transcript 22 October 2012 p 32 ll 9-20). [NAME_16] might have said something about [NAME_23] paying him, but he did not recall her telling him why the arrangement was set up in that way. 78 At the end of each day [NAME_2] or someone directed by her would tell [NAME_10] whether he would be working the next day. If [NAME_10] could not work on a day he would contact [NAME_2] or [NAME_28]. They resolved any disputes between workers at the farm. 79 [NAME_10] gave evidence that he was never told when he had worked more than 40 hours in a week. He was offered work by Mr or [NAME_2], but he was never given a choice about whether he wanted to work more than 40 hours per week. He was never paid for working on a public holiday and never agreed to substitute another day for a public holiday. He thought there may have been a meeting of the workers about public holidays once. He recalled that sometimes he might have had a choice to work on a public holiday, but most of the time he was required to work on a public holiday. 80 [NAME_10] said that [NAME_2] determined his rate and method of pay. [NAME_3] made a weekly deposit of [NAME_10]'s wages into his bank account. Some weeks he also received a deposit from [NAME_3]. During cross-examination, the following exchange took place: Okay, so you will see the third entry on that page, 19 September, [NAME_3], pay for 19 September 2006?---Yes. And the fourth entry, [NAME_3], pay for 19 September 2006?---Yes. That would have been your first pay, would it not?---Yes. It's the first entry, yes. So you would have known that you were being paid by the two different companies from the beginning?---Yes. Yes. (Transcript 22 October 2012 p 30 ll 31-36.) 81 [NAME_10] deposed that he did not know much about [NAME_23], did not agree to work for them, and was never aware that either company was his employer. [NAME_10] had met [NAME_2], he never met [NAME_2].

WORK BY [NAME_12]

Evidence of [NAME_12] 82 [NAME_12] worked in the packing shed at the farm from 13 January 2007 to 21 February 2008. Her duties included fruit grading, packing orders, operating machinery, cleaning the shed and training backpackers.

Commencement at the farm by [NAME_11] 83 [NAME_11] deposed that when she went to the farm to see if there was any work available she spoke with [NAME_2]. [NAME_2] offered [NAME_11] a job two days later over the telephone. [NAME_11] deposed that [NAME_2] never said anything about the work being with [NAME_23]. [NAME_11] did not agree to work for [NAME_23], was unaware that she had a relationship with [NAME_23], and did not know what the company names stood for. She thought she was employed and paid by [NAME_2]. 84 [NAME_11] understood that the name of the business for which she worked was [NAME_2], as this was the name written on the sign on the front gate and the packing stickers and boxes. Each fruit packer had a different packing number on their stickers, so that when the boxes of fruit went through a quality check it was obvious who had packed which fruit. Some of the workers in the packing shed wore "[NAME_2]" shirts. [NAME_11] did not as the workers had to pay for the shirts. No one told [NAME_11] that they were acting on behalf of [NAME_30]. 85 In her affidavit evidence [NAME_11] stated that she believed during her time at the farm that her employers were [NAME_2], because they owned the property, the business and the company. [NAME_11] said that [NAME_2] was in control of the working conditions at the farm. At the start of the season she oversaw everyone and checked which orders were to be packed. She told the workers when to take breaks, and reprimanded workers if they threw away too much fruit. [NAME_2] also hired and dismissed workers. [NAME_28] filled these roles when [NAME_2] was not there, which occurred more frequently as the season progressed. 86 However, in relation to her knowledge of [NAME_23], during cross-examination [NAME_11] deposed the following: I see. Now, you have got [NAME_9]'s affidavit there? The thick one, I'm sorry?---Yes. Can you turn to page 62 please of that affidavit? That is a document you signed about workplace health and safety guidelines on 13 January, is that right?---Yes. All right. And look at 63. Do you remember getting that document about the same time?---Yes. Did you read it?---Yes. And you read those first words prior to commencing employment with the above company: The following information will be required. ?---Yes. Fax numbers and everything like that. Yes. And you signed a form about [NAME_3] – the next page, 64?---Yes. And you signed another form, 65, with your employee details for [NAME_3]?---Yes. And indeed, you completed a tax file declaration which is at page 73 for [NAME_3], didn't you?---Yes. You also, on the same day, looking over to page 76, filled out an employee detail form for [NAME_3], didn't you?---Yes. And you filled out the document on page – signed the document on page 79 for [NAME_3]?---Yes. The ..... document on page 78 about [NAME_3]: Before commencing with the above company, the following information will be required. You have seen that as well?---Yes. Yes. And you did a tax file declaration for [NAME_3], as well. You knew at that stage that you were accepting employment with two companies, didn't you?---I was led to believe that there were two companies operating in the shed? Yes. And you knew that that's what the employment was offered to you was with the two companies?---Yes. (Transcript 22 October 2010 p 39 l 11 – p 40 l 8.) 87 When [NAME_11] started work at the farm she did not receive a letter of appointment. [NAME_2] handed her two sheets of paper – a white sheet with [NAME_3] at the top and a green one with [NAME_3] at the top. The forms stated that employees, prior to commencing, were required to provide personal, tax, superannuation and bank information. The forms discussed meal breaks and when wages would be paid but not hours of work or rate of pay. The forms stated further that the position was a casual position on a trial basis, until confirmed in writing. 88 On 28 June 2007 [NAME_11] completed employee details forms for [NAME_23] and a document entitled "[COMPANY_2] Guidelines". [NAME_2] also gave her two tax file number declaration forms to sign for [NAME_23]. When [NAME_2] gave [NAME_11] those forms, section B to be completed by the payer was blank (transcript 22 October 2012 p 47 l 44 – p 78 l 5).

