Company director foots $57K bill for unpaid entitlements

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Company director foots $57K bill for unpaid entitlements

A company director has been ordered to pay more than $57,000 in unpaid employee entitlements. He will also be subject to penalties, a judge has ruled.

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A company director has been ordered to pay more than $57K in unpaid employee entitlements after the Federal Circuit Court ruled he had breached the Fair Work Act.

The amount, owed to two former employees, encompassed redundancy and notice of termination payments. It also included payment for unused personal/carer’s leave – an entitlement under the Black Coal Mining Industry Award 2010.

A judge ruled Ronald Godfrey Nielsen would also be subject to penalties. 

Mr Neilsen was the former sole director of RGN Mining Services, which was a labour hire company that supplied workers to Angus Place mine.

RGN won a tender to supply labour in or about early 2012 and ceased work at the mine in mid-2014. The company has since gone into liquidation.

Bradley Boyling


RGN engaged Bradley Paul Boyling as a supervisor. Mr Boyling accepted a verbal offer of a supervisory position on 16 April 2012 on the same terms and conditions as his previous role. 

Mr Boyling became aware on 1 May 2014 that RGN would cease work at the mine. An RGN manager then said that he would be “finishing up” with the company. He was offered a letter, that was predated to 26 March, stating that his employment termination date would be 9 April 2014. Mr Boyling refused to accept this letter as it had the wrong date and, if the purported termination date had been valid, it would have meant that his period of employment with RGN would have been a week shy of two years.

Mr Boyling received his usual wages for work, his accumulated annual leave and four weeks’ payment which was described as “ETP Tax Free". He did not receive any redundancy pay. 

Jason Sydney Brett


Mr Brett initially began work at the mine on 2 April 2012 as a casual operator/fitter employed by RGN. “A few weeks” later he accepted, permanent employment. 

On 17 April 2014 he was told, during a phone call from an RGN manager, that he had been unsuccessful in obtaining work with the mine operator. He was told over the phone that his last day would be 22 May 2014. But on Wednesday 23 April he was given a pre-dated letter, dated 16 April, stating that his job was being terminated due to redundancy. He was given an employment end date of 15 May. Mr Brett was later told that he was not required to work from Monday 5 May. 

Mr Brett was paid up to Sunday 4 May but, he contended in court, he was entitled to five weeks’ written notice from 23 April 2014 (the date when he was given his termination letter) to 28 May 2014. 

 Mr Boyling and Brett sought declarations that RGN and Mr Nielsen were in breach of the Fair Work Act. They also sought orders for compensation from, and penalties on, Mr Nielsen. 

Mr Nielsen did not file any documents and did not appear for any hearings. All testimony and evidence was therefore unchallenged. 

The law


Among the obligations imposed by The Fair Work Act on employers are:
  • to pay money in full to employees that perform work (s323) 
  • not to contravene a term of a modern award (s45)
  • not to contravene a term of an enterprise agreement (s50).
Accessorial liability (s550) can also be imposed on any person who is “knowingly concerned in or party to” a breach of the Fair Work Act. This liability can attach to a wide range of behaviour and includes acts to aid, abet, counsel, procure or induce. Failure to act can also attract this liability. 

Held 


Judge Barnes of the Federal Circuit Court of Australia ruled that there had been breaches of the Fair Work Act by the company. The judge then noted that the company had been liquidated.

Attention therefore turned to Mr Nielsen as the former sole director of the company and any potential liability under the accessorial liability regime.
 
“Mr Nielsen was the sole director and controlling mind of RGN. He was responsible for the contract to provide secondary support services… he arranged the employment of persons including Mr Boyling and Mr Brett. He determined the terms and conditions of their employment... [he] directly negotiated his terms and conditions of… employment… Mr Nielsen made all significant decisions on behalf of RGN, including not only as to terms under which employees were engaged, but also decisions such as not to pay a particular employee entitlement,” the judge said. 

He then made declarations that Mr Nielsen had breached the Fair Work Act; made orders for $57,254 of compensation and ruled that penalties for those workplace contraventions will be fixed at a future date. 

Construction, Forestry, Mining And Energy Union & Ors v RGN Mining Services Pty Ltd & Anor [2017] FCCA 1546 (5 July 2017)
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