FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
Amin v Ractors Pty Ltd (in liquidation) [2023] FedCFamC2G 946
File number: MLG 1492 of 2022 Judgment of: JUDGE RILEY Date of judgment: 20 October 2023 Catchwords: INDUSTRIAL LAW – penalties for involvement in 14 contraventions – underpayments and record keeping breaches – corporate employers in liquidation – director not participating in proceedings – no remorse or corrective action – vulnerable employee. Legislation: Corporations Act 2001 s.471B
Fair Work Act 2009 ss.50, 535, 536, 539(2), 546, 557(1)Fair Work Regulations 2009 r.3.42
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 r.13.05(2)(c), 17.05(2)(a)
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) (2018) 262 CLR 157; (2018) 351 ALR 190; (2018) 92 ALJR 219; (2018) 273 IR 211; [2018] HCA 3
Australian Building and Construction Commissioner v Pattinson (2022) 175 ALD 383; (2022) 399 ALR 599; (2022) 314 IR 301; [2022] HCA 13
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; (2015) 326 ALR 476; (2015) 90 ALJR 113; (2015) 255 IR 87; [2015] HCA 46
Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown (2017) 275 IR 148; [2017] FCA 1301
Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65
Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412
Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153; (2014) 243 IR 244; [2014] FCAFC 62
Division: Division 2 General Federal Law Number of paragraphs: 75 Date of hearing: 16 August 2023 Place: Melbourne Advocate for the Applicant: Nicholas Grealy Solicitor for the Applicant: The Construction, Forestry, Maritime, Mining and Energy Union Advocate for the First, Second and Third Respondents: No appearance ORDERS
MLG 1492 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: KHAIRUL AMIN
ApplicantAND: RACTORS PTY LTD (IN LIQUIDATION) (ACN 604 133 262)
First RespondentSTRAIGHTLINE CONSTRUCTION CO PTY LTD (IN LIQUIDATION) (ACN 639 915 183)
Second RespondentTARKAN GULENC
Third Respondent
ORDER MADE BY:
JUDGE RILEY
DATE OF ORDER:
20 OCTOBER 2023
THE COURT ORDERS THAT:
1.Within 28 days, pursuant to s.546 of the Fair Work Act 2009, the third respondent pay the applicant pecuniary penalties as follows for the third respondent’s involvement in the first and second respondents’ contraventions as set out in the declaration made on 31 May 2023:
(a)$10,656 for failing to pay…
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- Case
- [2023] FedCFamC2G 946
- Decision Date
CaseChat Overview and Summary
The central legal issues the court had to address involved the appropriate level of penalty to be imposed on the respondents, given the gravity of the contraventions and the lack of remorse or corrective action from the respondents. The court had to consider the principles of deterrence, compliance, and the protection of vulnerable employees, alongside the absence of contrition and cooperation from the respondents. The court was also required to balance these considerations with the specific circumstances of the case, including the impact on the vulnerable employee.
The court found that the contraventions were severe, with no acknowledgment from Gulenc and a lack of corrective measures. Gulenc had shown no disposition to cooperate with the court or the union, which meant that no discount for contrition or cooperation could be applied. The court emphasised the need for compliance with minimum standards and the importance of deterrence to ensure future compliance. The court concluded that the contraventions warranted a significant penalty to achieve the desired specific and general deterrence effects, thereby protecting vulnerable employees and enforcing compliance with minimum standards.
The court ordered that Ractors Pty Ltd (in liquidation) pay a total penalty of $195,000 for the contraventions, with a further order that Gulenc pay a penalty of $50,000 for his involvement in the contraventions.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
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Ratio Decidendi
Legal Principle Established
I accept those submissions.i. contrition, corrective action and co-operation with the authorities In his written submissions, Mr Amin said at paragraph 31 that:The contraventions have not been acknowledged by Gulenc and no evidence has been adduced as to any corrective measures undertaken. Gulenc has evinced practically no disposition to co-operate with the Court or the Applicant’s union, being the Construction, Forestry, Maritime Mining and Energy Union. I accept those submissions. A discount is normally given for co-operation and contrition. However, Mr Gulenc has demonstrated neither of those things. He has not participated in these proceedings at all. He has not taken corrective action, which can be a sign of contrition. He has not expressed any remorse for his conduct. j. the need to ensure compliance with minimum standards The respondents in this case breached Mr Amin’s minimum entitlements. k. the need for specific and general deterrence As well as the statements made in Pattinson above, in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; (2015) 326 ALR 476; (2015) 90 ALJR 113; (2015) 255 IR 87; [2015] HCA 46, French CJ, Kiefel, Bell, Nettle and Gordon JJ said at paragraph 55:No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”(footnotes omitted) Similarly, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) (2018) 262 CLR 157; (2018) 351 ALR 190; (2018) 92 ALJR 219; (2018) 273 IR 211; [2018] HCA 3, Keane, Nettle and Gordon JJ said at paragraph 116:As has been observed, the principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conceptions as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. Other things being equal, it is assumed that the greater the sting or burden of the penalty, the more likely it will be that the contravener will seek to avoid the risk of subjection to further penalties and thus the more likely it will be that the contravener is deterred from further contraventions; likewise, the more potent will be the example that the penalty sets for other would-be contraveners and therefore the greater the penalty’s general deterrent effect. Conversely, the less the sting or burden that a penalty imposes on a contravener, the less likely it will be that the contravener is deterred from further contraventions and the less the general deterrent effect of the penalty. Ultimately, if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect, and so it will be unlikely, or at least less likely, to achieve the specific and general deterrent effects that are the raison d'être of its imposition.(footnotes omitted)