Working hours and pay of [NAME_11] 89 The usual hours that [NAME_11] worked were 6 am to 5 pm. However, these changed depending on the number of orders that [NAME_2] had accepted for each day, and [NAME_11] deposed that she never knew at what time she would finish work. [NAME_11] completed a single timesheet every day. On [NAME_11] had to a sign a pay sheet for [NAME_3] listing all of her hours for the week. If she had worked more than 40 hours that week she would also sign a pay sheet for [NAME_3]. It was never explained to [NAME_11] why she was required to sign two pay sheets. 90 [NAME_3] would pay [NAME_11] by direct credit into her bank account, except for a few times when she first started working at the farm and collected a cheque from [NAME_9]'s office. Some weeks she also received a payment from [NAME_3]. [NAME_11] believed that since [NAME_2] were the owners of [NAME_2], they decided how much she was paid. She would receive one or two payslips depending on how many hours she had worked that week. She never asked why she received two payslips and assumed it was so the farm could avoid paying her overtime. In paragraph 11 of her supplementary affidavit affirmed 31 August 2012, [NAME_11] deposed that she did not recall [NAME_16] explaining to her why she was being paid by two different companies, and she was not asked about giving up her entitlement to overtime. Further she did not recall [NAME_2] holding any meetings in mid-2007 to explain the employment arrangements at the farm. 91 Regardless of the number of hours she worked in a week, [NAME_11] always worked in the same spot in the [NAME_2] packing shed, supervised by the same people. On one occasion she asked [NAME_2] whether she could work fewer hours, but [NAME_2] said she could not as that would amount to favouritism. [NAME_11] was never paid additional wages for working on public holidays, and never agreed to substitute another day for a public holiday. In her supplementary affidavit affirmed 31 August 2012, [NAME_11] deposed that she was never asked whether she wanted to work public holidays. She did not recall any meeting in which the workers voted to work on a public holiday.

Evidence of the respondents concerning [NAME_11] 92 In her affidavit sworn 10 July 2012, [NAME_2] deposed in summary: [NAME_11] called the farm in January 2007 to enquire whether there was work available. [NAME_2] said it did not matter that [NAME_11] had no experience in packing capsicums, and she would call her if any vacancies arose. [NAME_2] subsequently called [NAME_11] to advise her of a vacancy in the packing shed. [NAME_11] stated that she was keen to start work. [NAME_2] told [NAME_11] that when she arrived at the farm she could speak to [NAME_16], who would provide her with all the details about the job. 93 [NAME_2] denies she told [NAME_11] that she could not work fewer hours, because at all times the hours worked at the farm were voluntary. 94 [NAME_16] does not recall providing [NAME_11] with commencement forms. However, she did remember that [NAME_11] returned the forms to her, at which time [NAME_16] deposed that the following exchange took place (affidavit of [NAME_16] sworn 10 July 2012 at [38]-[41]): 38. … I said words to the following effect: "Do you understand that you are accepting employment with two companies, [NAME_3] and N.B?" 39. [NAME_11] said words to the following effect: "Yes."

