Australian Nursing and Midwifery Federation v Barwon Health (No 3)
[2025] FedCFamC2G 80
•30 January 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Australian Nursing and Midwifery Federation v Barwon Health (No 3) [2025] FedCFamC2G 80
File number(s): MLG 2759 of 2022 Judgment of: JUDGE O'SULLIVAN Date of judgment: 30 January 2025 Catchwords: INDUSTRIAL LAW – application for civil penalty –contraventions of enterprise agreement under Fair Work Act 2009 (Cth) – agreed penalty – appropriate penalty Legislation: Fair Work Act 2009 ss.50, 545(1), 546(1), 547(2) Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (‘CFMEU’) (2018) 262 CLR 157
Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] 275 IR 148
Australian Nursing and Midwifery Federation & Anor v Barwon Health [2024] FedCFamC2G 376
Australian Nursing and Midwifery Federation v Barwon Health (No 2) [2024] FedCFamC2G 540
Division: Division 2 General Federal Law Number of paragraphs: 33 Date of last submission/s: 20 December 2024 Date of hearing: On the papers Place: Melbourne Solicitor for the Applicant: Gordon Legal Solicitor for the Respondent: DLA Piper Australia ORDERS
MLG 2759 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: AUSTRALIAN NURSING AND MIDWIFERY FEDERATION
First Applicant
LEAH SAMPSON
Second Applicant
AND: BARWON HEALTH
Respondent
ORDER MADE BY:
JUDGE O'SULLIVAN
DATE OF ORDER:
30 JANUARY 2025
THE COURT ORDERS THAT:
(1)Pursuant to section 546(1) of the FW Act the respondent pay a total pecuniary penalty of $25,000.00 for the contraventions set out in paragraph 1 of the orders dated 16 May 2024;
(2)Pursuant to section 546(3) of the FW Act the penalties in order 1 herein be payable to the first applicant.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
Before the Court are proceedings for the imposition of penalties for contraventions of the Fair Work Act 2009 (Cth) (“the FW Act”). On 16 December 2022, the Australian Nursing and Midwifery Federation (“the first applicant”) and Leah Sampson (“the second applicant”) (“the applicants”) commenced these proceedings against Barwon Health (“the respondent”).
On 30 April 2024, and for the reasons set out in Australian Nursing and Midwifery Federation & Anor v Barwon Health [2024] FedCFamC2G 376 (“the liability judgment”), the Court determined a dispute between the parties over the interpretation of an enterprise agreement made under the FW Act. On 16 May 2024 (and for the reasons in Australian Nursing and Midwifery Federation v Barwon Health (No 2) [2024] FedCFamC2G 540 (“the declaratory judgment”)) the Court made various declarations of contraventions of the FW Act by the respondent. These reasons concern what penalty should be imposed for that conduct. The parties have agreed on a penalty of $25,000 for the contraventions. The primary issue for the Court is whether the agreed penalty is an appropriate penalty.
BACKGROUND
The background to these proceedings is set out in the liability judgment at [3] – [10] which for the sake of brevity won’t be rehearsed. In the declaratory judgment, the Court held the respondent liable for:
(a) failing to pay the second applicant (‘Ms Sampson’) her base hourly rate in the amount of $6,363.87 in accordance with clause 79.4 and Appendix 2 of the Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2016 – 2020 (‘the 2016 Agreement’);
(b) failing to pay Ms Sampson her Saturday and Sunday rates in the amount of $2,484.17 in accordance with clause 48.1 and clause 79.4 of the 2016 Agreement;
(c) failing to pay Ms Sampson shift allowances in the amount of $273.40 in accordance with clause 34(a) and clause 79.4 of the 2016 Agreement; and
(d) failing to make superannuation contributions for the benefit of Ms Sampson in the amount of $866.59 in accordance with clause 27.5 and clause 79.4 of the 2016 Agreement.
In those reasons the Court also made the following orders:
2. Pursuant to s.545(1) of the FW Act, Barwon Health pay to Ms Sampson compensation in the amount of $9,121.44 with respect to the contraventions set out in paragraph 1(a) to (c) hereof, within 28 days of the date of this order.
3. Pursuant to s.547(2) of the FW Act, Barwon Health pay to Ms Sampson interest in the amount of $3,393.95 with respect to the contraventions set out in paragraph 1(a) to (c) hereof, within 28 days of the date of this order.
4. Pursuant to s.545(1) of the FW Act, Barwon Health make a superannuation contribution to Ms Sampson’s nominated superannuation fund in the amount of $1,189.03, inclusive of interest in the amount of $322.44, with respect to the contravention set out in paragraph 1(d) hereof within 28 days of the date of this order.