40. I then said words to the following effect: "[NAME_3] will pay you for the first 40 hours and N.B will pay you for any hours after that. All hours will be paid at ordinary time rate." 41. [NAME_11] said in words to the following effect: "Yes." 95 Annexure VC-6 to the affidavit of [NAME_17] sworn 10 July 2012 shows that [NAME_11] signed the following documents on 13 January 2007: [COMPANY_2] & Safety Guidelines; an "Agreement Authority" headed [NAME_3]; an employee and bank details forms for [NAME_3]; a choice of superannuation fund - Standard choice form for [NAME_3]; a tax file number declaration form (the payer information section B was signed on 20 February 2007 for [NAME_3]). 96 On 15 February 2007, [NAME_11] signed the following documents (affidavit of [NAME_17] sworn 10 July 2012 annexure VC7): an employee and bank details forms for [NAME_3]; a choice of superannuation fund - Standard choice form for [NAME_3]; an "Agreement Authority" headed [NAME_3]; a tax file number declaration form (the payer information section B was signed on 28 February 2007 for [NAME_3]). 97 In her Statement dated 14 November 2008 to the [NAME_1], [NAME_11] stated at [20]: I also had to complete two tax file number declaration forms that were given to me at the same time. I had to write [NAME_3] on one hand and [COMPANY_5] on the other. I can't remember whether I had to put their Australian Business Numbers on the tax file number declarations or not … (Affidavit of [NAME_17] sworn 10 July 2012 annexure VC20.) 98 [NAME_2] deposed that all of the employees voted to work the show holiday in February 2008. [NAME_11] left prior to the completion of the shift without giving [NAME_2] any notice.

WORK BY [NAME_13]

Evidence of [NAME_13] 99 From 13 July 2007 to 21 February 2008 [NAME_13] worked in the packing shed at the farm as a fruit and vegetable packer, cleaner and machine operator. Her duties included stacking, labelling, re-boxing, making up cartons and training other workers. 100 [NAME_13] deposed that she was offered the job of packer by [NAME_2] and [NAME_19], one of the shed bosses (affidavit of [NAME_13] sworn 4 May 2012). She knew [NAME_2] and [NAME_19] were in charge as they were allocating tasks to the workers. 101 When she started working at the farm [NAME_13] believed that her employers were [NAME_2] because they were the bosses. When she started work [NAME_2] asked her to complete a tax file number declaration form, with [NAME_3] listed as the employer. However, [NAME_13] deposed that it was incorrect to say that she accepted employment with [NAME_3] but declined employment with [NAME_3]. She knew that [NAME_3] stood for [NAME_2], but he never instructed her in her work. 102 In her evidence [NAME_13] stated: I did not receive a letter of appointment but at the end of my shift on the first day I started I was given a job description form. The name of the employer on this form was [COMPANY_3]. It was given to me with my tax form and other paperwork which I completed and gave back the same day. The details of the job description included that we worked for [NAME_3] and that we got breaks. I didn't pay much attention to it at all. I also signed a document entitled "[COMPANY_2] Guidelines" ... 103 In relation to overtime work, [NAME_13] deposed:

46. When I first started [NAME_2] gave me a tax form for [NAME_3] and a tax form for [NAME_3]. [NAME_2] said words to the following effect: "You won't need the second tax form as the first 40 hours are paid by [NAME_3] and once you have worked over 40 hours those hours are paid by [NAME_3]. We pay with two companies so you pay less tax. Because you won't work over 40 hours per week you only need to fill out the form for [NAME_3]." 47. [NAME_2] showed me a form where I could choose what amount of tax I wanted to pay, there was 10%, 13%, 20% or the standard. I chose to pay the standard amount of tax.

48. I did not work more than 40 hours in one week. 104 [NAME_13] worked from 6 am to 7 pm over two-three days, for an average of 30-35 hours per week. She deposed that she would be told by [NAME_2] or Mr [NAME_19] when she was to work, and had no say in when or where she worked. [NAME_2] would call her in the evening and inform her of her start time the next day. Her finish time changed each day depending on how many orders had to be filled. 105 [NAME_13] does not recall [NAME_16] ever explaining why the workers were paid by two different companies or the mid-2007 meeting referred to by [NAME_2]. She signed one timesheet each week for [NAME_3]. At some point each week she would receive a payslip with [NAME_3] on it. 106 In relation to public holidays, [NAME_13] deposed that she never agreed to substitute another day for a public holiday as it was never discussed with her. She did not get paid additional wages for working on the public holidays. She never signed a public holiday waiver form, and no meeting of workers was held in relation to voting to work on public holidays. 107 During oral examination-in-chief, [NAME_13] deposed that (transcript 22 October 2012 p 50 l 30 – p 51 l 3): although she did not wear the work shirts from [NAME_2], other workers did; the stickers with [NAME_2] on them were for the workers to place on the crates and boxes for [NAME_18]; the packing boxes all had [NAME_2] on them. 108 During cross-examination, [NAME_13] conceded that she had written a letter of complaint to Workplace Health and Safety. She responded, "Yes", to the question, "So you made as many complaints as you could think of there, didn't you?" (transcript 22 October 2012 p 54 l 28).

Evidence of [NAME_2] 109 In early July 2007 [NAME_11] asked [NAME_2] whether there was work available at the farm for her [NAME_7], [NAME_13]. [NAME_2] told [NAME_11] to tell the [NAME_7] to come to see her (affidavit of [NAME_2] sworn 10 July 2012 at [106]). 110 [NAME_13] came to the farm and had a brief discussion with [NAME_2] about the types of work available. [NAME_13] stated that she only wished to work two days every week. [NAME_2] said that was fine. She should speak with [NAME_16], who would inform her of the details of working at the farm. [NAME_2] did not ask [NAME_13] to complete any forms. In accordance with her usual practice she referred [NAME_13] to [NAME_16] for these to be completed.

RELEVANT LEGISLATIVE PROVISIONS 111 At material times, s 182(1) of the Act stated as follows: Subdivision B—Guarantee of basic rates of pay 182 The guarantee Guarantee of APCS basic periodic rates of pay (1) If: (a) the employment of an employee is covered by an APCS; and (b) the employee is not an APCS piece rate employee; the employee must be paid a basic periodic rate of pay for each of the employee's guaranteed hours (pro-rated for part hours) that is at least equal to the basic periodic rate of pay (the guaranteed basic periodic rate of pay) that is payable to the employee under the APCS. Note: For what are the employee's guaranteed hours, see section 183. 112 It is not in dispute that from 27 March 2006 there existed an Australian Pay and Classification Scale ("APCS"), being a preserved APCS within the meaning of that term given by s 208(1) of the Act and which was applicable to the work performed by the relevant employees. The APCS was derived from the Fruit and Vegetable Growing Industry Award - State 2002 (Qld) upon the commencement of Sch 1 of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) on 27 March 2006. 113 The coverage provisions of the APCS set out in cl 1.4 of the NAPSA provided that the APCS applied to: All employers and their employees engaged in the fruit and vegetable growing industry, including the preparation of land, cultivation, planting, care, picking, handling, treating, packing and despatching of all fresh fruits (including tomatoes) and vegetables, on or from fruit and vegetable farms, vineyards, orchards and plantations, throughout the State of Queensland. 114 It is clear that the conditions of employment of the relevant employees in this case fell within the terms of the NAPSA. 115 Clause 6.4.2 of the NAPSA provides in relation to overtime that: 6.4.2 All time worked by casual employees in excess of 40 hours in any 7 days shall be deemed overtime and paid for at the rate of time and a half for the first 3 hours and double the ordinary rate of pay thereafter. 116 Clause 7.6 of the NAPSA relevantly provides in relation to public holidays that: 7.6.1 Subject to clause 7.6.7 all work done by an employee on: the 1st January; the 26th January; Good Friday; Easter Saturday (the day after Good Friday); Easter Monday; the 25th April (Anzac Day); The Birthday of the Sovereign; Christmas Day; Boxing Day; or any day appointed under the Holidays Act 1983, to be kept in place of any such holiday will be paid for at the rate of double time and a-half with a minimum of 4 hours. 7.6.2 Labour Day All employees covered by this Award are entitled to be paid a full day's wage for Labour Day (the first Monday in May or other day appointed under the Holidays Act 1983, to be kept in place of that holiday) irrespective of the fact that no work may be performed on such day, and if any employee concerned actually works on Labour Day, such employee will be paid a full day's wage for that day and in addition works on Labour Day, such employee will be paid a full day's wage for that day and in addition a payment for the time actually worked by the employee at one and a-half times the ordinary time rate of pay prescribed for such work with a minimum of 4 hours. 7.6.3 Annual show All work done by employees in a district specified from time to time by the Minister by notification published in the Industrial Gazette on the day appointed under the Holidays Act 1983, to be kept as a holiday in relation to the annual agricultural, horticultural or industrial show held at the principal city or town, as specified in such notification of such district will be paid for at the rate of double time and a-half with a minimum of 4 hours. In a district in which a holiday is not appointed for an annual agricultural, horticultural or industrial show, the employee and employer must agree on an ordinary working day that is to be treated as a show holiday for all purposes.