The respondent filed an application for extension of time and leave to appeal in the Federal Court of Australia on 3 June 2024. The respondent subsequently withdrew that appeal and paid the second respondent the monies they were ordered to pay to her, with interest. The matter was then listed for a penalty hearing on 13 February 2025 with orders and directions for that purpose.
Ultimately, after the parties had filed submissions, they requested the Court consider their agreed position on the appropriate penalty for the contraventions (being a total of $25,000.00 payable to the first applicant) on the papers and that the penalty hearing be vacated. Accordingly, orders were made on 20 December 2024 that the matter be decided on the papers.
MATERIAL RELIED ON
The applicants’ relied on the outline of submissions filed on 15 November 2024.[1] The respondent relied on the outline of submissions filed on 17 December 2024 and the affidavit of Georgio Giannellis filed the same date. The parties also asked the Court to consider their agreed position that $25,000.00 was an appropriate penalty for the offending conduct.[2]
[1] See also material referred to in paragraph 11 of those submissions
[2] See orders 20 December 2024
PRINCIPLES RELEVANT TO THE DETERMINATION OF PENALTY
The approach of the Court in determining penalties for contraventions of the FW Act is well settled.[3] In Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599; [2022] HCA 13 (“Pattinson”), the High Court said that:
[9]… Under the civil penalty regime provided by the Act, the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act. In that context, the penalties fixed by the primary judge were appropriate because they were no more than might be considered to be reasonably necessary to deter further contraventions of a like kind by Mr Pattinson, the CFMMEU or others. They represented a reasonable assessment of what was necessary to make the continuation of the CFMMEU’s non-compliance with the law, amply demonstrated by the history of its contraventions, too expensive to maintain.
[10]The Full Court’s critical error was that it was distracted by a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention. The power conferred by s 546 of the Act is not subject to constraints drawn from the criminal law and there is no place for a “notion of proportionality”, in the sense in which the Full Court used that term, in a civil penalty regime. Further, and relatedly, their Honours were misled by the view that the Act required that the maximum penalty be reserved for only the most serious examples of the offending comprehended by s 349(1), and that this principle could prevent the court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind. Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). What is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed”. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others. …
[15]Most importantly, it has long been recognised that, unlike criminal sentences, civil penalties are imposed primarily, if not solely, for the purpose of deterrence….
[3] See the applicants’ submissions at paragraph 13 and the respondent’s submissions at paragraph 20-22
The Court has a broad discretion to assess the appropriate penalty. In Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown[4], Bromwich J endorsed the following approach:
(1)identify the separate contraventions involved – each contravention of each separate obligation in the FW Act is a separate contravention;
(2)consider whether any of the contraventions arising from the above constitute a single course of conduct within the meaning of s.557(1) of the FW Act;
(3)consider the extent to which two or more of the contraventions have common elements – the penalties imposed should be an appropriate response to the conduct of the respondent;
(4)consider the appropriate penalty for each contravention and, if relevant, each group of contraventions; and
(5)finally, assess whether the overall penalty is an appropriate and proportionate response to the conduct as a whole which led to the contraventions. This is the application of the ‘totality principle’.
[4] [2017] 275 IR 148 at [36].
Fundamental to the Court’s task, is an assessment of the gravity and seriousness of the offending which it is called upon to penalise, having regard to all relevant factual circumstances. The considerations deemed relevant to this task are well known and frequently cited.[5] They include:
[5] see Pattinson at [18]; Kelly v Fitzpatrick [2007] FCA 1080 at [14].
·the nature and extent of the conduct which led to the breach;
·the circumstances in which the conduct took place;
·the nature and extent of any loss or damage sustained as a result of the breach;
·whether there has been similar previous conduct by the respondent;
·whether the breach was properly distinct or arose out of one course of conduct;
·the size of the business enterprise involved;
·whether or not the breach was deliberate;
·the involvement of senior management in the breach;
·whether the party committing the breach has shown contrition;
·whether the party committing the breach has taken corrective action;
·whether the party committing the breach has cooperated with enforcement authorities;
·the need to ensure compliance with minimum standard by provision of an effective means for investigation and enforcement of employee entitlements; and
·the need for specific and general deterrence.
While this extensive list is well-settled, it is not to be interpreted by the Court as a “rigid catalogue of matters for attention”.[6] In Pattinson, the High Court reiterated that this list of possible relevant considerations ought not to be treated as a checklist. There is no specific order in which these matters should be considered. The Court may take into consideration matters relevant to both the character of the contravening conduct and of the contravenor.[7]
[6] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
[7] Pattinson at [19].
The Court’s role when dealing with a civil penalty case, where the parties have agreed on the pecuniary penalty (as they have here), is not to simply “rubber stamp” that agreed penalty.[8] That said, subject to the Court being satisfied that the proposed penalty is appropriate[9], it is accepted that it is “highly desirable in practice” for the Court to impose the proposed penalty[10].