CLAIMS AGAINST THE RESPONDENTS 117 In its application filed 7 September 2010 the [NAME_1] claimed that [NAME_2] had contravened all of these provisions. Alternatively, the [NAME_1] claimed that [NAME_2] and the second and third respondents had contravened those provisions. 118 In relation to the fourth respondent [NAME_2], the [NAME_1] claims that [NAME_2] should be held to have been involved in [NAME_2]'s contravention of the Act by virtue of s 728 of the Act, which provides: 728 Involvement in contravention treated in same way as actual contravention (1) A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision. (2) For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. 119 The [NAME_1] claims that s 182(1) of the Act and cll 6.4.2, 7.6.1, 7.6.2 and 7.6.3 of the NAPS are "applicable provisions" within the meaning of s 717 of the Act, and for the purposes of s 718 of the Act. Section 719 of the Act empowers the Court to impose a penalty on a person if that person is bound by an applicable provision and the person breaches the provision. The [NAME_1] seeks the imposition of penalties against each respondent for contraventions of these applicable provisions. 120 In summary, the [NAME_1] claims that: in breach of s 182 of the Act, the first respondent failed to pay each of: o [NAME_10] from 5 December 2006 until 30 September 2007; o [NAME_10] from 5 December 2006 until 11 March 2007; o [NAME_11] from 16 January 2007 until 30 September 2007; and o [NAME_13] from 9 July 2007 until 30 September 2007, at least the guaranteed basic periodic rate of pay payable under the AFPCS for each of the employees guaranteed hours of work. The first respondent was required to pay each of the employees at least the overtime rate of pay for hours worked in excess of 40 hours in any seven days, and failed to do so in respect of each of the relevant employees. The first respondent was required to pay each of the employees at least the penalty rate of pay for hours worked on public holidays, and failed to do so in respect of each of the relevant employees. As a result of these contraventions, the first respondent underpaid wages and entitlements to the relevant employees in the amount of $19,034.11. 121 In the second further amended statement of claim the [NAME_1] pleads that the underpayments were actually paid to each of the relevant employees by the second respondent in or about August 2010. 122 In summary, the respondents dispute the [NAME_1]'s claims on the basis that the relevant employees accepted offers of employment from both [NAME_23] and/or worked for those entities, and further that to the extent they acted [NAME_2] were acting on behalf of [NAME_23]. 123 It does not appear to be in dispute that penalty rates were not paid on public holidays. The major area of contention concerns the identity of the employer of the relevant employees.