[8] BlueScope Steel Limited v The Australian Worker’s Union [2019] FCA 182 at [3]
[9] See Commonwealth of Australia v Director Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [47] to [48].
[10]See Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (‘Agreed Penalties Case’) at [58]. In the Agreed Penalties Case the High Court held that the principles applicable to agreed penalty submissions in a civil penalty proceeding remain those articulated in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993
The proposed penalty will be consistent with these principles if it falls within the range of penalties that the Court could, in the exercise of its discretion, impose having regard to the facts and circumstances of the contraventions and the legal principles that apply to the fixing of penalties for civil penalty provisions.[11] When considering the appropriateness of the agreed penalties it is important to note the maximum penalty remains a “yardstick” against which the process of assessment is to proceed and the primary purpose of any imposition of penalty is deterrence. The Court's task is, and remains to be, the determination of what penalty is most appropriate given all the relevant circumstances of the case.[12]
CONSIDERATION
[11] See Fair Work Ombudsman v HSCC Pty Ltd [2020] FCA 655
[12] Pattinson at [68].
Identifying the separate contraventions
The liability judgment provided the background to the contraventions set out at paragraph 1 of the orders in the declaratory judgment. The respondent was found to have contravened four separate provisions of the 2016 Agreement and s.50 of the FW Act in that it failed:
(a)to pay the second respondent her base hourly rate in accordance with clause 79.4 and Appendix 2 of the 2016 Agreement;
(b)to pay the second respondent her Saturday and Sunday rates in accordance with the clause 48.1 and clause 79.4 of the 2016 Agreement;
(c)to pay the second respondent shift allowances in accordance with clause 34(a) and clause 79.4 of the 2016 Agreement; and
(d)to make superannuation contributions for the benefit of the second respondent in accordance with clause 27.5 and clause 79.4 of the 2016 Agreement.
In so far as those contraventions are concerned, the Court can impose a maximum total penalty of $216,000 in respect of those contraventions.[13]
[13] See para 15,16 & 43 of applicants’ submissions and para 18,19 & 23 of respondent’s submissions
Course of conduct
The applicants’ written submissions addressed this issue at paragraphs [17] to [20]. The respondent’s written submissions address this consideration at paragraphs [24] to [25]. The applicant submitted, and the respondent accepted, that each of the four contraventions referred to above were separate and distinct for the purposes of s.557 of the FW Act.
Common elements
The applicants’ submissions addressed this at paragraphs [21]-[23]. The respondent’s submissions relevant to this consideration were at paragraphs [26]-[27]. The applicants’ took the position that the common element (i.e. that all the contraventions “depend in part” on clause 79.4 of the 2016 Agreement) could be taken into account when considering totality.
The respondent submitted that all contraventions stemmed from a “foundational” mistake concerning the interpretation of the 2016 Agreement. I do not read this as a submission that the fact that the contraventions resulted from a single mistake should result in the application of the one transaction principle to all of the contraventions. If that is what the respondent intended to submit, I would not accept it because it would be contrary to what Bromwich J held in Fair Work Ombudsman v Lohr [2018] FCA 5 (‘Lohr’) at [33]. More recently, the Full Federal Court, in Fair Work Ombudsman v Ho [2024] FCAFC 111, at [30] described the effect of what Bromwich J held in Lohr.
The nature and circumstances of the contraventions
The applicants’ written submissions filed 15 November 2024 address this consideration at paragraphs [26] to [27] and [32]. The respondent’s submissions did the same at paragraphs [29] to [31] and [34]. It was not in dispute that the second respondent (as a result of the contraventions) had not been paid her correct entitlements to base rates, Saturday and Sunday rates, shift allowances and superannuation. The respondent’s submissions noted (given the “arguable” interpretation of the 2016 Agreement it had adopted) that this occurred was “explicable”. [14]
[14] A contravention that has arisen from the contravener’s honest and reasonable, but erroneous, construction of a relevant instrument is a powerful factor in favour of limiting the amount of any penalty (Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480 at [15])
The nature and extent of any loss
The applicants’ written submissions filed 15 November 2024 address this consideration at paragraphs [28] to [30]. The respondent acknowledged that the second respondent had been “held out” from receiving her correct entitlements for many years. This has now been corrected.[15]
[15] See paragraph 30 respondent’s submissions
Whether there has been similar previous conduct by the respondent
The applicants’ written submissions address this consideration at paragraph [37]. The applicants’ submissions were to the effect that they were not aware of any evidence of similar previous conduct. The respondent’s submissions pointed to an incident in 2008 involving different industrial instruments.[16]
[16] See paragraph 17 respondent’s submissions
The size and financial circumstances of the business enterprise involved
The applicants’ written submissions address the size of the respondent at paragraph [31]. The respondent’s submissions noted that it had “sufficient resources to ensure compliance” with the 2016 Agreement.[17]
[17] See paragraph 33 respondent’s submissions
Whether the contraventions were deliberate
The applicants’ submissions at [32]-[35] noted that “it may be accepted” the respondent did not set out to deliberately contravene the 2016 Agreement whilst the respondent’s submissions “concedes that it deliberately did not pay” the second respondent the entitlements she claimed, but submitted this was different to “flouting the law knowing” its position was incorrect.[18]
[18] See paragraph 34 respondent’s submissions
Whether senior management was involved in the breaches
The applicants’ written submissions address this consideration at paragraph [36]. The respondent’s written submissions address this consideration at paragraph [35]. I accept the respondent’s submission that the evidence doesn’t allow for the inference in relation to this consideration urged upon the Court in the applicants’ submissions.[19]
[19] See paragraph 35 respondent’s submissions
Contrition, corrective action and co-operation
The applicants’ written submissions address this consideration at paragraphs [38] to [39]. The respondent’s written submissions address this consideration at paragraphs [36] to [38]. In the circumstances, the respondent’s approach to the penalty phase of these proceedings (and the agreement of the parties on a proposed penalty) should be weighed in their favour.