CONSIDERATION 124 In my view it is clear that, at all material times, the employer of the relevant employees was the first respondent, [NAME_2]. 125 The respondents submit, in summary, that: There is evidence before the Court as to the commercial purpose of the arrangements adopted wherein [NAME_23] were incorporated as labour hire companies, and employees would work up to 40 hours for one of those companies and then work additional hours for the other. [NAME_23] were substantial business structures in their own right with tiers of management. 126 That the respondents operate in an industry where profits are low, where persons in the Stanthorpe area are keen to work in the fruit industry and indeed to work as many hours as possible, where the work is seasonal and an employee may be required to work more than 40 hours per week, where the respondents are required to take prices offered to them by the major supermarket chains, and where farms may otherwise take employees from labour hire companies and impose a maximum of 40 hours per week, are facts which are not in dispute. Indeed, the difficulties faced by primary producers in this country are of daily report in the media. However these facts do not detract from the legal position under the Act, which this Court is required to apply. 127 Principles relevant to the identification of an employer in circumstances of ambiguity were considered by the [ADDRESS] in Damevski v Giudice (2003) 133 FCR 438. In that case in particular Marshall J observed, in summary, that: the existence of a contractual relationship and employment relationship, in any given set of circumstances, is ultimately a question of law (at 450). Payment of wages by a third party is not fatal to the existence of a contract of employment between a worker and a putative employer (at 451). control over a worker did not merely relate to the on-the-job situation, but rather the ultimate or legal control over the worker (at 451). Contact between the putative employer and employee is an indicator of an employment relationship (at 452). contracts of employment may be entered into with a minimum of formality (at 452). It is necessary to look "beyond and beneath the documents" and not reach a decision concerning the existence of an employment contract on the basis of construing the correspondence (at 453, cf Lord Mummery in Franks v Reuters Ltd [2003] IRLR 423). Even where the work relations are documented, it is necessary to examine not only the correspondence, but also the circumstances surrounding it, the subsequent conduct of the parties, and the way in which the parties operated and understood the situation (at 453). 128 In this case the evidence demonstrates that each of the relevant employees signed (or had signed for them) weekly time sheets under the heading of either [NAME_30]. Similarly, each of the employees received payment advices under the name of either [NAME_30]. However in my view the arrangements whereby the relevant employees were identified as working for [NAME_30] were, effectively, a sham. That the true employer was [NAME_2] is clear from the evidence before the Court. In particular I note the following: The fact that all relevant employees considered that [NAME_2] were "the bosses" who could hire and fire employees, and that this did actually appear to be a correct perception. The evidence of each of the relevant employees that they believed that they were working for [NAME_2]. Indeed employees on the farm wore shirts bearing the name "[NAME_2]", on the basis that this was their employer. Similarly, the only Workplace, Health and Safety Guidelines applicable at the farm were in the name of [NAME_2] (transcript 23 October 2012 p 84 ll 9-19). This may be compared with the absence of evidence of any employees having any direct separate involvement with [NAME_30] in the employment environment. The fact that the employees performed the work in the same location, namely on the farm owned by [NAME_2], and by packing fruit in boxes labelled as produced by [NAME_2]. The fact that the relevant employees had limited knowledge of [NAME_30] other than as entities whose name appeared on pay slips. Indeed, there is clear evidence before the Court that there was no practical difference in their work environment or practice after an employee had worked 40 hours. The lack of awareness of the relevant employees of the arrangements whereby they worked up to 40 hours for one of the respondents and any additional hours for another, notwithstanding evidence of [NAME_16] and [NAME_2] that they had informed them of the arrangements. The directors of [NAME_23] had no involvement in employing staff. The clear fact that [NAME_23] existed only to provide services to the first respondent. Notwithstanding the existence of time sheets and pay slips, the absence of any contract of employment between either [NAME_30], and the relevant employees. [NAME_2] repeatedly gave evidence to the effect that there was no overtime available in the system, and that no farms paid overtime rates to their harvesting and packing staff. However while this may have been the practice, it is very clear that [NAME_2] was aware of the legal obligation on employers to pay overtime once an employee had worked 40 hours. Indeed, it was for this very reason that [NAME_23] were created – namely to be entities who could be the nominal employers of employees on the farm to obviate the legal requirements of [NAME_2] as employer to pay overtime for more than 40 hours work. That the directors of [NAME_23] were the children of [NAME_2] simply supports the inference that [NAME_23] functioned in the context of the family business. 129 The respondents relied on comments of Buchanan J in [NAME_31] (2011) 198 FCR 174, in particular the following observations of his Honour:

76. There may be many reasons why companies, businesses or enterprises associated with each other might wish to organise their affairs in a way where one legal personality employs labour for the ultimate use and benefit of other legal personalities. Such arrangements will often not be characterised or accompanied by the apparent profitability or identified reward which might be necessary in order to regard an arms-length arrangement as a genuine one.

77. In such intra-group arrangements there may be overlapping, or even common, directorships, interlocking shareholdings (either cross-ownership or through ultimate ownership) and there is frequently a system of cross-guarantees in place. Little of this may be apparent to outsiders. The details may not be discoverable through the public records system. Arrangements between or amongst companies related in this way where one company (or more) operates to engage labour while others are concerned with management, operations, marketing or sales are by no means unusual. They are certainly not illegal. Arrangements along these lines may even be indispensable for some forms of business activity e.g. joint ventures. Although more than mere lip service must be paid to the separation of legal personality provided by individual incorporation, the tests applied to other labour hire arrangements, of independence and separate business, are either not relevant or are much less readily applied in such a circumstance.

78. Nevertheless, it must be possible to identify a rational explanation for the arrangement and the explanation must be satisfactorily related to an intelligible business objective. That is so because otherwise, doctrines of agency, at least, may operate to defeat a bare claim of independence and isolated liability, supported only by a bare reference to separate incorporation. That is particularly likely to be the case when: the separate employing company is completely reliant upon a company to which it purportedly supplies labour; it has no assets and no management structure of its own; and it exists only as a corporate shell to protect another company, which does have assets, from liability to employees. In such a case a court might not hesitate long before pronouncing the arrangement ineffective or, in a more serious case, a sham. 130 In my view these observations do not assist the respondents. Indeed the concluding comments of Buchanan J at [78] concerning circumstances where the Court would not hesitate long before pronouncing an arrangement ineffective or a sham are squarely applicable here. While there may have been a rational explanation for the arrangements put in place by the respondents, to adopt comments of Marshall J in [NAME_32] v [NAME_32] at 450, it was to effectively to: attempt to exploit difficult areas of law and create vehicles designed, inter alia, to enable employers to avoid their award and statutory obligations. 131 As Marshall J observed in [NAME_32] v [NAME_32] there is no legitimacy in such arrangements. 132 It follows that the [NAME_1] has substantiated its claim that the first respondent was the employer of [NAME_10], [NAME_10], [NAME_11] and [NAME_13]. 133 Finally I am satisfied that any contravention by the first respondent involving underpayment of entitlements to these employees involved the second, third and fourth respondents within the meaning of s 728 of the Act. As the High Court explained in Yorke v Lucas (1985) 158 CLR 661 at 670: There can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention. 134 It is clear from the material before the Court that these three respondents aided and abetted the contravention, and/or were knowingly concerned in the contravention, in that: The second and third respondents were party to the arrangements whereby the relevant employees were allegedly employed by one of them for up to 40 hours per week and then by another respondent for additional hours. Each of the second and third respondents made payments to the relevant employees which were in breach of the provisions of the Act. The second and third respondents had knowledge of the essential facts constituting the contravention of the Act by the first respondent. The fourth respondent, who had detailed knowledge of the arrangements, had knowledge of the essential facts constituting the contravention of the Act by the first respondent.

CONCLUSION 135 I will ask the parties to prepare a minute of order to reflect these findings. Further, I note that the applicant seeks the imposition of penalties for contravention of the Act. In the circumstances I will make timetabling orders for the matter to return to Court for the parties to make appropriate submissions on penalty. I certify that the preceding one hundred and thirty-three (133) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

Associate: Dated: 11 February 2014