The need to ensure compliance with minimum standards
It is noted the entitlements, the subject of the contraventions, were minimum standards.
The need for specific and general deterrence
In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482, it was said at [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 it was said at [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)
Specific deterrence
Specific deterrence is directed at the party who has contravened the provision. It is concerned with ensuring a contravening party is not prepared to engage in the contravening conduct in the future.[20]
[20] See Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 at [50]
The applicants’ written submissions addressed the concept of specific deterrence at paragraphs [40] to [41] whilst the respondent took issue with the “speculative” claims made therein at paragraph [40] of its submissions.
General deterrence
General deterrence is concerned with ensuring, among other things, that the penalty is likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations.
The applicants’ written submissions address this consideration at paragraph [42] whilst the respondent submitted given the passage of events and its current relevant industrial instrument this factor was “limited or less weighty”. [21] The applicants contend correctly that the Court should fix a penalty with a view to ensuring that the contravening conduct is not such as to be regarded by the offender or others as an acceptable cost of doing business.
[21] See paragraph 40 respondent’s submissions
Totality principle
The applicants’ submissions address this consideration at paragraphs [44] to [47] whilst the respondent did so at paragraph [41].
Appropriate penalties
The applicants and the respondent submit that an appropriate penalty in the circumstances would be in the amount they had agreed on. The Court finds that the failure to pay the second applicant her correct base hourly rate in accordance with the 2016 Agreement was a serious matter involving contraventions of minimum standards and this warrants a penalty which reflects the seriousness of the conduct.
Noting that the other contraventions are similar, a lesser penalty could be imposed in respect the remaining contraventions.
In light of the above and in respect of the respondent, the appropriate penalties are likely to be determined (had they not been agreed) as follows:
| Contravention | Penalty |
| failing to pay the second applicant her base hourly rate in the amount of $6,363.87 in accordance with clause 79.4 and Appendix 2 of the 2016 Agreement; | $10,000 |
| failing to pay the second applicant her Saturday and Sunday rates in the amount of $2,484.17 in accordance with clause 48.1 and clause 79.4 of the 2016 Agreement; | $5,000 |
| failing to pay the second applicant shift allowances in the amount of $273.40 in accordance with clause 34(a) and clause 79.4 of the 2016 Agreement; | $5,000 |
| failing to make superannuation contributions for the benefit of the second applicant in the amount of $866.59 in accordance with clause 27.5 and clause 79.4 of the 2016 Agreement. | $5,000 |
| Total | $25,000 |
The total penalty (which was agreed) will be paid to the first applicant, as it wasn’t controversial and is in accordance with established authority for the payment to the person applying for penalty.[22]
[22] National Tertiary Education Union v Royal Melbourne Institute of Technology[2013] FCA 451 at [146], Sayed v Construction, Forestry, Mining and Energy Union[2016] FCAFC 4
CONCLUSION
In all the circumstances as the Court:
(a)is directed by the relevant authorities to consider what is appropriate in all the circumstances of this case; and
(b)in its discretion in relation to penalty is not fettered by a checklist of mandatory criteria; and
(c)notes the parties have agreed on the appropriate penalties for the contravening conduct which is within the permissible range of likely possible penalties had the matter not been agreed; and
(d)is satisfied in the light of the above considerations the penalties set out above are just and appropriate;
there will be orders as set out at the beginning of these reasons for decision.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Sullivan. Associate:
Dated: 30 January 2025
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